Failure On COMEX Silver Likely

We finished December with a large takedown of both gold and silver by the central banks cartel but already the COMEX is showing signs of strain in coping with demand in silver. Banks with short positions (used to suppress the price) are unlikely to be covered in 2013 and so there is likely to be a failure on the COMEX.

Matterhorn Asset Management’s Lars Schall has released an excellent interview with GoldMoney’s Alasdair Macleod, discussing the latest take-down of the metals post QE4, the outlook for gold and silver, and cartel manipulation of the metals.
Macleod states that massive amounts of physical gold and silver have been flowing to Asia, and that the latest bank participation report indicates massive problems are brewing for the banksters in the COMEX silver market.  With cartel shorts near a record at just under 300 million net ounces, yet with the silver price substantially lower than the 2011 high, Macleod believes that we are quite likely to have a failure on COMEX and in the silver market in particular.

Regarding the latest bank participation report, Macleod states that commercial shorts are at record highs, yet NO SILVER IS AVAILABLE!:

“Bank shorts are at or near record levels. And what is interesting is that with the prices of gold and silver well below the all-time highs there are no profit-takers in the market to sell contracts to close their shorts. And in silver it is very, very alarming. This leads me to think that we are quite likely to have a failure on COMEX and in the silver market in particular.

If you have a failure in silver on COMEX then that is going to affect the gold futures market as well. The West’s central and commercial banks have suppressed the price of both gold and silver by supplying central-bank gold and increased short positions, making prices far too cheap. The result has been a massive transfer of gold and silver to Asia. This is the relevance of the point that you have been raising about Central Banks gold holdings, and it is also going to bring into question the solvency of the bullion banks who are short.

So, I think that while it may not be obvious to many people at the moment, when we look back at the fourth quarter we will see that the conditions were in place for a huge bear squeeze, for silver in particular. I would assume that the short position in gold is more controllable so long as Western Central Banks continue to make bullion available to the bullion banks that are short either on COMEX or with LBMA. But silver is different, nobody has it for sale. There is no silver around.”

Macleod goes on to state that gold will be remonetized, and the process is already well underway:

“I suspect that the Chinese Yuan will play a big role in Asia. What they’re doing with Iran is interesting. They’re settling net balances in gold and gold is being re-monetized in that sense. And I think that China has accumulated a lot more gold than they officially tell us. So they have the potential to use gold as money. I can see gold being re-monetized in the loosest sense for the largest internal market the world has ever seen. Believe me, it’s happening now.”

Macleod also states that the upcoming physical silver crisis at the COMEX will result in a suspension of silver trading at the COMEX, and a reset massively upwards in the price of silver:

“You’ve got the banks’ short position on COMEX which cannot be covered. According to the most recent bank participation reports, the banks are short of nearly 300 million ounces of silver. When you bear in mind this is an industrial metal, the vast bulk of silver consumption from mining and recycling supply goes into biocides, solar panels, electronics, et cetera. You have only 100 million ounces annually left over for investors. The short position for the banks on COMEX is three times that 100 million ounces.

There’s no way this can be covered without a price rise sufficient to kill off significant industrial demand, because there are no strategic reserves to draw on. The only country which might have strategic reserves is China but otherwise there are no reserves. And I think that the only way in which the banks’ shorts could be closed out is after a price hike which would lead to billions of dollars of losses for these banks. There will be a market crisis, and I think that they will have to suspend trading in silver and agree a settlement procedure for long and short contracts. And if that happens, it will be well over $50 an ounce. But remember, other exchanges will continue to price silver if Comex suspends, which will not help Comex resolve the problem if the price continues to rise elsewhere.”

On another question, Macleod was asked about Yuan as the next reserve currency being backed by gold :

“We must also understand that the dollar is for security reasons not something they want to use for their international trade settlements. Remember that every dollar transaction done in the world is reflected in a bank account in New York. So, the Chinese want to get away from the potential control and the intelligence information that it gives America. They want to use a different settlement medium.

Now, they agreed about 10 years ago with the Russians to set up the Shanghai Cooperation Organisation (SCO), and the last unsatisfied objective of the SCO is to have a common trade settlement system between the members of the SCO, which at the moment are Russia, China, and the various “stans” in middle-Asia. But interestingly, the next wave of members who will join are India, Iran, Pakistan, Mongolia and Afghanistan (as soon as NATO has left). So you’ve really got the bulk of Asia’s four billion people and they’re going to be settling cross-border trade not with the dollar but with something else. They need to be gold-rich to give confidence to their currencies. I suspect that the Chinese Yuan will play a big role in Asia. What they’re doing with Iran is interesting. They’re settling net balances in gold and gold is being re-monetized in that sense. And I think that China has accumulated a lot more gold than they officially tell us. So they have the potential to use gold as money. I can see gold being re-monetized in the loosest sense for the largest internal market the world has ever seen. Believe me, it’s happening now.”

