Will a 'Silver Bullet' Finally Kill the Metal Manipulators? 94 comments
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In my previous commentary, “Silver market fundamentals DISTORTED by bullion-ETFs", I pointed out how (so-called) “bullion-ETFs" were (with rare exceptions) merely a tool of the manipulators – with two primary purposes.
First of all, bullion-ETFs soak-up billions of investor-dollars each year, which would otherwise be invested in real bullion, or in the shares of precious metals miners. Naturally, this has helped to depress the price of silver, and severely depress the price of silver miners – since almost all of the diverted investor-dollars were diverted from the miners, and not bullion, itself. I also showed how these fraudulent investment vehicles have been used to artificially inflate the supposed inventory-levels of silver stockpiles.
Specifically, at a time when actual silver inventories are at their lowest level in centuries, the (supposed) amount of “bullion” these funds claim to hold has singlehandedly resulted in “official” inventory levels tripling in just three years – after plunging by 90%.
Today's market price is based upon these phony “inventories” despite the fact that the bullion-banks who claim to hold all this silver are never subjected to audits, to determine that they are not only holding enough silver to cover their custodial agreements with the “bullion-ETFs" - but are also holding sufficient silver to cover the MUCH larger “short” positions of these Manipulators (see “Silver Manipulation the worst in history – Ted Butler”).
Unless and until there is such a full and complete audit, the only rational assumption for investors is this supposed “tripling”of inventories is totally illusory, which also means that the “bullion” that is claimed to be held by these bullion-ETFs is also illusory.
As I have also mentioned before, it is elementary economics than any “good” which is undervalued will be over-consumed (relative to its current price). Thus, we have TWO extremely important dynamics which are setting up this sector for a final “implosion” of the criminal conspiracy by the anti-precious metals cabal.
First, price-suppression means the (actual) tiny inventories of silver are still declining not increasing. It is simply absurd to claim that with record, investment demand and declining mine production (due to the dramatic cuts in base metals production) that inventories are increasing. The under-pricing of silver simply confirms this trend.
Secondly, with real inventories only 1/3rd of what is claimed by the Manipulators, continuing to under-price silver (through continued manipulation) must result in a supply “squeeze” which inevitably causes the price to “spike” (and begin to correct toward some sort of medium-term equilibrium). Given that there has been no similar depletion of gold stockpiles (merely the transfer of ownership), it is far more likely that the final defeat of the anti-gold cabal will be accomplished via a default in silver markets.
The BIG question in the minds of all precious metals “bulls” is when and how will this final victory occur?
Many commentators have pointed to the rigged Comex markets in New York as the place where the final destruction of the Manipulators will occur. However, with the short positions of the bullion-banks, and their (supposed) “custodial agreements” with the bullion-ETFs being “two sides of the same coin”, then implosion could originate in either component of this fraudulent manipulation.
A bullion-default at the Comex (or “Crimex”, as some like to call it) is a very simple scenario. The Comex is essentially selling its phony, “paper” futures for less than any other bullion market. Thus, at some point, large buyers will simply step into this market and continue relentless, heavy buying until default occurs.
Specifically, there would be a “failure to deliver” of bullion to a buyer (or buyers) - who chose to hold their futures contract until expiry, and thus take “physical” delivery of real bullion. As has been reported by several commentators, apparently such a default nearly occurred just weeks ago (see “Did ECB save Deutsche Bank from Comex gold-default?”).
There has been a great deal of frustration among the “gold bugs” (in particular) that such a final “show-down” has not already taken place. However, perhaps we would all be more patient in this respect if we were to try to put ourselves in the position of such big “players”.
Looking at silver, based on fundamentals, it is totally obvious that silver is headed for a spectacular explosion in its price. At a time of record demand for gold and silver, there are lower inventories of silver (relative to gold and in absolute terms) than at any time in centuries. Simultaneously, the gold/silver price ratio is more unfavorable for silver than at nearly any time in history, currently over 60:1. The long-term price ratio (over thousands of years) is 15:1. Additionally, as “elements” in the Earth's crust, silver is only 17 times as plentiful as gold. Thus, a 60:1 ratio is not remotely sustainable, even over the medium term.
Therefore, armed with the knowledge that investing in silver will yield a huge windfall for all long-term investors, do you (as a large “player” in the silver market) force the inevitable implosion now (and “kill” the proverbial “goose that lays the silver eggs”) - or, do you patiently use the Manipulators game against them: buying as much grossly undervalued silver as you can from these criminals, before their inevitable self-destruction?
From this perspective, it is suddenly much less automatic that the demise of the Manipulators will occur at the Crimex.
I would remind people about an event which went practically unreported last year in North America: at the time of AIG's near-bankruptcy, the European bullion-ETFs “guaranteed” by AIG briefly plunged in value – to a price MUCH lower than the nominal price of the bullion they (supposedly) held. The reason? Investors were “betting” in a clearly visible manner that if AIG was forced into bankruptcy it would not be able to honour its “custodian agreements” with these bullion-ETFs – leaving the investors in these funds holding paper and not bullion.
Thus, the outrageously expensive bail-out of AIG (over $180 BILLION, and counting) was not undertaken solely in order to secretly funnel roughly $10 billion into the vaults of Goldman Sachs. It was also bailed-out to prevent a domino-like chain of events. All it will take is for one “bullion-ETF” to default, and then the entire scheme/scam of the Manipulators would inevitably collapse.
The sequence of events is obvious: after seeing one group of bullion-ETF investors wiped-out (or nearly so) by fraud, then obviously the unit-holders for all (so-called) bullion-ETFs would demand thorough and honest audits of the bullion-banks who are essentially running these scams.
Even if the bullion-banks could scrounge-up enough bullion to cover their “custodial agreements”, there would be little if anything left over to “cover” their much larger “short” positions. With “blood in the water”, futures-buyers would obviously immediately start lining up for “delivery” at the Crimex – hoping to be the last buyer to grab some real bullion before the Manipulators were completely wiped out.
Thus, there appear to be three very plausible scenarios leading to the destruction of the Manipulators, and the explosion of the price of gold and silver.
