What happens when the COMEX goes bust?

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tmosley
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What happens when the COMEX goes bust?

There was some question as to what would happen to the price of silver in the event of a COMEX collapse, so I thought I would create a new topic to address that.

I would hope that by now we know well enough that JPM won't be taken down by this. They are a zombie bank, and the only way to take out a zombie bank is to remove the head, or destroy the brain. This is a solid chest shot. But killing JPM isn't the point. The point is increasing your purchasing power.

That said, here is what happens when the COMEX goes bust, totally defaults, declares force majeur, or starts delivering SLV paper only (same as a default). Currently, the COMEX is the ONLY silver futures exchange. This means that ANYONE wanting to hedge future production has to do so through them. It also means ANYONE wanting an assured price on silver to be delivered in the future must do so through them. When they shut down/can't make with the silver deliveries, those who wanted the silver will see that. They will be forced to buy off of the physical market, and keep it themselves. 

Do you see where this is going? The buyers want an assured price. That means they will buy NOW. The sellers want to hedge, but they can't. They also can't sell future production. Oh shit. That means all of that demand that is normally shifted off to the future hits the physical market NOW.

This is called an industrial panic. The users will start by buying now to lock in prices, and take delivery, which will result in higher prices, causing those who need it in the future, but were waiting until they needed it to also buy now, driving prices up, and so it will go, higher and higher, either until an inelastic commodity becomes elastic, or until the silver mines catch up (unlikely to be soon as they are barely able to keep pace now). 

Remember, this is in an environment of extremely low inventories. There is less silver on the surface of the Earth than there has been since records started being kept by the ANCIENT EGYPTIANS.  And for those who don't know, the price of silver back in those days was twice that of gold.  And there was less gold on the surface too.  IF we had the inventories, then that would dampen the price rise, as said silver would flood onto the market as the price exploded.  That is unlikely to be the case this time.  We don't know how much is in private hands, but you can bet that much of it won't be coming out at any easily foreseeable price, as $50 wasn't enough to bring it out in volume.

So relax.  Don't worry.  Just stack away any extra money you have, and sell when there is industrial user blood in the streets.  And sell for GOLD.

Edited by admin on 11/08/2014 - 05:09
Sockeye
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My personal opinion is

I do not want them to default.  I would be happy with a cash settlement and keep the game going.  where else will I get leverage. I will take the cash and go buy gold or silver where ever I can at what ever price I have to pay even if twice the price.  I want the leverage. I want to play the game.

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tmosley
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It's not a matter of what you

It's not a matter of what you want.  This is happening.

It is a matter of properly positioning yourself to take advantage of what is coming.  If you think it won't come because you don't want it to, then remain in paper.  I am warning you here that you will get hurt.

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Question of Timing

When I think of all the potential tipping point events and the probable sequence of events, I am not sure that the Comex default will be the first or primary trigger.  I agree that the Comex defaulting or significantly changing the game to cover their fraud is most likely a foregone conclusion.  I believe that sovereign default, i.e. Greece, or cascading banking collapses from one country to the next could well be the first series of the sequence that begins the implosion.  If we agree the Comex will, in effect, default through some mechanism, what are your thoughts about how it plays into the bigger picture?

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tmosley
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The effect depends on the

The effect depends on the actions taken.  There will be another bailout, but the size depends on the method of default.  If they default by switching to SLV paper delivery only (the most likely option in my opinion), then they have a chance of delaying the silver moonshot, as industrial users might be able to take delivery from SLV.  Such an action is likely to trigger a run on SLV, however, which will again drive the paper price towards zero, while the physical price rises.  

If an SLV substitution default path is followed, then JPM won't need a bailout until the SLV vaults are empties, at which point the fraud is revealed in all its glory, and there is a worldwide run on silver held by bullion banks (if that doesn't start sooner).