Source: SilverDoctors

 

Eric Sprott: Central Banks Use Accounting Tricks To Hide Lack Of Gold

Eric Sprott gave an interview on Bloomberg regarding Central Banks using accounting tricks to hide the missing gold from their reserves. Some of the transcript from Silverdoctors are below including link to video. Well worth a look.

Sprott simply destroyed the MSM pundits’ anti-gold arguments, stating that gold has beat the Dickens out of every other asset class over the last 12 years, and questioned whether the Western Central Banks have any physical gold left in the vaults, as the gold listed on their balance sheets includes gold receivables, which has been leased out and is gone for good.

Bloomberg kicked the interview off by asking Sprott whether he is as much a fan of precious metals today as he once was, ”given the fact that they’ve treated you so poorly over the past 18 months?”  Sprott replied:

A little history is probably important here.  Gold has gone from $250 to over $1700.  It’s beat the Dickens out of every other asset class over the last 12 years…To specifically answer your question, am I more optimistic today than I might otherwise be?  Absolutely.   I wrote an article recently questioning whether the Western Central Banks had any gold left.  We simply did a physical analysis of the people that are coming into the gold market and the changes that have happened since 2000, (and the supply of gold has not changed since 2000 on an annual basis, it’s still 4,000 tons).   When you look at the fact that the central banks used to sell 400 tons annually, now they buy 500 tons.  The ETF didn’t even exist in 2000, now they buy 300 tons a year. 

The Bloomberg host then interrupted Sprott to claim that this sounds like a conspiracy theory and asked for another reason to buy gold.  Sprott responded:

I could probably give you 20 reasons.  How about money printing?  QE1, QE2, QE3, LTRO, OMT’s, people are essentially debasing their currencies.  They’re not holding them in the esteem that they should, and it’s reflected in the fact that the price of gold’s gone up.  One of the issues we have with gold is the fact that it hasn’t performed well in the last 18 months…But People are flocking to gold.  When I look at the US Mint statistics for gold sales.  When I look at what the Chinese are doing in terms of imports of gold from Hong Kong into the mainland, they’re up 500 tons in the last 12 months in a 4,000 ton market!!  Imagine if the Chinese bought an extra 12% of the oil or wheat market this year!  Would they get it?  And who’s supplying the 500 tons?  We already had a market that was in balance!

Gold production is flat, and one might even argue that the gold miners may have trouble increasing production this year.  You’ve seen the disappointments of Barrick and Newmont, and many others are having issues.

The Bloomberg host then asked Sprott why the gold price hasn’t responded to those supply and demand factors.  Sprott responded:

Well, there’s two markets for gold.  There’s the paper market, the COMEX futures. You can have the annual gold production trade in two days on the paper market.  I focus on the physical market.  I want to see what people are doing with their money physically.  Are they continuing to buy more and more gold, year after year?  Every indication we have is that they continue to buy INCREASING AMOUNTS OF GOLD.  Sooner or later, (and ask Eric asked, how do the central banks sell gold without telling anybody?), they have a very simple way: Central banks have one line on their balance sheets for gold and gold receivables!  If they lease gold to a bullion dealer, that’s a receivable.  That gold has obviously been sold into the market, but we can’t tell what’s real gold and what’s receivable (on the central bank balance sheets).

Full Video Interview

Source: Silverdoctors

KWN: London Trader Explains Latest Moves In Gold and Silver Market – Including Recent Takedown

We are used to the gold market being controlled by vested interests but their ability to manipulate is now being seriously strained as Central Banks are lining up to buy the lows. In the case of the latest pullback from the $1800 level, the London Trader has pointed out that “We were within a hair of a major price explosion, and disorder in the gold market.” Checkout some of the comments from a series of 3 interviews given on King World News.

Physical demand is huge.

“In the past we have seen waterfall type declines when small speculators are heavily leveraged.  But the market has changed.  When the physical market was not as strong as it is now, these corrections would go $200 to $300 in gold.  As an example, we went from a previous peak of about $1,900 down to around $1,500, or roughly $400 in that case.”

“We are not going to see that this time.  It’s not going to happen that way this time.  Back then, the central bank buyers and these sovereign buyers were quite happy to sit and wait for a lower price.  Now they are not.  These buyers want out of their dollars and euros and they want physical gold and silver.

In the past, central banks have had the luxury of sitting back and waiting for the price to come to them.  Right now you have different central banks and different sovereigns competing with each other to buy gold, and in some cases silver as well.

There are simply too many buyers right now, and the competition to buy physical is extremely fierce right now….

“We are continuing to see the bids get raised in these markets.  This has become a competition for the central banks and sovereign buyers to get rid of their dollars and euros as fast as they can, and swap it for something of real value.