The frequently-predicted default at the Comex;
The bankruptcy of one (or more) of the bullion-banks; or
A default of one or more bullion-ETFs through a thorough audit being performed.
Given what the U.S. government has already shown it was willing to spend to “defend” AIG's custodial agreements with bullion-ETFs, the second scenario would appear to have the least probability of occurring. However, there is still somewhere close to a quadrillion dollars of derivatives floating around in Wall Street's private “casino”. Any surprise-implosion of a position in this market could create such unimaginable losses (hundreds of times higher than those of AIG) that a bail-out would simply be impossible to ram-through the corrupt, U.S. government – without literally setting off a second “American Revolution”.
Personally, I see the default of the bullion-ETFs to be slightly more likely than any other scenario for destroying the Manipulators. As with any scam, the larger it grows, the greater the likelihood of exposure. When bullion-ETFs were first created, their claim that they could buy infinite amounts of bullion, with zero “premiums” and store all this bullion for zero storage costs attracted little attention.
With the holdings of these bullion-ETFs rapidly approaching the total annual production of precious metals miners, and already being larger than the national stockpiles of almost every nation on Earth, this obviously-suspect “business model” will attract increasing doubt and skepticism among informed investors – until even blind/deaf/dumb “regulators” are forced to conduct a reputable audit of this sector.
For those hoping to read precisely when and where the Manipulators will meet their final defeat, I suppose you will be disappointed. Sorry, but I'm an “economist” - not a “psychic”. However, hopefully readers will derive some use out of this commentary.
First, because of depleted inventories, it is much more likely that it will be a silver default which “kills” the Manipulators, instead of a gold default. Secondly, as precious metals investors wait for this inevitable occurrence, you are reminded that there are three potential developments to watch for – and not just a “failure to deliver” at the Comex.
In the meantime, any/every investor who continues to add to his (or her) precious metals positions (preferably during short-term dips) is guaranteed to be richly rewarded. Given the extremely uncertain times in which we live, the reward of financial security is “precious”, indeed.
Disclosure: I hold no position in bullion-ETFs.
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This article has 94 comments:
That event will be an order of metal for physical delivery that overwhelms the manipulators.
Slight problem with the conclusion though: It's non-sequitur . . . does not logically follow.
"In the meantime, any/every investor who continues to add to his (or her) precious metals positions (preferably during short-term dips) is guaranteed to be richly rewarded."
According to the logic of the article, this is only true if you add to your "physical" or audited/insured precious metals positions; otherwise you're just one of many with worthless paper when it all goes belly-up into default.
I feel confident that this ETF IS holding metal.
A lot of metal is leaving the country being repatriated in the homeland of its owners. They may also be seeing a pending collapse and wish to have more say in their metals.
As the story goes--"Possesion is 9/10ths of the Law"
It's my understanding that CEF is one of the minority of LEGITIMATE bullion-ETF's. Sorry, I'm not familiar with GTU.
Regarding the suggestion in another comment that the manipulation could continue indefinitely: if the Manipulators had that much control, gold would still be less than $300/oz and silver would be back at $4/oz.
As inventories dwindle, it gets harder every day to maintain this criminal conspiracy.
On Jun 04 07:06 AM Barry Robbins wrote:
> Do you have an opinion on CEF and GTU?
Freya: I apologize profusely!
I don't see the problem, are you saying there is NO silver there at all (or as I infer from what you say) only 1/3? How do the storage schemes you regard as legitimate get their silver? I think CEF and GoldMoney have nearly 80 million ounces between them.
On Jun 04 09:17 AM doubleguns wrote:
> I believe that the new ETF in the middle east that is taking in silver
> and gold would have a lot of cash from oil to invest in the metals.
> This ETF could be the event that causes the default on delivery.
> As the story goes--"Possesion is 9/10ths of the Law"
To make this sham even more absurd, the same Manipulators who are trying to destroy this sector are SUPPOSEDLY buying all the "bullion" for ETF's with ZERO premium AND paying all the shipping, insurance, and STORAGE costs - THEMSELVES.
Are you really suggesting that bullion-banks would hold bullion ETF's at a LOSS to themselves - simply to do a a FAVOR for small retail investors, by HELPING them enter this market??
The mere suggestion of this is patently absurd!
On Jun 04 11:42 AM Roland Watson wrote:
> As I commented in your last article, JP Morgan publish a bar list
> and audit every delivery coming in to cover issue of new shares.
> They also do not lend or allow lending of the inventory.
>
> I don't see the problem, are you saying there is NO silver there
> at all (or as I infer from what you say) only 1/3? How do the storage
> schemes you regard as legitimate get their silver? I think CEF and
> GoldMoney have nearly 80 million ounces between them.
On Jun 04 12:12 PM Ken P wrote:
> I read somewhere that Saudi Arabia has built their own storage facility
> and is planning to start taking possession of and storing their own
> gold that is currently stored in London. I don't know how much gold
> they have, but with any luck this type of large scale claim for physical
> gold will start the ball rolling.
So what's your take on investing in the "silver-streaming" company Silver Wheaton (SLW), which doesn't actually mine silver, but buys shares in future production from existing mines, which it is able to acquire at a big discount?
This is not a bullion ETF like SLV, but leverages the price of silver.
how do you audit a short position? by definition, haven't you sold it to someone else? I think perhaps what you mean to say is that the shorts will have problems covering when they need to (short-squeeze).
If you concede that the ETFs are actually holding bullion (not sure if that's what you meant, and I don't know, but Roland suggest they are), then where's the manipulation? A short position is not a manipulation, it's a disagreement over price.
I tend to believe that the various financial instruments constructed around commodities (futures, ETFs, etc.) are a little bit like a game of musical chairs -- if the music stops (the market shuts down and goes back to physical), someone is not going to have a seat. But I'm not sure it's the shorts. Plenty of investment dollars have flooded into commodities, and none of those players are truly capable of taking physical delivery. That suggests that longs could be at risk too. (Nevertheless, I am long commodities via options on ETFs.)
In any event, if one truly believes that the music will stop, then canned goods and shotguns are the better investment. Precious metals are quite difficult to digest.
