Silver Price Management

If the entire world only produces 880,000,000 ounces of silver per year...and if 75% of that silver is consumed through the production of cell phones, solar panels and other items...then how do The Banks manage price off of the remaining 220,000,000 ounces? The answer: Alchemy.

Look, you likely already know how The Bullion Banks alchemize gold in order to control price. After the failure of the US to manage price in the 1950s and the failure of The London Gold Pool in the 1960s, the alchemy of paper/digital "gold" was formalized with the creation of Comex gold futures in 1975. If you need a refresher, perhaps you should take a moment and read this: https://www.tfmetalsreport.com/blog/8075/42-years-fractional-reserve-alchemy

Today, we want to focus upon how The Banks and The Comex alchemize silver. Like the alchemy of gold, the alchemy of paper/digital silver is also done to manage and control price. However, where the gold price is managed in order to prop up and sustain confidence in the fiat currency system, the alchemy of silver is primarily done for profit. And which parties profit?

  1. The Banks which manage, manipulate and control price through the brute force of sheer market domination.
  2. Manufacturers who use silver as a key input in their products. For examples, check the list found here: http://www.silverusersassociation.org

If someone is profiting in this process, then it follows that someone is also losing. And who are the losers?

  1. Mining companies, their shareholders and their employees.
  2. Any and all investors and traders of physical silver.

So, with all that in mind, let's take a look at how The Banks alchemize "silver" for investment demand.

As with just about anything, and as we wrote here (https://www.tfmetalsreport.com/blog/8252/econ-101-silver-market-manipulation), much of this can be explained through the lessons of Econ 101. Where supply meets demand is where you discover price. If demand outstrips supply, price is forced to rise. Conversely, if supply increases faster than demand, prices fall.

Applying this lesson to silver...If industrial production annually consumes about 3/4 of mine supply, leaving just 220,000,000 ounces per year for investment, then the shifting demand for that 220,000,000 ounces would largely determine price. In years where investment demand rose, leading to a shortfall in supply, prices would rise. In years where investment demand fell, leading to a surplus in supply, prices would fall.

And now we've come to the crux of the matter. How do Banks manage price for themselves and the manufacturers when the supply of actual, physical silver is so incredibly tight? The answer, again, is alchemy. The Banks create all forms of virtual/paper "silver" and then convince the investment world that it's a proxy for the real thing. Whether through the creation of shares in the SLV and other ETFs or the creation of futures contracts on The Comex , these forms of digital silver take the place of actual, physical silver and are used to meet the investment demand that exceeds the supply of real, physical silver.

For today, let's just focus upon how The Comex functions in this process. Again, in numbers that are approximations, the world annually produces about 880,000,000 ounces of physical silver per year. This leaves only about 220,000,000 ounces to satisfy investment demand after industrial demands consume up to 660,000,000 ounces per year. How do The Banks on The Comex manage this investment demand? Through the unfettered creation of paper derivative contracts which are fed to speculators and traders who seek silver "exposure" through investment.

Note the chart below and pay particular attention to the bubbles showing total Comex silver contract open interest at certain dates since late last year.

This post is not intended to describe again how price is effected by the daily creation of open interest. Instead, note the volume of the contract creation since the first of the year.

In the lower left, note that total Comex silver open interest was 163,812 contracts on January 3, 2017. At 5,000 ounces per contract, this represents a total of Comex obligation of 819,060,000 ounces of digital silver. Compare that to the CME Silver Stocks report of that same date. Note that the total Comex vault supply of silver was 181,903,038 ounces with 28,050,481 ounces listed as "registered".

Now take a look at the upper left of that chart back up above. Do you see that, as of last Friday, total Comex silver open interest had grown to a new ALLTIME high of 234,558 contracts?

Let's do the math, shall we? Again, with each Comex contract representing an eventual obligation to take or make delivery of 5,000 ounces of silver, 234,558 contracts equates to a total digital supply of 1,172,790,000 ounces of "silver".

