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Is JP Morgan Shifting Its Silver And Gold Shorts To Non-US Domiciled, And Thus Unregulatable, Banks?

Tyler Durden's picture


Going through recent bullion bank shorting information, Adrian Douglas has stumbled across a nugget that may explain the sudden willingness of JPM to admit to the FT, via proxies as obviously the bank would never expose itself to even remote market manipulation claims, that it has collapsed its silver short. The reason: even as US bank silver (and gold) shorts by US banks have been gradually declining, those positions established by non-US bank, and thus entities not under the CFTC's control, have seen their silver shorts surge, increasing by orders of magnitude over the past several months. Is there a stealthy transfer of precious metals market manipulation taking place, one that exonerates the domestic, and therefore regulatable, suspects, while making foreign banks carry the burden of suppressing silver and gold prices? The reason: hand over the silver shorts to entities that would not be subject to the CFTC's upcoming size limit rules. Per Douglas: "The sudden and massive increase in their short positions in both
metals is conspicuous when compared with historical trading patterns.
The fact that it occurs at a time when the US banks that are mega-short
appear to be covering makes it doubly intriguing. It looks like a
strategy to shift suppression and manipulation of the market to banks
that are not under the direct supervision of the CFTC. Will these non-US
banks be expecting to receive an exemption to position limits where US
banks might not be successful?"
We hope to get an answer to all these questions soon - Douglas has sent out the following letter to the only honest man at the CFTC, Bart Chilton, which explains Douglas' findings, and demands an inquiry into just who these foreign banks are that are suddenly shorting silver and gold on the margin at alarming rates.

Letter To CFTC Commissioner Chilton On Trends In Bullion Bank Gold and Silver Short Positions

TO: Bart Chilton, Commissioner of the CFTC
From: Adrian Douglas, Director of GATA
Date: Dec 13, 2010

I would like to bring to your attention some very disturbing trends in the BPR before your meeting on December 16th regarding position limits.

In figure 1 below I have charted the silver short position of the US banks (blue line) and the non-US banks (green line and right hand scale) and all reporting banks, US + Non US (red line)

Figure 1

Looking at the trend of the US Bank silver short position it shows that it peaked at the end of 2009 and has been on a declining trend as shown by the blue arrow. At the same time the short position of non-US banks has been declining as shown by the dashed green arrow. But look what has happened since July 2010. There has been a massive increase in the short position of non-US banks. It has increased almost 1000% from 614 contracts in July to 6,329 contracts in December (delta + 5,715). This increase is so large it has more than offset the decline in the short position of the US banks over the same period which has reduced from 31,803 contracts to 26,332 contracts (delta -5,471 contracts). The combined US and Non-US bank short position is shown by the red line and this is now on an increasing trend as shown by the red arrow.

Which non-US bank(s) has increased its short position in silver so massively? What is that entity’s relationship to the US Bank mega-shorts, JPMorgan and HSBC? I know you can’t answer those questions publicly but these are questions the CFTC should be looking into. It looks suspiciously like the US Bank silver short position is being shifted to a bank or banks that are out of the jurisdiction of the CFTC. To further add to my suspicions the Financial Times has out-of-the-blue published an article that declares that JPMorgan is reducing its silver short position on the Comex.

That is impeccable timing don’t you think? And this newspaper has never once mentioned that JPMorgan Chase even holds a massive short position in silver but now confidently declares it is reducing it!

But the irrational exuberance of non-US Banks to suddenly massively short precious metals is not limited to the silver market. They have felt a similar compunction with respect to gold also.

Figure 2

Figure 2 shows the gold short position of the US banks (blue line) and the non-US banks (green line and right hand scale) and all reporting banks, US + Non US (red line). The blue arrow indicates that the US bank gold short position appears to have peaked in July 2010 and has declined from 161,378 contracts to 135,602 contracts (delta -25,776 contracts). However, we see that non-US banks after having been gradually reducing their short position from March 2009 suddenly in July 2010 aggressively increased their short position by more than 200% from 16,798 contracts to 53,120 contracts (delta +36,322). This more than offset by 40% the reduction in the short position of the US banks. As a consequence the short position of all reporting banks (US and Non-US) is now on an increasing trend as indicated by the red arrow.

