The short position in Comex silver futures alone is almost equal to all the silver mined in a year – James Turk, King World News (Link)
I knew the silver futures open interest on the Comex was somewhere in the vicinity of the total amount of silver produced globally in a year. But when I saw Mr. Turk’s comments, I wanted to calculate it out for myself.
As it turns out, the amount of paper silver open interest based on yesterday’s total silver futures open interest of 163,592 contracts is nearly 818 million ounces of silver (Comex link). As you can see from the table below from The Silver Institute, total silver mined globally in 2013 was 819.6 million ounces:
With scrap recycling, total silver supply in 2013 was 978 million ounces. So, the Comex paper silver futures equals 83% of the total amount of silver available for industrial users, jewelry buyers and investors.
Does this make sense?
To add to the absurdity of the Comex operations, as of today there were 57 million ounces of silver registered for possible delivery to holders of silver futures contracts. Yet, for the next big delivery month of July, there’s a total of 348 million ozs worth of open interest. That’s 6 times the amount of silver registered for possible delivery. There’s 176 million ounces of total silver on the Comex.
In theory, if ALL of the July silver longs stood for delivery, there’s enough silver to fill half of them.
Up to this point in time, there’s no risk to the sellers of the silver futures that anywhere close to the amount open interest right now will stand for delivery. That doesn’t mean that it can’t happen.
The point of this is to highlight just how fraudulent the Comex is. There is no other commodity market in the world that allows the futures open interest in relation to the available underlying deliverable commodity to get anywhere close to the ratio that exists in Comex gold and silver. When oil and gas get a bit out of whack, the CFTC cracks down on the “manipulating” bank.
This will eventually resolve itself with much higher prices for gold and silver. Mining stocks will go parabolic. To see a couple of good ideas to take advantage of this market dislocation see this link: Stock Research Reports. I will be adding a least one more this week. AAU in particular has a heavy concentration of silver in its big Mexico mine project.
The Comex is is emblematic of the extreme fraud and corruption that is now endemic to U.S. political and economic system. The people who are really in control of our system have lampooned it into a complete joke.
This will not end well for most of us…