Over the past 6 weeks, we have documented the massive increase in the commercials' net short silver position from 20,382 net shorts to 44,593 net shorts- an increase of 24,211 contracts or 121 million ounces of silver to their naked short position in only 6 weeks!
With last Wednesday's massive $4 smash that saw 225 million ounces of paper silver dumped on the market in under 30 minutes, we have been anticipating a massive short covering and reduction of these newly acquired shorts to be revealed in today's COT report. The latest COT report is out, and it didn't surprise in the least.
The commercials covered (reduced) a net 8,797 silver contracts in the week ending 3/6/12, a reduction of 43,985,000 ounces in their net short position. This is a reduction of more than a third of the massive increase in net shorts over the past 6 weeks by the cartel in the the artificial correction that began last Wednesday at 10:00am. However, the commercials' silver futures positions now stand at 36,329 longs with 72,125 shorts, or 35,796 net shorts. This is still 76% higher than the 20,382 net shorts seen in late January. The cartel will either need to engineer substantial further raids to be able cover the majority of this 179 million ounce outstanding short position, or they will at some point have to break precedent and cover INTO A SILVER RALLY. Should the commercials (allegedly JP Morgan) have to begin covering their shorts into price strength (as they were forced to do in April of 2011) rather than price weakness (raids), the entire dynamic of the silver market will be changed. While we don't expect this to happen quite yet, at some point it will unless the cartel is able to smash silver drastically below current levels to extricate itself from the remainder of its massive net short silver position.
29 comments:
The Shame, The Sin, and THE CRIME is that this Silver Market continues this manipulation right under the regulators' nose...They are entrusted and paid to protect the public. In the Silver Market, they fail!
One good idea is to buy 'cash' silver metal and hold it for much higher prices that will surely come.
Another good idea is to write your legislators and send a copy to The CFTC...be polite but firm...Manipulation by large concentration (Shorts) must end...The CFTC is ducking their responsibility.
Bart Chilton is the Cartel's bitch.
Whatever happened to that blogger Wynter Benton (sp?). One point I remember is he(?) stated if silver held at over $35 for 60+ days then it would bust the Morgue which he blamed for this constant price manipulation.
If you haven't noticed they allow silver to float between $28 - $34 but once it crosses the $35 threshold then coordinated raids always happen. It makes me believe there was some truth to those posts.
I believe Wynter Benton went very quiet after he guaranteed silver to reach $45 in November I think,it didnt.It all gets tiring after a while,silver is going to the moon but when it doesnt,just blame the cartel.Thats all this website seems to do nowadays
Question #1: If they go with raids, won't that further tighten the physical availablity with a mad rush to buy the dips thus driving the price back up with basic supply/demand?
Question #2:Do I understand it right when it's said that jpm makes money on both ends anyway?
Question #3: Why not let the price go straight up until the buying stops, then smack the shit out of it.
I hate to be so basic here. It's hard to ask quality questions, without more understanding.
nb
@Anon 4:32pm
I agree about Bart Chilton.
3.5 years and no position limits implemented...
He is just the CFTC's good cop. He also does speaking engagements and has a book out and probably enriching himself that way.
We need a little people, PM industry wide, letter campaign to the CFTC and Congress to enforce position limits and make the game more fair for the Large and Small investors.
@Anon 5:28pm
Q1 - Sounds good in theory doesn't it? But there has to be players who are going to take delivery which means forking over a large sum of cash. One silver contract is (5000 ounces * #34.32 today's close) = $171,600 for 1 contract. Takes stackers with serious money to get a bunch of contracts delivered! That leaves the little guys buying from dealers and coin shops at a nice premium. The Doc has a good deal with cheaper premiums.
Q2 - JPM makes money every which way, selling long and covering shorts. They control the casino.
Q3 - They can't let the price go straight up because they would be telegraphing their strategy and too many Large and Small Speculators would take cash out all the way up.
Q3 -
I don't get it. Steal a snickers bar from 7-11, go to jail for a year(unless 3rd strike then life). Manipulate markets,steal peoples phyzz, and steal dedicated accounts, get a bonus!!
Placing my ass hat on the table in front of me, I predict that silver will go into a severe supply shortage by August 2012 or sooner.
Why?
Greek sort of got bailed out, leaving the price of silver to float upwards as opposed to downward should central banks and private owners need to dump PMs to get liquidity.
Absortion of silver continues apace with speculative and aggressive longs outnumbering shorts two to one.
The discount to real silver value will not go unnoticed for long. Sovereign wealth funds in China and Middle East have over $2 trillion in funds ready to deploy. War brings out the best in wealthy buyers. They do for safety when the chips are down and financial insecurity abounds.
The physical silver being held for personal investment and industrial and commercial purposes. Miners are holding supply hostage to buyer requests to avoid the taxes on the profits of their silver sales.
