Here's the conventional explanation, which is true for all futures markets, not just silver.

http://tinyurl.com/3oue5vv

The question to be asked then, is not why are they raising margin, but what took them so long?

If it's true that the era of inflating away bank losses via credit expansion died in 2008, and the method previously used to repair balance sheets - playing the spread - is no longer enough, then you have to look elsewhere to make up the difference. The stock market is one place, and what have we seen? A straight line up from the 2009 lows with no real evidence of recovery. If you believe these prices, then you must think the future's so bright you need welding googles just to look at it. Either that, or we're being set up, and the "players" which is to say, those with advanced knowledge, will be net short when the time comes. You and I will lose since most small fry are long only, but the big bank connected funds can play both sides.

Well the same is true of the futures. At some point, rising commodity prices will hit the wall of demand destruction. When that moment arrives, prices will collapse across the board and the same characters who led the parade up will be shorting it heavily on the way down.

It's all about squeezing that last buck out of joe average, via his home, via his pension, and now via the gas pump and supermarket. To say this will end badly is an understatement - it already has for many people. The trick is not to get drawn in by the excitement of rising markets but to see them for what they are - yet another bankster attempt to make up losses, with full cooperation of our so-called representatives.

Where it all ends is grist for another mill - right now we need to see it for what it is, and start thinking seriously about ways to protect ourselves.

ebear