The commercials have been net short silver for decades and that didn't rock any boats while there was plenty of "just in time" stockpiles. Perhaps it will be different this time but apart from brief backwardation in the futures there is no sign of it! Unless that basis begins to move, I see no trouble ahead. It is not a default that will signal supply problems but rather a rising price.
And remember, the shorts may not have all the silver to deliver, but the longs may not have all the cash to receive either. It's a paper game on both sides of the contract!
On Jun 04 11:53 AM Jeff Nielson wrote:
> Roland, if the same bullion bullion-banks claim to hold almost ALL
> the "bullion" for "bullion-ETF's" AND also have "short" positions
> at least TWICE as large, then it is IRRELEVANT if their ETF custodial
> agreements are audited - when the MUCH larger "short" positions are
> NEVER audited.
>
> To make this sham even more absurd, the same Manipulators who are
> trying to destroy this sector are SUPPOSEDLY buying all the "bullion"
> for ETF's with ZERO premium AND paying all the shipping, insurance,
> and STORAGE costs - THEMSELVES.
>
> Are you really suggesting that bullion-banks would hold bullion ETF's
> at a LOSS to themselves - simply to do a a FAVOR for small retail
> investors, by HELPING them enter this market??
>
> The mere suggestion of this is patently absurd!
The ETF makes money in an 0.50% charge as well as charging a fee when they issue/redeem baskets of 50,000 shares for silver. Storage costs are not really that high a factor. Look at goldmoney.com which has an annual storage fee of 0.87% for 50,000 oz or more.
As for doing this for nothing, their annual 2008 report said they earned $14.3M to Dec 31st 2008!
On Jun 04 11:53 AM Jeff Nielson wrote:
>
> To make this sham even more absurd, the same Manipulators who are
> trying to destroy this sector are SUPPOSEDLY buying all the "bullion"
> for ETF's with ZERO premium AND paying all the shipping, insurance,
> and STORAGE costs - THEMSELVES.
>
> Are you really suggesting that bullion-banks would hold bullion ETF's
> at a LOSS to themselves - simply to do a a FAVOR for small retail
> investors, by HELPING them enter this market??
>
1) # 5142152-337 , no I had not heard about this change to SLV's business model. If you see/hear any more about this, count me among those who would LOVE to see it.
2) I have HEARD (but not seen directly) reports that Germany AND some Gulf nations have demanded the "repatriation" of their bullion from the U.S.
3) I think SLW is a GREAT way to play the silver market. If its proposed takeover of SST takes place (a "junior" version of SLW), you would have to think that this should be very accretive.
4) "Short" positions (supposedly) require that the party "shorting" either borrow or own enough to cover their position, but they are only required to post 10% of this as collateral for their position.
5) Roland, how can you suggest there is no connection between the HUGE "custodian" positions of the bullion-banks and the even MORE huge short-positions? Without verification, we have no way of knowing if the ACTUAL bullion held is being "double-counted" or even "triple-counted" as occurred with Merrill Lynch - when they were CAUGHT engaging in such fraud.
6) Roland, you did not address what compensation the BULLION-BANKS receive for all their time, effort and MONEY spent (supposedly) buying and holding bullion for the ETF's. Storage charges are "not a factor" for 400 MILLION OZ'S of silver? Lol!
Would the visible and invisible powers of the world roll over and let such poison pill be dropped in the punch bowl? I doubt it. In this case, what we do not know won't hurt us. At the most such an auditor would quietly ask that the reserve shortfalls be replenished over the next few years, then conveniently establish a permanent residency in their "happy place" and forget to complete the follow up audit. It is a sad fact but none the less a real one.
Ask yourself (as the worlds largest and most powerful countries will) if you are a holder of gold or silver, do you really want to know how much these etf's hold?
With silver still under 16 is there any likelihood that China could pour a very significant percentage of her $2T in dollar holdings into the silver market, buying it up rapidly into the 20s? Then what would the rest of the world do? China would have it all and everyone would need it.
Thanks
On Jun 04 09:17 AM Jeff Nielson wrote:
> Hi Barry.
>
> It's my understanding that CEF is one of the minority of LEGITIMATE
> bullion-ETF's. Sorry, I'm not familiar with GTU.
>
> Regarding the suggestion in another comment that the manipulation
> could continue indefinitely: if the Manipulators had that much control,
> gold would still be less than $300/oz and silver would be back at
> $4/oz.
>
> As inventories dwindle, it gets harder every day to maintain this
> criminal conspiracy.
1) I think PF70 Silver Eagles are the coolest things, don't know why. I just like them. They give me a happy...maybe I think Lady Liberty is just bitchin' HOT.
2) I I have a silver eagle with One Dollar on it, no matter what the dollar is worth, I still have an entire ounce of silver. If I have a million ounces of silver, I am a millionaire in silver, same for gold and the Keynesians can all piss up a rope. They cannot pass a law saying I have less than I have, unless they show up with the grandsons of Roosevelt's goons.
3)Sometimes when I reading, writing or researching, I have a silver eagle that I twiddle as I think. I guess maybe it is a security blanket. The can collapse everything else I own with the strong of a pen or the push of a button, but the silver I got? Still there.
4)God says He hates a dishonest weight and measure. I can think of no more dishonest weight or measure than the dollar. I do think the Euro is awful pretty, though. Reminds me of Monoploy money.
5)Geithner got LAUGHED AT and Washington is either too stupid to have any embarrassment or they are engaged in treasonous behavior with regards to their fiduciary duties to the United States of America and her people. Or both. It is a 50/50 tossup to me because it is irrelevant the result will be the same.
On Jun 04 09:00 AM raytayzmd wrote:
> ...well, that certainly was a long rant and, true to a metals addict,
> more than a little paranoid...and like most of the paranoid metal
> addict rants, it neglects to provide sources for its information
> about inventories and short positions and...oh, wait!...I forget
> -- all that information is being obfuscated by those "manipulators"...
> what should we do?...oh, oh!!!...I know!!...buy gold and silver!