The numbnuts at EPA are stopping mine production due to environmental issues
Miners are starting continent-wide strikes in Africa for gold, silver, platinum and palladium. Nearly 100 million ounces were kept from the market in those recent strikes.
Nationalization of silver mines continues apace in south and central America.
Thanks Doc for getting the price of 100 ounce bars down so low I could not resisting a purchase
I topped up on those 100 oz bars today. That took about 100,000 ounces of paper silver (1,000 oz of real phyzz) out of the physical supply.
I found a new hidey hole.
Door stops!!!
Kid you not.
I plan to put a few in small colored plastic boxes like Tupperware(R) and hide them in plain sight.
But back to silver supply.
In another four months I expect that silver supplies to hit crunch time.
High costs of extraction due to skyrocketing fuel prices. Diesel could go to $9 a gallon. Economic slowdown reduces demand for zinc, lead and copper (silver being a byproduct). Mines are buttoned up due to extraordinary costs of production.
Rapid buying of silver by Asian central banks and sovereign wealth funds.
Since silver is a strategic metal used in vital communications and weapons manufacturing, and war with Iran is a certainty, this demand for silver will get very interesting. We have not had a war in which strategical metals was in critical shortages. But we do now and our purported allies are not quite so friendly to us now.
The lack of this strategic metal will curtail the war efforts. China and Russia doing anything they can to stripmine silver from the supply chain will cause us to use our already depleted inventory of war materiel, soon finding ourselves unable to replace these silver-laden items.
Without firing a shot they will effectively round up supplies to hamper our efforts. China has a lock on over 90% of the rare earths too boot.
Do I have exact numbers on each of these factors?
No
But with about 700 million ounces of silver available in a year, 200 million ounces coming from scrap, the US producing less than 10% of the entire world's annual supply.
That is the key figure. We have less than 10% of the world's annual supply and things are going to get sticky real quickly. Plus it would be an idea time to help move the US Dollar further off its reserve status.
The reason I chose August 2012.
Israel has about 3 months before it has to get moving on its attack on Iran
PS I forgot
$3 trillion in new money for Euro Bank bailouts will wash across the Atlantic to our safe harbor, flushing up prices in the US.
ZIRP created gross misallocation of assets chasing yields, safe or not. PM safety will be quickly seen as a great place to be.
Inflation of 10% will become 15-20% and the US and Euro consumers will scream for a shield against this inflation. Where do they go?
Where anyone trying to safeguard themselves goes. Physical precious metals
Gold is being shipped east at discount prices. When the COMEX is marginalized by physical demands, like the recent 3 million ounce order, gold prices will bounce and silver prices will race upwards, hugging the backside of the Golden Jackass (Thanks Dr Willie for your recent insight)
Like Bro Jo said, if even 1 tenth of one percent of SWF goes to silver, 200% of the world's annual supply of silver will be up for grabs immediately
Got phyzz?
I think it is real simple when you dumb it down. In the end supply and demand set the price for any given thing. Since we all know that a PM has a place in history and that history always repeats itself then if you can take a major portion of the supply (ie stacking because the commodity still exists but you aren't selling it ) then it becomes difficult to meet the demand at some point.
Assuming you understand this basic concept then the more you take out of the system the higher the price goes because the demand hasn't gone down for Silver industrial uses. The less there is in the system then the cartel's ability to artifically manipulate the price dissipates. Buy in the dips, buy on the way up, buy buy buy and keep stacking because if shit hits the fan you will have real money in your safe when the IOU's of the world aren't worth the paper they printed on them. Just my .02
10-4 just my .02
Wynter Benton group disappeared at the time of
MF'ing Global.Maybe JPM took them both out!!
Doc has a post saying CME gave JPM wavier till 32 May before they need to report position above specultive limit, could it be that JPM has to try and trim and cover their position within these 2 mths to comply thus driving silver price higher ?
Whenever I try to fortel the price of precious metals in an effort to expand my miniscule stack, I try to put myself in the mindset of the "manips" After all they do have a huge advantage over us physcologically. What I mean by this is that they spends millions to predict what the sheople will do. This is fundemantally how they make money. It's a monetary war and predictable mass phsycology is their greatest weapon. If you really KNOW your enemy you will win any war. Unless your enemy acts unpredictably and with great resolve.
That being said. There is ALWAYS a small group of troops in amongs your enemies' ranks, that is the first to smell trouble and the last to surrender. The war machine often call these people ELITE SOLDIERS. They use all the information available to them to plan the mission, they use their brains,they show up prepared for a long battle and often act unpredictdably and most certainly, they do NOT go down without a fight.
We, as informed, skeptical, critcal thinking individual investors, I believe, fall nicely into this catagory.