Deciphering how much virtual/paper/digital silver has been created thus far in 2017 in order to meet investment demand is pretty simple:

Friday, April 21 paper supply: 1,172,790,000 ounces

Tuesday, January 3 paper supply: 819,060,000 ounces

DIFFERENCE: 353,730,000 ounces

So, how is it that price is only up 12% year-to-date? Supply and demand. But not supply of simply physical metal. Instead, this is about the supply of digital metal or "exposure" and how this bank-created product is foisted upon the masses as a substitute for the real thing.

How do The Banks and Silver Users solve the problem of supply and demand? Well, if the world only has 225,000,000 ounces of silver each year available for investment demand, then you simply create virtual/paper/digital silver in enough supply to soak up the excess demand. And so far this year, The Banks have created over 350,000,000 ounces for this purpose.

Oh, and in case you're wondering, has the amount of silver held on deposit at The Comex grown over this same time period? I mean, to be fair, you would think that it should, right? Well see below. Note that as of last Friday, the same date as the latest open interest alltime high, total silver in the Comex vaults was still just 195,505,395 ounces of which 30,532,200 was listed as registered.

We've often described The Comex Pricing Scheme as a fraud and a scam and you can once again see why in the data above. While total, potential delivery obligations have grown by 353,730,000 ounces, total silver in the vaults has grown by just 13,602,357 ounces. That's leverage of 26:1. But, obviously, not ALL of the Comex silver is for sale. If we look at just the supply of "registered" silver, we see that it has only grown by 2,481,719 ounces over the same time period. The leverage of this silver versus total open interest is 142:1.

Anyway, we'll write about that again some other day. In the meantime, what is the point/objective of this post?

Simply...You need to realize and understand how this works. The price of physical silver is determined NOT through the trading of actual silver. Instead, paper derivative contracts that act as proxies or substitutes for physical silver make up the vast majority of the transactions and, as long as the investment world continues to accept these worthless paper obligations and the scheme through which the price is discovered, the fraud will continue.

All parties interested in fair pricing MUST reject The Bankers and their scheme:

  • Investors must demand physical metal. NOT paper derivatives, NOT unallocated accounts and NOT shares of ETFs.
  • Mining companies must demand delivery into a physical exchange for their product and move their business away from the hyper-leveraged paper exchanges.
  • Traders must recognize that The Banks are using their ignorance against them. Every trader that believes in "free and fair markets" in nothing but the proverbial fool who is soon to be separated from his cash.

Only when the world demands physical delivery for their silver investments will The Bankers' schemes finally fail. Only then will true and fair price discovery finally be made.

TF

www.tfmetalsreport.com/subscribe

68 Comments

hoeyke's picture

terrible day

first

LP's picture

Two

Silver ... which I prefer to gold anyway!

Marcrward's picture

Thurd

Those tf metals silver rounds look like a collectors.

NW VIEW's picture

Reality! - Draining the Swamp!

Draining the Swamp!

   Mr. Trump, although hopeful, will not be able to drain any swamps.  He will not be able to drain Washington D.C. and neither will anyone else upon the planet.  Who will drain the banksters marsh, the political swamp, the tar pit within the D.N.C. and the R.N.C.?   Those who will try will have little success.  Who will drain the Left Coast Hollywood swamp, filled with swimmers that are degenerates, perverts and reprobates?   Impossible with man, governments or new laws.  Who will drain the deep swamp of multiple religions, being filled with silver and gold and fame, cults and man made divisions, seeking wealth and members while the dry land is filled with the needy, storing up the wealth of nations as a witness against them in that day?

    Who will drain the swamp that is continually being broadcast on the tube, every channel, every newscast?  Who will drain the media swamp, who continually aid in the destruction of the family, bringing the demonic into our living rooms daily? Who will drain the dreamers swamp, speculators who tell of their dreams of "How things really work", star gazers and trans dimensional travelers? Who will drain the swamp of the countless wolves who see mankind as cash cows, seeking the hard earned funds of those who just want to survive? Who will drain the swamp of those seeking to pass more laws to regulate and control mankind, while Jesus came to set all mankind free?  Who will drain the swamp of the Military Industrial Complex (MIC), it will never happen?       There is a swamp drainer on the horizon. He will not negotiate His position but remove all the gators in a moment of time.  Once the gators are gone, Peace will remain behind as it was given long ago.        Jim

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

This is what the drain will look like:

41 The Son of man shall send forth his angels, and they shall gather out of his kingdom all things that offend, and them which do iniquity;

42 And shall cast them into a furnace of fire: there shall be wailing and gnashing of teeth.

104365's picture

Andy M.