Danny, if you want some REALLY interesting thoughts, you could read what Antal Fekete thinks about China and silver (sorry, you'll have to try to find it on "Google", or maybe Kitco).
Fekete suggests that CHINA is the major force SHORTING silver. His reasoning is that China could make an "income" on its silver through shorting, while being able to BUY-UP huge amounts of silver at DIRT-CHEAP prices.
I'm not saying he's got me convinced, BUT he makes a pretty good argument.
On Jun 04 04:42 PM 5142152-337 wrote:
> Danny Furman: If I may make a comment on your possibility of China
> buying up all the silver. That is a VERY interesting circumstance,
> and could be a boon to us (holders of silver). Whether or not its
> plausible we shall see. My initial reaction when I read your post
> was China may well prefer COPPER since they are building like madmen!
> If they wanted to just slip a little jab into our GEB's (greedy elitist
> bastards) they may just buy a chunk of silver, but their NEED is
> copper. I'll be interested to see what Jeff Nielson will have to
> say on your question?
On Jun 04 06:22 PM Jeff Nielson wrote:
> I thought I had already spread enough of my 'wisdom' around today,
> but here goes.
>
> Danny, if you want some REALLY interesting thoughts, you could read
> what Antal Fekete thinks about China and silver (sorry, you'll have
> to try to find it on "Google", or maybe Kitco).
>
> Fekete suggests that CHINA is the major force SHORTING silver. His
> reasoning is that China could make an "income" on its silver through
> shorting, while being able to BUY-UP huge amounts of silver at DIRT-CHEAP
> prices.
>
> I'm not saying he's got me convinced, BUT he makes a pretty good
> argument.
Will this happen? I can't say, but I can guess that 6 months from now the USD-denominated value of PMs will be higher than they are now.
Hold the physical material if you can. If not, play the ETF route with appropriate stops in place, just in case.
"fraudulent investment vehicles"
"real inventories only 1/3rd of what is claimed by the Manipulators"
Seek medication.
A buddy of mine commented he is interested in silver, but then commented by the time he bought it he would have to pay twice the spot price for it. I told him about slv and he poo-poo'd it without even checking it out. Maybe he should just enrichen the dealers as Jeff dictates?
Why not use ETF's? SLV has the silver in storage - so they say - they take cash and pay cash, what's the real problem????
What would bother me MORE is if my pieces here started attracting less interest!
On Jun 04 06:43 PM Danny Furman wrote:
> Thanks Jeff, I'll be sure to have a look. Sorry for "racking the
> brain" after so much discussion. Hopefully silver can hold on near
> 16 for now. Cheers
My guess is the bullion banks and central banks have maybe 5-10% in physical and 90-95% in certificate IOUs. They can make lots of money "loaning" these IOUs to to an ETF that needs to show inventory or a speculator for a short sale. Consequently, almost all of the daily volume you see in precious metals is the going price for the IOUs, not the real price of the physical metal. The banks won't give you physical delivery; you have to buy from a dealer.
What's happening is the same thing as when they switched off the gold standard. The govt confiscated privately owned gold and issued "promisory notes," basically IOUs. If the manipulation starts to unravel, the govts of the world will do the same thing again. You won't see them break the banks, just the little guys.
On Jun 04 12:33 PM Valley Boy wrote:
> The Arabs are certainly smart to do that.
While none of us really knows for sure when there will be a silver deficit at Comex, a shortfall of deliveries or a default on audit of the ETF's, I think we are all right to assume that in the current environment and with the dynamics now at play that it will be in our lifetimes. I am thinking in terms of months here and not long years.
I have spent many months buying up everything silver I could lay my hands on. For fun I bid on junk silver plate at auction, scrap jewelry and old (non-numismatic valued) coins. It is all garbage to most people and fetches a small price. I think that will turn around in a big way in the future. My hobby has a what I believe will turn out be a very lucrative outcome as the truth about Silver becomes mainstream and mania buying kicks in.
If they jump ship like rats it can only mean one thing to the average investor holding the bag......Financial Armageddon!
Look, as long as the whole market is participating there is no problem. But don't wait for an ETF price collapse to tell you it is time to get out. That is too late. Jeff is right here in his assessment of unfulfilled deliveries. That is your final signal to bail on paper Silver. And do it fast. The pros will already be out weeks, days and hours before you even catch it on the news. (I hope you are getting my drift here).
**you should get out before you get in**
Cam
And God help us all then. Otherwise, you are pretty much safe to keep playing this game.
On Jun 04 11:25 PM thedomfc wrote:
> Sorry if this question sounds a little too obvious...even stupid.
> If, for example, the SLV ETF defaulted, would it go up or down in
> value? What are you advocating as the best way to play this impending
> blow-up?
On Jun 04 09:00 AM raytayzmd wrote:
> ...well, that certainly was a long rant and, true to a metals addict,
> more than a little paranoid...and like most of the paranoid metal
> addict rants, it neglects to provide sources for its information
> about inventories and short positions and...oh, wait!...I forget
> -- all that information is being obfuscated by those "manipulators"...
> what should we do?...oh, oh!!!...I know!!...buy gold and silver!
Try the facts people?
As for the price being manipulated, well the market is the market and it is never wrong, only people are wrong............ and their "theories".
The future of silver lies in the hands of the people and not the "manipulators" for once the people learn of the true value of silver will it then go up.
The US population are now to broke to make the above come true so that I am counting on the population of China, Russia and India to make it happen.
On Jun 04 04:12 PM Tim Singleton wrote:
> My reasons for holding physical silver are real simple:
> 1) I think PF70 Silver Eagles are the coolest things, don't know
> why. I just like them. They give me a happy...maybe I think Lady
> Liberty is just bitchin' HOT.
> 2) I I have a silver eagle with One Dollar on it, no matter what
> the dollar is worth, I still have an entire ounce of silver. If I
> have a million ounces of silver, I am a millionaire in silver, same
> for gold and the Keynesians can all piss up a rope. They cannot pass
> a law saying I have less than I have, unless they show up with the
> grandsons of Roosevelt's goons.
> 3)Sometimes when I reading, writing or researching, I have a silver
> eagle that I twiddle as I think. I guess maybe it is a security blanket.
