JB Slear Asks: Is the Paper Ratio in Silver & Gold Much Wider Than 100 to 1?

paper goldCurrency historian Andrew Gause has informed me that one of his sources thinks the ratio of 100 pieces of paper to every real contract of (1) Gold is being expanded and could be up to as much as a 400 to 1 ratio.
With 80% plus of the products gone from the Comex warehouses since April of last year, the CMEGroup no longer guaranteeing the Comex inventory count, the constant buying from Asia,  their (Singapore and Hong Kong) opening up of the warehouses that promise open disclosure,   and the total lack of trust of the USA’s government both within and without, why not?
The real answers will come in time and most likely when the bank vaults are completely empty.   What can we do as individuals?   Take delivery of Silver and Gold and get it out of the system before China and India take it all with the approval of the western banking system! 

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Submitted by JB Slear, FortWealth  

The US Dollar is under the support mode this morning with the trade at 81.480,  up 11.8 points and at its top.   No reasons for the rise except that eastern parts of Europe are in riot mode along with the assassinations of an IMF official and 4 UN controllers in Afghanistan.   Not a good reason as far as we’re concerned.

Treasuries are under the support mode as well but seem to be losing that price fix because of the sellers continuing to liquidate into support.   Energy Sector is now trading higher with Crude Oil up 24 cents taking back the losses accrued in yesterday’s partial trade with the price now at $94.81 with the rest of the group following close behind along with another winter storm coming to the east coast.

Gold is down again,  after all,  you can’t have it go higher just because a German Central Banker claiming that Gold is being manipulated and is the biggest conspiracy in the history of man now can we?   The trade now stands at $1,245.50,  down $6.50 and $1 off its low.   Silver is down as well with its trade at $19.975,  32.9 cents lower and one penny off its low as well.   Bitcoin,  the only gauge that cannot be manipulated,  continues to climb with the trade now at $960,  up $5 from yesterday’s quote and within a trading range of $981 and $931,  as more and more are getting out of the system any way they can!

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Grains are mostly lower with Bean Oil and Wheat the only exceptions,  Softs are evenly mixed with Coffee and Cocoa trading higher,  Sugar and Cotton trading lower and the Live Stock Sector remains closed till 9:10 AM Chicago time.

Never worry about the Stepford Wives look on the Paper Markets.   It no longer has any real economic reality support with the exception of the Working Group of Banks that do nothing but support the price regardless of the damage it does and the now complete lack of integrity and data might have to support it.   In short,  the damn things keep climbing when all hell should be breaking lose to the downside!   Going back to Precious Metals for a moment,  I called in on the Patrick Timpone Radio show with his guest Andrew Gause (a currency historian of very high caliber) on One Radio Network where we talked about the events surrounding Silver and Gold and the manipulations.   (http://oneradionetwork.com/moneyfinance/andrew-gause-and-the-real-world-of-money-were-being-told-theyre-printing-less-but-theyre-printing-more-and-more-and-more-january-8-2014/ )

We both understand the draining of precious metals from the Comex exchange yet are confused as to why the prices keep going lower with part of their support mechanism being removed.   But then Andrew brought up something that has been bothering me since.   He said one of his sources thinks the ratio of 100 pieces of paper to every real contract of (1) Gold is being expanded and could be up to as much as a 400 to 1 ratio.   In a closed system,  this could not happen,  but knowing how these banks work (illegally, or in total secrecy),  why couldn’t this be the answer to their approach to keeping the prices of precious metals down?

With 80% plus of the products gone from the Comex warehouses since April of last year,  the CMEGroup no longer guaranteeing the Comex inventory count, the constant buying from Asia,  their (Singapore and Hong Kong) opening up of the warehouses that promise open disclosure,   and the total lack of trust of the USA’s government both within and without,  why not?   Open Interest doesn’t seem to be waning,  and from my understanding,  when a bar of Gold leaves the warehouse,  it’s supposed to remove 100 pieces of paper from the exchanges hands but we don’t see the reduction of paper at all,  only the product.   Now the CFTC and the NFA have more egg on their face, because a German Central Banker admits the manipulations,  yet they’ll sit there idly as the events come to conclusion collecting their incomes and choosing not to see anything.

The real answers will come in time and most likely when the bank vaults are completely empty.   What can we do as individuals?   Take delivery of Silver and Gold and get it out of the system before China and India take it all with the approval of the western banking system!   It’s time for the bullies of finance to get their comeuppance.   In closing,  keep your Precious Metals and Bitcoins close,   get out of the system,   and as always … Stay Strong!!

