Guest Post: Guess Who’s Buying Silver Now

Tyler Durden's picture

Submitted by Mark McHugh from Across The Street

Guess Who’s Buying Silver NOW?

OK, so the JPM vault that contains a whopping 30,844 ounces of silver
(about two hours worth, given the torrid pace at which JPM delivers)
was just approved by the COMEX in March.  JPM’s probably got lots of
silver stashed all over the place, right?  Maybe, maybe not.  One thing
is for sure, JPMs customer(s) are some of  the worst investors the world
has ever seen.  After selling almost 5 million ounces in the first
three months of 2011, they’re buying now.  That’s right, in March alone
they delivered 374 contracts (@ 5000 ounces each) and bought…..zero.  So
far in April, they’ve bought 92 contracts and sold, you guessed it….the
goose egg.  And yes, they are indeed buying at new highs (See here and here).  How bad would it suck if we learned that this clueless market participant was in fact the US government?

If you’d like to track the hilarity yourself, here’s links for the daily, MTD and YTD action on the COMEX.  Daily updates on COMEX silver stocks can be found here (xls format).

Apparently there are still quite a few out there who believe this is
all part of some Jamie Dimon mindfreak.  Good luck with that.

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chumbawamba's picture

I wonder how much silver is in these safes?

http://www.huffingtonpost.com/2011/04/10/japan-lost-money-safes-cash_n_8...

Sorry for the HuffPo link.

I am Chumbawamba.

SilverRhino's picture

+1 for sharing.   Interesting piece of attempted memetic programming.  

Note the "money" [forgive the pun] quote that they want your subconcious fixated on:

But he still has money in the bank.

That's not the case for many of his longtime friends and acquaintances, said Kimura, a former bank employee.

"I spent my career trying to convince them to deposit their money in a bank," he said, staring out at his flattened city. "They always thought it was safer to keep it at home."

Manthong's picture

Interesting. If there was a lot of metal inside, they may well have just sunk. Those look mostly like fire safes - for documents and paper. Good idea for the typical frame house over there.

Eternal Student's picture

Well, I just don't get these "money in the bank is safe" people. Let me see if I understand things correctly.

What they are saying that they are taking their money, valuables, important papers, etc., and giving it straight to a group of people who have been responsible for the greatest theft in the history of humanity. And furthermore, these same depositors are stuck with the bill from that theft.

So they basically really like doing business with the best of the professional thieves?

If I'm going to have my money stolen, I think I'd prefer the odds on having to deal with a relative amateur, and not the best of the professionals.

And here's a modern story of the scam which apparently was carried out during the Great Depression by California Banks. FDR was a polite piker during the confiscation of gold:

http://www.rapidtrends.com/safe-deposit-boxes-maybe-not-so-safe/

Truth to tell, I haven't yet found a definitive reference to the California Banks' confiscations during the Great Depression; just unattributed retellings of the story. If any one has a good reference, I'd be grateful for it. Thanks.

Hephasteus's picture

The banking industry has been a daily tsunami on japan since frikkin 1987.

Manthong's picture

Currency in the bank went out of style there before it did here. Here it makes paying the rent and plastic convenient, over there, to an old person, it's an inconvenience. I don't think they have anywhere near the burglary concerns that we have here, especially in the rural areas.

trav7777's picture

supposin the owner had a few kilos of gold and he's been washed out with the safe...the article says that shit is YOURS

SheepDog-One's picture

Ah yes, Dimon the mastermind had it all planned from the start. Short silver/sell paper silver from $20 to $40, then start buying hand over fist at $40. BRILLIANT!

IQ 145's picture

 With regard to their trading acumen; "look who's cryin now"; a teenage heart throb record from the sixties.