> The can collapse everything else I own with the strong of a pen or
> the push of a button, but the silver I got? Still there.
> 4)God says He hates a dishonest weight and measure. I can think of
> no more dishonest weight or measure than the dollar. I do think the
> Euro is awful pretty, though. Reminds me of Monoploy money.
> 5)Geithner got LAUGHED AT and Washington is either too stupid to
> have any embarrassment or they are engaged in treasonous behavior
> with regards to their fiduciary duties to the United States of America
> and her people. Or both. It is a 50/50 tossup to me because it is
> irrelevant the result will be the same.
Cheap PMs = strong(er) dollar
On Jun 05 10:31 AM Dukk wrote:
> For those of you that think paranoia is setting in, tell me who is
> selling silver? This commodity is obviously poised for a major move
> up. Why sell?
Cameroni, the "stage is set" for a SUDDEN, massive spike in the silver price which MUST destroy this price-fixing campaign in the relatively near future. It is not just basic economics, but common sense that the longer a good is under-priced (and the MORE under-priced it is) the more it will be OVER-CONSUMED.
I was going to add in a comparison to the spike which occurred in the nickel market a couple of years back - since if you subtract the EXTREMELY dubious "inventories" attributed to bullion-ETF's, then silver inventories are at just as critical a level as those nickel inventories were (and nickel isn't a "precious" metal).
When this market begins to spike in price and BREAK DOWN, in terms of the ability to DELIVER silver at these phony prices, the shell-game will end.
On Jun 05 02:34 AM cameroni wrote:
> Although it is possible for SLV and other ETF's to fail I would think
> that outcome could only come about in an environment of total financial
> chaos. Too many insiders have invested positions there.
> If they jump ship like rats it can only mean one thing to the average
> investor holding the bag......Financial Armageddon!
>
> Look, as long as the whole market is participating there is no problem.
> But don't wait for an ETF price collapse to tell you it is time to
> get out. That is too late. Jeff is right here in his assessment of
> unfulfilled deliveries. That is your final signal to bail on paper
> Silver. And do it fast. The pros will already be out weeks, days
> and hours before you even catch it on the news. (I hope you are getting
> my drift here).
>
> **you should get out before you get in**
>
> Cam
>
> And God help us all then. Otherwise, you are pretty much safe to
> keep playing this game.
>
> On Jun 04 11:25 PM thedomfc wrote:
Jeff seems to have hit on a well hidden and dastardly masterminded method:
In order to ultimately keep metal prices suppressed - set up a precious metal ETF to siphon off physical demand for that metal; The ETF only buys the minimum reserves required; The ETF market reported values paper track the market, while the excess paper assets are used to short the same metal market.
Jeff can you give us ETFs that are not in the swindle mode? Perhaps CEF? I seem to recall they were audited. Either way though, as you point out, if one of them is turned out as a swindle, then they will all become the pariah.
Yellowbeard points out that the bluff will be called at the highest levels in order to upset the applecart. Countries moving away from passively keeping their own currency weak, for trade advantages, to an aggressive bugger thy neighbor’s currency.
Recently, Germany wants its custodial gold back from the USA. Lets see how that plays out.
The Sec of Treasury went hat in hand to the Chinese, while the President may have been seeking to buy gold from the Saudis.
Pres. Obama’s empathetic speech to the Moslem world was struck right on the humanistic chord, and showed brilliance and clarity of mind. When you live in a small yard it just doesn’t pay to run around kicking hornets’nests.
Ron Paul has the correct thought, position, and path on most issues.
On Jun 04 08:28 PM allforone wrote:
> I have 210 shares of slv, which equates to 210 ozs of silver and
> paid about $.20 less per oz than spot price. If I had to buy physical
> metal there would have been charges above spot so I would have less
> than now. I can sell it at the same spot less $.20, far less than
> the premium I would lose by taking it to a dealer. I call this this
> my personal 'value theory', when someone else has something, it's
> got a high value until I buy it, then it's worth far less because
> I now own it.
> A buddy of mine commented he is interested in silver, but then commented
> by the time he bought it he would have to pay twice the spot price
> for it. I told him about slv and he poo-poo'd it without even checking
> it out. Maybe he should just enrichen the dealers as Jeff dictates?
>
> Why not use ETF's? SLV has the silver in storage - so they say -
> they take cash and pay cash, what's the real problem????
Let me trend analysis further: The government could outlaw private metal ownership to make their game and currency exclusive. The populace tows the line for fear of detention and forfeiture of assets.
A government desiring to control a populace could use RFIDs, sensors, and data mining to monitor and control all community aspects of life from financial, medical, world-wide-web, and personal movement access or denial. With an RFID a good conforming citizen can be on the grid for ease and convenience in shopping and travel, even personal safety with an activated alarm.
That safety alarm is a double edged sword because it is a GPS beacon locator, and if for any reason a person were wanted they could be found. To be off the same RFID grid would deny you financial, medical, world-wide-web, and travel abilities.
"You want to be a good citizen don't you? Isn't it the best way to control the borders and immigration, and reduce medical and financial costs? Your personal file will help you get employment. Things will be better for you and your children."
"You work at ___ and you pay goes to ___. Your whole life is tied to our grid. Either you are with us you are against us. So how is it going to be Mr. Jones? No, well how about we shove it up your rear end and you better like it...understand?"
On Jun 05 12:20 AM rogerk2 wrote:
> Remember, the "good" repositories like CEF have at least 95% of their
> inventory in physical form and maybe up to 5% in certificates, essentially
> IOU's. The "bad" repositories don't tell you how much they have in
> physical or in certificates, and they certainly don't let auditors
> in to count bars. Fort Knox hasn't had an audit since 1955. They
> won't even let the Congressional Bedget Office know how much physical
> they actually have left.
>
> My guess is the bullion banks and central banks have maybe 5-10%
> in physical and 90-95% in certificate IOUs. They can make lots of
> money "loaning" these IOUs to to an ETF that needs to show inventory
> or a speculator for a short sale. Consequently, almost all of the
> daily volume you see in precious metals is the going price for the
> IOUs, not the real price of the physical metal. The banks won't give
> you physical delivery; you have to buy from a dealer.
