Silver Prices in the Event of a Comex Default If and when the Comex silver market implodes, so should the paper market for silver. Nevertheless, can this happen and will it happen? Also, if a Comex default does occur, what are the likely scenarios and aftermath that will impact silver traders and the price of silver? The following sections explore the increasingly likely possibility of a Comex default in further detail. Inability to Deliver Physical Silver Perhaps the most likely scenario of a Comex “default” would involve the inability to deliver physical silver into its futures contracts due to a pronounced and protracted physical metal shortage. In this case, those holding paper certificates instead of actual physical silver will probably be settled at the cash value of their position once the physical delivery problem finally comes to a head. At this point, trading in silver futures on the Comex will probably also be halted temporarily while the market figures out the real price of physical silver. Pricing Implications of a Comex Default Of course, a Comex default of this type means that you will not be able to buy silver from the usual markets until the dust settles. Also, when said dust has finally found a resting place, silver will undoubtedly be priced much higher. That is because the price of silver will be based on the actual amount of silver metal in circulation, rather than on the inflated amount of silver paper that has suddenly been turned into paper money instead. Some of the silver pricing figures proposed are difficult to believe outside of a full dollar collapse (on the order of $500+/ounce), but seeing the price of silver more than double from where it is today would be trivial in a Comex default scenario. Read the rest of the article.
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