Q&A With The Doc: Unless Longs Stand for Delivery How Will the COMEX Ever Be Broken?

John writes:

Doc: Your website is excellent and provides valuable guidance to all us little guys.
Nagging Question:
With the trillions of dollars the BRIC nations have at their disposal for investment why don’t they crush the comex right now by overwhelming them with buy orders and standing for delivery. The comex would have to default because they couldn’t possibly cover. Why don’t they do it or why have they not already done it?

John in Philadelphia

John- Eastern investors and nations would rather have artificially cheap gold and silver than crash the comex.  Why stand for delivery on the CRIMEX in size if you know you will lose your money when the bullion banks can’t deliver and force you to settle for paper (when you already have $700 billion of US paper you are trying to extricate yourself from) , when you can acquire mining and base metals firms using your treasuries instead?  Why not use the CRIMEX to your advantage and let the paper futures pricing mechanism give you a discount on your mining acquisitions?

John replied:

Thanks Doc for the clarification but it leads to another question. If the big buyers are interested in tolerating the suppression so they may acquire metals cheaply on the open market how or when will the comex ever be broken?  Is breaking the comex actually a desirable idea afterall?  Unless buyers stand for delivery how will the comex ever be broken?
John in Philadelphia

John,
The COMEX will be made irrelevant as large buyers bypass it and go directly to the source (mining companies) to acquire physical metal. We are already seeing this- Eric Sprott went directly to miners for his recent PSLV placement.  Expect this to only increase in the coming months and years as more and more investors and end-users bypass the fraudulent paper futures market entirely, and go directly to the source for their physical metal needs.   The COMEX will likely fade into irrelevance before it is broken and completely drained of physical metal.

-Doc

Comments

  1. what if mines become government controlled or bank controlled and are they controlled right now?

  2. Doc the following question of John’s remains unanswered. Please respond. Is breaking the comex actually a desirable idea afterall?

  3.    “History records that the money changers have used every form of abuse,
    intrigue, deceit, and violent means possible to maintain their control over
    governments by controlling money and it’s issuance.” — James Madison

  4. John, This will all be known as the grate transfer of wealth ever. Doc is right and I’ll add this is world wide. All country’s are at record high level of stockpiles of PM’s going into there banks. The dollar is falling out of favor of the world reserve. Soon the Dollar & the COMEX will be irrelevant.

  5. Doc is right, they are going directly to the source…. Chinese interests are starting to acquire gold projects of substantial size (e.g. Norton Gold Fields, A1 Minerals, et cetera), not even to mention other projects. Word is out that they’ve built a secret air strip in Marange, Zimbabwe, the diamond rich area. They then fly a cargo carrier in, off-load the guns & ammunition, up-load uncut diamonds and there the plane goes again…. directly from the source.

  6. Hey, I’m happy for them to manipulate the prices as low as possible for the time being.  I just see it as an awesome fire sale for all of us smart enough to get in on physical PMs… you know, silver, gold, lead… ;)

     

  7. I believe the Derivatives Market is going to be the answer to the collapse of ALL Paper Markets then hang on for the ride. Stack! Stack! Stack!

  8. Marchas45 I am of the same opinion, but would like to add: I have to admit that it is a scary thought at best for me to imagine the astronomical impact the collapse of the fiat Ponzi scheme is going to have on society. I am 100% convinced that us silver bugs will be super wealthy, but needless to say, it is going to be an uphill battle to be able to fully enjoy the fruits of our labor and visionary efforts. Needless to say, we will have to band together and fight for our survival on so many fronts. Don’t get me wrong, I am no pessimist, I am just trying to mentally and physically prepare for what’s coming. 

  9. LMAO A good Boy Scout IS AlWAYS PREPARED  Keep Stacking!!!

  10. Yep Silverbullion, Thats why I said I’d bring my stack to that island in the forum 

  11. This is a great question with excellent answers plus some unexpected details.  There are about 20-25 billion ounces of silver above ground, 23 billion embedded in consumer and industrial goods not easily extractable.  There’s another  2-3 billion ounces in ETFs, storage, coins and like items that are easily available for sale.  There is little we can do except continue our protests and our bulwark of stacking against these actions.