As far as bigger picture, this will be like 2008 all over again.  The Fed will bail everyone out.  Who knows if it will work this time?  The game will be to sell your silver for gold while silver goes astronomical compared to gold (this works like the housing bubble burst in reverse).  Likely everything else goes into a short lived deflationary spiral that is met with massive printing until China says "nope", and dumps treasuries.  Then, game over USA.

Fighting Gael
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What happens when the COMEX goes bust?

what happens when it doesnt?...........................................

Silver_Watchdog
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I doubt they'll go bust

I doubt they'll go bust anytime soon but at that point they will have to access the Treasury's deep storage of 7 million ounces (if they have it). You will know when inventories are scarce when you see lease rates surge—unfortunately if you wait until that moment, you may be stuck buying while prices are going parabolic.

tmosley
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You think 1400 contracts

You think 1400 contracts worth of silver is going to save them?  I don't.  That's an extra 25% over what they already (supposedly) have.  If it was claimed to be 7 BILLION ounces, then you might be on to something.

And to the guy who asked "What if it doesn't?", the answer is simple--the same thing that is happening now.  The inventories will continue to drain, but at a slower rate (by definition, as they aren't out), the paper price will continue to collapse as the EE exerts trump card after trump card whenever the market shows any signs of resistance.  The best they can do is prevent a collapse in any given month.  If it doesn't happen this month (50% chance), then it will likely happen the next delivery month (60% chance), or the one after that (68% chance) or the one after that (75% chance).  Perhaps they will pull a few billion ounces of silver out of the aether one day, but that is unlikely to be real silver.

If you want to argue about whether or not it will happen, you are going to need to present an argument that the COMEX is sound despite plummeting inventories.  The only arguments I have heard in that vein amount to nothing more than conspiracy theories or platitudes about SLV being full of silver (resorting to buying up shares of SLV will greatly raise the price of silver as well, something the trolls seem to forget).

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Crash JP Morgan Buy Silver!

Fighting Gael
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You think 1400 contracts

tmosely

u r late to the comex busting party with your odds, they have been giving those same odds "monthly" for years

comex still rollin on..............................

according to your theory, it looks like jan/feb 2012 is the drop dead date for comex bust...

ok we have noted your ticket... the lotto dept will contact u if u r the big winner........................

tmosley
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Fighting Gael

Fighting Gael wrote:

tmosely

u r late to the comex busting party with your odds, they have been giving those same odds "monthly" for years

comex still rollin on..............................

according to your theory, it looks like jan/feb 2012 is the drop dead date for comex bust...

ok we have noted your ticket... the lotto dept will contact u if u r the big winner........................

Perhaps you ought to stop lying all the time, and maybe people will believe what you have to say more often.

I have never once seen anyone post odds, and have only heard people say that it is likely.  And it has been likely.  But now it's happening.

So post evidence of the health of the COMEX, or GTFO of my thread.  As it is, your only argument appears to be "it hasn't happened yet, therefore it never will," which is the definition of normalcy bias.

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When the Comex finally gives

When the Comex finally gives out it will come through lack of physical Silver to actually have a market.Forget paper and forget the market price,what I see happening is more and more physical Silver disappearing out of the market which leaves less and less physical Silver to trade.To my mind now we are seeing two different markets,a paper market which is easily manipulated whilst no one demands physical and the authorities ignore irregularities and a physical market in which a plague of locusts just continually take physical totally out circulation which is not returning back onto the market.Add to this the fact that certain countries are draining Gold and Silver out of the Western World with none of this metal returning and the official market looks increasingly hollow.When the masses realise together that their fiat cash is turning worthless through devaluation,money printing and inflation and they finally realise that PM,s are the new international currency that keep pace with wealth loss via the above then we are looking at hyperbolic price increases,I personally think the Comex will have ceased before this.Much as I feel the JP Morgue et al have huge short problems I honestly think a huge international currency crisis could well hit in the next 6 months and the fate of the Comex and the LBMA will not matter a jot.Bob :) 

Below some images to illustrate a currency cris or hyperinflation from Germany in the early 20,s including,new childrens toys,getting paid,fancy a change dear .... new wallpaper and sweeping up todays worthless rubbish.

