Beware the Ides of Farce (updated)

As the stock markets and precious metals plunge, a little Ides of March humour courtesy of williambanzai7 (picture above).

One of the key dynamics to watch here is the US dollar index. The Japan disaster is your quintessential black swan event. And as such there should be a flooding of capital into the safe haven of the US dollar.

That isn't happening this time.

And in the midsts of chaos, the banking cabal is taking the opportunity to try and slam Gold/Silver.

As always, analyst Harvey Organ comes up with an excellent analysis of what is happening at the COMEX.

• "The banking boys showed up in London and in the USA doing their usual, by raiding paper gold and paper silver. The real stuff, they have problems getting. Silver fell by $1.70 to $34.12, as the bankers supplied massive unbacked paper in their attempt to show the world that everything is fine.
  
  The confirmed volume for Open Interest yesterday was quite good at 61,854. The estimated volume at the silver comex today was a monster: 101,076. That kind of shows you what kind of unbacked paper was supplied today and our regulators as always look the other way at this criminal behavior."

A farce to be sure. But the key dynamic is the lack of capital fleeing into the US dollar.

The COMEX is clearly stressed to provide physical silver. In a dual attempt to prop up the US dollar and shake silver from those holding it, the banking cabal is massively raiding the price of silver.

The intent is to create a panic and fear that the bottom will fall out from beneath these recent record high's. I suspect we will see another massive raid tonight to drive the price to the mid $33.00 range.

It's such an odd scenario. Make the price cheaper so that people won't buy more?

But with capital not flowing into the US dollar, will this tactic simply create a surge in precious metal buying?

We shall see.

On another note, on last night's Fox Business television network program "Follow the Money", five minutes were devoted to complaints of manipulation of the silver market by JPMorgan Chase and HSBC.

Cited specifically was the testimony of London silver trader and whistleblower Andrew Maguire at the March 2010 hearing of the U.S. Commodity Futures Trading Commission.

Video of the segment has been posted at the Fox Business Internet site under the headline "Wall Street Conspirators Driving Spike in Silver" and you can :
find it here.

Sprott Asset Management has also come out with an excellent article titled "Debunking the Gold Bubble Myth". You can read it here.

Eric Sprott has also done an interesting interview with comments on Silver Manipulation, I will be posting excerpts later tonight after 10pm PDT.

==================

Email: village_whisperer@live.ca

Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Is the COMEX under stress for March Delivery?

In Part 5 of our series on Silver (The Short Squeeze), I talked about what happened last September for the delivery contracts of that month.

In the period from September 17th, 2010 to September 29th, 2010, Comex customers leased – in 5 out of 9 working days - a total of 3.1 million ounces of physical silver to Comex dealers.

In this same time period, Comex dealers delivered 4.1 million ounces of physical silver to owners of September, 2010 silver futures contracts.

This means that Comex dealers had only 1 million ounces of their own physical silver, even though at the same time, they reported to have around 53 million ounces in their warehouse.

Why would you borrow 3.1 million oz and pay a leasing fee if you own 53 million oz of silver yourself?

The rational man would suggest that somehow that 53 million oz was either spoken for or did not exist.

Fastforward to this week. Settlement of the futures contracts for March has begun. When the dust has finally settled, the open interest on silver turned out to be 4,250 contracts a fall from 14,259 (a drop of 10,009 contracts).

But don't think the COMEX is out of the woods yet. 4,250 contracts represents 21,250,000 oz which are standing for delivery.

Harvey Organ, a respected silver/gold analyst had this to say about the COMEX last night:

• "The comex folk announced a very tiny 252 notices or 1,260,000 oz of silver (have been settled after day 1 of settlement week). I would like all of you to go back to Saturday's commentary where I saw this strange transaction in inventory movement at the HSBC warehouse where 1.26 million oz left a customer at HSBC and entered the HSBC dealer section of the warehouse. The math at the bottom of the screen did not match the figures which many of you figured out. Normally we see a transaction of this type as an adjustment where we see a negative 1.26 million oz to the customer and an equally positive entry to the dealer. Why did they do it in the receiving category of HSBC and not an adjusting entry? Is there an imperfection in the inventory? To have 252 notices sent down on the first day out of 4250 and all of this inventory coming from a customer must surely scare bankers globally that something is terribly wrong in the silver comex."

Organ went on to note that in the official transactions for silver, there were no deposits of any kind into the dealer nor the customer. This is very strange in a delivery month for silver. On the customer side of the ledger, there was a withdrawal of 378,386 oz of silver.

Organ speculates that the situation at the silver comex is quite dire as they must resort to withdrawals from customer inventory to settle futures contracts on the first day of settlement week. Quoting Organ:

• "Ladies and Gentlemen: the silver comex has no silver in the dealer category to settle upon our patient longs."

Silver has hit fresh 30 year highs the past two days. Is silver shooting up in price as a desperate scramble ensues to procure physical?

We'll watch events closely.

==================

Email: village_whisperer@live.ca

Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.