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The COMEX may have a problem

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posted on Dec, 3 2010 @ 11:53 PM
The COMEX may have a problem.... as of last week, the open contracts standing for delivery far outweighed the amount of bullion they had available for delivery.

The open gold open interest as of this morning is 59,412 contracts. This translates into 5.9 million ounces. The Comex gold inventory shows only 2.6 million ounces of gold registered and approved for delivery. In silver, there are 17,208 open contracts. This translates into 86 million ounces. The Comex reports 48.5 million ounces available and approved for delivery.


However, earlier this week, a number of these contracts had been settled out in cash... and likely at a huge premium.

The open interest in gold for December now stands at 15,195 contracts or 1.51mm ounces. Given that the total available-to-deliver amount of gold stands at 2.6mm oz, if even half of the open contracts take delivery, it will stress the Comex and likely push the price of gold higher.

In silver the open interest is 5,428 contracts. This is 27.1mm ounces vs. the 48mm ounces available to deliver. This is 56% of deliverable silver. Again, if even half of the contracts demand delivery, the Comex will feel stress and the price of silver should squeeze higher.

Many of us believe that the Comex is fraudulently reporting its actual amount of physical inventory. SLV had a 6 million ounce withdrawal of silver last week and is speculating that this silver may be possibly intended to help cover silver deliveries on the Comex. JP Morgan, not coincidentally, is the custodian (safekeeper) of the silver in SLV and just happens to be the largest short interest in paper silver on the planet, both via Comex futures and OTC derivatives.


It is also interesting to note; While the seller has until the end of the month to deliver, once a buyer requests delivery the seller typically moves it out as fast as possible so they no longer have to pay storage fees and insurance. The fact that so little silver has actually been delivered so far, little to none actually, suggests the sellers just dont have it.

Huge fraud at the COMEX courtesy of JP Morgan and the US FED.
edit on 12/3/2010 by sp00n1 because: (no reason given)

edit on 12/4/2010 by sp00n1 because: (no reason given)

posted on Dec, 4 2010 @ 12:49 AM
The real physical gold available may be lesser than reported. Buyers should be smart, not dumb. it is a mandatory self-responsibility to drill through their gold bars and test for their gold purity randomly.

China already sound the fake gold alarm not too long ago.

posted on Dec, 4 2010 @ 12:53 AM
There are rarely any that take physical delivery.

1 contract of gold is 100 troy oz. What percentage actually take delivery? Something like 1-2%.

No worries.

posted on Dec, 4 2010 @ 12:55 AM
The only reason everyone is not asking for physical gold and silver is the rich and banks know that paper gold and paper silver is a scam.

The rich holders are waiting for the right time to bust the market.

So far there is not enough small people in the system but the time will come.

When that time comes the rich big holders will as a group sell there gold.

Then the price will spiral down.

Then the rich and banks will buy again while the small people lose there money.

This will just be a repeat of the oil market scam and the housing finance scam.

posted on Dec, 4 2010 @ 01:00 AM

Originally posted by wisdomnotemotion
Buyers should be smart, not dumb. it is a mandatory self-responsibility to drill through their gold bars and test for their gold purity randomly.

That ruins the bars.

One could use electrical conductivity testing to gauge the purity of the metal without ruining the bar.

posted on Dec, 4 2010 @ 10:01 AM
reply to post by Dance4Life

I disagree. There are about 100 "contracts" to the ounce in the form of Exchange Traded Funds(ETFs for the newbies)..At least that was the ratio in early 2009 when we started talking about this. You're right that most people still aren't taking delivery, but as the volume of these contracts increases against the rate at which physical can be acquired and delivered you begin to distort the price of real gold, as the paper-or "contract" you've purchased is the medium by which gold is priced. This artificially drives the price DOWN(in the case of our current market it helps to constrain the price gain in physical gold) because there are many, many contracts that reflect a legal promise for something that doesn't exist...If this kind of practice is allowed to continue with all legal oversight("contract" enforcement) omitted as it has been for 6 years now, then the problem compounds, until someone makes a stink...Meaning that if enough demand stimulating delivery orders materializes out of the uncertainty created in our current economy, even a few percent increase in deliveries would expose the imbalance.

