There are a variety of reasons to liquidate a large position.

But whatever the reason, no experienced trader would take a very large position into a thin market and then just dump it at the market, if they wanted to achieve some sort of reasonable economic benefit from selling that position. One does not do this unless they were under significant duress, or have some motive other than profit. Such a trade is called 'selling against yourself.'

Usually one diversifies their positions slowly and carefully, selling some and buying others without roiling the markets. At some point their trading objective becomes known, but by then it is fait accompli.

Unless of course they may have a strategy to lose some in one market while making huge profits and buys in others at cheap prices, as in the case of buys in the mining sector while slamming bullion for example. Here is one old hand explaining how funds rig the markets.

A trader who was being paid to obtain the best value for the seller would be fired if they simply dumped a large position in the market, driving the prices realized down almost 10 percent in less than an hour.

The same situation occurred at roughly the same time in the silver market, as hundreds of millions of paper ounces of silver were just dumped in the market in less than an hour, breaking the price down dramatically.

Such unbridled selling triggers other selling, as the complex web of trades and relationships drive other parties to liquidate their positions and trigger stop loss orders.

I have described in the past how the big trading desks use the Dr. Evil tragedy to artificially disrupt markets. Regulators are in place to prevent such things from happening.

And this is the story of the economy and the governance of the US markets today. There is little rule of law, only the power of size. And it will get worse as the paper game comes closer and closer to default.

Personally I think there were multiple reasons and beneficiaries from yesterday's market action in the metals. When the word goes out from some powerful party, others in the market find out and craft their own strategies and trades to benefit from this insider information. This is how outsized profits are made.

I believe that some parties who were heavily short silver were staring into the abyss, seeing a first delivery notice going out into a paper market that is many multiples larger than their ability to deliver silver bullion into it. And a default of a major commodity exchange would have disastrous results for the confidence in the markets, already stretched thin by fraud and scandal. So the interests of the big short, the government and the exchange might be aligned.

Let's see what happens. Because when these artificial market operations occur in a long term trend, they often are short lived, and tend to reinforce the primary trend, in this case the shortage of real bullion caused by many years of price manipulation and the resulting underinvestment to meet demand.

Still, there should be no need for speculation about what happened. The CFTC have the direct responsibility to question the seller's motives and trades, and to reassure the public about what happened. I am sure they will be doing that shortly, if they are actually doing their jobs.

When this tide of corruption goes out, 'we will see who was swimming naked,' as someone who some years ago owned a huge amount of silver, and then capitulated under duress and sold it, once said. And he remains bitter about it to this day.