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March Comex Silver "Deliveries" - Craig Hemke (29/3/2017)

March Comex Silver "Deliveries" - Craig Hemke (29/3/2017)
By Craig Hemke 2 years ago 16090 Views 3 comments

March 29, 2017

It seems that every few months, the charade of "physical delivery" on Comex becomes so outrageous that we feel compelled to write about it. Well here we are again today.

Before we get to the CME-reported numbers, let's start with the usual background...

What you need to know is that most of this is just a massive scam. Rarely is any actual, physical metal exchanged. Instead, the bi-monthly Comex delivery process is primarily a shuffle of paper warehouse receipts and warrants. Additionally, the parties to these exchanges of paper are usuallly The Banks themselves, acting in one seemingly endless circle jerk where one month Scotia "delivers" to HSBC and, the next month, HSBC turns around and "delivers" metals back to Scotia. It's been this way for years and it continues to this day.

And the volume of "deliveries" rarely changes, as well. For March, the initial amount of contracts still open and "standing" when the contract went off the board on February 27 was 7,299. Even at the conclusion of First Notice Day on the 28th, there were still 4,271 contracts still open. The delivery month is now complete and a total of 3,855 "deliveries" have been made. How does this compare to previous delivery months? It's about average. See below:

Delivery Month Total "Deliveries"
Dec 2014 2,975
Mar 2015 2,583
May 2015 2,840
July 2015 3,637
Sept 2015 1,555
Dec 2015 3,939
Mar 2016 1,356
May 2016 2,716
July 2016 2,474
Sept 2016 3,215
Dec 2016 3,980
Two-year average: 2,843

So, as you can see, the total amount of "deliveries" for March were not extraordinary by any means, though when compared to the previous to Marches, the 3,855 for March 2017 is above average. Regardless, let's dispel with the idea that suddenly there is some surge of physical demand for silver on the Comex for as you can see above, March 2017 was really no different from any other month in the past two years.

However, I do want to make note of two items and they both have to deal with The Major Power in Comex silver...JP Morgan. Not only does JP Morgan control about half of the total vaulted silver on the Comex, they only do so after nearly experiencing an extinction-level event back in 2011 when they were caught massively short paper silver with no physical silver with which to cover it. This led to the final short squeeze of April 2011 and all of the events that followed. In response and to prevent this from happening again, JPM was rushed through the approval process for their own Comex silver vault. See here: https://seekingalpha.com/article/259549-will-jpmorgan-now-make-and-take-delivery-of-its-own-silver-shorts

In the years since, JP Morgan has amassed a stockpile of what is alleged to be physical silver in their Comex Vault. As of Monday, their total stockpile of registered and eligible silver stood at just over 94,000,000 ounces versus a total Comex vaulting structure of 191,488,871 ounces. That's just a shade over 49% and JPM now has enough silver to "physically settle" a short position of nearly 19,000 Comex contracts should they ever find themselves squeezed again.

How did JPM acquire all of this "physical silver"? Primarily through the Comex "delivery" process. Below are the year-end summaries for just 2015 and 2016 (click to enlarge). Note that the "house" or proprietary account of JPM is the primary stopper of "deliveries" nearly every month, to the tune of a NET 10,199 contracts. At 5,000 ounces per contract, that's just shy of 51,000,000 ounces of their current 94,000,000 ounce warchest.


And this continued during the just-completed March "delivery" month. As you can see below, of the stated 3,855 "deliveries", the proprietary account of JPM stopped a total of 2,689 for nearly 70%. That's another 13.5MM ounces added to the stockpile for use in the event of another paper metal short squeeze.

Lastly, just one other item of note. Since there is a stated position limit of just 1,500 contracts for each front/delivery month, you might be asking yourself how JPM gets away with stopping far more than that number. If you go back and look at the 2015 and 2016 tables above, note that they seem to adhere to these limits each month. So why and how did they manage to stop 2,689 in March? That's a good question so I took the time yesterday to submit a formal complaint to the CFTC:

Given my past experience in dealing with the CFTC, in no way do I expect any aggressive action from this neutered and fully-controlled agency. Instead, I just thought it would be fun to see if I heard anything back from them at all. Will I even get a response? I can tell you that, so far, I haven't even received one of those "thank you for writing us, we'll look into it" emails so it's not looking good. However, if I do eventually hear from them, I'll be sure to write follow-up to this post.

Thanks for reading and thanks for taking the time to understand some of the forces aligned against you in the Bullion Bank Paper Derivative Pricing Scheme.



Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities. Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.


The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

s. hutchinson 2 years ago at 5:13 PM
I makes you realize how corrupt and disgusting this self-serving activity is. Somebody DO SOMETHING, PLEASE !!!
S. Hutchinson, Sydney, Australia
ThePreacherOfStroms 2 years ago at 11:43 PM
BWAHAHAHAHA I'm sure it's not DAMAGING...especially when the powers that be allows for this to happen. It will only continue to be. Unless:-
> the PHYSICAL asset is thoroughly or 75% Removed from the Controllers Vaults and in the custody of the individual private entity.
> The day that the CFTC stops their "Illict" dealings and actually no longer covering up the "Scam" for 104years.
> the World population actually understands that Silver is ACTUALLY at its lowest availability both Above & Below ground.
> GATA actually wins.
> Warren Buffet or Bill Gates suddenly decides to buy out all the Contract both paper and Physical and DEMAND immediate Delivery and deposits it in "Shakalakalanistan" outside of AmeriKKKalands reach.
> the "7 Walking Dead" are actually Called out to Settle their positions that's apparently way higher than the actual physical Asset by an unfathomable figure by the billions in contract paper trades...which they do not have Physicals nor the Fiat to cover. (Which then would lead to a massive MASSIVE BAIL-IN or even the COLLAPSE of the Economic Structure that is the Financial Institution.
***all that's mentioned above are merely a rant by an EXTREMELY DISGRUNTLED fellow human being. And is purely for stating the obvious...are without prejudice nor able to inflict harm to anyone individual or Financial institutions***
(If it could...then GFYS)
BWAHAHAHAHA BWAHAHAHAHA BWAHAHAHAHA

this manipulation will Not have any significant roll in financial securitization in the short 2-5 year's
Ivanov 2 years ago at 3:26 AM
I guess they have been granted an "exemption" on position limits by the very CFTC. Like the commodities index funds are...
But it is an interesting fact that JPM has half of the physical certified stocks of silver. In a normal commodity market, this is a prerequisite if you would attempt a squeze on shorts.
BitcoinCash

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