Matterhorn Asset Management’s Lars Schall has released an excellent interview with GoldMoney’s Alasdair Macleod, discussing the latest take-down of the metals post QE4, the outlook for gold and silver, and cartel manipulation of the metals.
Macleod states that massive amounts of physical gold and silver have been flowing to Asia, and that the latest bank participation report indicates massive problems are brewing for the banksters in the COMEX silver marketWith cartel shorts near a record at just under 300 million net ounces, yet with the silver price substantially lower than the 2011 high, Macleod believes that we are quite likely to have a failure on COMEX and in the silver market in particular.

2013 Silver Eagles As Low as $2.59 Over Spot at SDBullion!

 

Regarding the latest bank participation report, Macleod states that commercial shorts are at record highs, yet NO SILVER IS AVAILABLE!:

Bank shorts are at or near record levels. And what is interesting is that with the prices of gold and silver well below the all-time highs there are no profit-takers in the market to sell contracts to close their shorts. And in silver it is very, very alarming. This leads me to think that we are quite likely to have a failure on COMEX and in the silver market in particular.

If you have a failure in silver on COMEX then that is going to affect the gold futures market as well. The West’s central and commercial banks have suppressed the price of both gold and silver by supplying central-bank gold and increased short positions, making prices far too cheap. The result has been a massive transfer of gold and silver to Asia. This is the relevance of the point that you have been raising about Central Banks gold holdings, and it is also going to bring into question the solvency of the bullion banks who are short.

So, I think that while it may not be obvious to many people at the moment, when we look back at the fourth quarter we will see that the conditions were in place for a huge bear squeeze, for silver in particular. I would assume that the short position in gold is more controllable so long as Western Central Banks continue to make bullion available to the bullion banks that are short either on COMEX or with LBMA. But silver is different, nobody has it for sale. There is no silver around.

 

Macleod goes on to state that gold will be remonetized, and the process is already well underway:

I suspect that the Chinese Yuan will play a big role in Asia. What they’re doing with Iran is interesting. They’re settling net balances in gold and gold is being re-monetized in that sense. And I think that China has accumulated a lot more gold than they officially tell us. So they have the potential to use gold as money. I can see gold being re-monetized in the loosest sense for the largest internal market the world has ever seen. Believe me, it’s happening now.

 

Macleod also states that the upcoming physical silver crisis at the COMEX will result in a suspension of silver trading at the COMEX, and a reset massively upwards in the price of silver:

You’ve got the banks’ short position on COMEX which cannot be covered. According to the most recent bank participation reports, the banks are short of nearly 300 million ounces of silver. When you bear in mind this is an industrial metal, the vast bulk of silver consumption from mining and recycling supply goes into biocides, solar panels, electronics, et cetera. You have only 100 million ounces annually left over for investors. The short position for the banks on COMEX is three times that 100 million ounces.

There’s no way this can be covered without a price rise sufficient to kill off significant industrial demand, because there are no strategic reserves to draw on. The only country which might have strategic reserves is China but otherwise there are no reserves. And I think that the only way in which the banks’ shorts could be closed out is after a price hike which would lead to billions of dollars of losses for these banks. There will be a market crisis, and I think that they will have to suspend trading in silver and agree a settlement procedure for long and short contracts. And if that happens, it will be well over $50 an ounce. But remember, other exchanges will continue to price silver if Comex suspends, which will not help Comex resolve the problem if the price continues to rise elsewhere.

Click here for Macleod’s full MUST READ interview:

  1. And this is why people buy phyzz. Every precious metal is already priced twice its 1979 high mark in dollars except silver (as Bro John F pointed out Friday). When the Crimex finally is taken out, the price adjustment in silver will be spectacular. I can hardly wait for that day!

    • It’s not that the Crimex can settle in fiat, it’s that it must settle in fiat (they don’t have the phyzz). A failure to deliver is the end of the paper game! That’s why it will be taken out. The paper silver will be settled between 50$ & 60$ oz, while the phyzz will continue to rise. A Crimex default is what we want! If they can’t deliver isn’t that a default?

    • The Comex has already settled with fiat in some cases.  All big silver physical buyers (goverments and central banks) are buying directly from the miners, not from the Comex.  If you want physical, buying from the Comex is suicide, all you will end up with is fiat in a pinch.   Buy physical and mining stocks only.  The miners have to stop selling Silver at the Comex price.

    • Being able to settle in fiat will depend on the contract the silver was bought under. Some specify fiat only, others allow phyz so it will take them down.

    • Anybody have any idea when the future is gonna get brighter? Personally, I don’t think anyone knows.
      Lately the Guru Posts on here are fairly neutral and have no direction. Charts don’t tell me a damned thing
      as it depends on who is charting and drawing. I am not a Silver basher or Gold basher as I hold a shitload
      of both.  Silver goes down 3-4dollars andthe next day it goes up 5 cents and the Gurus’s throw a damned party!
      Makes no sense. Gotta be rats in the wood pile somewhere telling us not to set fire to the wood pile, while the rats
      play away our assets? Ya think???  If 2013 shows any strong advance out of the closing deficit of Silver in 2012,
      I’ll be a Japanese typewriter!!!!! Tell me where the HOPE IS? 