How will the physical orders be filled?

Meanwhile, the bullion banks run the COMEX and they are not stupid.  They are going to ring the register on this managed money.  The commercials have been doing extremely heavy short covering into the weak-handed longs which have been selling, but they are also covering into fresh shorts from speculators and managed money.

 The question now is, where is the inventory going to come from to fill all of these physical orders?  The physical market is already tight as a drum.  I would be surprised if there is much more downside in this environment.  Yes there is this game of the commercials covering into weak-handed longs, and fresh shorts, but there is reality here, and reality is the physical market, and these buyers have moved their orders higher, and will continue to do so.

In the past India was the largest buyer of physical gold and when they didnt like the price they would sit back and wait for the price to pull back. Now plenty of buyers are lining up including China and Central Banks.

India would just say, ‘We’re the biggest gold buyers in the world, so we will just step back and wait for our price.  We will wait for our price because we already have plenty of gold here.’  But now you’ve got too many competing entities all trying to acquire physical gold. 

Suddenly China has overtaken India.  So India doesn’t have the luxury of sitting back.  India is back in the market now.  India is back buying in the mid-$1,700s.  India was back yesterday.  India is back today.  They need to buy gold and they are stepping ahead of other entities and becoming a large buyer.

The Indians are not stupid.  They know the commercials harvest the weak hands on the COMEX.  Once they see open interest get to a certain level, they fully expect a reaction in the price.  But your readers have to understand that there isn’t going to be a ‘correction’ this time, there will only be a ‘pull back.’  There is a big difference between a pull back and a correction.

The reasons for this is there are just layers of central bank and sovereign physical buy orders in here right now.  Some of it has already been filled.  There has been tonnage filled at higher levels than we are currently trading.  As soon as we went through $1,760, we started to see central bank buying.

Bullion Banks had to stop the latest price rise

“Why do you think the bullion banks threw everything they had at the gold market at the $1,800 level?”  The answer, “We were within a hair of a major price explosion, and disorder in the gold market.”

“As gold was heading up to the $1,800 level recently, we were very close to a situation where we were going to see a commercial capitulation.  Some of the weaker commercials were already starting to bail out of their shorts.” 

“You have to understand that some of these bullion banks are more than happy to turn on these less powerful commercial shorts.  They view them as weaker hands.  Yes they are all commercials, but some of them are a lot weaker than the bullion banks. 

But there does come a point where the bullion banks say, ‘We’ve got to protect those stops.’  We had already gotten to the point where some stops were being tripped from those weaker commercial shorts….

“It got to the point where the vast majority of stops were located near the $1,810 level.  If gold would have pierced $1,810, that would have tripped the vast majority of all of those weaker, underwater commercial short positions out of the market.  This would have created enough of a short squeeze that we would have seen new highs in gold very rapidly.

 This would have been a literal failure by these commercials (commercial signal failure).  The gold market got to within $10 of their stops.  Why do you think the bullion banks threw everything they had at the gold market at the $1,800 level?  We were within a hair of a major price explosion, and disorder in the gold market.

 They (bullion banks) wanted to protect those stops, even though they weren’t their own stops.  They needed to do this in order to stop those weaker commercials from capitulating.  Now everyone is getting bearish, and when the physical market is closed, we are seeing some shenanigans such as after hours price drops in access market.

 So we are seeing more weak hands entering the short side of the gold market, and the commercials have been covering not only into the small speculators liquidating, but also into these fresh shorts.  The commercials are doing this in a very, very calculated way.

 hat readers need to take away from this, is we were dangerously close to a commercial signal failure and a major price spike in gold.  Even though the commercials have alleviated that concern for the time being, the possibility still exists that we could see a major price spike when the $1,810 area is pierced on the upside in gold.”

LBMA is a massive Ponzi scheme.

On July 20th, the ‘London Trader’ told King World News, “The LBMA’s price fixing scheme is coming to an end.”  Gold quickly rose $200 after that interview.  Today the source now tells KWN the LBMA has, “… incredibly large quantities of paper silver and gold being traded each day, but the real problem here is there is virtually nothing to back this up.”  The source also said, “This is all part of the LBMA Ponzi scheme.”

 

“The physical silver market is extraordinarily tight.  It’s insanely tight right now.  In other words, there isn’t any for sale.  We are seeing large premiums in places like Shanghai.  If a buyer wants size in physical silver, you are going to have to wait a long time.”

“When the commercials see a large order enter the market, they just turn the market around.  They don’t have that quantity of silver in inventory.  Every day the London Bullion Market Association (LBMA) clears 5,000 tons of silver, and between 600 and 700 tons of gold through paper trading.  When you think about it, that is a ridiculous amount.

This is all part of the LBMA Ponzi scheme.  You have these incredibly large quantities of paper silver and gold being traded each day, but the real problem here is there is virtually nothing to back this up….