I'm pretty sure this correction will put CDG around $1,240 or so.  I wonder what the wholesale market will say about this discount to current prices. 

...Not sure why everyone get's excited being in the top 10???

Thor's picture

Great Summary Article

Thanks Turd

Hans-Dieter_Mueller's picture

Barrick AGM Happening Today

Will Barrick's management cut output projections for the future?  Yes, of course!

Peak Gold is here!!!

Angry Chef's picture

9/11 Destroyed America & The World

https://geopolitics.co/2017/04/25/911-destroyed-america-the-world/

Good article by Dr. Paul Craig Roberts. And a good job on the Silver expose Turd. I'm beginning to be convinced that Silver is too valuable to the Military and Industry to allow for the true price of Silver to arise. IMHO Silver is the most undervalued asset on the planet. But it's also the most or one of the most strategic metals on the planet. With all the demand stated above and the fact that Silver is used by the military for missile technology, you would think the price of Silver would be thru the roof. But it's not. Instead it languishes for years at these levels. Yet demand continues to rise. We're also led to believe that JP Morgue has a massive Silver position. We know the Morgue works for the Treasury and the ESF and anything that they do is legal. So how do we EVER get out from the hob nailed boot pushing down on our throats ?

I see only a few sceanrios.

1. Physical demand does force the COMEX/LBMA into a short squeeze or a force majeur scenario.

2. The USD gets killed and that JP Morgue Silver hoard needs to be used to back a new dollar ala Jim Willie Scheiss Dollar.

3. War.

And I have to say that watching the PM Porn everyday is getting to me. I bought into the PM's because of what I saw was disastrous Economic and Monetary Policy going back to late 2008. I never thought interest rates would be where they are today. It simply was impossible to fathom. Basic Economics screamed that rates had to go higher. But they didn't.

I think Dr. Roberts article above and all of Turd's analysis over the years say's we're a captured people's. The Neo-Cons / Banksters have taken over and have complete control....until they don't. It looks to me like option #3. But I pray for #1.

ArtL's picture

How tight is the PM market

when you think the system will break, you will be disappointed. When you finally give up, that is the signal for the PM price to be set free. There are still too many true believers.

infometron's picture

@104365 Re: Top 10

Welcome aboard! It is a very long standing tradition... pure and simple

Great summary, Craig! Top notch, clear as a bell, succinct and to the point!

Oh, and lest I forget... tenth!!

https://i0.wp.com/freemasoninformation.com/wp-content/uploads/2016/05/Tetractys-of-Pythagoras.jpg?resize=300%2C286

phoenixphoenix's picture

Silver Hoard

Some reckon that JPM Silver hoard is a hoax, really not sure about that...

And many reckon the New World Order is just the Old World Order, without the Web we probably wouldnt know anything about it.So much disinformation is released to obscure facts intentionally .

As for the PM porn getting to you, its meant to get to all of us.

H8Fiat's picture

Just sick of it

I believe everyone knows that the system is rigged until it won't be.  Call your miners investor relations people and tell them as a stockholder you object to them selling into a rigged market at below true pricing levels established by honest markets.  You can reference above materials.

H8

Leto's picture

Speaking of silver...

it was just pushed off a cliff.

AIJ's picture

The the opposite happened according to Bo's prediction

AGAIN.....I'm shocked.........

