The July silver open interest increased by 31 contracts on Friday. Those people wouldn't be buying unless they intended to take delivery AND they couldn't buy unless their account was funded for the amount needed to take delivery. I don't scrutinize the o/i like this every month, but I have never noticed open interest increasing in a delivery month this close to to the end of the delivery cycle. Here's the open interest report for Friday: Comex Metals O/I
Why is this significant? Because right now there is over 3.5 million ounces of silver standing for delivery and silver has been leaving the "eligible" vaults (i.e. customer storage vaults) nearly every day this month. I really do not believe that the Comex has the ability to deliver that much silver without tapping into an outside source, like SLV. JPM, per Ted Butler's analysis of the COT and Bank Participation Report, is short close to 30% of the entire Comex silver open interest. Not coincidentally, JP Morgan also happens to be the custodian of SLV. If you don't believe that there is foul play going on, something is wrong with your brain.
Monday, July 19, 2010
Subscribe to:
Post Comments (Atom)
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vfPHsOZKW3NGjtNrnHeYXQZxLPO3LnEdvnD4OXmvHLH4NPWR9iKQV0h4HzJZYcmX2M50N0GtOSegaJXO1NZNBs44-2VGISh4GoKiuydg=s0-d)
Dave, Forgive me for my scepticism, but I've been reading about crashing the comex for delivery for years. And Ted and Ed have been writing/talking about the end being very nigh since sept of last year! As the saying goes talk is cheap.
ReplyDeleteJP Morgan can take silver out of SLV to meet delivery requests. The July delivery may not be a game changer.
ReplyDeleteJJ from WSB
jon, this has been building since GATA first started exposing all of this to the public 12 years ago. i have never put a timeframe on when the Comex would default, but it is eventually coming. all the signs are there that physical bullion is running low. kitco is not offering any products in Canada right now because their inventory is so low. you can google that to get the news release.
ReplyDeleteI love it when people are skeptical because it means the upside price explosion will be that much more violent as everyone decides to chase, just like internet stocks and homes. wash, rinse, repeat.
JJ a Comex july delivery issue is not the game changer to which i'm referring. i fully expect july to pass without much of a hiccup, although the current bulging silver o/i for july is a definitive red flag.
ReplyDeletestay tuned and watch the tape for what I am referring to. it won't be too long now.
This is from Ted Butler's private subscriber service - posted this weekend:
ReplyDeleteIn private commentary to his subscribers yesterday, Ted had this to say about silver... "The one thing I am not concerned with in the least is whether the silver manipulation is going to end soon, regardless of CFTC involvement. Everything I look at says the time is nigh; physical market conditions being at the top of a long list. So convinced am I or the silver manipulation's demise that let me advance an idea I don't mention very often. It's not just a question of the timing, but more in the nature of how the silver manipulation will end. By definition, all manipulations end suddenly and violently in price. I am convinced that the silver manipulation will end with the most violent move to the upside in history. I see no other way. It will be, quite literally, almost an overnight affair, with the silver price moving higher in the shortest time ever. Of course, I can't tell you which night, just that it feels real close to me. Therefore, this a time for maximum exposure; including [if you've taken complete leave of your senses] call options."
JP Morgan can take silver out of SLV to meet delivery requests. The July delivery may not be a game changer.
ReplyDeleteJJ from WSB
WTF?! Who ever said SLV had any real silver?!
LOL Jon. Agree for the most part but they have to keep enough silver in there for the investors who have enough shares to redeem the shares for silver. probably about 20% of the share base, which is what i estimate it is for GLD too.
ReplyDeleteWhat's even more hilarious is that the SEC lets the market makers actually SHORT SLV and GLD shares, because those shares are NOT AT ALL covered by gold/silver.
something to read from goldtrail3 and then some quick comments below.
ReplyDeleteIt's almost as if they didn't really want gold wealth in the first place. I see it as if they want everyone else to make physical gold worth more so their fiat based assets can grow? God awful logic for a gold advocate, but then again, they aren't gold Advocates? These are the new breed, aren't they? Fiatgold bugs? Well, I write it all off as the Gold Bugs can't see the difference anymore and still crave playing in the same house, using the same house rules. Most of them would rather the government keep the fiat going at the expense of just a little higher gold price. Say $500? Just enough to make their fiat grow. Instead of advocating holding bullion wealth and a freegold market to crash the old system. Ha! Ha!, These guys even want those in charge to change the rules back into the players favor, bankrupting the house in the process! There is no chance in hell of any casino doing that to themselves. It'll only happen when the casino's credit is taken away. And that process is in the works, don't we know! That's why I am a physical gold advocate. My time will come as the fiatgold bugs go broke with the casino. I guess it's the nature of life that we go down with the ship we sail."""""
the key sentence here is...