So if I turn up to the LBMA and I say, ‘Out of your 5,000 tons of silver that you clear every day, I just want 300 tons.’  It shouldn’t be a problem.  It shouldn’t even cause a ripple.  But when you think about it, and that physical silver is leveraged 100 to 1, that’s more than the annual mine production of silver for the entire year when you do the math, including the leverage implications.

Of course they can’t deliver the 300 tons.  They don’t have it.  So when you actually go and send a Brinks truck to go and pick this silver up at the back door of Scotia Mocatta, you aren’t going to get it.  An order like that takes at least two months to get filled.

Too many large physical orders waiting to be filled.

 The problem right now is that there is such a large overhang of orders in both of these markets, and specifically silver.  Every day there are people turning up at the fix to buy physical, regardless of price.  As the markets are taken down, it exponentially increases the amount of physical silver that needs to be filled.

I would also add that the local traders are heavily short now.  So we are seeing a large short position building in silver on this price decline.  And don’t forget, the COT reports are groomed.  I don’t trust them. 

So when they see a large physical order enter the market, that’s the point where the commercials start covering.  Remember, the gold and silver markets on the COMEX are all about chasing out leveraged longs.  That’s all that market is about right now.

But we will see a day when silver can no longer be capped through paper trading and various games being played at the LBMA and COMEX, and in the end, it will be the physical market which will be the deciding factor.  At that point you will see the real price of silver for the first time, and it will leave people in disbelief.”

 

Sources:

1. London Trader – Competition To Buy Physical Gold Is Fierce,
2. London Trader – Bullion Banks Had To Halt Gold’s Advance
3. London Trader – The LBMA Is A Massive Ponzi Scheme

17% Of Silver In Comex Gone In One Day

Last friday a client of JPMorgan got tired of holding paper silver and asked for the delivery of 3.6 million ounces, which is 17% of all the registered inventory of silver. The full amount wasn’t met which begs the question what happens when others eventually follow suit and how long will it be before everyone panics and swaps paper for physical? Its long been know that paper silver out numbers physical, therefore someone is going to be disappointed when the paper is eventually traded for the real stuff.

This week’s interview with gold dealer Tom Cloud of National Numismatic Associates comes as precious metals are correcting and rumors are swirling around Comex silver.

Dollar Collapse: Hi Tom. It’s been an interesting couple of days for silver, with a big Comex draw-down being followed by a sizable price drop. If the silver market wasn’t so obviously free and honest, it might be tempting to suspect some kind of manipulation…

Tom Cloud: Late Friday afternoon a big client of JP Morgan requested delivery of 3.6 million ounces, which is 17% of all the registered inventory of silver (assuming it’s all really there). But only 1.6 million ounces were reported moved. A lot of people are asking where the rest of it is. If it wasn’t immediately available and the client allowed JP Morgan to move it in pieces, that’s another sign of very tight supply.

Ordinarily seeing that much silver inventory move would make the price go up, but at the same time they – probably the same people — were buying shorts to drive the market down late in the day when trading was slow.

DC: The size of the silver draw-down raises the question of what happens if a few more big players want to turn their futures contracts into physical metal. Would this cause a delivery disruption or outright default on the Comex?

TC: Somebody stepped up and said ‘no more paper for me; it’s time to get the real thing in my name.’ They’ve played the [paper silver] game and benefited from it and now they want their silver. But not everyone can do that. There is 100 times as much silver paper [in the form of futures contracts] as there is physical, which means a lot more people think they own silver than there is silver in the world. At some point someone will be left out. If 17% of Comex inventory is taken out in one move, then you don’t need that many more big players to take delivery to see this thing fall apart.

A lot of people were already worried about this, and what happened Friday certainly raises the odds that others with paper claims are going to ask for physical. This morning I’m seeing a lot of dealers buying a lot of silver for their own inventories. This is a very scary situation.

DC: Has an exchange ever defaulted on a commodity?

TC: I don’t know of one that has completely defaulted, where they drain their warehouses of product. So it would be a huge event. And the picture for gold, though not as urgent as silver, is also pretty tight, with futures contracts far exceeding available physical.

DC: So what does the prospect of a Comex default mean for precious metals investors? How can we play it?

TC: Only gold bars from major fabricators like ScotiaMocatta and Johnson Matthey can be used to settle a Comex futures contract. That is, they’re approved for future delivery. When the shortage hits, if you’re holding one of these bars the premium is going to shoot straight up, so in addition to a higher spot price you’ll make money on the wider premiums. Because of this, a lot of my larger investors buy Comex bars exclusively instead of coins.

