The paper silver open interest on the Comex is at all-time highs.
The previous all-time high was 224k contracts when the price of silver
was pushing $50 in 2011. The current paper silver open interest is 229k
contracts with the price of silver at $18. At least the degree of fake
silver open interest in silver was more appropriate to the price level
at which silver was trading in 2011.
Having said that, the current paper silver open interest is entirely
inappropriate relative to the amount of silver reported to be held in
Comex silver vaults. 229 thousand silver contracts translates into 1.15
billion ozs of paper silver. That number represents about 37% more
actual silver ounces produced by global by mining companies in one year.
Compare that paper representation of silver to the actual 193 million
ozs of silver reported to be held in Comex vaults, primarily “held” by
JP Morgan which is reporting nearly 102 million ozs of silver in its
Notwithstanding whether or not those 101 million ozs of silver are
actually sitting physically in JP Morgan’s Comex-designated custodial
vault (and much of it has likely been hypothecated), the amount of paper
silver issued primarily by Comex bullion banks is nearly 6x the total
amount of silver reported to be held in Comex vaults.
But it gets worse. The amount of silver that has been designated as
available for delivery, or “registered silver,” is only 30 million ozs.
In other words, the amount of paper silver issued by the Comex is 38x
greater than the amount of silver made available to be delivered to the
holders of those silver contracts.
The point here is that the Comex is likely the world’s most
fraudulent market. In fact, It’s inappropriate to refer to the Comex as a
The Comex is nothing but a mechanism by which the
Fed, in conjunction with the Treasury’s Exchange Stabilization Fund and
the Comex bullion banks, exerts control over the price of silver.
The degree to which the Fed et al has to exert fraud in order to
contain the price of silver is reflected by the absurd imbalance between
paper silver contracts issued in relation to the amount of the
underlying silver available for delivery. In any other commodity
sector this situation would be labeled “criminal.” With silver and gold
it’s labeled, “nothing to see here, move along.”
As with silver, the trading patterns in gold reflect a high degree of
desperation by the bullion banks to contain the price and demand of
physical gold. Interestingly, right now most of the blatant
manipulation appears to be connected to the London p.m. gold fix
activity on the LBMA. We believe it’s evidence of a growing shortage of
physical gold available to deliver into India, China and other
gold-buying countries. We explain this view in detail in today’s
Shadow of Truth episode:
Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at email@example.com.
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.
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