Comex Silver Is The Most Corrupted Market In History

The silver paper futures open interest is now officially over a 1 billion ozs., most of which represents a naked short position in silver.   Never in the history of the markets has any futures market been this extraordinarily disconnected from the amount of underlying physical commodity that is available to deliver against those contract open interest.

The only conclusion that can be drawn is that the Fed, Treasury and big banks are implementing the most extreme market manipulation exercise ever witnessed.  I shudder to think about what catastrophe is coming at us that they know about but we don’t – yet.

“James Mc,” a valuable daily contributor to Lemetroplecafe.com’s nightly “Midas” report commented last night on the Comex silver market in comparison to the CME lumber futures market:

Total North American lumber production for 2015 (est.) is 60 billion board feet. At an average of $400 mbf that translates into $24 billion dollars. Keep in mind this excludes the rest of the world’s lumber production, which could easily be double that amount. On the other hand total world silver mine production for 2014 was estimated by GFMS to be 877 million ounces. At $16 oz. that is a total of $14 billion. Silver OI is 45.45 times greater than lumber OI. with physical silver production being only a fraction of lumber production in dollars. Lumber futures O.I would have to be 100 times greater or more to compare to the outlandish oversized silver futures. Or, put another way lumber futures would have to reflect hedging 68 billion board feet, more than the entire year’s production for North America to be scaled to silver Any arguments for a higher silver O.I due to hedging for recycled and above ground silver supply are dwarfed by the stark reality of the above figures. To say the silver market is normal is like having referred to hurricane Katrina as a passing thunderstorm.

A long-time friend of mine who works with hedge funds in NYC thinks a Comex default is coming.  If that’s the case, it would make sense that JP Morgan, HSBC and Scotia – the primary Comex market-makers and Comex gold/silver vault custodians – are amassing a record level of naked-short interest in paper silver.

Why?  Because this serves the two purposes:

1)  these banks make enormous trading profits through their illegal manipulation of the gold and silver markets.  In fact, I don’t know about HSBC and Scotia, but in some past quarters JP Morgan’s commodities trading unit has been its only cash-profitable business segment.  I suspect this was largely from illegal trading profits in gold and silver futures trading.

2)  keeping the price of silver down via illegal manipulation enables these banks to accumulate physical silver at artificially low prices.  Obviously they know the truth about the real condition of the physical market. If you put on your “think like a criminal” hat, you would use the paper to push the price of silver down using paper – taking out trading gains on the market’s volatility – and you would be accumulating a massive hoard of physical silver because, once the Comex eventually defaults, both gold and silver will soar in price but silver will soar many multiples more than gold.

The Comex is headed for a default.  This means that the long side of the open interest will be settled in cash.  Of course, it takes a force majeure to trigger the cash settlement provision in the gold and silver contracts.  I can’t wait to see the nature of that force majeure event…

COMPLACENY

We are dealing with as heinous a suppression scheme as we have had to deal with all these years. While we have to deal with the here and now, there is no doubt in my mind there will be reckoning for all of this, as James Mc posits … especially in silver. The odds grow that reckoning will occur when least expected and it will be spectacular.  – Bill “Midas” Murphy, www.lemetropolecafe.com

13 thoughts on “Comex Silver Is The Most Corrupted Market In History

  1. Really now.

    We have been hearing this “they are going to carry out the shorts on stretchers” nonsense for what, ten plus years.

    They can never default if they have any amount of funny money they need.

    Our, ahem, “national security” depends on it right?

    Right?

    Anyone?

  2. Dave, You just have to keep these conspiracy theory fires
    burning don’t you. Now you know fully well that the CFTC
    is right on top of this and would never allow manipulation.
    You know that justice would be swift and fines levied against
    those who would perpetrate any manipulative activity.
    If you can’t trust you own government then who can you trust ?
    You know you have my word on it. Joe

  3. Nothing stays the same and that goes for the value of physical silver as well. It’s amazing how physical silver has been stereotyped incredibly. Once the truth comes out by way of the phony paper trades which have helped to obscure the true whereabouts with accurate prices of the physical , will we then know. Say what you want , think what you want , do what you want . The facts will speak for themselves. We can only observe what will happen regarding this dynamic.

  4. Hi Dave,

    I have a question about the banks accumulating a large naked short position. If they were called on it wouldn’t they have to provide the metal if they were in possession of a huge hoard? I guess that huge hoard would be hidden away from the regulators. Oops, I forgot that they are the regulators!

  5. Silver Open Interest yesterday –> 200273

    Americans Refuse to Purchase 10 oz Silver Bar Worth $160 for 10 Bucks

    1. It’s stunning with how IGNORANT Americans are regarding the true value of physical gold and silver. The media , government , central banks , big business , educational system , etc. have all done a fine job of omitting the truth while keeping Americans in the dark.

      The tragedy to all of this is realizing that every nonchalant soul who was showing their clueless demeanor and mind set to Mark Dice will some day wish they had it!

      “Willfully ignorant” ~ You got that right George !

  6. You’ll never get price discovery on real Silver metal when the equivalent of an entire years worth of Silver production can be conjured up out of thin air (paper) and dumped onto the market in a month.

  7. We need to hear more from many sites and commentators on the role of the Silver Users Association and its banking relationships with the megabanks. Additionally some commentators appear to not understand the motive relationship between holding silver low and helping Federal Reserve currency appear stronger. Finally we need a publicly visible list of The Pilgrims organization, the megabankers most secretive group. This appears possible only by Congressional subpoena. Additionally we need a group of members of Congress to push for creation of a new silver stockpile for national defense, to be acquired without any use of disgraceful eminent domain tactics as took place August 1934 into February 1937 in America’s worst ever administration, that of Franklin Roosevelt. Rand Paul declined this suggestion when I mentioned it to him. Perhaps Morgan Chase owned silver should be seized for this loftier national interest.

  8. Great article Dave! The amount of engineered fraud is astounding but this will all end in a massive launch in the price silver soon enough. When free markets are denatured over a long time eventually supply & demand take over and dominate the outcome. Just keep accumulating especially when the price is manipulated down. What else can people do – keep their money in the bond market or in a bank ripe for a bail-in or steal- in. Keep up the great articles on Ag.

  9. I look at this from a different point of view –
    If either Russia or China wanted to devastate the US, all Russia or China (or both) would have to do is buy up all the silver contracts and then demand delivery.
    When the CRIMEX couldn’t or wouldn’t deliver, Russia and China could then tell the whole world how corrupt and untrustworthy the US commodity markets are, while non US commodity markets are fully trustworthy (such as Shanghai) leading global investors to view the US with even more distrust.

    This is one more way the US has set itself up for failure, the US may have the most powerful military on earth, but if the infrastructure collapses the US Government will need all of its military resources back home in order to keep order.

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