Don't Keep Silver with ANY Banks!
(Or Brokerages, not just JP Morgan!)
Silver Stock Report
by Jason Hommel, December 10th, 2010
Dec. 7, 2010, 5:49 AM
Jim Rickards of Omnis has an interesting anecdote about global gold mania.
He tells King World News of a client of a major Swiss bank who was refused access to his one ton of physical gold ($40M) and was forced to make threats to convince the bank otherwise:
“Correct, and through all of that eventually the individual did get his gold -- it took lawyers, it took threats of publicity, it took a lot of pressure to do that, which my inference is that that gold was not there. The bank had to scramble, go out and find it somewhere before they could make good delivery.”
To be safe, Rickards says you should take out your gold out of the banks before governments freeze physical holdings.
The risk isn't unfeasible. Gold is already treated as a paper asset, sold in futures, options and ETFs. All you need is a government order and "gold" becomes something that isn't to be backed by real gold. At which point you'd be wise to have real gold in a treasure chest at home.
Some banks unwilling to hand over client-held physical gold and silver?
Anecdotal evidence, so far, suggests some banks may be having trouble laying their hands on client-owned bullion in their own vaults.
JP Morgan's short position made the news for sfgate, Home of the San Francisco Chronicle.
The article notes:
An article by Max Keiser which appeared in the Guardian on December 2, 2010 claims that the size of the short position is 3.3 billion ounces of silver.
Max Keiser's 3.3 billion oz. number was my 3.3 billion oz. figure, from my Nov 13th article:
See, the problem is that the silver price will hit $500/oz. just for starters, by the time only 1% of people in the USA alone try to protect their wealth from inflation by buying silver and gold, and the way things are going in government, that's nearly a given by now.
If my reading of the OCC report is any indication, then JP Morgan's short position in silver could be as high as 25% to 50% of the entire world banking system's short position of $200 billion in silver (and that was when silver was $15/oz.)!
JP Morgan's short position in silver could thus be as high as 3.3 billion ounces if we are conservative, and estimate their position at only 25% of the BIS report numbers. By $500/oz., JP Morgan's short position could be worth a negative $1.5 trillion, and that's just for starters. It could grow worse if they add to their short position, in a misguided attempt to manipulate a market that is clearly moving against them.
Rob Kirby tries to look more closely at JP Morgan's silver short position by looking at the BIS report and comparing to the OCC report.
Something’s Wrong in the Silver Pit: But It’s Much Bigger than J.P. Morgan
Rob Kirby analyses the BIS report and the OCC report of derivatives, and notes that JP Morgan and HSBC, together, might only be responsible for 10% of the world banking short position in silver!
(Must be a member to read the full report.)
In sum, the OCC (US, such as JP Morgan and HSBC) silver derivatives are about 13 billion, but the BIS silver derivatives are about 127 billion.
The total open interest in silver paper vs. gold paper ranges from 3:1 (world BIS Report), to 10:1 (COMEX and OCC reports), suggesting that those might be more appropriate price ratios for the metals, suggesting that silver prices should rise to anywhere between $150 to $500/oz. without gold moving a bit.
I looked at the BIS report numbers again, and noted something changed! They changed prior numbers in their reports, perhaps due to the increased scrutiny that the reports are getting! But I recorded my notes on their report in my archives!
I note that I started quoting the BIS report over a year ago. I noted recently as of April of 2010, that the June 2009 column listed the notional value of silver derivatives as $203 billion, at which point, the heat on JP Morgan started turning up.
"The BIS, the Bank of International Settlements indicates that the notional value of "other precious metals" (silver) in the "over the counter" category increased to $203 billion by June of 2009.
At some point since then, the data was changed! It now lists the period of June 2009, as only $93 billion!
So, either the BIS report is lying, or someone, or many banks, who reported numbers to the BIS changed the numbers for the prior period!
Unfortunately, most gold and silver investors desire privacy, and so, obtaining that data might be difficult.