 

                   JB Slear

866-443-0868 Ext 104

817-717-5489

Fax: 817-764-2537

www.FortWealth.com  

 

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Comments

  1. Just a few minutes ago I gave the Doc a heads-up about a news article by Patrick Heller, telling about the low inventory in the Comex warehouses.  Great minds think alike!
    What is striking, is there are 420K oz in inventory, yet there are 41.6M oz in open contracts.
    Yes indeed – that is a 100:1 ratio.
    Linkey:
    http://numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=27578

  2. “keep your Precious Metals and Bitcoins close,”   Bitcoins close???   How do you do that then?
    Bitcoins the currency with less substance than Scotch mist.  
    Bitcoins the “wet-dream” of our controllers.   They have been trying to force people to go completely digital and along comes Bitcoin and does it for them.   One day soon the advocates of Bitcoin will suddenly find that all of their locked-away wealth has evaporated.   Even paper currency, no matter how devalued, still has at least some presence in your wallet.
     

    • Again hidden advertising Bitcoin! Every second article on the internet – this hidden advertising Bitcoin. I’ve eaten too much of this sh*t already and burp in your mouth to anyone who sings about Bitcoin.

    • Bitcoin’s trading price is soon being made irrelevant as fractal units will be place holders for actual stuff. Just like gold receipts.
      Banksters are liking Bitcoin now, so save to invest in it, right? Good luck with that. 
      I am on the record as saying BTC is a the sinkhole for hard earned cash. Now it’s being marketed as the sink hole for actual assets too. Lose the BTC receipt (or the infra), and the asset is gone. Nice scheme. I’m jealous. The FED should put their reserves in BTC fractals. Oops, who pulled the plug at the most opportune moment there? Oh well, a sunken gold ship you can dive for. Lost BTC is truly lost.

    • BTC is not for noobs or the faint-of-heart. 
      I predict a tectonic shift in the BitCoin realm for sometime in 2014. 
      You can likely count all of SD’s BTC enthusiast on one hand, but we shall have the last laugh! 

  3. What does it matter on the ratio?   People that buy gold/silver futures contracts are NOT gold/silver investors, they are paper speculators who do NOT want physical metal, they want paper profits.   They will always want paper profits.
    If they wanted physical metal they would own it, they want trading profits.

    • If all of the derivitives are counted it may be magnitudes higher than 100-1.

    • Indeed @zman. There are alot of articles doing the rounds at the moment re gold. With the exception of a (very) few, most observers/commentators are not providing much fact to back up their assertions. 
      ‘We both understand the draining of precious metals from the Comex exchange yet are confused as to why the prices keep going lower with part of their support mechanism being removed.’ – FOAOA has some opinion on this as does preciousmetalspete!
      Does this make me a troll (BOP’s)…..no. I have built a small stack of mainly gold over the past 2 years and wait in anticipation for what is next, the same as other stackers.
      Something ‘feels’ wrong to me at the moment, almost like the calm before the storm however, I cannot claim to have any intel or insider knowledge to determine what is actually going on in the gold space.
      My time is used (enjoyment) to suck everything in to determine what is likely to happen next. However, I express no opinion other than to say, I would like to make through whatever is approaching……
       

    • zman, I would argue that at the current rate, at some point in time the Comex will be nearly completely depleted of physical Gold inventory.
      And when this happens and the publicity gets out – THIS will change people’s perception of the value of Gold.
      The effect will be a large price increase.
       
      But what the hell do I know?

    • “at some point the Comex will be nearly completely depleted of physical Gold inventory”
      I doubt it, and remember that the Comex is NOT really an exchange for physical gold, that would be the LBMA.
      Everyone in the gold market already knows about the Comex supply levels, it doesn’t concern them. Everyone in the gold market already knows about the German gold deal, it doesn’t concern them.
      There has always been a high ratio of paper to physical gold on the Comex, it doesn’t matter because at the end of the day, there is plenty of gold at 1250 oz to meet physical demand, and plenty of silver at 20 oz to meet physical demand.
       
       
       

    • Aye, the paper-shuffling momentum monkeys have a large impact on the ‘spot’ price at present.  For how long, nobody quite knows, but many of us suspect the paper-shuffling momentum monkeys will get their comeuppance for being the useful idiots of the banking cartel (like all the other useful idiots will get their comeuppance – such as psyop shills).
      Interesting times, indeed.
      Keep stacking the phizz, folks.

    • It matters because paper price is setting the price of physical

    • I just want to get LAID.  That’s it!!  I am close to Nevada!!  I will go down to Nevada, Wells is closest…and make arrangements for “Paper Lays!”  See…people don’t really want to get laid they just need to know they CAN get laid, sometime in the future.  I am sure I could get the CME to go along with it.  I could cross collateralize it to people in Michigan and get the Chinese to do all the work by HAND!!

    • @zman
      “…Everyone in the gold market already knows about the German gold deal, it doesn’t concern them.”
       
      This German repatriation shortfall story is morphing into the Deutschebank investigation and getting a lot of people asking a lot of harder questions with a little more intensity.  I suspect that the gold repatriation story has turned up the heat on DB quite a bit and the fact that they bailed on their London Fix seat may actually give the whole unravel process some legs. Whatever the paper/physical ratio, at some point it will become apparent that it’s a lot greater than 1 to 1.  You are right that, at the moment, no one really cares what the ratio is… their processes for trading and making money, thus far, haven’t been disturbed.  But I’m not so sure this calm will continue for too long.