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Fighting Gael
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comex bust

tmosley wrote:

Fighting Gael wrote:

tmosely

u r late to the comex busting party with your odds, they have been giving those same odds "monthly" for years

comex still rollin on..............................

according to your theory, it looks like jan/feb 2012 is the drop dead date for comex bust...

ok we have noted your ticket... the lotto dept will contact u if u r the big winner........................

Perhaps you ought to stop lying all the time, and maybe people will believe what you have to say more often.

I have never once seen anyone post odds, and have only heard people say that it is likely.  And it has been likely.  But now it's happening.

So post evidence of the health of the COMEX, or GTFO of my thread.  As it is, your only argument appears to be "it hasn't happened yet, therefore it never will," which is the definition of normalcy bias.

lying??? dont know what u r talking about, as far as "odds", fyi thats a general term, whether u seen any1 post here i dont know i never said that about specific posts on here...that info is from some of the pundits & their followers, for a long time (years).....

its real simple either u r right and comex will bust in jan 2012 or u r wrong & it wont....

keep sayin it forever and someday u will be right..............................

"evidence" of health is meaningless, all entities have isssues

same as anyone sayin the us postal service is bust, they been bust for long time, keep saying/predicting its day of demise one day they will be right, big deal.................

arch stanton
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@tmosley

I have read many of your posts and believe your analysis is uniformly excellent.  I think many of us have been listening to guys like Bill Murphy yell about "commercial signal failure" for so long we have become numb.  Question:  do you think the Silver Users Association is still active in the price suppression scheme?  Years back they used to be the Blythe Masters of we silver bugs, but I haven't heard anything about them in a long time.

tmosley
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Are you twelve or something?

Are you twelve or something?  Take the time to form cogent thoughts, and people will be a lot more likely to take you seriously.

You don't know what you are talking about.  I started talking about a COMEX collapse being in the cards back in December when they first began to default.  I talked about it briefly back in 2008, when there was real danger of said collapse as well.

But hey, you are free to dismiss any informed opinion you like by claiming that other people have had that opinion for a long time if you want to.  It just makes you look like an idiot.  Sort of completes the ensemble. 

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arch stanton wrote: I have

arch stanton wrote:

I have read many of your posts and believe your analysis is uniformly excellent.  I think many of us have been listening to guys like Bill Murphy yell about "commercial signal failure" for so long we have become numb.  Question:  do you think the Silver Users Association is still active in the price suppression scheme?  Years back they used to be the Blythe Masters of we silver bugs, but I haven't heard anything about them in a long time.

I don't know much about Bill Murphy.  I think the noise about the Silver Users Association was probably overblown.  They certainly had an interest in keeping the price down, but not the means.  Only the banksters have that ability.  But then, when you take a gander at the list of members of said association (here: http://www.silverusersassociation.org/directory/index.shtml), you see that Scotia Mocatta is a member.  Interesting.

It seems to me that it is, and always was, the bullion banks that were in charge of the suppression.  They might use proxies like the SUA to influence public policy, but the ones behind the day-to-day manipulation are definitely in the financial sector.

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Agree the price of physical

Agree the price of physical will become a moonshot.

No idea if that ever will be allowed to come to pass.  It has managed to hang on a lot longer than many implied it could.   As a precursor I would look for commercial paper investment to suddenly disappear as they will be the first to know if DNR orders are issued.

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Fight back - Silver Viral Project

We can't take this shit anymore. Fight back.

http://lonerangersilver.wordpress.com/silver-viral-project/

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The definition of complacency

Fighting Gael wrote:

tmosely

u r late to the comex busting party with your odds, they have been giving those same odds "monthly" for years

comex still rollin on..............................

according to your theory, it looks like jan/feb 2012 is the drop dead date for comex bust...

ok we have noted your ticket... the lotto dept will contact u if u r the big winner........................

