The paper silver open interest on the Comex is at
all-time highs. The previous all-time high was 224k contracts when the price
of silver was pushing $50 in 2011. The current paper silver open interest is
229k contracts with the price of silver at $18. At least the degree of fake
silver open interest in silver was more appropriate to the price level at
which silver was trading in 2011.
Having said that, the current paper silver open interest
is entirely inappropriate relative to the amount of silver reported to be
held in Comex silver vaults. 229 thousand silver contracts translates into
1.15 billion ozs of paper silver. That number represents about 37% more
actual silver ounces produced by global by mining companies in one year.
Compare that paper representation of silver to the actual 193 million ozs of
silver reported to be held in Comex vaults, primarily “held” by JP Morgan
which is reporting nearly 102 million ozs of silver in its vault.
Notwithstanding whether or not those 101 million ozs of
silver are actually sitting physically in JP Morgan’s Comex-designated
custodial vault (and much of it has likely been hypothecated), the amount of
paper silver issued primarily by Comex bullion banks is nearly 6x the total
amount of silver reported to be held in Comex vaults.
But it gets worse. The amount of silver that has been
designated as available for delivery, or “registered silver,” is only 30
million ozs. In other words, the amount of paper silver issued by the Comex
is 38x greater than the amount of silver made available to be delivered to
the holders of those silver contracts.
The point here is that the Comex is likely the world’s
most fraudulent market. In fact, It’s inappropriate to refer to the Comex as
a “market.” The Comex is nothing but a mechanism by which the Fed, in
conjunction with the Treasury’s Exchange Stabilization Fund and the Comex bullion
banks, exerts control over the price of silver.
The degree to which the Fed et al has to exert fraud in
order to contain the price of silver is reflected by the absurd imbalance
between paper silver contracts issued in relation to the amount of the underlying
silver available for delivery. In any other commodity sector this situation
would be labeled “criminal.” With silver and gold it’s labeled, “nothing to
see here, move along.”
As with silver, the trading patterns in gold reflect a
high degree of desperation by the bullion banks to contain the price and
demand of physical gold. Interestingly, right now most of the blatant
manipulation appears to be connected to the London p.m. gold fix activity on
the LBMA. We believe it’s evidence of a growing shortage of physical gold
available to deliver into India, China and other gold-buying countries. We
explain this view in detail in today’s Shadow of Truth episode:
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Rory Hall, Editor-in-Chief of The Daily Coin, has
written over 700 articles and produced more than 200 videos about the
precious metals market, economic and monetary policies as well as
geopolitical events since 1987. His articles have been published by
Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors,
SGTReport, just to name a few. Rory has contributed daily to SGTReport
since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr.
Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a
few. Visit The Daily Coin website and The Daily Coin
YouTube channels to enjoy original and some of the best economic, precious
metals, geopolitical and preparedness news from around the world.
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Dave Kranzler spent many years working in various
Wall Street jobs. After business school, he traded junk bonds for a large
bank. He has an MBA from the University of Chicago, with a concentration in
accounting and finance, and graduated Oberlin College with majors in
Economics and English. Dave has nearly thirty years of experience in
studying, researching, analyzing and investing in the financial markets.
Currently he co-manages a precious metals and mining stock investment fund
in Denver and publishes the Mining Stock and Short Seller Journals. Contact
Dave at dkranzler62@gmail.com.
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The author is not affiliated
with, endorsed or sponsored by Sprott Money Ltd. The views and opinions
expressed in this material are those of the author or guest speaker, are
subject to change and may not necessarily reflect the opinions of Sprott
Money Ltd. Sprott Money does not guarantee the accuracy, completeness,
timeliness and reliability of the information or any results from its use.