    • The history of finance is littered with the corpses of the “unconcerned”.  No one at MF Global was one bit concerned about their future UNTIL they no longer had one.
       

    • We get it. Wait until that changes. We are not all day traders and want a safe form of savings. I’ve always found the paper game to be very bizzare… how money is made out of nowhere…it’s all fake and people don’t care… like I said… wait until that changes.  
      Stackers have their metal in hand and are not afraid to barter with REAL people for REAL value.
      You can be an asshole and trade paper all day. Try seeing how far being an asshole will get you when a real physical trade goes down.     
       

    • Unless the mechanics of the comex change it is highly unlikely that the gold will ever disappear.  Prices will respond before that happens.  Zmans argument is fairly appropriate, the news we all mention makes headlines.  The people trading the big money read that, but likely more “secret” stuff we dont see.  The price has not reacted, that says something.
       
      As another said, maybe a calm before the storm, maybe not.  The rangebound activity in silver is not bullish to me, could be eventually but not impressed so far.

  4. Certainly the information is of note, but a look at the chart says they are still in control. I’ll be the first one to cheer when that changes. Sadly, it hasn’t changed yet.

    The stench of desperation is getting worse to be sure.

    • Look at it this way, CDL… an explosives expert is in full control of the bomb he is diffusing until he is not.  At that precise moment, a loud BOOM! is heard and various parts of his anatomy become separate entities.  Yes, he IS sweating profusely while he works, right up until that very moment.

  5. I heard that Jeffrey Christian of the CME Group admitted they had sold Ag @ a 400 to 1 ratio about 3 years ago! If that was true, then only heaven knows what the ratio is currently, after years of naked shorting! Never forget when the manipulation ends there will still be five times as much gold above ground as silver. It Doesn’t matter about the 9 to 1 mining output. Using USGS Ag reserve numbers (shown to us by Brother John F to be fraudulent and manipulated so as to show a higher reserve supply than actually exists)the true in ground ratio could be much lower than the 9 to 1 current mining output!. Global in ground silver will be largely depleted by the year 2020. Unless they start digging it up faster to meet new demand with a rising price. Then silver could be “extinct” long before then! This is what gives bankers sleepless nights and ulcers!


    • Jeffrey “witness protection program” Christian did admit on camera as I recall that leverage was 100 to one, that is for sure. The fact that it’s even 100 to one is laughable. Once you hit 100, I think it is sort of all academic. I think we can all agree we’re getting close enough to the end game that the smell is discernable.
       
      I’ve said before that I personally think that you could get to a point where silver could be considered a vital national security or national interest item and become stringently regulated down the road. Obviously the supply side is a little murky, but given the fact that the US mint has pulled back steeply on supply, and the sunshine mint is weeks out on orders shows something. Shortage? Maybe maybe not. Tightness? Certainly.

    • @CD: YUP! I couldn’t find his 400 to 1 Ag quote although it has been reported that he did say that. If we look at the 60 to 1 GSR though, it is safe to assume that Ag is being shorted by multiples more than Au just to maintain its price cap and ratio. I’ve noticed the ETSs have bought up and stored Ag while letting their Au stock go!

    • @RRG
      Why would additional measures be necessary for silver? COMEX stocks are holding strong, no-one seems to be buying big enough to cause a dent. India got a couple thousand extra tonnes this year, and that was fine. 
      Also, the gold and silver prices are currently both extremely well in line with their typical respective complete mining costs. So there’s nothing more strange about silver’s current price compared to gold’s. Spot=cost, pretty much. 
      Since COMEX stocks for silver are holding up better, perhaps supply and demand should raise gold’s prices some, not silver’s.
      All the silver money (all of the market) can buy at spot. 

    • @XC Skater: I would have to disagree with pretty much all of that. There isn’t enough Ag around for anyone to “buy big”. You can not give a normal mining cost of silver because there are so few primary silver mines. A 9 to 1 mine production GSR ratio while stock piling the primary metals their mining such as copper, lead and zinc that they can’t sell. The demand for Ag is insatiable and as for the Comex numbers, they say themselves you can’t trust them! Nothing official about these “markets” can be trusted to be truthful. But hey, buy up that Au, it just leaves more Ag for the rest of us!

