Posted on 10/20/2024 9:47:48 PM PDT by RomanSoldier19
Silver prices soared by over 6% yesterday, breaking through the crucial $33.6 per ounce mark and sending shockwaves through global markets. The surge has put five major U.S. banks at risk of massive losses, potentially in the billions, due to their heavy short positions in the precious metal.
According to data from the Commodities Futures Trading Commission (CFTC), the open interest in silver futures contracts has reached a staggering 141,580 contracts, each representing 5,000 ounces of silver. This translates to a total of 707,900,000 ounces – nearly equivalent to a year's worth of global silver production.
(Excerpt) Read more at msn.com ...
707 million ounces eh? To paraphrase Bogie in The Maltese Falcon....that’s a lot of coin
Never dreamt DemoRATs/GOPhers would allow the Bankters to raid the Treasury to the extent they have (Debt accelerated from 10-35+ Trillion 2008-2024), but I did anticipate several scenarios playing out, all pointing to $50oz Ag ;-)
Of course my relatives failed to heed my advise in 2004, nor in Q3 2005 when I told everyone to *SELL* RE & plow it into Ag/Au...
Can't believe I haven't sold an oz. yet, shouldn't be long now though!
Keynesians are about to get an expensive wake up call ;-)
P.S. If KamaLa-La-Ding-Dong is "selected" via fraud like 2020, I'm dumping ALL my assets before that moron can jack capital gains...
When we were on the gold standard, that Gold/silver ratio was 15:1. Since then the average has been 65:1, which, with current gold prices, would price silver at about $42/oz. It’s only $34 now. This move is just the ratio reverting to the mean.
Why don’t they name the 5 banks?
It’s about to move a *LOT* closer to 15-to-1 again, once the paper market & shorts are cleaned out ~ Reserves are at critical lows, it ain’t coming out of the ground a historical levels nowadays...
At this point it’s a *must* buy just as an alt. to currency risk IMO.
So many historically unprecedented scenarios unfolding, so many variables...
Got Silver?
Better switch everything to Digital Currency - you know, more stable. /s
I just had a little talk with ChatGPT:
which 5 us banks may lose money because of rising silver prices
ChatGPT said:
Rising silver prices can impact various sectors, including banks that have exposure to mining companies or commodities trading. Here are five U.S. banks that could potentially face losses due to rising silver prices, particularly if they have significant investments in silver mining or related sectors:
Bank of America (BAC): As one of the largest financial institutions, Bank of America has extensive exposure to commodity markets. Rising silver prices could affect its trading operations or investments in mining companies.
JPMorgan Chase (JPM): JPMorgan is heavily involved in commodity trading and has significant investments in precious metals. Increased silver prices could lead to higher operational costs or impact its commodity portfolios negatively.
Goldman Sachs (GS): Goldman Sachs has a strong presence in commodities trading. If silver prices rise significantly, it could impact its trading positions and lead to losses, especially if the bank has short positions in silver.
Wells Fargo (WFC): Wells Fargo has a diversified banking portfolio that includes financing for mining operations. Rising silver prices may affect the financial health of these companies, leading to potential losses for the bank.
Citigroup (C): Citigroup has exposure to various commodities, including silver. An increase in silver prices could affect its trading positions or impact its relationships with mining companies.
Banks with significant exposure to silver mining companies or commodities trading might be at risk if rising prices lead to volatility in the market. However, the actual impact on each bank will depend on their specific investments, trading strategies, and risk management practices.
How in the heck do Banks get to engage in shorting commodies?
https://www.icij.org/investigations/fincen-files/td-bank-hit-with-3b-penalty-in-u-s-money-laundering-settlement/
Can you ask Chat the question posted at #9 on the thread,
How in the heck do Banks get to engage in shorting commodies?
ChatGPT said:
Banks and financial institutions can engage in shorting commodities through a variety of mechanisms. Here’s a breakdown of how they do this:
Derivatives Trading: Banks often trade commodities using derivatives such as futures and options contracts. A futures contract allows a trader to agree to buy or sell a specific quantity of a commodity at a predetermined price on a future date. By selling futures contracts (shorting), banks can profit if the price of the commodity falls.
Commodities Exchanges: Banks participate in commodities exchanges like the Chicago Mercantile Exchange (CME) or the New York Mercantile Exchange (NYMEX), where they can execute trades in various commodity contracts, including those for silver, gold, oil, and more.
Hedging Strategies: Banks often use short positions as a hedging strategy to protect against price fluctuations. For instance, if a bank has a long position in a commodity, it might short the commodity to offset potential losses if prices fall.
Proprietary Trading: Many banks engage in proprietary trading, where they trade using their own capital rather than on behalf of clients. This allows them to take speculative positions, including shorting commodities.
Exchange-Traded Funds (ETFs): Some banks may invest in or create ETFs that focus on commodities. These funds can take short positions on commodities, allowing the bank to profit from declines in commodity prices.
Market Making: Banks often act as market makers in commodities markets, providing liquidity by buying and selling contracts. In this role, they may take short positions to balance their books and manage their risk exposure.
Access to Capital: Banks have significant access to capital, allowing them to take larger positions in commodities markets than individual investors. This capital enables them to short commodities effectively.
While shorting commodities can lead to substantial profits if prices decline, it also carries significant risks. If commodity prices rise instead, banks can incur significant losses, which can affect their overall financial health.
No honest financial institution would touch it. Does that answer your question!
It is gambling, but a low risk way to hedge other positions and/or to make a lot of money for little investment if you are lucky.
But a bank or any entity should only put a tiny percentage of their money into it knowing it could easily be lost.
I am skeptical.
Five major banks are massively short on the price of silver?
Perhaps they mean Investment Bankers, like Goldman Sachs?
Considering the huge amount of world debt, I cannot imagine anyone going massively short on a precious metal.
Silver also has a significant industrial market - around 50% according to several sources - which makes it even more difficult to estimate a future price.
Problem is, retail banks that are also investment bankers gamble all the time. The bigger the bank, the bigger the gambling. Why not? They’re “Too big to fail”.
Ping to the FR Gold & Silver List!
JP Morgan is the BIG one. They have tremendous losses.
Then Bank of America, Citibank, and Wells Fargo.
Goldman has a minor position.
If a bank acts as a market-maker and a customer buys a long futures contract or option, the bank sells them one, effectively going short. If their customer book is balanced (the same number of customers are long as are short) there’s no problem. If it gets lopsided the market maker would need to buy or sell the underlying asset to neutralize their exposure. If they can’t offset the risk they can get themselves in trouble.
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