Again I urge the CFTC to investigate which non-US bank(s) has increased its short position in gold so massively? What is that entity’s relationship to the US Bank mega-shorts, JPMorgan and HSBC?

A review of historical data indicates that non-US banks have not been major participants in the precious metals markets and have generally held fairly balanced positions between short and long holdings. The sudden and massive increase in their short positions in both metals is conspicuous when compared with historical trading patterns. The fact that it occurs at a time when the US banks that are mega-short appear to be covering makes it doubly intriguing. It looks like a strategy to shift suppression and manipulation of the market to banks that are not under the direct supervision of the CFTC. Will these non-US banks be expecting to receive an exemption to position limits where US banks might not be successful?

I consider that these trading patterns warrant investigation by the CFTC.

Best regards,

Adrian Douglas


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Mon, 12/20/2010 - 23:10 | 820063 Croesus
Mon, 12/20/2010 - 23:46 | 820129 El Hosel
El Hosel's picture

  Anybody now why the Dollar got wacked at 8 eastern?  Futures are bumping the highs, maybe the Bernank got brand new bag?

Tue, 12/21/2010 - 00:00 | 820163 Jasper M
Jasper M's picture

'Cause no war; NK's leader declined to demonstrate his military genius to the capitalist, imperialist aggressors, and all their running dogs. 

Tue, 12/21/2010 - 02:03 | 820367 bonddude
bonddude's picture

He saw the "Team America" spot light shining against the clouds. ;-)

Tue, 12/21/2010 - 00:27 | 820201 Fidel Sarcastro
Fidel Sarcastro's picture

Was wondering the same thing myself and went long - several times - in the 6e (Euro futures).  Picked up a quick-G.  

Tue, 12/21/2010 - 00:32 | 820211 Careless Whisper
Careless Whisper's picture

do these bankers ever do anything on the up-and-up? it's just a matter of time until they get the short squeeze of all short squeezes. now gaga fans are getting on board, and that is a few hundred million people under 25 years old world wide.


Tue, 12/21/2010 - 04:40 | 820447 The Navigator
The Navigator's picture

Fool - silver braces?? - when the times comes, someone gonna rip your teeth out for the metal. Also, Good luck trying to get by TSA. That's no way to transport silver.

Thu, 12/23/2010 - 18:11 | 827058 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Thanks for sharing this. Hilarious.

Tue, 12/21/2010 - 01:50 | 820348 chopper read
chopper read's picture

a G-note, no big deal.  ;)

Tue, 12/21/2010 - 03:38 | 820422 I Am The Unknow...
I Am The Unknown Comic's picture

Thanks for that link El Hosel.  Man, I miss that kind of talent that James Brown had.  It's a Banksta's World!

Mon, 12/20/2010 - 23:13 | 820066 detersbb
detersbb's picture

What difference does it make when the physical runs out.  They cover their behinds until they can not deliver.  They protect themseves from the CFTC "cough-cough," and they protect themselves from the lawsuits including the RICOs, but it is only going to be until the longs demand delivery from the shorts and they can not deliver then the game is up.

Mon, 12/20/2010 - 23:22 | 820093 Captain Benny
Captain Benny's picture

I'd like to see a lottery winner invest $100,000,000 into silver.  That'd definately put JPM into a bind overnight.

Mon, 12/20/2010 - 23:50 | 820147 SilverIsKing
SilverIsKing's picture

After I win the Megamillions tomorrow night, I promise to invest a sizable portion of my winnings into physical silver.  I might only net $50,000,000 or so but that should help.

Mon, 12/20/2010 - 23:16 | 820067 TheGreatPonzi
TheGreatPonzi's picture

That's exactly what I forecasted on a previous post concerning the end of the silver manipulation.

"Now, they will have to use shell companies to do the job".

Tue, 12/21/2010 - 00:08 | 820172 tmosley
tmosley's picture

Yup.  You can bet mass defaults will proceed the minute JPM and HSBC have offloaded the last of their shorts.

Won't be long now.

Tue, 12/21/2010 - 00:48 | 820252 JLee2027
JLee2027's picture

I wish, but I'm not convinced about that. I hope you're right though.