    • @RocchetsRedGlare
      The 9 to 1 mining ratio doesn’t say much. It’s been like that for a while, and stock off both are holding, despite being tiny.
      As you increase the amount of time, the likelihood for something specific to happens approaches infinity. Yet no-one has bought big enough to cause that dent. The market is really small, and full of bottle necks, yet price and premium are both in check.
      I agree, few primary silver mines remain, and if there would be more, silver might need to be priced lower. No-one is buying that silver. And COMEX is doing great ;-)
      I also strongly prefer silver for now. I used to do that because I thought the GS ratio was silly high. Now I realize the SGR is 100% fair to current cost levels.
      And yeah, base metals are being stock piled. I see base metal falling hard in the near future. No-one is eating into those stock piles. Economic hardship world-wide. And THIS is a prime reason I see silver supply dropping over the next decade. Right now base miners don’t care about low silver price, they dig it up anyway. If base metal mines start shutting down (those that dig up the lion share our silver) due to fallen base metal prices or utter lack of demand, even tripled or ten-fold silver prices won’t persuade them to stay in business. they dig up too little silver, and get stuck with unsellable base metals.
      Demand for Ag is very satiable I am afraid. Some articial bottle necks thrown up are keeping us tense, but hey, plenty of silver for everyone. We’ve seen sub-$19 silver very recently and we are being bombarded with banner for sub-$ silver premiums. Tell me it ain’t so. Sunshine rounds may have run out, but as long as you can get Buffalos or 10oz bars to satify your demand and that of your fellow stackers, there is no shortage, just a waiting list lined up behind a bottle neck. If there is actual shortage, you will not see $0.99 premiums for anything.
      There is barely 1/10th ounce of silver dug up annually for every human alive to buy. And actually most of that is destroyed in industry. Leaving closer to 1/30th to 1/20th of an ounce per human for stacking.
      The one buying big (Sprott) is selling to get some leverage via the mining stocks no-one can pick (save from death) as well as they can. This put significant amounts of silver on the market, which we bought because it was cheap. If shortage is to happen, it’s just been delayed :-)

      I don’t hold gold at all. From where I am sitting is seems utterly plentiful. China is supposedly going crazy for it, and yet it keeps on coming. Someone in the west was sitting on a huge stockpile obviously, and there is no telling how big it was (since we cannot trust official figures, not to be overstated nor understated), so this supply may well last a life time.

      With silver, I have not seen real proof of large stockpile being used. We’re just not buying that much above annual production. And a silver warehouse is going to be pretty big, for something that does warrant being guarded really well.
      My bet is that since gold is useless and silver is vital, there is a better chance we’ll run out of silver stock piles one day. 
      Although, are we sure all the world’s junk silver extracted from us around 1980 was really destroyed in industry since? Surely if humongous silver stocks existed, this would have been leaked? Then again, until Karen Hudes came with the Hawaii gold reserves claim, did any substantial claims surface? Seems PM are best kept secrets.

      Not sure what to think, but I like silver. A tiny buying frenzy can devastate this market. Every human to try and own 1/10th ounce would already cause huge drama and possibly war.

      Many start private bullion series, no-one re-monetizes silver. Surely now we have the BTC craze, someone can turn their stack into a fresh currency of silver? If BTC can get bankster approval… the silver community however have been a huge disappointed from what I’ve read the past years I’ve been obsessing over it. SO SO SO easy to re-monetize silver. And it would totally take care of any stock piles. I have some great practical ideas on it. Make it the people’s cash. Again. Open source standards. Logical gram denominations. Durable alloys. Nice names for the coins. I propose naming each size coin after a virtue. And anyone who meets the standards (for slot machines etc) can mint their own design. As long as size, weight,  alloy and purity are good (silver is great to design automated tests for) are good, go wild. It could totally replace cash around the globe as BTC is replacing wire transfers. And yeah, the silver debit card thing to hook the coins to is already out there. It’s really TOO SIMPLE. And no-one doing it properly. Just talk. And selling novel 1oz coins for $3 over spot. Just a few retailers joining in, offering a discount for first used coins (and striking a specific dent in it to remove implied coupon as a kind of mint mark) can pay for the premiums of production and distribution. Say a drug store chain joins in. Offers a 15% discount for coins never used for a discount before. Nothing crazy. Takes the coin, strikes the coupon receipt mark in it, and put the coin back into circulation (cash register). Used coins could get 5% discount in any place that declares to do so. And draw in bizz of those holding coins and having to spend them. Too simple, I am ashamed to come up with it. And I can go on. Eric, you listening? Call me bro, let’s get busy killing silver stockpiles! I’m putting your face on one of the virtue coins. Or lets call the 5 gram one the Genius.

    • Funny, 1st you say-plenty of silver for everyone, then you say-Every human to try and own 1/10th ounce would already cause huge drama and possibly war. What I understand is that there is about 1 b oz above ground Ag & 5 b oz above ground Au, estimated. The world as we know it could lose all the Au and nothing would change except there would be a lot of very unhappy rich people with empty vaults. Disappear the silver and the modern world would feel it right way! Which one is really precious is all I’m saying? The prices and ratios are where they are but, they are not realistic or set by a free and fair market. If they were I believe Ag would be at par with Au at the very least. The reason I mention mining production is because many times people confuse that number with the natural ratio of the two. Historically the ratio has been 15 to 1, but that ratio has changed dramatically in the last century, advantage silver. Yet the price ratio has inexplicably gone in the opposite direction and it isn’t because of demand. We know this because the S/G demand ratio (for investment alone, coins and bars) is at least 50 to 1 at gov. mints and 150 to 1 from private mints!

