[heading]1 Big Reason September Could Be Silver’s Month[/heading]
Silver has corrected since its’ 2011 high of nearly $50 an ounce. At that point, “49ers” ran in droves to the devil’s metal, only to lose considerable amounts of wealth, vanished in the Sunday selloff on MayDay of that year.
Now, more than two years later, many silverbugs learned a lesson that many people in the banking crisis learned: cash is King. In other words, those who control the cash are in control.
There just might be, and it is centered in a contentious area for the small silver market: banks and physical commodities.
Morgan Stanley disclosed in US Securities and Exchange Comission filings that it could be forced to exit commodities by September 21, 2013, when the five year grace period comes to a close; that is if the Fed decides they do not conform to the bank’s status as an FHC
“If the Federal Reserve were to determine that any of the company’s commodities activities did not qualify for the… grandfather exemption, then the company would likely be required to divest any such activities that did not otherwise conform to the BHC Act by the end of any extensions of the grace period,” Morgan Stanley stated in the SEC filing from February 26.
Goldman Sachs has pointed towards the same: “The Federal Reserve Board… has the authority to limit our ability to conduct activities that would otherwise be permissible for a financial holding company, and will do so if we do not satisfactorily meet certain requirements,” the bank stated in a February 28 filing with the SEC.
The Federal Reserve, Goldman Sachs and Morgan Stanley have all declined to comment on the matter, though sources familiar with the Fed say that it is unlikely to force the two banks to make any dramatic exit from physical commodities.
While it is likely the Fed is unlikely to taper at all from the current physical commodity regime, the mere presence of this meme in the mainstream could lead to increase quantity buying in silver, having implications for price.
*Gold Silver Bitcoin actually has no idea what is going to happen in any market ever anywhere.