  2. 1) People in a bubble don’t recognize that they are in a bubble.
    2) It is easy to buy into rumors if it fits your outlook/view of the world.

    The thing is we cannot trust him like we cannot trust Eric Sprott like who can we trust?  

    Kingworldnews sprouts the same information day after day and does not give a balanced view of the world. When was the last time Jim Rickards was interviewed or others who disagree with the perpetual gloom?

    I like and visit silverdoctors, but l am aware of my bias and the biased news that l am listening to. How many of us are truly conscious that we are only seeing one side of the coin?  

    • The news campaign against the metals and especially silver, is pretty ripe at this time. I may be wrong to do so but at this point I look right through the negative arguments for one reason……demand fundamentals. Time will tell if I/we are right in our assessment that silver is due for a stellar upward correction. I do not mean a correction from the last month, I mean a correction from the last 30 years or more!

      “Pay no attention to the man behind the curtain…….”

    • I understand what you are saying, JR, and have had similar thoughts from time to time.  At some point, however, we should also consider that if we have The Truth of a situation sitting right in front of us, is there really any need to “balance” this by getting some alternative views?  I’m not completely convinced that we need alternatives to the truth.  It is only when we are unsure that it seems wise to gather alternative points of view so that we can compare them and eventually select the one or ones that seem best to us.

  3. The glaring signs of silver bullion fail on the COMEX and LBMA have been slowly mounting since 1979. The frequency and intensity of those signs over these past two years have been modulating up so rapidly that, for months now, I’ve been in a state of constant anticipation that its advent can unfold at any moment. We will NOT see this unfold on the charts because, as EVERYONE is FULLY aware, that’s a complete ruse and sham. Some Sunday night (probably) we’ll see a ‘news’ report of an indefinite shut-down or severely restricted operation of commodity trading facilities and THAT will be the ‘tell’.

    • @4 oz … Paper stamps can’t cover over huge value imbalances in supply-demand interdependencies that those stamps cause throughout the entire spectrum of goods-at-market. Far less so when those stamps float at complex compounding interest. The underlying progression of the math guarantees the system’s doom and we’re well beyond the historic average life of all the other attempts of the past five centuries.

      I understand that a life-time of ‘normalicy’ in this current run makes it appear more viable than it actually is. Many, if not most folks beam the epitome of health and vitality before they keel over in cardiac arrest. Paper currency schemes are highly analogous in that regard.

    • Agreed, Pat.  I would ask our charting friends, “What part of a chart that comes before an asymptotic rise tells us that the rise is coming or how radically severe it will be?”.  The answer, of course, being NONE.

  4. Now this in an interview.  It flows; it’s consistent and not self contradictory, unlike the post below with Jim Rogers.  It also leaves out the tonality of the verbal interview so you can read the wording and analyse it based on those premises.

    I agree with you JR. We do focus on precious metals to a near obsession.  Nothing wrong with that if we get some alternate views to compare and evaluate our opinions.  It’s hard to break the bubble even when you are aware of it but quality information helps to that end 
    Working within the paradigm of precious metals it’s easier to break the bubble of conventional thinking that’s been the lot of nearly everyone in the US.  You can view the world differently frm that standpoint
    I read a very powerful philosophical statement a few months back that helps me understand other people’s points of view and act or react reasonably  when someone makes a statement that might be contrary to my belief system.  Nearly anyone who makes a statement based on their point of view provides information and opinion that is worth gleaning for some core values.

    The philosophical statement that helped me change my POV were  words to the effect: 
    Don’t be critical someone elses religion and thereby stand in the way of another man’s path to heaven.
    I can’t remember who wrote this or even the era in which it was written but it meant a lot to me

    • AGXIIK-The metals community is almost a type of religion.  It’s a belief system or a realization of the global market environment.  Once you realize that the whole system is based on fraud, it’s hard to imagine that the system can implode at any moment.  I don’t know about you but I can remember the single moment that I came to understand that the system will not last.   It’s a feeling of hopelessness.  Kinda like a feeling that you are drifting aimless without a compass. It hit me like a ton of bricks.   It’s a very powerful feeling like you just woke up after sleeping decades or years.  We all have many different thoughts and ways we can predict how it will work out.  I like to come back to thought, truth, math, and logic.   The only thing left of keeping this system going is perception.   If people wake up in numbers, it’s over.  The governments of the world will keep a look out for this.  If perception changes to see the truth, more and more controls will be coming.  The next few years will absolutely be wild.  Take away their guns, pensions, benefits and unions, people will start to revolt.  I think the powers of control are walking a tight rope to control the masses in the world. 

  5. I beleive that the silver and gold markets are indeed manipulated but to the imminent collapse of the comex i think is a little premature. Also there is still silver around to fill these orders(JUST THINK SPROTT) he is getting all his orders filled with no problem.