There are now ten different mints producing Comex gold bars. Two years ago there were four. Comex is smart. They know it’s gonna hit the fan and are now willing to approve other brands in order to increase their sources of metal. I don’t think they’d be approving these other brands if they didn’t expect a default. It’s the same with silver. 24 months ago there were two approved fabricators, Johnson Matthey and Engelhard, making bars you could deliver on a futures contract. Today you’ve also got Ohio Precious Metals, Academy, and Royal Canadian mint.

But even in the absence of a Comex default, bars are cheaper than coins. They’re not made by a country, but by large refineries, and because of this their premiums are lower. One exciting thing that happened this year is the introduction of one-ounce Comex silver bars from Johnson Matthey. The premium is $2 an ounce, which is about $0.75 an ounce more than for a 100-ounce bar. But it’s a dollar an ounce cheaper than for a Silver Eagle coin, so they’re selling very well.

DC: How do you store Comex bars once you’ve bought them?

TC: Several ways. You can take delivery of them and arrange your own storage. The newest state-of-the-art depository is Diamond State in New Haven, Delaware. They’re tremendous. A buyer can arrange to have their bars shipped directly there, generally for free. They’ll handle the paperwork and charge an annual storage fee. If you buy through us, we have a warehouse where customers can store their bullion for three years for free. It’s allocated, so you own specific coins or bars, and it’s all insured.

Source: Dollar Collapse

Is JPMorgan Stockpiling Physical Silver?

The ultimate of hedges, to sell paper silver and yet stockpile up on the physical in anticipation of the USDollars demise. Thats exactly what SilverDoctors are suggesting. Makes perfect sense when explained below and very profitable for JPM.

As silver investors are likely aware, leading silver analyst Ted Butler has openly speculated whether JP Morgan’s alleged massive short silver position is held on behalf a client such as the Federal Reserve (with the intent to prop up the dollar by suppressing gold and silver) or the Chinese government (with the intent of acquiring physical gold and silver bullion at a discount due to their massive paper short position on the futures market).

The Doc has long privately wondered whether the bullion banks’ PM short positions could actually be leveraging their own physical bullion accumulation by artificially suppressing the paper futures price.

These thoughts originate in our following of Jim Sinclair, who has always maintained that the bullion banks will be the one’s making the lion’s share of the profits in this great secular gold and silver bull market.   One thing the bullion banksters are not is dumb, and they can see the writing on the wall for the US dollar as well as any SD or ZH reader.

New commentary from a bullion insider who claims to have personally managed the movement of 27 million ounces of gold from HSBC’s vaults into JP Morgan’s seems to substantiate Sinclair’s claims.

The industry insider has come forward claiming that JP Morgan’s paper short position is in fact a hedged trade (as Blythe Masters claimed here)- and claims that JPM is in fact MASSIVELY LONG PHYSICAL GOLD AND SILVER HELD IN THEIR OWN PRIVATE VAULTS while short the paper futures market. 
Is JP Morgan actually a double agent shorting the paper metals market for their own benefit?

The claim is not only rational, but it also would perfectly explain why the CFTC has opened three separate investigations into silver market manipulation, and has yet to charge anyone with manipulation of silver.

Clearly, if JP Morgan’s commodities desk was accumulating massive physical gold and silver inventories in their own personal vaults, they would be able to claim their paper short position is a legitimate hedge- essentially leveraging their physical position against the paper COMEX futures market itself.

Miles Franklin’s David Schectman states he has been in contact with the insider, who claims JPM is massively long physical gold and silver bullion stored in their own warehouses:

In insider gave his opinion of whats happening:

My friend Trader David R flatly states that this IS the case; he has seen the silver with his own eyes in London. In fact, he asked me to come with him last year and told me he would bring me to the vaults and personally show me the silver. Last winter he emailed me and said, “I will be going to London in May; if want to come along, I am sure I can get you a tour of a few of the major banks vaults (JPM included) and you can see all of the gold and silver for yourself ?”
 

For those inquiring minds wishing for a little background on this mysterious gold trader David R:

I worked at some of the largest bullion banks in the world over my career and I ran all types of books and did a lot of business with Central Banks around the globe.  I was involved in the largest gold hedge ever done in the history of the world back in 1996. This has been my life for the past 18 years. From 2000 to 2006 I was the gold trader at Barclays London. I have worked for AIG, Barclays, and UBS, some of the biggest bullion desks in the world.

I worked for three of the major bullion banks for 11 years and was in charge of Barkleys gold book and the hired 42 Brinks trucks to move our 27 million ounces of gold out of HSBC ‘s vault and into JPMs vault when HSBC raised storage costs on us, I am 100% positive that it’s there. I know we had 27 million ounces of gold on our daily balance sheet and the other big banks all had around the same amounts.

David R left Barclays and moved to Manhattan to work for one of the largest and most successful privately held hedge funds in NYC. He was in charge of the precious metals trading department, and supervised dozens of the most talented precious metal’s traders in NYC. I was told by a reliable source that every metals trader worth his salt would kill to work for that firm. The traders were not salaried, they worked on commission and they all made BIG money. That is where I met David. He gave me a personal tour of their trading department. His understanding of the gold and silver industry and his resume is as good as it gets.

