Why the silver longs, and Eric Sprott, can defeat the silver shorts – an education in 4D chess
Why the silver longs, and Eric Sprott, can defeat the silver shorts – an education in 4D chess by natefishpa for Renaissance Men
TDC Note – We have ask this question many, many times – why haven’t the big money precious metals players taken out the COMEX? They profit from it the same as the criminals on Wall Street. /END
Worldwide silver shortage. Bullion stores sold out for weeks, if not months. No one selling their product to them for spot price. Bullion priced $10-$13 over spot. Silver deficit of mine supply of 350 million ounces.
And of course, you expect to wake up at silver $2 less than a day before. Actually – I did, many of you did not. The price is actually in “contango”, where the futures price the last time I checked is wayyyyy above spot. I know how they play this game. At issue here is the disconnect between the REAL physical price and the “paper” price.
When you see a contango like this, you can, in essence, sell a futures contract, then go to the spot market and buy silver. You can then deliver the product on the futures contract. This contango was $.75 a few minutes ago, per ounce. For a contract of $5,000 ounces, that is $3,750 you can pocket on this deal. Of issue, NO ONE will do this, because anyone trying to buy on the spot market may get months of delays to get product.
Yet, prices are falling because we obviously have all of this supply!!!
Watch Andrew Maguire – he walks you through everything.
But this supply – it’s falling off the rafters!! Just yesterday, did you know they put on sale 2 BILLION ounces of PHYSICAL SILVER? Yeah. No. They didn’t. But they did write pieces of paper to sell 2 billion ounces.
Let me explain what you are seeing: you are seeing institutions conjure up fake metal to sell in the futures market. The metal does not exist. Some of these banks say, “look, I have metal!”. It is LEASED. They count it on their books so they can then sell it. The lessor counts it on their books so they can sell it. And, the metal that IS there is:
- Allocated – assigned to a group or person and not for sale – at this price.
- Unallocated – this is a pool of silver which is a fractional reserve, which they sell over, and over, and over. It is thought there are perhaps 250-500 paper claims on each one of these bars in vaults.
What is in progress, and has been for some time, is a good old fashioned bank run, of sorts. There are two strategies here:
- Take unallocated “in to your possession” and get the unallocated titled to you in their vaults. No one seems to trust this actually happens. They just shuffle paper around
- Take unallocated “in to your possession” by removing it from the vaults and putting them in your own vaults.
The main issue with the COMEX is that, on average, they allow sales of 200x daily production almost every day. The COMEX was setup to allow hedging of production. You know, you are a wheat farmer and you want to hedge your production. Well, for most commodities, this is 125% daily production. Yesterday, you saw price go up $2, then smacked down $2 on approximately NINE HUNDRED DAYS PRODUCTION “UP FOR SALE” IN A DAY.