    • Interesting dynamics, aren’t they?
      Who did that estimate, and will he sell me his car?
      The way I tested the breeze with a wetted finger, there must be well over a 1 billion ounces Ag above ground. How many ASE’s do you think get melted down annually? Maples? Buffalos? 10oz bars? That’s the north american market. Now extrapolate to Europe and beyond. No-one’s melting down perfectly fine bullion. It’s catching too high a premium. And there’s not enough physical demand from industry to warrant it anyway. Premiums would signal this clearly.
      Every year we globally stack 300 million ounces, maybe better. If you consider 40 billion are ugly overpriced depictions of long gone qualities linked to one very disliked country, you can see the picture. lots more being stack than that. And no-one’s melting it down. 1B oz would be 3 or 4 years, tops. And stacking was going on long before I got in.
      I know it’s a big ask on SD, but let’s for a moment try to be realistic? It was 1 B a year ago, and we’re supposedly creating huge demand. Where did YOUR silver go then?
      Really it doesn’t matter if there’s 3-4B oz in private stacker hands. We’re not Apple stock investors happy to double our money. My silver position will not be existed until I hear angels sing, and silver’s done a 10 bagger since today. Strong hands. The anti-silver folks hate this notion, but it’s true. If we have strong hands, we drive up price. When you and I decide it’s been fun, but time to get serious, and we collectively bring our entire silver stacks to dealers tomorrow, the day after we’ll see very low sell-back prices. Ha, perhaps we should directly invest in short term liquidity solutions for bullion dealers.

      Face it, us stackers have a terrible rep. And the attitude and blind faith based on false numbers doesn’t help. I was like most of us until I caught up and was able to insert some fresh thinking. We’re going to have to work this market harder, get other people’s money involved. I’m doing it. Flipping silver, getting people hot for the idea. Offering them variety, which helps them invest more. Who wants to own 10oz, in 10 identical ounces? Maybe Americans to get them pretty shiny Eagles, but the poor folks on my side of the Atlantic are a bit more particular.

    • Yup! interesting times too!  Nothing is what it seems. I don’t really know if coins and medallions are melted down as scrap and recast. I suppose some are. If the markets are just barely meeting demand then all it should take is a little more push to brake them! We’re all trying as best we can. I personally want Ag sub 20 for as long as possible Sub 10 even better. I want more! I can’t argue against that logic, it was 1 billion 3 years ago so “they say” 200 million for investment annually should have made that number 1.6 billion. I guess it’s scrap being used in industry to be lost forever keeping that 1 b constant or that number is false too!

    • Where I’m at (Euro zone and friends), VAT protects silver from the melt.
      We get spot +7%, sometimes +10% for .999 official silver. And trust me, refiners are obviously not offering spot.

    • VAT, what a rip off. We’ve been fighting against that for over a decade.

    • VAT suxx when it affects your investment asset class of choice, absolutely. But if you consider how much revenue it brings the treasury… 6% on food and select services, 21% on the rest. 
      My health insurance (mandatory with choices) is €61 per month, to offer just one example. No potholes in the roads, trains that go on time and some other stuff we fail to appreciate as we didn’t actively ask for it. We don’t have a much higher measurable living standard, but you don’t pay for nothing. And at a 3% budget deficit rather than 40-50% ;-)

    • I could care less who makes trains run on time, that’s the train owners problem. We don’t need government for that or spending our money on trains! Taxes are theft. Government has one job, to defend, life, freedom and property. People can do most of that and all rest. Even better without them on our backs and in our pockets! Maybe things have changed from when I was last in Europe but I remember plenty enough pot holes to go around. Although nothing as bad as places like Illinois or the east coast.

    • No-one likes taxes, but face it : countries with the highest VAT offer the highest quality of life. Heard of the huge teen pregnancy, racial riots, poverty, homeless freezing dead on the streets, etc problems of North Europe? It’s outrageous and it didn’t happen :-)  
      Yeah, Germany has all of those and charges only 19% VAT. Germany is Europe’s discount center. Seriously.
      You do get something in return. Small things add up. How many days does a dad get to stay at home with a new born on your end? Small example.
      And somehow the job environment, without powerful unions, is that e get at minimum 21 holidays a year, and most get more due to competing employers. My American employer hated the environment enough to close the local office all but entirely :-)
      What does Obama charge you for your affordable care? Deduct my €61/mo and then add that you your salary ;-)

    • Lets face it. It’s not for me to pay for someone to stay at home to take care of their newborn! Race riots are manufactured and have nothing to do with how much one pays in taxes. If it does, then I’ll call it what it is, extortion! poverty and homelessness are circumstances of government corruption or choice. You may pay 61 E but someone else is paying a lot more than they should. That’s bribing one and robbing another, if one supports it they’re corrupt..  Wasn’t long ago a British subject died of dehydration in a hospital waiting room! Wow! Takes three days to die from that. Some system they have there! Think I’ll pass on that and Obama care too. Only 20% wanted that scam but it didn’t stop the crooks!