      The COMEX is digging itself into the ground for many reasons, not least of which is their criminal behavior. People are racing for the exits in these markets as well as the stock markets with the certain knowledge their money is NOT SAFE   See Ann Barnhardt on this. 

     China’s new paper exchange market will be another nail in the coffin to the COMEX and perhaps the LBME.   China buys 2,500 tons of silver a year, as does India,  and mines much more than that so their PM backed currency will become a world dominator along with the other BRICS nations within another 5 years.  All these resource-rich countries  have silver in the ground and it’s my guess they are not going to be selling it at a discount to the western powers.   IMO— what’s good for these countries is good for us.  If we buy silver and in effect bury it in the ground as a wealth stockpile we are essentially doing what the other smart money advocates are doing, digging it out of the ground and holding it.

    On  a personal note, I began trading paper silver–made some money and lost some–until I saw the poor yields and risks associated with that system. Doc and Bull Run made a compelling argument that owning and holding PMs, so I  have both silver and gold in equal dollar amounts at about a 55 to 1 GTSR.  The net measurement is not in dollar value, something that will make you crazy if you obsess over it, but in the number of ounces you own.   It’s not the value of the metals today you own today but the steady accumulation of something that will be a much more valuable storehouse of worth in the next 3, 5 and 10 years.  If silver’s value goes up faster than inflation, we should be safe. 

     In those intervening years we need to live our lives, protect our families and home to our best abilities and essentially watch the movie unfold.  It’s going to be a wild and bumpy ride with events that make even the most exciting movie seem tame by comparison.  

  12. Marchas45 lol Have you ever lived and/or worked in South Africa for any length of time? If yes, then you should know that we eat Boy Scouts for breakfast here. lol The Boy Scouts here are called “Voortrekkers”.

    427 lol I do remember… are you going to sent your yacht to pick me up at the coast? I will be the guy standing with the potato bag with a .357 Magnum tucked under my shirt. :-)
  13. AG You’re right, it is essential to think of wealth in terms of ounces.

  14. With all the different manipulative financial institution I feel if the thread gets pulled on one of them we will see a bit of a domino collapse… They all have to be intertwined the way there is constant manipulation taking place… Along with this I believe the FED along with “main stream” government would also see a crashing of sorts… It be like pulling that loose string on the sweater that your mother always told you not to pull… Next thing you know you have a cat toy instead of something to wear… And maybe thats what it would take to finally get things turned around in this “UNCIVILIZED” world…

  15. The collapse of this ponzi scheme will be very ugly, nothing to look forward too…Peter Shiff’s new book talks about what to do after “The Crash”, which is a mathmatical certainty at this point.

  16. Acudoc I agree, it’s going to be an ugly bitch. Have you read Shiff’s book? 

  17. The answer is: The Comex will become irrelevant when they refuse to deliver what can be proved to be an overwhelming demand for silver that exceeds current supply. The actual “break” of the Comex as I’ve stated in other comments will be similar to a run on a bank, but unlike a bank that can print paper, the outcome will result in the inability of the Comex to function. Please See My Comments Here: Comment to “Widget” On This Silverdoctors.Com Link

    Large delivery totals dominate certain Comex silver delivery months each year. See backround here: Comment To AGX On This Silverdoctors.com Link.

    Since 12-2010, some months begin with enough contracts to have the potential to equal as much as 50% of the available registered Comex Silver Inventories. As an example, on 2-28-2011, 4250 contracts had the potential to stand–equaling 49.26% of the total Comex Registered Category at the time. If all contracts actually ended up standing, a run on the Comex might have occurred. However, due to cash settlements, only 1749 were left standing–equalling only 20.96% of registered inventories.