It appears to me that banks don't know where to get silver or gold anymore, or they don't want to have to go into the market to buy it, as they know that would bid up the price that they are actively suppressing! Their monopoly on printing paper money is in danger of collapsing and is rapidly coming to an end as people wake up.
As I see it, if the banks were short $203 billion of silver in June of 2009, when silver was $15/oz., then they are probably more like $400 billion short now that silver is $30, or perhaps they are short even more!
Yet, physical silver is being purchased at only a mere 100 million oz. per year, worldwide, which is only a $3 billion worth!
Yet, the banks typically charge a 1% storage fee on silver that does not exist, which may range from $200 to $400 billion.
THE BANKS ARE LIKELY CHARGING STORAGE FEES OF ABOUT $3 BILLION PER YEAR, ON UP TO $300 BILLION OF SILVER THAT DOES NOT EXIST, WHILE PHYSICAL INVESTORS ARE ONLY BUYING ABOUT $3 BILLION PER YEAR OF PHYSICAL SILVER!!!!
I'll say that again, in another way!
99% of "investors in silver" do not own any silver, but only a promise of silver from a bank that has no silver.
The "world" of silver investors are paying about the same in "storage fees" for silver that does not exist, as they are actually paying for in total physical silver that they are getting for deliver!
The "world" continues to remain utterly clue less about silver.
Foolish Forbes acknowledges JP Morgan's silver short position and CFTC investigation, but recommends SLV, where JP Morgan is the custodian, anyway!
The "world" continues to remain utterly clue less about silver.
In these markets, silver wins by default
"The fundamentals of the silver market certainly don't support a spike that on Monday surpassed US$30 an ounce, the highest price since 1980 and an increase of more than 75% this year alone, analysts say."
Analysts say? Analysts say?! What analysts? Names? None mentioned! Nadler? Christian? Maybe? Insane.
The fundamentals of silver are that $3 billion is being purchased per year, out of $300 billion in demand, because most banks are defrauding people! Because, at $30/oz., 700 million new oz. per year of new mine supply is only $21 billion, which is not nearly enough to satisfy all silver investors without the price rising sky high,.
Mainstream analysts remain clue less about silver, and admit ignorance.
$30 silver is it a buy or a sell?
"I am not sure what has moved this market to this 30-year high. To the best of my recollection, the use of silver has diminished over the years for different products such as photography and in the X-ray field," said George Nickas, a broker of FC Stone in New York."
Not sure what has moved this market? Insane.
Years ago, back in 2003, in nearly every article, I wrote the following, in large print, in every "issue" of the silver stock report, so nobody could miss it:
Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz.
Back then, that was unthinkable, laughed at. Back then, silver was about $5-6/oz., actually, $5.76 in that report.
Here, today, at $28/oz. for silver, we see the supply/demand numbers. Only $3 billion of silver purchased by investors per year, about 100 million oz. That's 1.6% of 1% of the paper money supply of $18,000 billion!
We are still a long way away from, and well under, when 1% of paper money tries to buy silver. Our store will have 50 times as many customers by then! By then, silver will probably exceed $500/oz. How else can $180 billion fit into a $20 billion market???!!! It's no surprise. Not sure what has moved this market? Please! How dumb can the analysts get?
Such writers must have fried eggs for brains!
Did I mention yet that he "world" continues to remain utterly clueless about silver? They probably think it's only a color, not a metal.
Silver - 2010's most popular car color
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Silver at $936 per ounce? Believe it. GATA's Adrian Douglas makes the case for bullion bank metals price suppression, and for the TRUE value of one ounce of gold.
www.OneOverSpot.com is listing more and more silver and gold for sale. But our prices at www.jhmint.com are currently cheaper, and we have more available! But if we begin to run out, we may start listing our bullion for sale on their platform more and more!
Follow Max Keiser's latest on "Crash JP Morgan, Buy Silver"!
Insider Info on Silver on "the JP MORGUE" Hilarious! (A bit dirty, but funny.)