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The E-Sylum:  Volume 9, Number 20, May 14, 2006, Article 20

MORE ON THE GREAT BIG SILVER MELT OF 1980

A subscriber writes: "I think one important element of the disposal
of 90% silver coins has been omitted.  I was involved in the metals
game during the later part of the 'Rush' of the early 1980's.  As I
remember, the savvy people in the metals business at that time
bought 'physical silver' in almost any recognizable form and
concurrently sold contracts for an equivalent number of .999 Fine
ounces for delivery at some time in the future.

During the interim (the time between the purchase and the contract
date of delivery), the silver would be sent to a refinery, melted,
refined, and poured into 'deliverable bars'.  These were bars
recognized as genuine by the COMEX.  They bore the stamp of one
of the major refiners, such as Handy & Harman, and were stored in
bonded COMEX warehouses.

As a rule, the more volatile the metals markets are, the more
useful the futures markets are in helping dealers to avoid price
risk.  Unfortunately, during the frenzied metals markets of early
1980, the refinery backlog may have temporarily exceeded some of
the contract periods.  That may have exposed some of the scrap
buyers to price risk."

  Wayne Homren, Editor

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