Xibalba's picture

gotta get those America the Beautiful set's done before Ron Paul asks why the USMint can't keep up with demand....even though there are no supply/demand disruptions.....according to Blythe

The Axe's picture

Janet Yellen   talking up Q3.....baby.......more money....No inflation!!! Central Bankers not causing inflation......stupid bitch...lol

HoofHearted's picture

There's so much head faking going on, I'm losing track of what is the fake and what is the real move. I still say that the Bernank says "let the market tank" without all the QE(x)...and he does so for about a month. Then he becoms Jack Nicholson in A Few Good Men telling us how much we need him and his QEing. I'm waiting for the crash to BTFD with a little dry powder. There is a lot of silver and gold ounces somewhere, and I might hold some of them...I might not. Do you hear that FDR? I probably don't have anything worth confiscating. Trust me on this one.

HedgeFun's picture

Slow Roast your post is rather interesting - I too was in at $26 and sold at $41, holding my gold position and adding on dips.

slow_roast's picture

The risk/reward in gold feels more suitable to this environment in which the USD could fall off a cliff or power higher on short covering.  If gold falls we can watch $1,450...if silver falls we watch $38-$38.50 I guess...if that falls silver could be at $34 in a matter of minutes it seems.

 

I'm no expert and I'm hugely bullish on gold and silver, but there is almost certain to be some drubbing as QE2 ends(at least as a headline) and everything collapses.  If it doesn't I'm still buying physical metals on a weekly basis, but if it does there will a great unwinding of leverage that could see prices falling all summer.

 

I might miss another 10-20% run in silver and a smaller one in gold through the summer and I might lose 5-10% in my cash position(basket of currencies) but getting caught in a downdraft in my options positions could see me lose 50-100% in a few days.  

 

Vacation bitchez!

brian downunder's picture

Well Max Keiser should be happy to know it won't take much to break JPM

SheepDog-One's picture

I think Max said $45 is the point where Dimons head explodes 'Scanners' style? We'll see.

doggings's picture

I just heard $47 on his latest interview, he said that JPM had used their own stock cash to "invest" in their own unique way in Silver and that at that point the Hedge Funds would all be piling in, shorting (and naked shorting) JPM

link to interview http://maxkeiser.com/2011/04/11/from-yesterdays-tam-with-max-stacy/

"live by the naked short, die by the naked short.."  .. I live in hope that the cosmos has a sense of humour, "one a long enough timeline.."  .. it definitely does. 

 

They Live's picture

Does anyone know more about this?  Specifically, what will technically cause JPMorgan to crash?

Trifecta Man's picture

We don't need no stinkin' CFTC.

lincolnsteffens's picture

Quite obvious because they are asleep at the wheel. Since they have done nothing for decades why waste taxpayer's / trader's money. Same as other parts of Govt. that either don't prosecute the big crooks or don't even know how it gets done. Then there is the other useless parts of Govt. that wastes a lot of paper for nothing or worse killing the incentive to rise above the cog making worker.

Buckaroo Banzai's picture

The CFTC and the SEC and all the regulatory organizations play an important role on Wall Street. They create the illusion that the marketplace is a fair and safe place to invest. Otherwise, the average dope would invest in other things besides publicly traded companies, like their own businesses, or their own communities, or their own education.

You know, stupid stuff like that.

Obummer's picture

Ladies and gentlemen, fellow Americans, good people of the world.  Much talk has been made about the increasing value of silver on today's markets.  And while I would love to tell you that this is another sign that our free market is strong and vital, I cannot.  In reality, this "silver menace" is a clear threat to our standards of democracy, human values, and the American way.  For behind this rise in silver are the very terrorists we have been fighting against for so long.  And now these terrorist organizations have infiltrated the very heart of America, and are in our living rooms and our bedrooms even as I speak.  Rest assured that I will do everything in my power as President of this great nation to repel this threat to our ways, and that in the coming months we shall take decisive action against this new menace to our financial stability and Constitutional law.  Thank you, good night, and God bless America.

slaughterer's picture

Who printed that on the teleprompter for Obummer to read?

Long-John-Silver's picture

Translation: We're sending in the Gestapo for your PM's, 401(k), and IRA accounts so we can "save" Social Security. Your retirement at 140 years of age will be secure.

malikai's picture

Translation: Your euthenasia has been scheduled for the evening of your 67th birthday. God Bless America.