The trader states that JPM is indeed massively long physical precious metals and set to vastly benefit from the coming mania, precisely as Jim Sinclair has long predicted:

 Here lies the beauty of the trade for JPM.

They buy the physical silver at the same time they sell the future (on Comex) futures trade in contango (higher price than spot physical) they get zero interest rate cash from FED so borrow the money for free, they own the vaults to store the silver…. so as the future comes to maturity they can either settle against their physical long or roll the future to collect more free contango…. This is pure arbitrage paid for by the FED.  This has been going on for over 30 years and why shouldn’t they be allowed to have 25% of the Open Interest?  There is no manipulation because they are short the futures and long the physical and have “ZERO” price risk, but nice profits!  It’s brilliant trading and completely 100% legal and that’s why they will never be charged with manipulation because there is none going on. Sometimes it’s just that easy!

David R states there is no massive shortage of physical silver- it is just being hoarded by the bullion banks in their own private vaults ahead of dollar devaluation and collapse:
Let’s go and visit their vaults and you can see all the physical silver there… Lease rates are at full carry +.  There is no shortage what so ever and the banks are charging 40 bp for storage because they cannot find any more space to put it all, you can take all the physical you want!  The JPM manipulation is not a manipulation, but a way of trading that has been going on for years. JPM is short futures (due to contango) and long physical.  People need to understand that metals are just a derivative of the interest rate market and once people do, they will get a better understanding why the market moves the way it does.

I explained to you what HSBC and JPM do on the silver.  They get $ from the FED for free.  They own all the storage vaults, so they do not have to pay the fees for storage.  They then own the physical silver in their vaults and sell the futures contracts (which are in contango) at a much higher price than OTC price so then hold the both till delivery.  Since there is no cost for $ and no cost for storage, they made a fortune on earning the contango of the silver and gold market. It’s a brilliant strategy, which has made them a fortune.

If you sat with me for a day I could show you how this market really works.

Miles Franklin’s David Schectman states he has known David R for over four years, that he is legitimate and the real deal, and that although David states JPM’s short silver (and gold) positions are NOT naked, it is massively bullish for both metals, stating:
He is absolutely convinced that gold and silver are going MUCH, MUCH higher. He told me last week that with the Fed’s latest “open-ended” QE edict, the dollar and bond market are done, finished and the bull market in gold is guaranteed! As far as he is concerned, Bernanke has sold out our kids and grandchildren and it no longer makes any difference who occupies the White House!

 As mentioned previously, if JPM is shorting gold and silver futures with the intent of eventually breaking the futures market/ physical price link to the metals, this would explain motive (pure profit- always the ONLY motive for a bankster), as well as the reason why the CFTC has been unable to charge JPM with manipulation of the silver market- even though they routinely fleece the specs using their algos and raids.

Source: SilverDoctors

Massive Attempt At Silver Price Manipulation

Yes we all know who as a vested interest in making sure silver does not take off. Over the weekend paper silver was sold off in huge volumes(6 month total US silver supply in minutes) again to try to smash the momentum since the recent QEver announcement from the Fed. What I enjoy most from these stories is that eventually the dam will burst and will be interesting to see the manipulators panic. Excellent work from SilverDoctors below:

Apparently Blythe’s monkey’s are burning the Sunday midnight oil in order to prevent silver clearing $36 and triggering JPM’s rumored silver derivative losses.

A miniature replica of the May 2nd, 2011 drive by shooting was just completed, as silver was knocked down the proverbial mine-shaft moments ago, dropping nearly a dollar in nano-seconds on Monday’s Asian open.

Volume data indicates that 3,297 contracts, or 16.5 million paper ounces of silver were dumped on the market in a mere 5 minutes between 9:00 and 9:05pm EST.
In other words, approximately 1/2 of the entire US annual silver production was dumped on the market by the cartel in a 5 minute period on a Sunday night.

Silver was drifting under $34.50 prior to the raid which knocked .80 off the metal nearly instantaneously at precisely 9:00pm EST:

Wynter Benton Returns, Predicts Silver Will Trade Above $50 by Dec 31, 2012

Wynter Benton is an ex JPMorgan Commodities broker who was well know for his accurate predictions via Yahoo’s forum in the silver market. After been missing for the last 11 months, has returned to predict silver to go to $50 per oz by the end of the year. A fascinating story of what happened to MF Global.

Silverdocters writes:

Benton claims that the Oct 31st 2011 take-down of MF Global was SPECIFICALLY designed to prevent the group of former JPM traders with a chip on their shoulders against their old boss Blythe Masters from taking delivery of a massive amount of physical silver and breaking JP Morgan’s massive naked short silver position.