    Eventually, all that start the month standing and maybe more that might accumulate during that given month will end up standing without succumbing to cash settlements. In this case, we’ll see a true run on the Comex. Until then, it’s an academic exercise quantifying this stuff.

    In the current month, we had  2592 contracts potentially standing. As in my first reference above, usually, beginning totals drop off dramatically over the course of the month. In this case however, we still have not, as yet, seen this “dramatic” drop off this month.

    Since that 2592 contracts total was posted on 4/27, the reduction has only “dropped-off” to 2410 contracts as of 5/3–and we’ve seen a slight increase from 2361 to 2410.

    We could see a steady increase taking the total higher over the course of the month if those standing see the need to hold on to real silver rather than settle for cash. This would be the first time I’ve ever seen this since I’ve been monitoring these totals.

    Let’s hope we see this increase this month! The catalyst for this event will be the increasing feeling among those standing that the value of silver in hand is higher than paper premiums doled out by Blythe today. This battle always plays out each month as the banksters continue their lies and schemes to conceal the overwhelming paper:silver claim ratio.

       

  18. Thanks for the update Jake. Your posts are always well written.

  19. It’s a waiting game

  20. As I’ve said before, I used to wish for a default of The Fed. If the COMEX falls, that could be THE END, of The Fed Ponzi scheme as well, and expose what I look at as being a CRIMEX, not COMEX. Because I believe in Adam Smith’s invisible hand and like to think that if things were to just crash, a new market structure would appear almost overnight, as if by an invisible hand.

    But, I listen to Ron Paul. I believe he knows best. And he believes that a disorderly default would not be good. That it would be better to have an orderly default rather than chaos and total anarchy. So, I’m with him.

    So what should you do? Keep stacking of course. But really, get involved and do what it takes to elect real actual civil servants to represent you… locally, nationally. Civil Servants that believe in the Constitution and the Rule of Law, in civil liberties, and freedom. Civil Servants that believe that power comes from the ground up, from the people, not from Government. You probably already know but I’ll say it anyway, that’s where money comes from, from the people that create the wealth, not from Government.

    You are voting every time you spend money. The problem comes in when you have a Government and Private Bank that can outvote you. So vote out politicians that believe in The Fed and Government money creation, and vote in civil servants that know what real free markets are, and believe in freedom and liberty. You can’t have free markets without free market money. Money isn’t what the Government says it is, it’s chosen by the people in the marketplace. Investigate and learn, so that you know which people vying for your vote obviously stand for the principle of ‘Free Competition in Currency’ so that you can choose what to use as money.

    Doing some stacking does send a message as to what’s being chosen! But I worry, a little, about chaos. It doesn’t have to be that way.

    Does the Government work for us or do we work for the Government? –Judge Andrew Napolitano

  21. While I like to follow this website its unfortunate that many of the posters seem to actively want the Dollar to crash.  As the old saying goes, Watch Out What You Wish For!!

    Recommended reading: When Money Dies by Adam Fergusson which details The Nightmare Of The Weimar Hyper-Inflation.  Its only after you read a book like this that it start to click!

  22. Power Ball I don’t believe we WANT the dollar to crash but just letting people know that we believe there’s a very good chance of it and not caused by anyone on this forum but a bunch of money hungry bankers who are out of control. We love stacking and we are preparing for the future.

     

    Based on what’s happening in the world economy there is a very good chance of the dollar crashing. Be prepared.

     

  23. PowerBall Whether we want the fiat dollar to collapse or not should be of little and/or no difference, because like all Ponzi schemes, the fiat Ponzi scheme from which the dollar derives it’s value, is destined to completely collapse without our assistance. It is a mathematical certainty and the dollar is collapsing while I am writing this. This is why we actively advocate that people switch to honest money as far as possible, especially in the form of gold and/or silver coins, so that when the inevitable comes, we can bring honest money back into the system. If we come over as actively wanting to collapse the dollar, it is only driven by a desire to see a change over to a world order where debt and death don’t reign supreme, as is currently the case.