I can understand how easy it is to become complacent when things continue to go on when it seems they cannot. Don't let it lull you to sleep though. There was some crazy preacher recently that predicted Christ would return back in May. Some people have taken the inaccuracy of some of these claims to adopt the view that Christ is never coming back..... Well, I can assure you, despite what anyone thinks, Christ will come back. Just like there are signs to look for when the time is near for Christ's return (but not the day or hour), so too will signs tell us when the death of the comex is near. Yes some others have jumped the gun, but as time goes by, more and more evidence accumulates that advertise the end of comex. The ramifications of it's doom will be far reaching, effecting the whole damn fiat universe. So I think we should all be diligent to continue to prepare for what most assuredly will come. I remember selling my last investment house in 2005. Some told me I sold too early, missing out on thousands. I can tell you now.... I am glad to have been a year early, because if I had waited and been one day late, I would still be stuck in a unwanted liability, with an underwater mortgage.

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Fighting Gael

Fighting Gael wrote:

tmosely

u r late to the comex busting party with your odds, they have been giving those same odds "monthly" for years

comex still rollin on..............................

according to your theory, it looks like jan/feb 2012 is the drop dead date for comex bust...

ok we have noted your ticket... the lotto dept will contact u if u r the big winner........................

keep sayin it forever and someday u will be right..............................

same as anyone sayin the us postal service is bust, they been bust for long time, keep saying/predicting its day of demise one day they will be right, big deal.................

I know that I'm responding to a 12 year old, but where do you get "theory or prediction" of a Comex collapse by Jan/Feb 2012? I don't see any hard prediction dates in this thread about when the Comex is supposed to or even should collapse. If you care to look, I also contributed a thread about this using the rate of silver depletion in both registered and eligible sections of the Comex. I concluded that the comex should collapse somewhere between Jan-Feb 2012 based on the observations of silver-depletion rates.

I think you should understand that there's a difference between posting "Little Chicken Sky is Falling" pronouncements and suggestions of outcomes based on observations and facts.

The fact is that the comex could default or "go bust" on any given month based on delivery demands. However, the banks have managed to suppress the price enough until recently to avoid it. But even that can be examined. Any idiot can see that they are fighting a losing battle but have not given up. I think it's useful to propose conclusions and suggestions based on observations of facts to better understand what could happen. This helps with decisions made on silver purchases, etc.

The fact that it hasn't "gone bust" does not mean that this event isn't getting closer. There are many examples of people making observations based on sound conclusions and known facts that have been too early. Peter Schiff's seemingly "Sky is Falling" pronouncements back in 2004-2007 looked as if they were overblown to morons at the time, but are now regarded by everyone except shill CNBS talking head types as extremely bright and clairvoyant. 

Prediction of future events is largely a fool’s game when one must pin down an actual date, however, observation of facts and contributing an educated conclusion is part of the human condition and is accepted universally as part of what's needed to make informed decisions.

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Fighting Gael
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jake ......u bipolar?

"I know that I'm responding to a 12 year old, but where do you get "theory or prediction" of a Comex collapse by Jan/Feb 2012? I don't see any hard prediction dates in this thread about when the Comex is supposed to or even should collapse. If you care to look, I also contributed a thread about this using the rate of silver depletion in both registered and eligible sections of the Comex. I concluded that the comex should collapse somewhere between Jan-Feb 2012 based on the observations of silver-depletion rates.

I think you should understand that there's a difference between posting "Little Chicken Sky is Falling" pronouncements and suggestions of outcomes based on observations and facts"

so using your own words what did u predict?

u either predicted something or u didnt , in your own words u implied a bust in jan 2012, so make up your mind........................

u said u concluded .....................

i say u r wrong..... i have no theory i never came up with one predicting a collapse, i took ur words, ur post and extrapolated what u said.... ur ability to critcise me as a boy doesnt make your argument right, but is typical for those whose make these ingenius predictions......... bottom line ..u will be right jan 2012 or i will be, pretty simple, age has nothing 2 do with it.................... brains might though..........................

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