Benton also claims that JP Morgan’s $36 silver derivative time-bomb is still in effect, and states that the ex-JPM traders have re-grouped, and that silver WILL trade above $50 before Dec 31, 2012.

Benton wrote on Yahoo’s forum of his latest prediction.

We wish to inform our followers that silver will trade above $50 before Dec 31, 2012.

The $36 silver derivative timebomb is still in effect for the Morgue so count the trading days once silver gets above $36.

MFG was setup to prevent us from taking silver above $45 last year. Did anyone wondered why MFG failed precisely 30 days before our deadline or why no one can locate the vaporized money? It was designed SPECIFICALLY to stop us from taking silver up and out. Think about it.

Too bad The Morgue cant do that again this time cause we are beyond their reach now.

Once again, we are back. . . . . do da do da. . . .

http://finance.yahoo.com/mbview/threadview/?&bn=657e31ff-3231-3847-9760-4f6647a2dfc9&tid=1347560331309-c1ef57d8-049d-48bb-9918-c56a7832d4d9&mid=

Source: silverdoctors

 

Utah – Gold and Silver Now Legal Tender

Utah has become the first state to bring in gold and silver as legal tender. Another small step away from fiat currency as people’s confidence in the monetary system breaks down. 

After months of public outcry over Washington’s out-of-control fiscal and monetary policies, Utah Governor Gary Herbert signed into law Utah House Bill 157 Currency Amendment allowing gold and silver bullion as legal tender within the state to settle retail transactions and debts.

Though several other states have proposed similar legislation, Utah becomes the first state of the Union to actually pass a law providing ammunition to fight back the ill effects of the Federal Reserve’s malicious debauching of the U.S. dollar.

The symptoms of rapidly rising costs of life’s necessities can be directly attributed to 10 years of money supply growth, not seen since the disastrous 1970s.   As of April ’02, M1 money supply has skyrocketed 77 percent to $2.22 trillion for April of this year.

……

Other states may soon follow Utah’s watershed legislation—and quickly.  In its annual World Economic Outlook publication, the International Monetary Fund (IMF) noted that a Eurozone breakup could rapidly disintegrate into a “full-blown panic in financial markets and depositor flight.”

 

Source: EFTDailyNews

Use of Gold Dinars and Silver Dirhams Growing Across Asia

When fiat currency get debased and confidence gets eroded, eventually people will use real assets for trade. In Asia there is a growing trend to use gold dinars and silver dirhams. Eventually we will see this grow globally. The practical use of metals which can’t be debased can only hasten the end of the dollar and other fiat currencies that are being debased at an increasing rate. During the last great bull run for precious metals in the 70s, there was mainly demand from US citizens. Now we are seeing demand globally.

 

SGT report as follows:

I just received an update from reader and physical precious metals stacker Dean Arif, the Program Director of Dinihari Dinar (The Dawn of the Dinar) in Malaysia.

Dean reports that the use of physical gold and physical silver in the form of gold dinars and silver dirhams, has spread from Malaysia to Indonesia and has now gone viral in Singapore, Brunei and Philippines!

Dean writes, “The silver dirham coins will unite the people of this region (Southeast Asia) as the dirhams from Indonesia can be used in Malaysia and the ones from Malaysia can be used in Singapore WITHOUT THE NEED FOR THE MONEY CHANGER’S fiat! And the coins follow WIM (World Islamic Mint) standards (consistent weight, purity and size), so they are fully interchangeable anywhere in the world, making it a true global mode of payment.

If you don’t think that’s bad news for the Central Banking criminals, check this out. Dean reports that exchanging physical silver for everyday goods is simple, and one ounce of silver – while still representing a ridiculous 50 to 1 silver to gold ratio – goes FAR. There are 31.1 grams of silver in one troy ounce, so 1/10th of an ounce, around $3.10 in silver value (USD) will buy 5 loaves of organic wholewheat bread.

 

South Carolina Report Mentions Silver Manipulation

While South Carolina investigated investing in silver, the South Carolina State Treasury Department was asked to conduct a study into whether or not the State should invest State Pension funds in gold and silver. The following lines were in the report outlining the silver manipulation by the Fed, JPMorgan etc.

Similar to other commodities, the value of gold and silver is determined by supply and demand as well as speculation. The Federal Reserve, The London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practised fraction-reserve banking and enganged in naked short selling causing artificial price suppression.

Silver Manipulation Attempt Fails

Excellent news for Silver when a paper contract attack on silver price failed. The cartel dumped 102.5 million ounces in paper silver over 7 minutes in an attempt to manipulate the silver price down but failed.