It'll only happen when the casino's credit is taken away
Dave sums it up. Oneway they have kept this going is by getting the customer's to keep leasing them the metal because they know its so hard to get the real thing elsewhere. Those customers were convienced that some more fiat is good for them.
a 25% premium on a silver comex contract is nice yes but it will never make up for the premium that will come once the real thing is gone and the casino's credit has been taken away. Understand the new BIS system.
Excellent comments Mike. It's funny referencing the US dollar fiat reserve system as "working for so long." Strictly speaking, for 39 years now. That's the longest ANY fiat currency system has lasted over 5,000 years of organized human history. Amazing isn't it. There is a famous back and forth between Ron Paul and Greenspan, in front of Congress, like in the early-mid 1990's. And Ron Paul was busting his balls about fiat vs. gold. And Greenspan conceded, to paraphrase, that the current system was indeed one big "experiment."
ReplyDeletelol yes i think i heard of that at one time.
ReplyDeleteone thing to note is that if its an experiment then its not stable and its not final. similar to an experiment in science class.
they tried to keep the experiment going but have now lost organization of everything they've done in the past. too many papers in their binders. so they are now writing up whatever (more credit) they need to keep it alive whether or not it makes sense, until the teacher(free market/BIS) gives them an F.
stick to the real deal, gold in your hands is real. its simple.
Have a look at FOFOA, Dave.
ReplyDeletehttp://fofoa.blogspot.com/2010/07/gold-ultimate-wealth-consolidator.html
Jesse A C seems to like it.
Ted Butler. Is he naive? Considering his initial opinion about Gensler?
Is he talking his book? He has and needs subscribers.
We all know what G + S are and as I once heard him speaking positively about SLV, well, he has discredited himself with that since. Most of the time I've learned to trust only people who don't need to sell me something and these are plenty.
Take a gander at this Dave,
ReplyDelete"U.S. Secretary of State Hillary Clinton announced a major aid package for Pakistan on Monday -- pledging hundreds of millions of dollars for projects to address the country's water and power shortage and its floundering economy."
And NO mention of where exactly this money was going to come from! With the news of stacks and stacks of usd being flown out of Afghanistan (due to money laundering) I am f'ing amazed people are not using the usd to wipe their asses with.
This is plain insanity. Aid packages up the yin yang for the world: Chile EQ, Haiti EQ, Pakistan, Afghanistan, corporate bailouts, etc... Apparently the US fed really is a God on Earth.
wow. thanks for the heads up on that. it's just insane.
ReplyDeleteGold Price Slides, Chinese to Boost Gold Holdings.
ReplyDeletehttp://www.goldalert.com/stories/Gold-Price-Slides-Chinese-to-Boost-Gold-Holdings
http://www.cmegroup.com/daily_bulletin/Section62_Metals_Futures_Products_2010137.pdf
ReplyDeleteThanks for the link. If notice, at the top it says "preliminary." The final o/i is usually posted around 9 a.m./11 a.m. MST/EST.
ReplyDeleteThe 39 year experiment is a subset of the much larger experiment, life. Perceptions of value have never been constant.
ReplyDeleteSo what happens to holders of SLV if JPM starts pulling silver out of SLV's vault? More to the point, what happens to the share price of SLV?
ReplyDeleteNothing happens to the share price of SLV unless it is exposed as fraudulent. If that happens, then the share price of SLV drops like a rock. The timeframe on a collapse of SLV might be on the scale of a day to weeks, depending.
ReplyDeleteOh ya. Sorry I forgot to answer that inquiry. Anonymous is correct. I would add that it won't necessarily take a perceived issue with the silver in SLV for SLV to dislocate from the price of silver and start to trade at a serious discount.
ReplyDeleteThe degree of the discount will depend on how open SLV were to become about the true amount of unencumbered silver it holds plus the market's perception of that amount.
If SLV is discovered to be participating in the fractional bullion safekeeping scheme - and I have no doubt whatsoever that it is - the value will drop immediately.
I just would not use SLV for anything other than indexing silver on a daytrade basis or use it hedge your physical holdings by shorting SLV. The home run scenario is one in which you are short SLV, long physical, the Comex defaults, SLV drops like a rock and the spot price of silver goes to the moon. That WILL happen, it's just a question of when.
SLV is a sophisticate pool silver scam fund where they are using your money to buy future options meanwhile JPM and HSBC are shorting the metal and making money in the process .
ReplyDeleteDid I mention they also play the long side....as their wish !!
recently in sep 10 heard that there was an article where people were asking delivery for comex silver and gold, and comex asked them not to take delivery, but willing to settle with them in cash only..
ReplyDeleteWhat a way to end manipulation, anyone please contribute if you have heard, seen or have the link to the related articles..