Posted on 03/06/2011 6:27:42 PM PST by Errant
...It was reported that Blythe offered 50 percent premium. That was not even close in our case. We got over 80 percent premium. That's right. Over $50 per contract on the condition that our group sell all our contracts...
These sets of facts from our traders lead us to believe that the paper price of silver may have a difficult time surpassing $36 because if the counterparty at the Comex is so willing to pay north of $50 to dissuade people from standing for delivery yet the paper price of silver is still under $35, then we suspect that losses triggered by derivatives is the main reason for the price suppression of silver. We can see no reason why they would not allow the paper price to go up yet are so glad to pay off the comex contracts to show the world that so few are standing for delivery. In our mind, Comex could default with if as little as 4,000 contracts stood for delivery. We are very curious to see how high the paper price of silver actually trades during this run. Posted by Louis Cypher"
It should now be obvious to all that silver is a fractional reserve system. Just like a fractional reserve bank, when there is more demand for the actual underlying good (i.e. silver or money) than there is a real physical supply for, it's called a "run on the bank". Those who get in line first, get their silver. Everyone else will end up as an "unsecured creditor", holding a worthless piece of paper when the music stops.
(Excerpt) Read more at marketoracle.co.uk ...
The take-home message here is:
GOT PHYSICAL SILVER?
If you don’t, you ain’t got nuthin but worthless paper.
If all this COMEX hubub is true then how do you explain silver bar availability at APMEX? Some bars are out of stock but there are still bars available at spot silver price ($36.30) plus $1.29 (approximate)
http://www.apmex.com/Category/1184/Silver_Bars_.aspx
From the "shorts", those who have sold the contracts. It's rumored that JPMorgan is the largest seller of silver contracts. It's also rumored that they are working in conjunction with the central banks flush with newly printed cash.
Even if that is true, why keep doing it. Thats like buying silver at $80 and selling it at $35 continuously. You know you will keep losing, so why keep doing it. Its better to simply default and pay less
Thanks for your analysis. Doesn’t sound good.
Some people invest in silver and think they are a contract for delivery (if they request it) of physical silver (silver bullion).
What many are actually trading are silver futures, which are contracts not for physical silver but paper “deeds” to silver, but the physical silver does not actually exist.
Something to bear in mind is that some investment portfolios are invested in gold and silver and the people who are investing in these also think that if the equities markets, the mutual funds, the bond and treasuries markets and the dollar itself plummet and crash that they at least have the gold and silver in their investment portfolio.
This is a fallacy. They do not. They have been trading the same as what this article is talking about, ETF’s, which is really just trading on the future price of a commodity (in this case silver). As such, it is merely speculation on the near trend for people who want to buy and sell and get out with a quick profit (in dollars).
Silver is really going up in cost. Whether it will drop back down and, if so, when, remains to be seen.
But you can bet it will be very difficult for it to drop back down under $20 an ounce, because so many people are in tune with what is happening with these communists running our country and the banking system and how pathetic is the fiat currency they are using.
When/if the cost of silver begins to drop for other reasons, the strong demand will keep the cost high.
Silver is a decent investment, not, as most people falsely assume, because if you buy a thousand dollars with today in a couple of years you’ll be able to sell it for $2000, but because it, like gold, retains its purchasing value.
If today $1000 can buy $1000 loaves of bread and if the government prints itself into an inflationary spike, that $1000 may only buy 500 loaves of bread in a few years. However, if you took that $1000 and bought $1000 worth of gold or silver and held on to it, in a few years when that $1000 of fiat currency is only worth $500 in purchasing power (500 loaves of bread) you’ll be able to sell that $1000 worth of silver for $2000 dollars and with that $2000 you can buy the same 1000 loaves. This is why it is a good investment, to maintain purchasing power when a fiat currency is losing its value due to inflation.
By the way, I have no position in anything. I’ve been studying monetary science and monetary policy and economics from the Austrian-school perspective. So, take my information with a grain of salt and verify all of it.
See my post #27.
the guys name is LOU CYPHER??? Really???? LUCIFER???
Your Welcome.
It is the beginning of the “Lie of Fiat Money” being found to be worthless, unfortunately.
We are living in interesting times.
If there’s a short squeeze in silver ... and it looks like it’s happening presently ... JPM could face billions of dollars in losses on its silver shorts. And if JPM folds, it being the counterparty to trillions of other derivatives, could make the worldwide financial system “interesting.” Ruh roh indeed.
If you buy a contract for silver, you can get silver or cash when you sell the contract. Today silver spot price is 35 bucks per ounce, but the COMEX is willing to pay people 50 plus bucks per ounce if they are willing to settle for cash in lieu of the physical silver metal. In theory every contract sold by the COMEX should be backed by silver, but there is 100 ounces on paper contracts sold to and held by investors for every ounce of physical silver in the COMEX vaults. What happens when more people want the physical metal in lieu of the declining value of US dollars??? That is starting to happen as more people are concern with the devaluing US dollar. COMEX may not have enough silver on hand to meet its customer demands.
The current spot price of silver is based on numbers 100 times the actual physical supply available. Imagine what the price of silver would be when the public finally understands that the actual number of silver available is 1/100 the numbers quoted by the COMEX and banks.
If that’s the case, which I suspect it is, there is also the element of fraud involved.
This happened with JPM about two years ago when they got caught naked-shorting gold sales. They thought they were just selling contracts to a customer in Europe but the customer, rather than just wanting the paper to turn around and resell, demanded delivery. JPM never had it because they were running a naked-short and they were caught and should have been brought up on charges. Of course, they and their commie cousins in the White House figured a way out of the jam without having to do jail time.
It's not a day to hope for. Once gold and silver go to price levels that are not tampered with by central banks, their values will rise to levels unthinkable today. And that is the day the drumbeat will begin for confiscation.
They are being paid as if the silver is worth $80, but they are being paid in dollars, not silver.
They are being paid extra NOT to take the real silver.
Does this help?
Lucifer is the name of the person Wynter is in contact with. Oh, sorry, Louis Cypher. But Louis is not one of the traders.
Shouldn’t this be fairly simple to verify by looking at the books? How can COMEX be hiding how many contracts they are buying/selling and at what premium? I don’t doubt that the do have a mechanism to hide it, but I’d think this one would be fairly simple to discover.
As if silver is worth $60 - 80% premium over 35.50. Not $80.
http://www.youtube.com/watch?v=9FGVtJRWP6k
The Wicked Witch Explains Her Motives..... This video explains why JPM shorts silver
The “wicked witch” is Blyth Masters who heads commodities at JPM... she also was one of the inventors of credit default swaps
Because if this is true, it is a form of Ponzi scheme. And Ponzi schemers have to keep playing until the entire scheme falls apart. They keep thinking they’ll figure a way out.
The only way out at this point is if the price of silver crashes back down to $15 an ounce or so and stays there for a few months until most of these contracts end.
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