>
> What's happening is the same thing as when they switched off the
> gold standard. The govt confiscated privately owned gold and issued
> "promisory notes," basically IOUs. If the manipulation starts to
> unravel, the govts of the world will do the same thing again. You
> won't see them break the banks, just the little guys.
However, I would encourage you (and anyone else) who invests in any bullion-ETF to find out what percentage of their bullion holdings is made up of bullion DIRECTLY in their possession - and what percentage are "paper promises".
The first warning sign for ANY bullion-ETF is when they claim to let investors buy shares in "real" bullion with ZERO premiums charged for transactions costs, delivery costs, storage costs, insurance costs and SECURITY costs.
It doesn't cost anything to hold PAPER.
On Jun 05 02:25 PM ArbyH wrote:
> Who knows for certain how much subterfuge is hidden beneath this
> giant fur ball of unaccountable finance and redistribution of wealth
> called a bailout. The Fed, banking interest, and perhaps even Wall
> Street could have been made whole from losses resulting from acting
> under government direction. Things like shorting the gold and silver
> market to strengthen and preserve the dollar's utilization. You can
> bet there is an oil game present as well. Uncovering all the little
> ways it was done will be an adventure for years to come.
>
> Jeff seems to have hit on a will hidden and dastardly masterminded
> method:
> In order to ultimately keep metal prices suppressed - set up a precious
> metal ETF to siphon off physical demand for that metal; The ETF only
> buys the minimum reserves required; The ETF market reported values
> paper track the market, while the excess paper assets are used to
> short the same metal market.
>
> Jeff can you give us ETFs that are not in the swindle mode? Perhaps
> CEF? I seem to recall they were audited. Either way though, as you
> point out, if one of them is turned out as a swindle, then they will
> all become the pariah.
>
> Yellowbeard points out that the bluff will be called at the highest
> levels in order to upset the applecart. Countries moving away from
> passively keeping their own currency weak, for trade advantages,
> to an aggressive bugger thy neighbor’s currency.
> Recently, Germany wants its custodial gold back from the USA. Lets
> see how that plays out.
> The Sec of Treasury went hat in hand to the Chinese, while the President
> may have been seeking to buy gold from the Saudis.
> Pres. Obama’s empathetic speech to the Moslem world was struck right
> on the humanistic chord, and showed brilliance and clarity of mind.
> When you live in a small yard it just doesn’t pay to run around kicking
> hornets’nests.
>
> Ron Paul has the correct thought, position, and path on most issues.
>
>
On Jun 05 06:21 PM Boot wrote:
> I noticed that your article "Silver Bullet" was listed by GLD, the
> gold ETF. I would think with the stance you are taking, they would
> want to distance themselves from you. Perhaps they think you are
> good for gold in spite of your stance against paper gold. Any thoughts?
On Jun 05 03:24 AM maxe wrote:
> I love the way people here say, "i heard somewhere", or "i think
> maybe", "I know someone who", "it's my understanding" ETC ETC.<br/>Try
> the facts people?
>
> As for the price being manipulated, well the market is the market
> and it is never wrong, only people are wrong............ and their
> "theories".
"It will end when other countries, who do not like us, and are currently building large reserves that are being stored in their own countries, decide to trigger the event that brings about their own ascendency to the throne of reserve currency status."
I think he is up to something interesting. Both Japan and China own a lot of "reserve currencies" with great difficulties to invest/spend their fortune. Just a few days ago, Australia prevented China from buying a major stake in one of it natural resources companies. It somehow reminds me a casino where one is unable to collect a large win. (No wonder casinos are losing money and more and more relying on entertainment for incomes and revenues.)
As for gold, the Soviet Union superpower status was built on it. Stalin's USSR entered the WWII as a country with the most advanced defense industry. It was all bought in the USA, England and Germany and paid in gold.
arabianmoney.net/2009/.../
The historical 'debasement toolbox' contains a range of toys which are at least as effective. For example, the companies responsible for those holdings could be efficiently debased overnight (unlikely huh?), leaving the investors in a long queue of creditors waiting for their $2c on the $, with no direct link of ownership to the holdings themselves. The more layers between the investor and the investment (read any prospectus in depth), the easier it is to separate the two when the day comes. And it would be past tense before you hear about it.
It is dangerous to assume that because you can see specific flaws in the way these vehicles work that outcome is predictable. The potential for error is large because the game can be 'pulled' at one or more levels higher than the level at which you are observing.
On Jun 04 08:09 AM yellowhoard wrote:
> It will end when other countries, who do not like us, and are currently
> building large reserves that are being stored in their own countries,
> decide to trigger the event that brings about their own ascendency
> to the throne of reserve currency status.
>
> That event will be an order of metal for physical delivery that overwhelms
> the manipulators.
- The world WAS awash in silver, above ground as well as in the crust.
- This has helped to create present day confusion.
- Since the 1940's world industry, medicinal discoveries,
electronics, photography,etc. have all played an important part in
eating away at the overall total of silver.
- Most of what has been consumed in science is NOT able
to be recycled.
- Methods of use are on the increase due to it's incredible
properties of conductivity and heatsource holding.
- Silver is NOT manufactured, helping to create a worthwhile ?
about availability ~ when the ones who need it realize this alone
than hard numbers will drive the price of silver skyward like
that of the space challenger taking off.
-For all intents and purposes it really is more valuable than gold.
- Silver has the ability to deliver a 1-2 punch...1- Hyperinflation
reaction. and 2-when the world comes to realize the practical
worth of silver vs. the finite principals...all bets are off .
- Comex and all the other players/manipulators have been at the
game of successfully creating leveraged moves by creating value
followed by devaluing silver for y e a r s ~ and who can blame
them - it was a game to get in on and they were masters at it!
It would surprise me though, if at present most of those so
called "players" were'nt aware of the fact that the game board
is about to be taken away.