    • @RocketsRedGlare
       
      When did Jeffrey Christian become employed by the CME group?

  6. Zman, you are again wrong. Gold reserves have been declining on the Comex.
    Following your logic, gold reserves on the Comex  may be zero and can be negative. And it will not change anything in the behavior of investors and speculators, is not it? LOL

    Zman, conversation goes on: “Customers are entitled to physical delivery of the metal, what can not be fulfilled.”
    But you are trying send our talk to other theme: “Customers do not want physical delivery.”

    I think this is a different theme and it seems to me that any desire of buyers, can not justify the violation of their legitimate rights.

    • “Zman, you are wrong again. Gold reserves have been declining on the comex.”  
      I’m not denying this fact, and everyone in the market knows about the reserve levels, it doesn’t concern them, why?   The Comex is not  really a physical exchange.
      Don’t you think that if physical gold or silver were really in short supply that investors would buy up all the physical at $1240 and $20 per oz?   The Comex supply means very little, the market doesn’t care. 

    • It used to be that the Central banks held the price of gold down by selling their gold into the markets.  Whatever the gold demand was, they met that demand in order to keep the price within their specified comfort zone. For some years the Central Banks had an agreement via the IMF to sell a maximum of 400 tonnes into the market to meet this demand. This was done to keep the price where they wanted to keep it.
       
      The balance between supply and demand was carefully modulated to keep the price within their desired parameters and as long as they were able to maintain this equilibrium, the fiat currency charade remained safe.
       
      Well, now, as the world is losing confidence in the governments of the developed world and their ability to maintain the value of their currencies, world demand for the metal is ramping up,
       
      The supply however, has NOT KEPT UP.  So, in an effort to maintain that supply-meets-demand balance, and, hence, the price where they want it, they have had to ‘manufacture’ supply to meet the increasing demand.  Otherwise, that price would rise… a LOT. Since they can’t manufacture gold itself, they’ve had to manufacture ‘SYNTHETIC’ gold.  It’s called paper.
       
      And, the trick for them was that, in order to give that ‘synthetic’ gold the appearance of credibility, they had to create the paper markets of Comex, et al. This institution is an old mechanism that used to be used for price discovery and matching demand to supply. They just changed a few rules and told the regulators to watch porn all day.
       
      In these paper markets, they don’t need any physical metal.  All they need is paper and a track record of credibility of settlement at the end of the contract.  This is mostly done in cash or in rollovers.  In the event someone gets a bit insistent on a settlement in physical, they’ve got access to some of that too just to keep the threat of exposure under control.  To maintain the price of gold within their specified target zones, all they need to do is to add synthetic supply on demand, as necessary to modulate the appearance of a demand/supply equilibrium. As long as they do this, the price takes care of itself according to their formula.
       
      As demand rises, they simply create a ‘supply’ to meet it. And they count on that demand accepting this synthetic paper substitute. If demand truly met supply, no fractional reserve in precious metals would even be necessary.
       
      But fractional reserve IS NECESSARY. Isn’t it?
       
      Demand is physical.  Supply is Synthetic.  And the day people realize that synthetic is only paper… the game ends.
       
      Once again, The demand is, most assuredly, real.  The supply is, most assuredly, now synthetic.

    • “In these paper markets, they don’t need any physical metal.  All they need is paper and a track record of credibility of settlement at the end of the contract.  This is mostly done in cash or in rollovers.  In the event someone gets a bit insistent on a settlement in physical, they’ve got access to some of that too just to keep the threat of exposure under control.”

      True or false, there are many speculators who trade these markets with no intention to make or take delivery, and therefore “cash settle” long before a contract comes to expiration?
      True or false, many people use these markets to hedge their physical exposure even though they have no use for the underlying gold in NYC and therefore “cash settle” their positions long before a contract comes to expiration?
      True or false, the above two categories make up a majority of the players in the market?

       

  7. COMEX may well be reducing stock because they’re getting better at not delivering. Working out those customers who still ponder the idea of taking delivery. that simply is not what the COMEX is for. It’s for paper trading to determine price. Logistics are just not their par tay.
    COMEX could reduce to 1 open-to-public vault, in which a ceremonial bar is placed. So we can see what this is all about. Gold. the real deal. The money of kings. Look at the one’s and zero’s on the screens, we’re trying to find out what the price of this bar should be. In the institute of standard they keep one yardstick and maybe a back-up. They don’t keep stock of yard sticks, and are not expected to hold a year’s demand of yard sticks. They are there to determine the length of the yard. And as long as it’s 1 yard, they’re doing a swell job. As does the COMEX.
    Don’t be surprised when reality is more bizarro than the silliest you can come up with. Has it ever not been, or have you not seen reality in the eye?

    • So in your mind, it is OK to sell one widget 400 times over.  Always knowing that when 400 buyers come to take possession of their widget, you will tell them to fug off.

