The world is waking up to the silver manipulation story...FINALLY!
The mechanisms of manipulation are being exposed. Those silver short "hedges" held by JP Morgan, Citibank and HSBC are a ridiculous house of cards supposedly justified by the following physical silver:
1) Hedged LBMA Warehouse silver
2) Hedged COMEX Warehouse silver
3) Hedged SLV Inventories
4) Hedged Pasqua-Lama & San Cristobal future production
5) Hedged Silver Wheaton royalty streams
6) Hedged silver producers
7) Hedged refiner and smelter silver inventories
8) Hedged jewelery manufacturers
9) Hedged retail bullion dealers
10) Other mystery hedges on mystery silver bullion
According to our good friend (ha!) Jeffrey Christian there's about 3.3B ounces of physical silver that are hedged...at least that's what he said at the 2012 Silver Summit.
But what does this really mean? Most legitimate hedges are closed out at the end of their term as they are set up to hedge against price fluctuation risk over a specific period of time. Clearly, there is little reason to go in and out of legitimate hedges that are mitigating price risk on owned metal unless physical metal is added or subtracted from inventory. So not all of the 3.3B oz need be hedged multiple times during the year. Sure, there are legit "traders" out there but they gain legitimacy ONLY due to the real market participants who are hedging the price of their owned metal.
So here's my question: If only 3.3B oz of physical silver are available for legitimate hedging why is the COMEX trading at volumes of 100B oz per year? And how in the WORLD does the LBMA "transfer" over 130B ounces of PHYSICAL silver every year?
Clearly something is very wrong when people like Jeffrey Christian claim that "hedging" at these volumes EVERY YEAR is legitimate.
***Keep an eye on Pasqua-Lama, San Cristobal and other silver mines that are being relied upon to deliver physical silver into forward silver sales contracts...Governments have a funny way of hanging onto their TRUE wealth when economic troubles start.
Mark my words...
"The wealth of every nation lies in their soil, not in their bank vaults."
May the Road you choose be the Right Road.
PS - I have posted this article with a very appropriate graphic on the website :-)
Naked Silver Shorts