Tue, 12/21/2010 - 01:59 | 820362 RockyRacoon
RockyRacoon's picture

Try to get a good 8 hours of sleep in the interim.

Tue, 12/21/2010 - 00:13 | 820184 JimmyTheHand
JimmyTheHand's picture

I do distinctly remember you making that call TGP. I completely agree, let the defaults roll.

Mon, 12/20/2010 - 23:16 | 820071 living on the edge
living on the edge's picture

JPM has been replaced by the Fed itself as the main gold and silver short. TPTB were not pleased with the recent run up and JPM has been benched.

Tue, 12/21/2010 - 00:23 | 820195 woolly mammoth
woolly mammoth's picture

When I read the piece I thought, bag-holders. Proxies designed to fail. Thinking Real Estate tricks. It just seems the Fed has enough problems without adding silver shorts. But, your probably right.

Tue, 12/21/2010 - 01:58 | 820361 dlmaniac
dlmaniac's picture

Maybe they are setting up phantom Caribean banks to be bag holders so when TSHTF it's the phantom guys hold the hot potatos. I don't know. That sounds too easy to get off.

Tue, 12/21/2010 - 09:26 | 820559 Arius
Arius's picture

sounds like a plan...its supposed to be easy; these guys dont care what u and i think about it as long as it is legal; and if it is not lets change the laws and make it legal. Voila!

Mon, 12/20/2010 - 23:17 | 820075 Segestan
Segestan's picture

The mining industry needs to take a page out of OPECs book and sell through a network... cut the parasites out.

Mon, 12/20/2010 - 23:56 | 820159 breezer1
breezer1's picture

restricting sales would work except that most funds and who knows how many stocks are shorted and naked shorted. there is so much fiat at the disposal of tptb that the perception is easy to feed to those that don't know whats going on other than whats on the front page of the msm.

 there is a day coming when only physical will matter. the spot price will be as meaningless as the politicians and their criminal banker bosses.

merry Christmas to all.

Tue, 12/21/2010 - 01:28 | 820310 Segestan
Segestan's picture

I don't know, FOFOA and Bix Weir say like you. But without a collective association working to Free Gold it's all in the favor of the crooks.

Merry Christmas

Mon, 12/20/2010 - 23:17 | 820076 Slash
Slash's picture

fair, efficient, balanced markets at work......nothing to see!


Big Mother is watching.

Mon, 12/20/2010 - 23:16 | 820077 f16hoser
f16hoser's picture

Final act of a dying FIAT currency economy. Hold the line.....

Mon, 12/20/2010 - 23:18 | 820078 unwashedmass
unwashedmass's picture

does this matter now? let them short themselves silly....i, for one, will gratefully accept any opportunity to purchase silver lower....hell, dream of my life would be they take it to 25 and the 100k i just pulled out of the market would go into hard silver bullion in a heartbeat....which i would take delivery of and sock away in the old safety deposit.

At this point, i think we should all stop whining about what these guys are doing -- they are suiciding out, kamakaizing....

let them do it, and let them throw out cheap silver bullion all the way into the heart of implosion......

Mon, 12/20/2010 - 23:20 | 820084 Captain Benny
Captain Benny's picture

I'll be quadrupling my personal silver investments over the coming two months if silver holds steady.  I'll be doubling my gold holdings as well.  I'm not in it for returns,  I'm in it for capital preservation and a lingering hope that JPM will be forced to fail one day.

Mon, 12/20/2010 - 23:25 | 820099 living on the edge
living on the edge's picture

Look for a desperate act such as a massive take down to shake out gold and silver. This could be our final chance to buy at lower prices. I have been hoping/expecting this.

Mon, 12/20/2010 - 23:29 | 820110 JLee2027
JLee2027's picture

Only in your dreams will that happen. It would collapse the physical market in a week and the crooks would be heading up river real quick.

Mon, 12/20/2010 - 23:54 | 820153 living on the edge
living on the edge's picture

Perhaps you are right and it is a dream, but perhaps these idiots are more desperate than we can imagine and are willing to try anything to forestall the inevitable.

