CSI: Comex. The Gold and Silver Massacre

173
120
Thu, Mar 1, 2012 - 4:14pm

As with most crime scenes, evidence can be difficult to uncover. First, you have to know where to look for the evidence. Then, how do you build a case if the only evidence you find is circumstantial? Well, your humble correspondent is willing to give it a try.

With deference to our legal department (CALawyer), it would seem that the first component of the investigation is the search for motive. Does JPM, et al (aka The Cartel aka The EE) have the motive to attack and slaughter the gold and silver markets?

  • The total Cartel net short position in gold has risen from 160,000 contracts at year end 2011 to 229,000 contracts last week. This is an increase of 43% while gold had risen in price by nearly 15% over the same time period.
  • The total Cartel net short position in silver has risen from 14,000 contracts at year end 2011 to 39,000 contracts last week. This is an increase of 178% while silver had risen in price by nearly 30% over the same time period.
  • As of Tuesday evening, February 28, gold was threatening to overtake critical resistance at $1800 and, if successful, would surely accelerate its rapid ascent.
  • As of Tuesday evening, February 28, silver had broken through critical resistance at $36 on heavy volume and was trading above $37. A move toward $40 was imminent.

Were there any witnesses to the crime? Even if it's heresay, enough corroborating, eyewitness testimony can turn a circumstantial case into a successful prosecution.

  • Exhibit A - The information posted by Turdite "Goldmania3000". In it, GM3 lays out a series of detailed conversations he had with his broker and floor broker at the time of the crime yesterday: https://www.tfmetalsreport.com/comment/76627#comment-76627
  • Exhibit B - The Prosecution received several emails yesterday similar to the one below. This particular one came from a Turdite who chose to remain nameless: "I was wondering if you have heard about the rumor going around that a group of ex jpm traders are trying to corner the silver market to crush JPM. Todays action is allegedly JPM fighting back. Not sure of the validity, I heard it from our broker who is usually a pretty reliable source concerning the PMs. Somebody told me they too heard it from another source. Just wondering if you know anything about this."

Lastly, the circumstantial, physical evidence. At the crime scene, did the perpetrators leave behind any clues? Like any villain, our criminals may try to cover their tracks but, sometimes, a complete cover-up is impossible.

  • In gold yesterday, the total open interest fell by a massive 17,303 contracts. This drop was entirely due to the closing of positions in the April12 contract where the open interest declined by 17,991, from 270,183 to 252,192. The next delivery month, June12, saw its OI rise from 65,492 to 65,522.
  • In silver yesterday, the total open interest fell by a tiny 1,039 contracts. A drop in the May12 OI from 65,443 to 64,280 making up the vast majority of the change.

Combining this evidence, the prosecution hereby summarizes it's case:

  • In an attempt to crush gold and negatively impact silver, The Cartel (led by JPM) liquidated at least 10,000 April12 gold contracts yesterday. They did so in a hurried fashion, not concerned about efficient execution, in a blatant attempt to set off a cascading, "waterfall" selloff in gold. It worked, again, as gold fell nearly $100 at its worst.
  • They were also successful in creating a huge, sympathetic selloff in silver. However, total open interest in silver only declined by 1000 contracts, even though price declined by over $2.

The Honorable and Decent Magistrate (Turd) declares his verdict:

The Gold and Silver Bullion Banking Cartels are hereby declared GUILTY of tampering and manipulating the precious metals markets with the malicious intent of falsely creating fear in investors and hoping that, through the creation of this fear, gold and silver will fall farther and The Cartels will be able to successfully extricate themselves from the substantial net short positions they have acquired by attempting to suppress and contain price rallies through the first two months of 2012.

Sentencing:

All evil conspirators and co-conspirators shall be defrocked, flogged and humiliated in the public square. They shall then be sent to Van Diemen's Land where they shall spend the rest of their days wailing and grinding their teeth while being to forced to watch endless reruns of "Full House" and "Barney & Friends". This sentence must be carried out at once, without appeal, before The Evil Ones are able to amount a follow-up assault on their true target, silver. With open interest still near 115,000, The Honorable and Decent Magistrate fears that it is only a matter of time before The Convicted attempt another crime.

