Loading ...I think the re-set crash we all expected after 1971 HAPPENED in 2008. But the thought police and money managers were able to “fool” the markets until a “spark” that we all figured in long ago would “lock up” the brakes.
part: Demand Shock
The demand experienced industry-wide over the past 5 days has been unprecedented. This is worse than Y2K, 9/11, or the Great Financial Crisis. It is the speed at which demand spiked (seemingly overnight) that has crippled the industry. Volume is up over 10x (in some cases much more) in a matter of days. This has strained customer service, logistics, and – relevant to this article – supply. The industry is built for elasticity. We are used to big spikes in demand. We can handle a 1 or 2 standard deviation move. We can’t handle a 5 standard deviation move in 5 days.
Distributors sold out of stockpiles in 48 hours. Dealer inventory disappeared immediately. Precious metals are the toilet paper rolls of the financial markets – under appreciated until there isn’t much left. To be sure, there is ample raw material, just like there are plenty of trees to make paper. Getting the raw material into the form that you want is the problem.
https://www.texmetals.com/news/demand-shock-the-forces-behind-rising-premiums/