Silver has put in a monster rally this week, and much to the cartel’s dismay, was preparing to close the week above $35.50 today, preparing a break-out next week that could potentially fill the gap from the September smash to $40, and see silver off to the races back to challenge the all-time nominal highs near $50.  Obviously, the cartel stepped in with a massive paper raid to prevent such a bullish weekly close.
That’s where things got interesting and likely induced more than a few Myocardial Infarctions today among JPMorgan execs.
Check out the following price and volume chart screen shot on this 1-minute silver chart courtesy NetDania.
Notice the massive volume that began at approximately 14:47, with 4,000 paper contracts dumped on the market in a single minute, followed by 2,500, 1,800, 3,200, 3,000, 2,900, and 3,100 over the next 6 minutes.

 

Using History To Value Silver

Excellent video to help establish the true value of silver. Taking examples from the past history, 1 days labour(12 hours) was equivalent to 1/10th ounce. By todays money if you take average wage of $8 per hour then

$8 x 12 hours = $96 (1 days labour) <=> 1/10th ounce.

=> $960 per ounce.

 

Silver Shortages

KingWorldNews did an interview with a London trader on the shortage of physical silver. The help with filling orders the SLV has been tapped.The trader was quoted as saying

“It is so tight, the silver market is so tight that we’ve been waiting three weeks plus, before this takedown, for deliveries of size to arrive.  I’m talking about tonnage orders.  This is also key, most of the silver being delivered was refined after the orders had been placed, and again, that was before the takedown.  You can just imagine how long the wait times will be going forward.”

There is nobody in COMEX silver contracts anymore, other than casino players.  The only way they have been able to keep silver depressed is by borrowing silver from SLV to meet immediate demand.  That’s the only reason silver isn’t trading $10 to $15 higher right now.

There isn’t enough silver for investors to buy (in large amounts) so they have been using SLV as a flywheel.  SLV is over 20 million ounces short on the silver they are supposed to have in the vaults to back the shares which have been issued.  The silver isn’t there.  So there are people who purchased SLV to own physical silver, but all they have is shares that aren’t backed by the physical silver.

… on manipulating prices…

Part of managing the price of silver recently has been for the central banks to attack the gold market.  But what is interesting is how this manipulation of the gold price was effected.  Obviously, the bullion banks, which are working with the central banks, have inside knowledge as to the timing and just how much gold is going to be available to them. 

So, in order for the bullion banks to maximize the effect of the physical gold they get from leasing, they add high scale paper leverage.  They then short-sell just enough tranches of COMEX contracts to surgically take out three important support pivots….

What tactics are used to suppress physical demand?

“Each of those important support pivots that everyone is watching, like the 50 day moving average and so on, each one of those are taken out in the access market in the quiet trading, overnight, on three successive days.  In other words, they take out these three important pivots, which turns the momentum buyers into sellers.  It also gets a bunch of funds to start selling as well.

So using as little ammunition (physical gold) as possible, and in thinly traded markets, they take out these pivots.  They smash the price, but leave just enough physical gold for going into the fixes because the smart buyers are saying, ‘I’ll take it at this price.’  So, as we go into the fix, they’ve provided just enough physical to satisfy as many of those buyers as they can.  They then smash it right after the fix, again, with paper. 

That’s what’s happened with gold and it’s the reason it has been manipulated down to these levels.  It’s the only way they could do it, and it’s a sign of absolute desperation when central banks are willing to risk giving bullion banks gold they will never, ever receive back. 

..and of course China is taking advantage of cheap prices and taking delivery as should YOU.

These central banks had to be in desperation to allow this borrowed gold to be absorbed by foreign entities.  They needed to raise dollars in a hurry and they are extremely afraid of gold going through the roof.  I was very, very surprised they got as far as they did (driving gold lower).  They had to use an awful lot of gold to do it.”

Anyone For Physical Silver ?

Above ground Supply in Months –

1950 – 140 months supply
1970 – 70 months
1990 – 55 months
2010  -11 months
(700 million ounces of above ground silver ounces)

This translates to a 93% collapse in global inventory

Where Silver goes

Electronics
1999 100million oz
2011 250 million oz

Solar
1999 not reported
2010 75 million oz
2014 130million oz projected.

Investment
1986  10million oz
2010  35million oz

a new mine takes 10yrs from discovery to product an oz.

Nevada produced
1997 25 million oz
2010 7.3 million oz

COMEX trades of paper silver are 100 times physical silver
1bn oz per day traded in paper

So have you got yours yet?

Silver Bears – Part 8

Don’t you just love our little buddies. Can’t wait for part 9 already 🙂

Summary:

Source in Dept. of Homeland security syay all out war to get physical metals is on. They don’t care about currencies or bonds.

European gold is hel in New Yeork Fed.

IMF is gearing up for paper war on metal and plan to manipulate market with SDRs.

Paper price is irrelevant.

Central Banks are fighting themselves for the last ounces of gold, then prepare for violence.