    • Actually, sprott hasn’t been getting his orders very timely.  Additionally, his orders have had mint dates months after his order should have been delivered.   The silver stock has been depleted and now he, like us, are buying the flow.

    • “Comex won’t fail, its a ponzi scheme.”

      So, from this we surmise that Ponzi schemes never fail?  Something tells me that the ash heap of history is littered with the remains of every Ponzi scheme ever invented.

    • Ed, I think the ponzi scheme is the dollar illusion called Treasuries and the federal reserve note printed by a fiat balance sheet.   Silver on the COMEX is not a ponzi, it has a very clear resolution path…. physical or fiat settlement.  Rule changes are always allowed…. so its not a ponzi.   Instead, with Treasuries There will always be some on left holding the bag….. that’s the ponzi.

    • Saddle… Ponzi schemes are many and varied.  US Dollars, which MUST be printed in ever-increasing amounts, certainly qualifies, as do US Treasury notes, bonds, and bills, as well as many other things.  

      Physical silver and gold cannot be Ponzi schemes unless there is a scheme that has to do with selling them while also holding them… like the hypothecation schemes out there.  If a PM can be bought, received, and held in our own possession, THEN it cannot be a Ponzi scheme.  

      I believe that the way that the PM markets are manipulated are very much Ponzi-like and the COMEX is right in there leading the charge.  Selling 100+ ounces of paper silver for every REAL ounce of silver backing IS a Ponzi scheme, IMO, because only 1 of 100 buyers can actually recover what they have bought… assuming that those running the scheme do not simply run off with that 1 oz., of course… and given ANY chance at all, they will!  The true nature of the COMEX and LBMA Ponzi schemes will become very apparent once more futures buyers demand metal than they have or can get quickly.  Ponzi schemes all have at least one feature in common and that is they need a continuous flow of money from new “clients”.  Once delivery is halted, that new money will not be showing up and the game will be over.

      But then again… I could be wrong and will leave that determination to those who frequent this web site.  :-)

  6. Unless I read this incorrectly, its not whether or not the CRIMEX will fail, its where the hell will they get 300 million ounces to COVER their shorts?????

    Remember folks, the holders of these longs just need to hold on and not take that check from BM (bowel movement, Blythe Masters) forcing the CRIMEX to come up with the silver.  Then, the fun will begin!

    There was a time when Blythe would just sit there writing checks to push the longs out of her way.  Now, the worm has turned, and its ass-kicking time.  We’re not talking symantics here.  Use whatever word you like.  When the CRIMEX has no silver to deliver on demand, the game is over, and silver will be warp speed to the moon!     

  7. I think there is a cap on how much silver can be delivered in any one delivery month.  Which means there won’t be a crash on the Comex.

    Most ppl playing the futures market don’t take physical delivery anyway, so I don’t see the cap being met either.

    Listen guys, the cost of mining silver for the primary silver miners is ~$28/oz meaning it’s a good time to buy silver.  However, if the price doubles from here, u can rest assured a lot of silver will come back into the market including silver from gurus such as Sprott to take paper profits on an overvalued commodity.

    • “Most ppl playing the futures market don’t take physical delivery anyway…”

      That was the case for many years but now we have successful Asians in the game and they do not want paper!  They want metal and LOTS of it.  The raw tonnages of both silver and gold being shipped to Asia these days is absolutely staggering. 

  8. Or just think of this guys why not just go around the crimex. what laws say that they have to give the price of silver an gold. I say that just be the minimum price. We need to make our own pms bank. every body be tied into the internet an has to be a registered bonded buyer an you get to bid on silver an gold you want to buy. Thus taking the curruption out of the system of gov. I always side if you wanted to control the world its not the one with the most gold an silver. its who controls the price. Of all the people in the usa with money to spend an worried about the banks there be lots of actions. It would butt heads with ebay an even be bigger if goes world wide.

  9. That’s the secret to the Chinesa game plan. They use some of their $2 trillion USD reserves or some freshly printed Yuan, play our futures market and when they win, they demand physical gold and silver.  Willie estimated they have snorkeled 6,000 tons of gold in 5 years. They will also receive 170 MOZ of silver X chinese production.  That’s the grand scheme of things. Using our FIAT to force bad hand bankers playing right into their game of settling for precious metals. Why they would take cash when they get something of real value.  If I could play that game at that level I would always take phyzz.  Storing it might be a problem but I think I could figure out a way. I’d at least go long on canoe futures.

    • “Storing it might be a problem but I think I could figure out a way.”

      Actually, storing it will not be a problem.   In fact, it is a 2-fer.  First, they get a huge amount of gold and silver with which to back their currency for when they make a bid for World Reserve Currency status, which I believe that they will at some point; and second, this would make for quite a jobs bill… tens of thousands of Chinese construction workers digging tunnels, laying re-bar,  pouring concrete, doing wiring,  doing HVAC, etc.  There’s just NO downside to it at all.
       

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