IQ 145's picture

 Stop that! Right now!. You're making me nervous. Jeezuz, don't give 'em any ideas, okay?

slaughterer's picture

Why does it appear that JPM customers are so dumb?  We need to ask that question, with the emphasis on "appear."

ZapBranigan's picture

 

Either 'too busy' or 'too naive'. 

'Too Busy':  The guy working 14-hour days trying to make partner at his law firm doesn't have time to manage his portfolio, so he turns that chore over to his friend of a friend at JPM. 

'Too Naive':  Some people, from birth-to-death, actually wander through life completely asleep, never questioning anything and having full-faith in any company that advertises on CNBC.

 

Bastiat's picture

Silver contract volume at 93% of gold volume today as it refuses to yield $41.  Unbelievable.  A bid with attitude.

Bastiat's picture

They may have got it on that try.

Bastiat's picture

Silver vol now 97% of gold.  40.75

 

Careless Whisper's picture

Here's the business model;

1. go to the bank for a loan.

2. bank agrees to loan but requires top quality collateral worth much more than the loan.

3. bank knows you're going to default sooner or later, but whatever, it still let's its own clients invest in the borrower.

4. default occurs and bank takes collateral.

5. bank makes $1.9 Billion profit.

6. bank claims to be the victim of a deadbeat and says it doesn't have any obligations to its own clients.

http://www.nytimes.com/2011/04/11/business/economy/11bank.html

 

chunga's picture

Oldie but goodie...How Main Street Destoyed Wall Street

I guess now would be a good time to shoot the greedy homeowners.

It’s crystal clear. From the very beginning the homeowners have gamed the system. They started by tricking the property appraiser (lender’s agent) into submitting an outcome-based appraisal.

Then, millions of homeowners shrewdly conned the “lenders” into dismissing all agency and fiduciary responsibility in the underwriting process….going so far as to force the “lenders” into forging documents.

Then, the greedy homeowners forced the “lenders” to securitize the loan in such a fashion as to bifurcate the mortgage from the note.

On top of that, the homeowners secretly cooked up the concept of “Credit Default Swaps” and forced the “lenders” to insure the collateral at the full (outcome based) value 30X over.

Having successfully pulled the wool over everyone’s eyes – these irresponsible homeowners showered themselves with well deserved bonuses.

Realizing they were too big to fail, these irresponsible, reckless homeowners lined the pockets of legislators and received enormous sums of taxpayer bailouts.

The result of these cunning maneuvers by the fraudulent homeowner scheme has them sitting fat and happy in the cat birds seat. Yup, that’s how they did it. And they’re getting away with it.

Savings drained – check, 401ks all gone – check. Kicked out of their homes – check. “Lenders” made whole many times over via Credit Default Swaps – check. Homeowners foreclosed and “lender” buys back property for pennies on the dollar – check.

Follow the money and you’ll find the culprit. It’s about time we hold these homeowners accountable.

Good call. The websites below are sponsored by a well-healed, politically connected, PR machine of greedy volunteers… and contain detailed information on how the collusion on Main Street has ripped off Wall Street.

Don’t look though… it’s just spam.

http://www.4closurefraud.org

http://www.foreclosurehamlet.org

digalert's picture

JPM reports on Wednesday...wanna bet what report looks like?

Hansel's picture

No.  The U.S. abandoned reasonable accounting years ago.  Who knows what flavor bullshit JPM the welfare queen will be selling on Wednesday?

True.North's picture

Look for real earnings to dissapoint, but they'll be inflated with the release of more loan loss reserves.

plata pura's picture

j.p morgan groupo has of late been increasing their commons and middling accounts; even the gentry class have been moving checking and savings accounts from other banks.

RobotTrader's picture

Gold stocks once again getting the beat down as the SPX sells off.

No follow through.

SA, BVN, SVM all down about 4%

darkaeye's picture

Buying opportunity!!  Maybe the last one until July.

RobotTrader's picture

At least JPM isn't getting brutalized like many of the golds today.