Anyone holding onto these pieces of paper would go bust immediately..Anyone holding physical would suddenly become MUCH richer. The dollar would suffer. There are already lawsuits going through over this. It won't be long before congress does nothing about the problem, and hurts the physical gold and silver owners the way they did during the Great Depression, by confiscation.
edit on 4-12-2010 by projectvxn because: (no reason given)

posted on Dec, 4 2010 @ 01:13 PM
reply to post by projectvxn

I think of it like a bank. Do they have all cash on hand? No, if they don't, they can find it.

Do you really think COMEX is going to default? No, lets be serious.

There will never be such a thing as worthless paper as long as the USA is the financial capital of the world. This is the same thing as the garbage with CME being in cahoots with JPM with this silver thing. Just a lot of broad information with really no good factual evidence.

If someone really wanted to pull the strings they would scare ****less all longs in silver and precious metals. That hasn't happened yet, so I am guessing no one has came that close to breaking the bank.

The recent ramp in silver's initial maintenance margin requirement isn't going to do it. That was just done to cover the back sides of the CME group from a bunch of speculators with $10,000 retail accounts that blow up on average of every 5 minutes during regular trading hours. I have seen these people first hand, used to be one myself a long time ago with ZB (30 Year Bond). Learned my lesson after showing up to the hospital on a regular routine for panic attacks.

Volume is one thing. But volume taking delivery is a different story. No one takes delivery that cannot afford it. There is a point where SLV and GLD become overvalued - the equilibrium of the markets always takes precedent in the long run. It will be messy.

posted on Dec, 6 2010 @ 02:13 AM
reply to post by Dance4Life

Except the COMEX isn't a bank. It doesn't take deposits, it doesn't have branches where you can use ATMs. It's an exchange. They don't have deposits that earn interest, and as a result, it cannot control how levered or distorted the exchange is overall. At least banks can control reserves as they require...

I think this is going to be a big boon to gold bugs for the foreseeable future.

posted on Dec, 6 2010 @ 08:13 AM
reply to post by projectvxn

I understand. You do not think there is Silver anywhere else in the world to import?

There are other venues where metals trade. I understand you can't create Silver like the 100 dollar bills that Ben wipes with, but all this talk is getting out of hand.

posted on Dec, 6 2010 @ 02:28 PM
reply to post by Dance4Life

Read and watch this:

‎"The confirmed volume of silver at the Comex on Tuesday was 201,216 contracts which equates to just slightly more than 1,000,000,000 ounces of silver in one day. Now, for perspective, consider that the total annual production of silver on planet earth is 600,000,000 ounces. So Tuesday's volume was 166% of total annual world production."

And now read this:

JPMorgan, HSBC sued for alleged silver conspiracy(Reuters)

You don't need to make silver production disappear to make the scenario I outlined happen. All you need is a lot of paper to distort the market. Once that paper goes away and silver and gold have to be priced at their actual value, the dollar will take a hit. Why? Because it will be an dramatic UPWARD adjustment to the price of both gold and silver...But the paper contracts are going to burn. Why? Because according to the black letter of the law you can't write and conform to contracts where the product does not exist or where the contracted services are never intended to be performed.

edit on 6-12-2010 by projectvxn because: (no reason given)

posted on Dec, 7 2010 @ 12:04 AM
Consider me a bit of a layperson here, but please correct me if I'm wrong in my interpretation, but the way I am understanding all this means that the value of gold/silver held in trust will dramatically decrease, while at the same time the value of gold/silver held in possession will soar..

Is this a reasonable line of thinking, based on this info?
edit on 12/7/2010 by nasdack24k because: no reason

posted on Dec, 7 2010 @ 05:09 AM
reply to post by nasdack24k


Paper, even ETFs are over-leveraged crap..Most don't know it yet. Physical is where the smart money is. And when the price manipulation is exposed in court anyone holding physical will be having a champaign party.

posted on Dec, 7 2010 @ 11:25 AM
reply to post by projectvxn

Thanks for clearing that up. Sounds awesome

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