Fixing the Silver Fix : the Corruption Continues
My name is Tommy Flanagan, and I’m a member of Pathological Liars Anonymous. In fact…I’m the president of that organization. Yeah, that’s who I am.
I didn’t always lie. No, I used to tell the truth. Then one day I told a lie, and I got away with it. Yeah, I told my parents that I had a brother that they had never met…
-Jon-the-Liar Lovitz, The Johnny Carson Show, March 28, 1985
As the character Jon Lovitz explained on The Johnny Carson Show, lying is habit-forming. If perpetuated, it becomes compulsive conduct. Lying is a form of deviant behavior that (in the eyes of the liar) makes problems go away. Of course such problems never disappear permanently, because a lie can never solve anything. At some point the problem resurfaces, and because it never was addressed, often the problem has grown even larger.
The response from the liar is to tell another lie. But, because the problem is now almost inevitably larger, the new lie tends to be bigger or worse than the original. The process repeats. As the lies become larger and more numerous, eventually some of the new lies begin to openly contradict the old lies.
At this point, the proverbial “jig is up” for the liar. At least that is how things are supposed to work, as illustrated by the fable The Boy Who Cried Wolf. Which brings us to the “silver fix.”
The most obvious starting point is a question: why do we need a “silver fix”? In an era of electronic, instantaneous communication, and with (supposedly) “free and open markets,” why do we need someone to tell us what the price of silver is supposed to be at a particular moment in time? Why can’t market participants simply observe for themselves the current spot-price in our “free and open markets”?
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