One man reported that his company owned 4,000 long March contracts (20 million ounces of silver) for which delivery of physical silver was demanded. The counterparty was JPMorgan Chase. Instead of silver, the bank offered cash.

After the first offer was refused, the bank offered more than $40 per ounce. When the company turned down that offer, JPMorgan Chase apparently threatened the company that the bank would deliver physical silver against other contracts, then declare a “force majeure” inability to deliver all the silver to this particular party. After this, the company accepted a cash payment, reported to have been for more than $50 per ounce!

8) In 2010, the total U.S. mined Silver Production was 38.6 million ounces. 89.6% of all silver mined in the U.S. in 2010 was consumed JUST by the American Silver Eagle program of the U.S. Mint, leaving only 10.4% of all U.S. mined silver for all other investment use (bars, ETFs, privately minted coins), all industrial use, jewelry, photographic use, medical use, etc. (source: silverinstitute.org)

Let us reiterate a COMEX default on delivery of precious metals and specifically of silver bullion bars is far from “noise”. It is of significant importance and that is why we have covered its possibility for some months. A COMEX default would have massive ramifications for precious metals markets, for the wider commodity markets, for the dollar, fiat currencies and our modern financial system.