Wednesday, July 20, 2011

An example of how Silver is manipulated on the COMEX (amended)

Faithful readers who have followed this blog know we have covered Silver and Gold manipulation on the COMEX.

JP Morgan's shorting of the Silver market has lead to the largest short position on a commodity in the HISTORY of commodities trading and has set up a situation where the paper price of Silver has been artificially suppressed in huge distortion to the massive worldwide demand for the metal.

On Saturday, the Commitment of Traders report showed a huge increase in commercial shorts in both Silver and Gold.  Gold was hitting a new record over $1,600 per ounce and Silver had climbed back over $40 per ounce... all of which forced the banking cartel to raid both metals on Monday and that raid was intense.

Above is an examination of just how immense and blatant that Silver raid was.

At exactly 14:03 (2:03pm) on Monday, in what is known as the access (after-hours) market, someone dumped over 50,000 Silver contracts onto the Silver market in one minute!

The video clip shows you (in a very visual graphic) just how 'out of whack' the dumping of this much Silver on the market at one time was.  There was no event that justified this kind of selling, no wave of panic that would lead to a sudden liquidation of this magnitude.

There was just ONE massive dump in an attempt to trigger a collapse in the price of Silver.

As you watch the video, consider just how much Silver 50,000 contracts represents.

In the span of one minute someone attempted to dump 250 million ounces (50,000 contracts x 5,000 ounces per contract) on the market.  That's over $10 Billion of Silver being sold into the the market in one minute.

Think about that for a moment.  Someone tried to sell over $10 Billion worth of Silver in one minute.

250 million ounces is roughly one-third of all the Silver mined in the world for an entire year.  The United States only extracts about 50 million ounces in one year.

As the clip explains, this is an extraordinary amount of Silver and couldn't possibly be a mining company hedging production or the act of a single investor liquidating assets.

Someone, in the midst of a world wide buying frenzy of precious metals over sovereign debt, tried to dump five times the amount of Silver mined in the United States in one year onto the market all at once.

It has to be someone with an access to an unlimited supply of paper Silver contracts - no one else has that kind of access to that much Silver.

But the attempt to flood the market failed.

So voracious is the current demand for Silver that this massive dump was not only absorbed - but Silver surged back up over $40 an ounce today.

The battle to keep a lid on Silver and Gold is intensifying. And the desperation of those shorting the market is palatable.

And why is the demand so strong? 

Congressman Ron Paul explains it best in the video clip below. If you can understand what Congressman Paul is saying you will understand why Gold will hit $5,000 an ounce and Silver will surge over $250 an ounce...

Jim Sinclair also summarized the situation on his blog today and expanded on Congressman Paul's points by explaining why the debt issue will only intensify even after the Congress lifts the debt ceiling.
  • The idea that an increase in the debt ceiling is a solution to anything is nonsense. The event would be simply a can kick forward for a very short period of time. Increasing debt is not a solution to a debt problem. It actually makes the problem worse.
  • It is an act of extending your Federal credit card borrowing line so you can use it to pay your mortgage.
  • [To call the act of ] increasing the debt ceiling a solution to a debt problem is too stupid to be stupid. The unwind is deeply entrenched since the failure of Over the Counter (OTC) derivatives in 2008. There has been no meaningful intervention in this economic downward spiral at the level of the cause. The downward spiral therefore continues unabated.
  • OTC derivatives are what turned a four year correction into the greatest economic accident in human history. OTC derivatives only go one way in size and that is up.
  • Changing the way nominal value is determined does not solve the problem. All that does is add camouflage to the problem. It does not solve it.
  • The damage is done. The debt of the entire Western world is beyond out of hand. The so called solution, just like raising the debt ceiling, will be acts of kicking the can down the road.
  • We have come to the end of the road. The result of no financial discipline anywhere in the Western world is unfolding.

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  1. great post again . they are just trying to kick that can one more time down the road. Until there is either no more can to cick or no more road this pretend economics will be spun to the sheep. Just waiting for all the sheep to finally open their eyes and spot the wolf..

  2. Another thing we should be keeping our eyes on is Harpers plan to dissolve the Canadian Wheat Board this fall, in the name of removing a monopoly. What he does not tell us is that five private companies, as in they don't trade shares, already control 75% of the world grain market.

  3. As for the increased shorts, If a fish wants more line - you give it to him.