    I have previously read the book that you mention, it is in my personal library. It outlines what can more or less be expected when the dollar and other fiat currencies completely collapse, based on the experiences in Weimar Germany. Again, the debt and/or fiat based system will collapse without our help and there will be pain either way. I suggest you read Mr. Ralph T. Foster’s FIAT PAPER MONEY: THE HISTORY AND EVOLUTION OF OUR CURRENCY.
    In addition to the above, those who are not willing to actively prepare themselves, but rather choose to continue to actively participate in the fiat Ponzi scheme, are doing much more harm than those of us who wish to see the quick diminish of the current system of debt and death. I personally believe that the longer it runs, the greater the damage will be…. like the case is with all Ponzi schemes. Just my two cents.
  24. Spot on Marchas45

  25. Powerball: If we what the dollar to collapse—IT WILL COLLAPSE.
    If we don’t want the dollar to collapse—IT WILL COLLAPSE.

    Banksters devised this system knowing full well that it is temporary. Dollar issuance = debt. Debt can not be piled up indefinitely–even by the world’s superpower, with the proviso that collapse is avoidable.

    This system is transitory and will not survive past the point where enough people lose faith in the govt that perpetuates it. We have also past the point where fixing fiscal problems means voting for measures that promote private sector growth. Once this point is reached, voters accelerate their voting tendencies towards larger and larger largess until the system can no longer hold under it’s current form.

    Since banks thrive off of labor generated by growing societies, they can print dollars(debt) that is backed by the value of future labor. As long as the dollar(debt) is issued during this growing phase of a society, the society accepts it as currency with perceived a value. However, this condition eventually exhausts itself–once the accumulated debt is determined to be so impossibly large that it can not be paid off within multiple future generations. This condition then rapidly deteriorates into a state of “NO DEPOSIT-NO RETURN:
     
    The Banksters know this. Dollars that are now used to pay interest to foreign countries will eventually not be accepted resulting in the acceleration of inflation which slides quickly into hyperinflation. Weimar Germany type collapse is the result--see my reference below.

    There is no way anyone can stop this inevitability. Forgetaboutit!….Were done…past the point of no return—slip-sliding away whether you want it or not. Read My Previous Comments Here regarding “Visualizing Spending and Revenue for a visualized chart of collapse and some discussion and references:    http://www.silverdoctors.com/campaign-for-real-money/

  26. Doc

    what are your thoughts on the following ???

    the us government banning the privite owner ship

     or sale of gold or silver

    orrrrrrrrr

    god & silver held on US soil is priced at on price ( low & controlled )

    while gold & silver held aborad is pried at a much higher price

    I have heard that these ideas may be …..a….used at some point

    for us monitary ontroll ( for the children of course)

     

     

     

     

     

  27. Folks at the Yahoo Message Boards on Silver Wheaton Are Reading This Blog–That’s Good! —Keep It Up! SILVER DEFAULT COMING?
    Excerpt: My(Jake) Silverdoctors Post: Originally Posted Here in Silver Doctors: SILVERDOCTORS LINK

    “Widget: As I see this, it’s impossible to figure out what or where the
    silver is or isn’t within the Comex vaults–especially when these
    transactions are suspicious “adjustments” and whole-number transactions.
    There is no way physical silver is actually moved around in such
    quantity each day—we all know this. Your question and befuddlement
    is—So someone took delivery?–What’s the big deal?…is not a big deal
    and it isn’t.”
  28. Sorry PowerBall,

    Your comment is unfounded. Most poster on this site would love to see everything hunky dory. However we pulled our heads out of the sand and looked around. I would rather have my worth in a bank and spend it on fun shit. We just have come to an acceptance of what is going on and what we need to do. No it will be no joy ride, in fact most of us will die. I know with what is in store, no falt of my own I would perfure to die. But I will fight as long as I can.
    I know this is falling on deft ears because it looks as though you just did a drive by
    Jake,Silverbullion, Marchas45. SPOT ON!! KEEP STACKING
  29. The GREATEST DAY IN HISTORY will be the death of the cartel!

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