To those of you holding "fancy" coins like the Eagle rounds or the Moon rounds or the John Wayne rounds..... in the future if I were ever to buy your silver I would pay only for the silver content and not for the design, one oz of silver round equal one oz of silver .999 and no more.
Silver, ratio wise to gold, has a long way to go and those who hold it today will be "rich" tomorrow, I am not talking money wise but as to what you will be able to buy with it that you wont be able to buy with fiat.
I am from Cuba and I know what I am talking about.
I'm pretty sure than most of the people commenting here are not oblivious to those possibilities - but simply prefer to focus on all of the less-dire reasons for accumulating real silver (and gold).
On Jun 06 10:20 AM Ponce wrote:
> Many of you are holding silver for all the wrong reasons, in what
> is to come silver will be a survivalist tool and not one for investing,
> or in other words "To retain the value of today's fiat". Do you remember
> the movie "Soylent Green?" where a jar of jam cost $166.00 of the
> new money? or the same price as before with silver of $2.56
>
> To those of you holding "fancy" coins like the Eagle rounds or the
> Moon rounds or the John Wayne rounds..... in the future if I were
> ever to buy your silver I would pay only for the silver content and
> not for the design, one oz of silver round equal one oz of silver
> .999 and no more.
>
> Silver, ratio wise to gold, has a long way to go and those who hold
> it today will be "rich" tomorrow, I am not talking money wise but
> as to what you will be able to buy with it that you wont be able
> to buy with fiat.
>
> I am from Cuba and I know what I am talking about.
Like I wrote elsewhere....."In the future the government will be printing more paper but no coins hence the coins will retain their original value as in Germany in 1923 where an old lady with a bathtube full of coins did just fine during the depression"
Hold a 100 dollar fiat in your left hand and a brick of nickels in your left hand, which one feels more real?. And of course you all know by now the price of printing a $100.00 bill vs stamping and distributing a brick of nickels... counting the metal content.,,,,,,,, .07 vs $166.00 : )
This writer hints that SLV somehow doesn't hold bullion. This is just wrong.
SLV holds actual bullion worth the entire price of the share, less expenses of $100k per year spread over a $3.5billion fund.
SLV constantly converts new shares into bullion, and vice versa, in "baskets" of 50,000 shares. This miniscule "basket" is the only possible float that isn't backed by bullion.
Some people are desperate to believe that 9/11 was an inside job, despite all factual evidence. Similarly, some with vested interests in selling you the dinosaurs of the past -- mining stocks and bullion with a HUGE bid/ask spread rendering it difficult to ever make real money except in an apocolypse (and only bullets will be valuable, then, anyway), make demonstrably false statements to prop up their dying niche.
I own about half of million bucks of silver as bullion and ETFs. I've separated the rubbish claims from reality. Check into the reality, yuou'll be surprised.
-Michael
On Jun 07 11:16 AM Siouxwestern wrote:
>
>
> Some people are desperate to believe that 9/11 was an inside job,
> despite all factual evidence.
On Jun 07 10:14 AM Ponce wrote:
> Hi Jeff, thank you for your answer and I am with you about coins
> (I do hope that you are talking about today's everyday coins) for
> I have being saving my everyday coins for the past 32 years and now
> have five 5 gallons plastic bottles full of them and now working
> on number six.
>
> Like I wrote elsewhere....."In the future the government will be
> printing more paper but no coins hence the coins will retain their
> original value as in Germany in 1923 where an old lady with a bathtube
> full of coins did just fine during the depression"
>
> Hold a 100 dollar fiat in your left hand and a brick of nickels in
> your left hand, which one feels more real?. And of course you all
> know by now the price of printing a $100.00 bill vs stamping and
> distributing a brick of nickels... counting the metal content.,,,,,,,,
> .07 vs $166.00 : )
About 9/11 I believe more the people that were there and were able to see and hear the explosions......since when does the government tells you the truth?
"They (who ever it might be) will only tell you that which they want you to know or what they cannot longer hide"... Ponce
Is there any way we can determine how many shares/ounces of gold are being spoken for by the Dubai Gold ETF?
I would have to think that, in the Muslim Arab world, they would have to have complete honesty in the way that particular ETF held gold for its shareholders, if only because they have such blood-curdling penalties for property crimes.
Having said that, and given the multi-billion dollar Saudi gold purchase that we found out about this past December, recognizing that what we found out about was just the tip of an iceberg we would never have any information about because such deals are almost always confidential, the Dubai Gold ETF would give us a fair indication of how much gold bullion was being taken off the market and held in vaults in that corner of the world.
Bowman711, no one is omniscient. John Paulson looks to survey the entire market in choosing his investments. When your perspective is that broad, intimate knowledge of detail MUST be sacrificed as a trade-off. That said, there remain many commentators INSIDE this sector who continue to recommend these investments - and I readily admit, myself, that I did not immediately recognize these investment vehicles for what they actually are.
To summarize:
1) There has NEVER been an audit of the "short" positions of the bullion-banks, which are the SAME banks CLAIMING to hold over 400 MILLION oz's of silver on behalf of bullion-ETF's. The short positions are TWICE as large as the ETF-holdings. Thus if the short positions are NEVER audited, the only way that the SLV "audit" has any meaning at all is if it comes with the SPECIFIC guarantee that the bullion-ETF's have a claim on this bullion SUPERIOR TO any OTHER claim on the same bullion
2) After global silver inventories decreased by 90%, these same inventories suddenly did a U-turn - and TRIPLED in a little over 3 years, with the SUPPOSED increase in inventories being almost COMPLETELY comprised of the bullion-ETF "reserves".
Given the huge spike in silver demand - with little to NO increase in supply, it is totally unrealistic to believe that global silver inventories REALLY did triple over this period. Thus, there are TWO strong reasons to reject the validity of most silver bullion-ETF's (including SLV).
On Jun 07 11:16 AM Siouxwestern wrote:
> The largest silver ETF is SLV. SLV is audited by PricewaterhouseCoopers.
>
>
> This writer hints that SLV somehow doesn't hold bullion. This is
> just wrong.
> SLV holds actual bullion worth the entire price of the share, less
> expenses of $100k per year spread over a $3.5billion fund.