Se ordena, declara y decreta

About the Author

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turd [at] tfmetalsreport [dot] com ()

  173 Comments

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GoldMania3000
Mar 4, 2012 - 5:57am

Everyone is getting Pissed off

https://www.netcastdaily.com/broadcast/fsn2012-0303-3.mp3

Altee-WTF this wasn't done electronically? it was all paper. Get real.

TheGoodDoctor
Mar 3, 2012 - 11:38pm

@victorthecleaner 300 to 600

@victorthecleaner 300 to 600 ratio is laughable. It will never reach that. Has it ever in history? No.

What about the USGS saying that silver will be the first element to become extinct on the periodic chart. Like I said believe what you want.

Remember its puff, puff, pass!

victorthecleanerTheGoodDoctor
Mar 3, 2012 - 10:46pm

silver?

Hey,

when gold is at $30000 per ounce in today's purchasing power (purely physical market), when all central banks hold gold as their major reserve and manage their paper currencies with reference to gold, when international trade balances are settled in gold, and when the global financial system has successfully transitioned into the post-dollar era, then what do you need silver for?

Sure, solar panels and all that stuff.

Regarding 'scarcity'. Have you ever wondered how much above-ground silver there is, stuff that is around in the form of cutlery, tea-pots etc., that can readily be melted down? Perhaps some 150000 metric tons? That's enough for all the solar panels of this world. The scarcity argument, by the way, puts silver on the same footing as zinc or nickel, perhaps as indium or even yttrium. Nice for a quick shortage plus some politics, then a squeeze, and finally it is substituted by something else in case it remains too scarce. Cool if you capture the price rise, and not so cool if you are still in when it breaks down.

That sounds like the usual commodity trading to me. With gold, in contrast, you speculate on a tectonic shift in the international monetary system.

In the long run, for silver you perhaps get some $50 to $100 per ounce in today's purchasing power. That makes a gold-silver ratio of 300 to 600.

Victor

TheGoodDoctorvictorthecleaner
Mar 3, 2012 - 8:16pm

@victorthecleaner Ha ha you

@victorthecleaner Ha ha you go ahead and believe that analogy about your those paintings. How can you rectify the industrial use of silver and scarcity? Silver will be more valuable than gold. Silver is shinier than gold too. How does that work on the supply/demand curve?

buffalo3
Mar 3, 2012 - 2:41am

It's over

If they thought they had a chance of screwing over the American Taxpayer again and had only One half of their 12 % left. Their done. THEY ARE OLD NEWS

StychoKiller
Mar 3, 2012 - 12:28am

CFTC is more like the 3 monkeys (see, Hear and Speak no Evil)...

Jesse's Cafe Americain posted this today:

Silver Update 3/1/12 Bullion Banks
Mar 2, 2012 - 10:19am

Thanks NW View

I just switched my AG chart to a weekly. I like the look of it, even after the raid. Helps me keep the big picture in view.

BagOfGoldBe Prepared
Mar 2, 2012 - 10:03am

Be Prepared...

Sorry to hear about your unfortunate piercings!...However...it could be worse!...Look what they did to Murphy!!!...

Then again...there's my recently botched facelift!!!...

Bag Of Gold

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NW VIEW
Mar 2, 2012 - 10:00am

THE RAGING METALS STORM-GUARD YOUR EMOTIONS

This day reminds me of Acts 27:18-19 : "As we were being dangerously tossed about by the violence of the storm, the next day they began to throw the freight overboard; And the third day they threw out with their own hands the ship's equipment (the tackle and furniture)".

The volumes are low today and the storm will pass, so guard that finger that wants to trade. jmo

murphy
Mar 2, 2012 - 9:52am

@Larry

That was the same judge from My Cousin Vinny

Vinny Gambini: I object to this witness being called at this time. We've been given no prior notice he would testify. No discovery of any tests he's conducted or reports he's prepared. And as the court is aware, the defense is entitled to advance notice of all witness who will testify, particularly those who will give scientific evidence, so that we can properly prepare for cross-examination, as well as give the defense an opportunity to have his reports reviewed by a defense expert, who might then be in a position to contradict the veracity of his conclusions. Judge Chamberlain Haller: Mr. Gambini? Vinny Gambini: Yes, sir? Judge Chamberlain Haller: That is a lucid, intelligent, well thought-out objection. Vinny Gambini: Thank you, sir. Judge Chamberlain Haller: Overruled.
@BOG - Hey! What happens in Vegas stays in Vegas!

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