Ozymandias's picture

If you're a stacker you

BTFD.

fluxplus's picture

Don't cry - it is a beautiful day

If someone offers you to buy something for $17 and you know it is worth $50 then why cry? Use that as opportunity to load. We know the manipulation so play their game. We saw no continuation to the upside after the weekend and OI. Based on that I just got some weekly puts for SLV and GLD yesterday and they more than doubled today. Great! Will use half gains to get some eagles and play the game again. Wash, rinse and repeat.

canary's picture

Beautiful day...in Siberia

Cartel's gulag.   Anyway, I just bought a new recliner, to be ready for the second half of this year, when that illusion is over.smiley

No need to look at my portfolio today....likely until Friday.

Klingon's picture

Anyone know why trading in

Anyone know why trading in First Mining Finance was halted?

Mickey's picture

Just for the Record:

"Bo" targeted today as the big day that stocks would sell off and metals would start raising. He said a day or so either side of today.

just saying.

One day he will be right and we will never hear the end of it.

AIJ's picture

Remember Bullion Direct?

After the restructuring it is now called:

Bullion Universe

April 19, 2017 3:00PM EST
The Bullion Universe website was turned on this morning, and Bullion Direct creditors have been invited to preview it.

The E-mail that creditors received says that final testing and product configurations are underway, and they expect to announce a soft launch soon.

At least they are trying to come back...hope they make it.

yukon123's picture

FFMGF

Don't know why, but i pray that is for a rush of buyers coming in.  I can't take the losses anymore.  Lol

scoremore's picture

Look at that POSX...

So with the rise of the USDJPY that means the JPY is dropping more than the USD right?

And if the metals are priced in dollars for us and the dollar is losing value then it should take more dollars for metal...

I know don't try to understand it just accept that the algos run the show and follow the USDJPY.

Ozymandias's picture

"Imagine if George W. Bush had told us in 2001

he wanted to start a series of wars that would kill 6,000 Americans, wound tens of thousands more, kill hundreds of thousands of Middle Easterners, make millions homeless, totally destroy ancient cities, and wreck several countries. Add to that the expenditure of five to six trillion dollars, and after 16 years have more people committed to attack and destroy us than before, with no end in sight. Would anyone have agreed to such a disaster other than the neoconservatives?"

A rather lengthy but worthwhile article:

http://www.theamericanconservative.com/articles/why-do-we-want-a-cooperative-relationship-with-russia/

billhilly's picture

FFMGF...

Klingon, I do not see where it was halted.  Maybe it is your Klingon technology that's mucking things up.  Come try some of our good Human tech !

IwlIj jachjaj

tvend's picture

Sick

And tired! Fuck reality I'm just gonna go all in on Tesla from now on. See ya in outer space, bitches. I'm coming, Spock!

yukon123's picture

ffmgf--it has resumed now, still unsure

Press Release: IIROC Trading Halt - FF

12:33 pm ET April 25, 2017 (Dow Jones) Print

IIROC Trading Halt - FF

Canada NewsWire

VANCOUVER, April 25, 2017

VANCOUVER, April 25, 2017 /CNW/ - The following issues have been halted by IIROC:

Company: First Mining Finance Corp.

TSX-Venture Symbol: FF

Reason: Pending Company Contact

Halt Time (ET): 11:51 AM

IIROC can make a decision to impose a temporary suspension (halt) of trading in a security of a publicly-listed company. Trading halts are implemented to ensure a fair and orderly market. IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.

SOURCE Investment Industry Regulatory Organization of Canada (IIROC) - Halts/Resumptions

View original content: http://www.newswire.ca/en/releases/archive/April2017/25/c6452.html

billhilly's picture

FFMGF...

Interesting that it gets halted in Canada but not US....currently trading .445/.455 here.

edit;  now halted US.

104365's picture

@104365 Re: Top 10

I am not one to break with tradition.....Unless it means breaking the tradition of the Cartels manipulation!!!!

canary's picture

Central Banks conditioned investors Not to be afraid to buy...

with their repeated support of the market.

infometron's picture

Re: First Mining Finance

Scuttlebutt on ceo.ca is that they might be announcing another acquisition, possibly Moneta Porcupine Mines (TSE:ME; OTCMKTS:MPUCF)

Further thoughts: First Mining has been doing a lot of drilling lately, perhaps some drill results about to be announced?

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