    • XC skater is merely describing the reality. The COMEX is a bullsh1t scam casino. He wouldn’t think it is any more right than any of us. The sooner the thing blows up or becomes irrelevant the better.

    • @XC-Skater
       
      You understand comex is an exchange and not a person?  My point is that comex is a facilitator, the only ones who play in delivery are individual accounts (banks, companies, individuals), comex just guarantees the transaction happens.

  8. Really be nice if there were some new real news instead of recycled and re-inflated old news. What the Hell is the argument about anyway, we ain’t getting richer, PM’s are not soaring in price even though the Gurus predicted that Silver would end the year 2012 at $36.00! Get my drift? How can there be so much demand and so little price increase if any? Same ole same ole, just keeps the wheels barely greased. So repetitious. The truth is in the price not in the Bullshit.

    • @Ranger My Friend you need a good cheering up and a smile on your face. So Chucky is here to help.  Keep Stacking



    • @Marchas45: Good little video Charlie. The price of the 1/2 oz libertads are almost as high as a full oz, but you’re right, they don’t mint many of them.

    • I have 1/2oz Libertads and rarely sell one. Only as part of a serie. While they’s a nice size and nice (sexy) print. 

      I can find a place in Germany that offers the for €11,71, but most are around or above €15.
      People complain about the US Mint, but try and get some steady supply from Mexico… :-)
      If one ever sees a kilo Lib for similar premium as a Perth one, GET IT. It’s 110mm vs 101mm, and it makes a difference I tell you. Flipped the one I got, and keep my eye out for another one. Awesome piece.

  9. to Zman:
    “Don’t you think that if physical gold or silver were really in short supply that investors would buy up all the physical at $1240 and $20 per oz?”

    Investors are buying up all presented on the market gold and silver at these prices and even more.
    Only the sale of gold reserves of the U.S. and the manipulation of paper, allow the Fed to keep prices at these artificial levels.

    What do you think, what would be the price right now, if it prices without sales gold reserves of the United States and without manipulations of Comex paper?

    • I am afraid you have it the wrong way around.
      All the gold and silver we’re prepared to buy at these bargain prices are being supplied to us. A bit of a wait, butt we’re getting it. No-one has been denied delivery all through this. And if a product ran out, an alternative was available.
      Shops may decide to work off zero inventory (very typical in Europe now) but not one that I am aware of have been forced into throwing the towel. 
      Some stackers claim to be waiting for $14 to get in big, but I bet most are all-in already. I trade a bit, speak to people. Most are broke. People with real money are not buying silver. They are buying real estate and stocks and high interest bonds.
      A week of USA QE (not even the world’s largest economy) would turn the silver market in a Mad Max prop. No-one with big money is interested. Perhaps buy big silver is more toxic than drinking Fukushima tea. Sprott has alluded to some of it, but nothing specific. He’s a gentleman, and playing the playing field.

    • No one? What about the allocated gold at AB Amero or what ever that banks name was? They got theirs stolen. Germany hasn’t gotten theirs from The Fed or the French! Also M.F. Global, they got a cash settlement but not the metal.

    • ABN Amro.
      Come on, those gold accounts are for people who are too lazy to get coins. Gold can be had easily at 2% over spot.
      The savers got their spot value back. Jim Sinclair had just called the bootom at $1600 and since prices went falling, they could buy more physical back for their paper.
      They never held it, they never HAD the gold, and it worked out wonderfully for them. 

    • Come on lazy or not it was theirs and it was stolen! If the market had went the other way before they bought back in with the cash… Either way it’s lawlessness. But Germany hasn’t gotten theirs. I doubt we in N. America will ever get ours back. Nor the Austrians, the Finns or any other country that had bullion stored by American, British or French central banks!

    • @Silvermail
      “Investors are buying up all presented on the gold and silver at these prices”
      No, if they bought up ALL the gold and silver there would be physical shortages, and there are NO shortages.
      “sale of gold reserves of the US”
      You state this as a fact, and it’s not, it’s speculation.

    • @RocketsRedGlare
       
      You need to re-research your ABN claims.  They did indeed terminate a physical gold division with over one years notice and also offered an alternative as a bridge for the customers who used them.
       
      As another mentioned, there are plenty of other alternatives.  No gold in that instance was stolen.

  10. Giant ponzi scheme, new paper buyers keep it rolling as old ones sell off

  11. XC Skater  I’d love to pay less than $100 a month for health insurance.  Our two policies, me and wife, is $9,900 a year with $5,000 deductible

    A couple of facts to consider
    Total annual production of silver from all sources is about 800,000,000 ounces
    China and India will account for 400,000,000 of the annual use in 2014.
    About 25% going to solar power production.
    Some estimate that there is about 2,500,000,000 ounces of silver stocked above ground
    That is pretty thin stocks given world wide demand.
    Much of that silver is stacked and not available for use or sale at these prices
    What I would like to see and think is realistic is gold stocks get bent around the axle with some small supply crunch that can’t be managed with paper trades. Gold goes to $2,000 Silver suffers a similar drought, even a perceived shortage and not one that is,in reality a substantive shortage. GTS ratio contracts to 30 to 1. Silver is $75 an ounce. Gold is not over priced. Silver is not overpriced. They simple move back to what could be considered normal price/demand/value ranges.

