"We risk becoming the best informed society that has ever died of ignorance"
- Rubén Blades

"You can't make up anything anymore. The world itself is a satire. All you're doing is recording it"
- Art Buchwald

"It's getting exciting now, two and one-half. Think of everything we've accomplished, man. Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium"
- 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, April 27, 2011

It's Getting Dicey

     Silver has been tearing it up lately.  Jim Rogers calls the run up "parabolic" and warns that if it continues with the same appreciating characteristics, he'll sell out his holdings.  JP Morgan has been out cheer-leading for a raise to the debt ceiling.  While Americans worry about a Birth Certificate ( Does America prefer Joe Biden to be President for the last stretch?) and Planned Parent Hood (like this cost is anything compared to what American's will pay once the dollar begins its 50% technical retracement from its 2008 lows), JP Morgan continues to manipulate Silver while the Fed monetizes the US debt.  The CRIMEx has made an adjustment for the second time in a week to its Silver.  The move relates to a shift in Troy Ounces from and account market "Registered" (a category that represents Troy Ounces of metal that meet the contract specifications as defined in the Exchange Rules for which an electronic warrant has been issued) to an account marked "Eligible" (a category that represents Troy Ounces of metal that meet the contract specifications as defined in the Exchange Rules for which an electronic warrant has not been issued).  

     On the inventory releases below, HSBC's Eligible account dropped 14.76%.  Which means HSBC had 9.63Mn Troy Ounces on 4/20 which dropped to 8.21Mn Troy Ounces, representing, according to CME, a decrease in contracts for which an electronic warrant has not been issued.  The same rules state that one (1) contract represents 5,000 Troy Ounces.  With those numbers HSBC has enough Total Silver (Eligible + Registered) to fill 7,078.59 contracts.  ZeroHedge thinks this shift has come about from a run on the Silver inventory, however this change represents no change to the total amount of Silver that HSBC has.  This is no way can represent a run on the Silver inventory.  When the change in the Combined Total is calculated, a downward change of 1.3% is observed from 4/20 to 4/26.  Calibrated Confidence would like to note that the total inventory of the COMEX is enough to cover 20,330.41 contracts according to CME regulationsOpen Interest for May is 26,890 (32% above what is stored) and July OI is 68,528 (237% above what is stored).  This is a delicate game JPM plays and with the recent run up in Silver prices, the margins that were 55% and have been raised to 74% (Page 2 SI Futures) must have Jamie and Blythe worried, that is unless they know the Fed will continue to give them free money to cover the margins. 

     From SilverAxisThus, the appropriate way to treat eligible COMEX warehouse bullion stocks is that they represent metal that could potentially be registered at some point in the future but cannot presently be used to make delivery under a short futures contract.   Some of the metals that show up on the CRIMEx inventory reports may be stored there by an individual who bought say 1,000 Ounces and is completely independent of the CRIMEx. 

Keep your eyes on the inventory reports and do your own research.   

Also, below you will find two (2) reports showing the prices for coins and bars of Silver.  The prices are well into the $50 range.  Good Luck

CME Silver Metals Quotes

Comex Inventory Release from April 20, 2011
Source: http://www.cmegroup.com/trading/energy/nymex-daily-reports.html#warehouse

Comex Inventory Release from April26, 2011
Source: http://www.cmegroup.com/trading/energy/nymex-daily-reports.html#warehouse

Silver Eagle Coins
Source: http://www.silver-eagle-coins.com/prices.html

Silver Bars