I do not know how or when this battle will be won, but as a PM stacker and somewhat of a prepper, I have planned and prepared for a protracted economic battle, I use my brains to verify all the intelligence available to me and I resolve to not go down without a fight.
Through reading the numerous posts and comments on Silver doctors and other sites, It's nice to know I don't stand alone.
Crazy Canuck
Stackin the PYHZZ is the only way to demand payment on a paper IOU because once actual money is in your hands it is delivered. This is the only way that you can forget about the cartel. Blythe can only sell paper for so long and the more you and people like us remove from the system the better. Don't be greedy like the Hunt Bros because it is easy for the system to print a scapegoat (pardon the pun) but if everyone took 2 oz out into their safe every week there could be no blame other than the supply doesnt meet the demand! Having said that....those of us that would like to have a small kingdom and not worry what the price of beans was will probably take out more.
Crazy canuck I bet there are thousands of people who think exactly like you/us. The prepper guide has thousands of hits and the site registers millions of hits. So we like minded band of brothers can drill down with our intel and work against those who work against us, often from the inside out.
We have the key to winning battles and coming out with more victories, small or large, than those arrayed against us because we are legion.
In Denmark we do so as well, we buy and hide.
P.S.: God bless America, and Mr. Ron Paul.
www.tavex.dk
Denmark out.
The game will just keep going on and on. Regulators?? Give me a break.
All on the take. Period.
Not the end of the story, but it is the story.
Just going to keep buying when I can. I've got time. Lots of time.
Once again crazy Canuck hits the nail on the head. ANON 11:33 Most of the time 2 oz. per week(+/-)is all I can get. Once in a while I can break for a bit more. But 2oz. a week really does take a lot of phyzz off the market every year.
2OZ.
Interesting Hmmmmm.
Right on CC. This site is part of my intel. I've taken alot of criticism over the years. But as I look back, all the sources were spot on. Jim Rickerts, Jim Sinclare, Dave Morgan, Mike Maloney, Chris Duane, "The Doc", Jim Willie, Doug Casey, "Turd", Max Kieser, Trader Dan, Silver for the People, Steve Quayle, Jeff Rense...the only guy I dropped was Larry Edelson. Sorry Larry, you weren't quite as "right as rain" as you thought.
Some of the least likely sources of intel were, CFR, Bilderburg Group, David Rockefeller, Trilateral Commission, MIAC report, Phoenix Freedom, Alex Jones, Ben Fulford, Bix Weir.
Blacklisted News, The Blaze, Al Jazeera, Rumor Mill, Paul Craig Roberts, G. Edward Griffin, Daily Bail, Excutive Intellegence Report/La Rouche.
I'm sure I missed a few. But nonetheless, I read 'em all. I got the bags under my eyes to prove it.
I also, listen to Rush Windbag, Sean "I can't get my head out of the GOP's ass" Hanity, Glenn Beck, Mark Lavin, Michael Savage, George Noorey/Coast to Coast.
We have got a mainstream radio on all the time, with two computers constantly searching information. I also have a short wave close by as well.
I also check in with Ann Barndhart's site as well.
nb
AGXIIK for President!
If nominated, I will not run.
if elected, I will not serve
look like the cartel still has a long way to go to cover their 100m oz short from $37
JP Morgon's Silver shorting is a risk free trade, because JPM is simply the trading arm of the Federal Reserve. I have no doubt whatsoever that the FED has guaranteed to make any losses that JPM might have with freshly printed money, while allowing JPM to keep any profits that they make from these shorting raids. It is heads JPM wins and tails you lose.
Anon 449, that is a chilling thought. I was one of the unlucky ones caught in the Feb 29 smack down. In fact, I stayed up into the wee hours of the night buying, buying, buying on bullion vault.com. I accumulated 9000 ounces of silver between midnight and 3am on the 29th, at a cost average of $37.50 per ounce, only to go to bed and wake up to the horrific smack down. Can you believe it? It's true. I'd wanted to buy earlier, but my wired money only made it into my bv account at midnight, and with the price going up, I went all in. I'd read that once it cleared $35.50, there was no resistance until 40, which is why I did it. And sure I felt bad when I saw the Kitco chart in the morning, but I'm in it longterm, and expect to not touch my silver ounces for many, many years. I feel bad I spent that night (morning, actually) buying in, I mean, I feel like such a sucker to the Cartel, but what am I gonna do about it now? What's done is done. Longterm, I'll be looking back on it saying, "I got into silver when it was in the 30's", and will be wishing I could have bought more, even at $37.50.
ANON 2:06: Hang in there buddy. You will be rewarded. The Cartel is looking for people like you to sell before the price goes beyond what you paid. I can't say the price will beyond your purchase tomorrow but it will happen within the next 3 - 18 months. You'll be happy.
Keep stackin'
2 OZ.
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