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- Rubén Blades

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- Art Buchwald

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- Tyler Durden

"It is your corrupt we claim. It is your evil that will be sought by us. With every breath, we shall hunt them down."
- Boondock Saints

Wednesday, March 9, 2011

JP Morgan Manipulates Silver Market

-  The meat of this rests on the November 2011 probability of the Fed ending Quantitative Easing 2 and the inability of the Dollar to maintain its value.  If the Dollar losses value, commodity prices will sky rocket, more than they have recently.

- Gold to Silver has historically been at 16:1.  With Gold @ $1435 this morning,  Silver should be $89, its trading at $36.35 as of 3/9/2011 @ 9:07 AM, a ratio more like 40:1.   The (quick and less complicated) reason silver isn't trading at the historical ratio:  Bear Stern's had "naked short" positions on Silver (borrowed Silver and sold it at a higher price, then planned to repurchase Silver when the price dropped).  When Stern’s was bailed out, JPM took those naked contracts.  JPM is short 30,000 silver contracts representing 150,000,000 OZ of Silver.  The largest concentrated position known of any individual investment bank.  JPM needs to keep Silver prices low but has trouble doing so when the FED is printing money.
- So JPM drives the prices down at specific times (by selling off large blocks of Long-Positions in silver) and then unloads some of the Short Contracts.  JPM can't unload them all at once, the market will be shocked and no one knows how it would react.  This is the largest concentrated position known of any individual investment bank.  When all the banks are added, 65,000 Contracts are short silver and those contracts cover 350,000,000 OZ of Silver.  COMEX only has 105,000,000 Ounces and only 50,000,000 of that is actually deliverable.  All it would take is 10,000 contracts on the COMEX to buy up all the “available silver” at the COMEX and 20,000 contracts to deplete it completely.  March Open Interest (which gauges contract sales) is at 78,000 contracts.  It makes no sense.  How can you sell contracts that bet on the price of an underlying asset, when there is no underlying asset to couple to the contract?  I'll sell you two $5 bills that represent your holding of Silver in G.Cook Bank.  Your two $5 contracts coupled with the other 1000 $5 contracts equals a market with 1002 contracts that represent $5010 of stored Silver in G.Cook Bank's vault.  But wait! I only have $500 of stored Silver.   So I am only able to fill 100 contracts (500 Silver contracts/$5 denominated contract), see our problem here?

Now JPM has over 40% of the net short positions that are open on the market.  The kicker is JPM is short the contracts, not the physical metal.  The Asians are starting to notice this situation and are aware that as Bernanke continues to print money, Dollar value will drop causing the commodities to increase in price.  The Asian, Russian, and Chinese buying of the physical coin is forcing JPM to take a loss on some contracts which has caused the volatility and quick run ups in Silver.

- Remember the Dollar is the reserve currency so many commodities are denominated in Dollars.  The Asians are aware of JPM Silver Manipulation and have decided to buy physical Silver.  JPM is facing a situation of trying to buy back its short positions as Silver rises on Asian demand.  When Clinton was in office he was able to convince the Chinese to sell us their physical Silver.  We traded them US Fiat money and other things for their Silver.  Now they want to cancel the deal, so Bernanke decided to print more money, forcing the Chinese to pay more to exchange their currency for ours, which forced the Chinese to stop trying to reverse the deal.  Now the Chinese are loading up on Silver in the market and shorting it too, in an effort to create a volatile market.

The basics are as follows:
1.     Silver is being manipulated and held low so JPM can unload Short Positions it took on and inherited from the Bear Stearn's bailout.
2.     As Asians and Russians and Chinese demand the physical delivery of Silver to their shores, its price rises and the Dollar, because of the FED printing, decreases in value which exacerbates this cycle.
3.     COMEX says it is running out physical silver for delivery and is settling in Fiat money
4.     If the people can't redeem their claims for their Silver, the shit hits the fan.  It is like a run on the bank when the bank doesn't have the gold to back the Legal Tender it issued.
5.     This is a disaster in the making. 

Take 3 minutes and think of what you have just read and evaluate if it means anything to you.
It goes so much deeper than this but I hope I was able to give you enough information to understand the depth of this and be remotely interested in looking this up.

To be continued...