    • If GSR goes to 30:1 I am trading my silver for gold.

    • @RRG
      It’s a transparent health insurance market here. Corps can’t really rip us off. Govt tells us to get insured, and leaves to us whom we take it at. Must be alien to you guys, I know.

      @AGXIIK
      So just my cheaper insurance alone compensates for all the VAT I pay. I am a modest (actually deep under poverty line, and without subsidies) but you’d need to be quite a consumer to pay that much VAT even at 21%. It’s just an example that VAT maybe is actually spent decently. It won’t affect my health premium directly, but my country can actually afford what they’re doing.
      Also, my power bill is dropping like a brick.

      If there would be 3 years of oil production above ground… :-) But I agree, a large part off that silver is in very strong hands. Heck, it will be part of people’s inheritance, not what they’ll bring to market themselves.
      Actually I’ve bee studying GSR charts for a few years, and there hardly is any deviation. The price of silver for a given gold price is very predictable. Something huge will need to happen for that (leveraged) relationship to be unhinged and possibly re-attached. Like the 2011 silver crash due to margin hikes. That unhinged it for 4 months. Gold kept climbing, silver was smuthered.
      $75 will see a GSR of below 20. In 2011, before the artificial unhinge, we had 1600/50=32. Gold climbed on to 1900+, silver could have reach $70 easily on that wave.
       
       

    • @XC Skater: first the government shouldn’t have the ability to tell anyone to “get insured” . 2nd Before gov. health insurance whatever gets their money, it gets passed through the gov. with their employees taking pieces of it every step of the way. Taking 80 cents on every dollar from the one who is forced to pay. Then they return 20 cents and call that a “benefit”.  It only benefits them! Healthcare companies can’t rob one (not for long) if they must compete with hundreds of others in a free market. They go out of business.  Not so with government master thieves. Only someone who thinks they have the right to enslave others for their own benefit supports this! Funny how socialists, who claim they’re so intelligent and compassionate, can never create a program that pays for itself with only the revenue from those who freely choose to participate (and that lets those who don’t want to be involved in their schemes decline participation). Instead they force compliance by putting a gun in someones face and threaten them with all kinds of ugly results if they refuse!

    • Not sure it quite works that way over here. Heck, there are countries who provide health care for free. Because the govt gets enough taxes in. Saves a lot of overhead cost and jobs. 
      I got to choose my own risk. Mandatory is €300+ or so, and I raised that a bit to get a nice monthly discount. I hardly need any meds, and those I need are cheap or hopefully soon obsolete (asthma).

    • Nothing is free but love.

    • I’m not up on the German healthcare system or how it works. I’m talking about forced government socialized medicine as seen in nearly all developed countries. Forced gov. socialized anything, is not freedom. Without freedom the human spirit waists away and TPTB know it. They trick people into socialism/fascism/communism by convincing the masses they are going to get everything they want for free while demonizing the self reliant. All they ever get is corruption, poverty and slavery.

  12. Something came on the intel screen   Mexican drug cartels are seizing Mexican silver miners.  Where the cartels go the CIA goes. Where the CIA goes the money goes   Does anyone have more intel on this?  Mexican government is part of this deal or so the story goes

    • The story goes that the mines have started using unmarked beat-up trucks to carry the dore from the mines in small amounts because the cartels were tracking and hijacking the armored trucks that were being used.  Saw a story of a guy and a friend who were mistaken for officials from one of the mines who were stopped, torn out of their truck at gunpoint and thrown on the ground for a few hours.  One of the guys with them spoke spanish and they eventually were able to convince their captors that they were not the people that they were looking for…  I do know a couple of folks down there I used to race with who now drive corporate execs around in armored SUVs and cars now who are telling me that the reports of kidnappings for ransom are way up again… but also that thefts of product are simply being hijacked at a much greater pace now.

  13. rocketsredglare   copy that on socialized medicine.   The more these sons of bitches want to rotate me into this sytem the more I resist.
    I pay cash for all my medical needs with a cash only no insurance physician. Our insurance coverage is for catastrophic events.
    The fascists call our type of doc a ‘Conceirge Doctors’ These collectivist assholes would do away with them if possible. Not happening on my watch.
    We call him Doc.  We had lunch as a little Mexican Caf yesterday, and talked about KLUMMAC-care, guns (he has more than me), ammo, silver and then he asked me what I thought would cause the Great Reset, when it might happen and what I thought might be the tipping point.  15 minutes later he got kind of silent
    Then We talked about my BOB.  We are on speed dial just in case the balloon goes up.
    He has med skills and a family to protect.  We need med skills in the BOB
    I got his back and then some. 
    For real

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