Zeev's Turnips Patch-No Politics (ZEEV)

[valuepump]

question for precious metal buff.

Now I'm not all that familiar with the finer aspects of trying to manipulate the price of a precious metal, but what is the significance of sudden spikes in lease rates for a precious metal? Why would they occur? Is it a sign that someone is trying to short a large amount of the metal, whether it be physical or paper metal? As I stare at a long term chart of silver lease rates

http://kitco.com/lease.chart.silv.html

it baffles my mind how or why someone would be willing to lease silver at interest rates of 30-70% like they did during early 1998 during the buffet run. Clearly someone had an interest in silver that required paying these high rates, but I'm not certain why. All I know, is that every time silver breaks out of it's normal trading range, lease rates spike, and silver tanks back down, then lease rates tank back down to near nothing, and the cycle repeats. The recent spike in gold did not cause unusual lease rate spikes, so it will be interesting to watch the next couple weeks to see what happens.