Silver: It’s All About Inventories
Written by Jeff Nielson
Tuesday, 05 July 2011 13:35
While I have long since given up the “hunt” for intelligent analysis from the mainstream media on the silver sector, I have also become somewhat frustrated with much of the commentary I’ve seen from the more reliable/better informed commentators within the silver sector. Two “camps” seem to have emerged, separated by what I can only describe as a logical disconnect.
On the one hand, we have a group of very vigilant and bullish commentators who are squarely focused on the melodrama of ‘evaporating’ inventories now taking place in the Comex exchange (and any/every other warehouse where significant amounts of silver can still be found). Theirreporting, while insightful, is almost surreal.
They are essentially engaged in a “countdown” until some “default” event occurs in the silver market, something these commentators look forward to with extreme anticipation, as to them this would signify “the end” of the silver-manipulation game the bullion-banks have been playing for the last 30 years (and actually much longer). Conversely, since such a default event directly implies the financial disintegration of the ‘monster’ silver-short, JP Morgan, I have much more “mixed feelings” about what such an event portends.
READ MORE --> https://bullionbullscanada.com/index.php?option=com_content&view=article&id=21610:silver-its-all-about-inventories&catid=49:silver-commentary&Itemid=130
ive noticed and been reading your updates on SilverDoctors Jake! Keep them coming!
Check this out:
So if I have the premise correct, it goes like this:
Big institutional investors desired to purchase physical silver. They buy large quantity from big bullion bank, who takes cash, and promises to acquire physical bullion. Buyer agrees to allow bullion bank to hold the silver in an approved metals warehouse. Except, however, bullion bank never actually acquires any new physical silver. Instead, on paper, bullion bank creates entry which purports to be the bullion bank acquiring the actual physical silver. Bank uses cash from investor to purchase who knows what.
Think how many times that bullion bank can "acquire" the same silver for their big institutional investor clients? Hundreds of times or more, unless ALL of the investors actually demand physical delivery.
This sounds exactly like fractional reserve banking, no?
Anyhow, while the big banks claim to have acquired large quantities of silver for their clients, the banks also realize that if the silver price goes up, then the banks will owe their clients loads of money, so the banks manipulate the silver price lower, by buying tons of shorts to suppress the price.
Seems the scheme is admitted on paper, according to the author at silverdoctors.
Is that correct? If so, what are the immediate implications, if any?