2011-10-12

Chinese silver futures market is three times the size of CME; does this sound like a bubble?

And 4 times the size of its gold market. From Song Hongbing's weibo (author of Currency Wars).
刚才一位上海金交所的朋友上山来看我,才知道上海金交所每年的白银交易规模高达20万吨,已经是3年前的20倍之多!虽然规模上超过了CME,但定价权却仍然受制于人,因为他们是国内的封闭市场。可以说,中国白银市场的水已经相当深,如果打开闸门将明显影响世界价格。上海金交所的白银交易已是黄金的4倍!
The price is still controlled by regulators and it is an internal market only. But as Song Hongbing asks, imagine the impact when this market is opened!

The market has grown so large that the exchange is moving to kick out retail (small investor) traders.
现在金交所是在努力压缩白银交易规模,否则明年可能达到36万吨!他们现在有意识地将10万元以下的小客户赶走,年龄超过50岁的也不欢迎。2008年黄金暴跌时,5公斤以上的客户资金都没有问题,全部风险都在5公斤以下的散户。散户神经比较脆弱。
The silver market is on pace to grow from 200,000 tons to 360,000 tons next year if nothing is done. Right now they are getting rid of customers with assets below 100,000 yuan ($15,000) and over the age of 50. In 2008, all of the risk was in the 5kg and under retail customers, customers above that amount had adequate capital.

Those looking for a bubble in precious metals need to be looking at China.

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