>
> SLV constantly converts new shares into bullion, and vice versa,
> in "baskets" of 50,000 shares. This miniscule "basket" is the only
> possible float that isn't backed by bullion.
>
> Some people are desperate to believe that 9/11 was an inside job,
> despite all factual evidence. Similarly, some with vested interests
> in selling you the dinosaurs of the past -- mining stocks and bullion
> with a HUGE bid/ask spread rendering it difficult to ever make real
> money except in an apocolypse (and only bullets will be valuable,
> then, anyway), make demonstrably false statements to prop up their
> dying niche.
>
> I own about half of million bucks of silver as bullion and ETFs.
> I've separated the rubbish claims from reality. Check into the reality,
> yuou'll be surprised.
>
> -Michael
How can you say silver has "little to no increase in supply"??
They pull almost 2 million ounces of this stuff out of the ground every day of the year. About 680 million ounces in a decent year.
That's supply!! And most of it gets hedged through one of those big bad bullion banks who carry those short positions you fret about.
For example, 100 TONS of silver are consumed every year - just in polyester sportswear. And that's only one of THOUSANDS of industrial applications.
On Jun 08 02:43 PM kohalakid wrote:
> Jeff---
>
> How can you say silver has "little to no increase in supply"??<br/>
>
> They pull almost 2 million ounces of this stuff out of the ground
> every day of the year. About 680 million ounces in a decent year.
>
>
> That's supply!! And most of it gets hedged through one of those
> big bad bullion banks who carry those short positions you fret about.
Ask the Hunt brothers. At $50 silver it was pouring in from every corner of the earth and the refineries were backed up 6 months with crap to refine.
Just looking at reported depository holdings of silver is not giving you the full picture.
Your analysis of the silver supply/demand equation is incomplete.
So what if new mining is less than industrial demand and fabrication?
Mining isn't the only supply. There is metal from scrap sales and investment sales that supply the market every year. And much of the industrial usage eventually gets scrapped and recycled. It doesn't get "used up" like oil does.
Looking at new mine supply vs. industrial usage number gives a false picture of the silver market.
Go see the Silver Institute numbers. I've been hearing for almost 3 decades how the world is going to run out of silver and those pesky COMEX depository numbers hold fairly steady year after year.
Why do large funds like COMEX or SLV, CEF etc keep their bullion in vaults? Becasue it is stupid to do otherwise.
My 1000 oz bar is about the size of 5 cans of cambells soup.
5 cans of soup is $5 vs 1 bar $15,000.
Anyone with more than say $100,000 in wealth would need to find something more efficient than canned food rather quickly.
On Jun 04 01:44 PM long roh wrote:
> To the author, in response to your comment to Roland:
>
> how do you audit a short position? by definition, haven't you sold
> it to someone else? I think perhaps what you mean to say is that
> the shorts will have problems covering when they need to (short-squeeze).
>
>
> If you concede that the ETFs are actually holding bullion (not sure
> if that's what you meant, and I don't know, but Roland suggest they
> are), then where's the manipulation? A short position is not a manipulation,
> it's a disagreement over price.
>
> I tend to believe that the various financial instruments constructed
> around commodities (futures, ETFs, etc.) are a little bit like a
> game of musical chairs -- if the music stops (the market shuts down
> and goes back to physical), someone is not going to have a seat.
> But I'm not sure it's the shorts. Plenty of investment dollars have
> flooded into commodities, and none of those players are truly capable
> of taking physical delivery. That suggests that longs could be at
> risk too. (Nevertheless, I am long commodities via options on ETFs.)
>
>
> In any event, if one truly believes that the music will stop, then
> canned goods and shotguns are the better investment. Precious metals
> are quite difficult to digest.
www.thestar.com/News/C...
Canada's money-makers can't find tens of millions in precious metals that are shown on the books.
Thanks,
Shanky
So that means it is very high risk to have Life Insurence, money on the bank, stocks, all Kind of paper, etc. Also paper gold and silver is just paper. The only things what helps is physical Silver or Gold in that times. In Germany people buy a lot Silver/Gold right now. So just take not to much attantion to the comex they are dead in in a few month! So the decision for Gold / Silver is very clear and easy.
best regards from Germany, Joe
Don't need any comments as my thoughts here are not complete. I do & don't agree with some here. PM is OK if you buy it too off-set any valuation but only as a side (at my level) as a for profit thingy.
In the U.S. I have been hearing of impending doom for 40 years now and of course there where very ovious times to own gold & silver but as far as I can remember we have not been through anything like Cuba-Germany or even South Veitnam (right before the fall) when having gold & silver could make the difference between eating or starving. The U.S. Military knew ahead of time when S. Vietnam hyad given up the fight because all the S. Vietnam citizens got rid of there local and U.S currency in exchange for all the gold/silver and other PM they could buy.
So even though I have stayed out for 40 years I am getting in at a late date (as silver $ is up from 5 years ago) but I am doing with the idea of trying to keep what little I have at it's curreny valuation if and when inflation hits us in the near future, or at least that is my biggest concern at this moment.
If silver corrects to historical levels compared to gold and IF there is a short fall in the supply for industry all the better I just hope that everyone is wrong about the collapse etc. Because I have been in two areas of the world where things collapsed and it wasn't fun also I have friends in areas right now, plus in Iraq & Afganastan where carring side arms is an abosulte must and PM is king if you don't get killed by robbers.
Anyway I have shot off my mouth too much BUT would still like to see the disscussion between Jeff & Kohalakid continue.
And besides, there are many here that would need a box the size of a Brink's truck in order to hold all their silver.
Why do I believe in silver? in 1972 I bought it at $2.45 + .50 and in 1980 sold it for $43.65 : ) for a profit of almost $750,000.......however, like I stated before... this time it will be to hold the value of my $$$ and not for profit.
On Jun 04 07:53 PM Linda Jones wrote:
> You can see my last blogpost about time to buy gold at theinvestmentspa.blogs....
> John Paulson has been buying and has about half of his hedge fund
> in gold, plus another hedge fund denominated in gold. It's no coincidence.
> He does his homework!