3 card monte continues to accelerate in COMEX silver warehouses, as Brink's and HSBC combined to transfer 2.626 million ounces of mostly REGISTERED silver into Scotia Mocatta vaults Wednesday!
COMEX WAREHOUSE SILVER INVENTORY UPDATE 2/2/12
*Brink's received a large deposit of 1,190,894 ounces into REGISTERED vaults
*Brink's also had a small deposit of 2,146 ounces into eligible vaults
*Brink's had a massive withdrawal of 2,287,779 ounces out of REGISTERED vaults
*HSBC had a withdrawal of 338,460 ounces out of eligible vaults
If you add the 338,460 ounce withdrawal from HSBC and the 2,287,779 ounce withdrawal from Brink's, that comes to 2,626,239 ounces.
*Scotia Mocatta just happened to coincidentally report a deposit of 2,626,240 ounces into eligible vaults. They tossed a freaking silver eagle into the pile of HSBC & Brink's phyzz that was hustled into Scotia's vaults to put out February delivery fires!
*No changes for JPM or Delaware
This is becomingly unbelievably blatant as it is clear that the amount of physical silver actually available to satisfy delivery demands is practically non-existent.
*TOTAL REGISTERED Inventories declined a net -1,096,885 ounces to 35,441,343 ounces
*TOTAL ELIGIBLE Inventories increased a net 2,289,926 ounces to 94,734,725 ounces
*TOTAL COMEX Silver inventories increased to 130,176,068 ounces
17 comments:
I see fairly regular posts about these movements on SD but why do they matter to holders of physical like us? What does it tell us? Why do we need to know?
Because there is a shortage of physical.
Without enough to go around each large banks holdings.
They have to make it look like they have enough.
three card monte game
When I read these all I hear Charlie Brown's teacher (Wah, wah, wah, wuh-wan, wan). I suggest Doc write a brief summary to include (1) his interpretation of the raw data (such as anon 5:57 did) and (2) how it may affect silver prices, if at all.
Yes, a more educational approach to these blog postings would, greatly benefit us with less knowledge of the silver market, as well as real silver dummies like myself. Explain it like you would to a kindergarten student. Much obliged.
i hope ya'll are using Zero Hedge :)
- runlevel
*as well
And this makes a differense, WHY?
My LCS has lots of Silver and I can buy it or not. If I do it's mine. If I don't it doesn't matter how much he has in the show case, or in back, or can get because its not mine.
Banks, Banks and more about stupid Banks! Enough already!
I still try to get a few oz a week at spot +3. I have no control over anything else.
Zero Hedge is the best. I just wish I had time to read more content there.
For those looking for an explanation on the COMEX reports, please see What's the Difference Between Registered & Eligible COMEX Inventory?
As far as the meaning of today's inventory movements- it implies that the bullion banks are having extreme difficulty in satisfying longs standing for delivery in February- as they must shuffle massive inventory volumes into and out of various COMEX vaults in order to satisfy delivery demands. Hence the 3-card monte comparison. Hope this helps.
-Doc
If demand starts outstripping supply then expect them to raise margins again. Isn't this what was done the last 2 or 3 times that silver demand got really hot and the price went ballistic?
Bingo Anon945!
hha ha ha...Mr. Diamond you make me laugh!
Like Anon 7.38 said "kinderarten style" explanation, I too don't understand the virtuous circle.
Does it work like this?:-
1. Comex is also known as the CME. Comex is a Commodity exchange, which trades Futures, as distinct from the NYSE which trades stocks. Globex is for trading electronically on the Comex exchange 23 hours a day, while trading on the floor of the Comex is during office hours.
2. The Comex exchange buys and holds a stock of silver. Assume Comex bought it's stock at an average of $25/oz. Assume there are 100 silver futures contracts of one oz each in a given month, say February 2012 (ie "open interest" of 100). 99 will settle between each other for cash - ie 99 will pay in (the losers), and 99 will get paid out the same amount (the winners). Only one stands for physical delivery. This lone contract has a buyer and seller. Assume the buyer and seller contracted at $30/oz, and at delivery, silver is $32/oz. Comex steps in, takes $2 for itself out of the sellers account, takes $30 for itself out of the buyers account, and hands one oz of silver to the buyer. The seller lost $2, the buyer paid $30 for a bar of silver worth $32 (winning $2), and Comex scores $7 on the one oz bar it bought for $25. If Comex had no Eligible stock left at end February, it would have to go out and buy physical at $32, and in this event make no profit. If say 10 buyers instead of the expected one wanted delivery, Comex would urgently need to buy 10 oz, and would likely have to pay more than $32, causing prices to rise above $32. If Comex expects only one in a hundred to ask for delivery, it only keeps stock of one on hand, and is therefore "leveraged" at 100 to 1. Is that how it works?
3. The silver stock that Comex bought for itself, and holds for buyers who want delivery is called "Eligible", while it also stores other silver in it's vaults for various third parties, referred to as "Registered". Do third parties use these storage facilities because they are particularly safe and convenient? If there is a risk of Comex dipping into the Registered silver when it's own stocks of Eligible are depleted and buyers are calling for delivery, why would these third parties risk leaving their silver with Comex? Whose to say Comex is not "comingling" it's own silver with that of it's third parties, a three card monty situation, which a proper audit at a given point in time would reveal? Surely there are such audits, but what if the auditor is getting hoodwinked, like MF Global apparently hoodwinked the CME which was supposedly it's auditor?
4. It appears the cartel uses the SLV etf as the main vehicle for price manipulation. They do it by shorting SLV stocks. I read that the SLV is technically not "fully backed by physical" when it's stocks are shorted (thus making it's prospectus claim of 100% backing fraudulent), but don't understand this. Assume SLV starts out with 100 issued stocks, backed by one oz of physical silver each. If JP Morgan sells short on 10 stocks, it does so by "borrowing" 10 of the 100 stocks in issue, and selling/flooding them into the market (pushing prices down) in the hope that when they must be returned, they can be bought back cheaper than when they ere borrowed. I can't see how the 100 SLV stocks do not remain fully backed by 100 ozs of silver. Any explanation?
Could this be part of Sprott's silver heading to Canada? Where is the ScotiaMocatta vault located?
Great explanations of SLV, the silver market, and how these short manipulations work... but nothing on "3 card Monte". For those who do not know this game, it is basically the old shell game only with cards instead of 3 walnut shells and a pea. There is a "money" card and 2 other cards. The dealer scrambles the face-down cards and the sucker, er player, chooses one of them. If it is the money card, the player wins the bet. If not, the player loses. As with the shell game, the dealer frequently palms the money card so that none of the 3 is a money card and it is impossible for the player to win. This play is often egged on by shills, people who work with the dealer but pretend to be other players. They get to "win" some money to show how easy it is to play this rigged game. Wow... this IS amazingly similar to what goes on in the silver market these days! :-(
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