Mon, 12/20/2010 - 23:57 | 820160 VegasBD
VegasBD's picture

Same here. Would really like one more opportunity to grab some physical silver below $20/oz before it blows up

Tue, 12/21/2010 - 00:06 | 820170 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Below $20??? hahahah, good luck.  We see $100 before we see $20 again.

Tue, 12/21/2010 - 01:00 | 820269 DoChenRollingBearing
DoChenRollingBearing's picture

The Bearing, not having a brain in the middle, just a hole, just mindlessly buys PMs as income rolls in in.  Just bought some gold and silver today.  Been buying silver for years, gold for decades.

Tue, 12/21/2010 - 08:54 | 820522 RockyRacoon
RockyRacoon's picture

Doug Cass sees a $250 drop in gold within the next few weeks or first month of 2012.

That's my contrary indicator.  He could be right, of course.  If so, I'll relish the idea of picking up some more at a reduced rate.  I'm selling off all the silver generic rounds and art bars to build up some cash for possible buy-in at a nice price.  I've got about 120 rounds/bars so I can either buy some cheaper gold, or, worst case I'll have cash to stash.

Tue, 12/21/2010 - 05:26 | 820461 Sudden Debt
Sudden Debt's picture

JP's problem isn't just demand that's picking up but also the inflation that doesn't really exist according to Bernanke:

  • Unleaded gas up 24%
  • Heating Oil up 28%
  • Corn up 50%
  • Wheat up 48%
  • Coffee up 56%
  • Sugar up 27%
  • Soybeans up 30%
  • Beef up 26%
  • Pork up 22%
  • Cotton up 101%
  • Copper up 33%
  • Silver up 72%
Tue, 12/21/2010 - 01:00 | 820270 JLee2027
JLee2027's picture

If the paper pushers drop the price to $19, only the stupid would sell physical for that. Look at 2008...paper silver went to $9, physical demand went through the roof and jumped over $20. 

Bottom line, it's a bull market, if your waiting for a better price under $20, good luck because you'll need it. A lot of it. Really a lot. Like winning the lottery odds.

Tue, 12/21/2010 - 01:23 | 820305 LowProfile
LowProfile's picture

Low 20's isn't out of the question.  Gold has done 9-12% corrections over the past couple years, no reason silver can't double those swings.

If you can't handle the volatility, you may want to hedge...

Tue, 12/21/2010 - 03:44 | 820426 JLee2027
JLee2027's picture

This isn't yesteryear. The system is coming apart and demand for precious metals has zoomed.

It's not going in the low 20's ever again. I'd bet my life on it.

Tue, 12/21/2010 - 01:54 | 820357 barkster
barkster's picture

I remember that. I bought silver eagles when silver was at $9.50. There was so much demand for physical that premiums skyrocketed to $5.50 each so I had to pay 15 usd per eagle. Nothing but a paper manipulation...

Tue, 12/21/2010 - 06:35 | 820476 fiftybagger
fiftybagger's picture

Yes, I remember that very well.  Cheapest I got the morning it touched 8.50 was buffalos for 12.50.  Picked up a bunch of maples at 14 and my 2009 koalas cost me 14.30.


Buying Silver

Tue, 12/21/2010 - 01:55 | 820358 barkster
barkster's picture


Tue, 12/21/2010 - 05:25 | 820458 Sudden Debt
Sudden Debt's picture

JP's enemy isn't only the demand for silver that's picking up, but also inflation that doesn't really exist according to Bernanke:


  • Unleaded gas up 24%
  • Heating Oil up 28%
  • Corn up 50%
  • Wheat up 48%
  • Coffee up 56%
  • Sugar up 27%
  • Soybeans up 30%
  • Beef up 26%
  • Pork up 22%
  • Cotton up 101%
  • Copper up 33%
  • Silver up 72%
Tue, 12/21/2010 - 08:52 | 820518 Widowmaker
Widowmaker's picture

It's not inflation if you don't look.

Only terrorists will look for truth.

Tue, 12/21/2010 - 10:17 | 820646 Ace Ventura
Ace Ventura's picture

Bingo. By the way, isn't the whole 'net neutrality' thing being sorted out today on capitol hill?

The peasants are sure getting all uppity with this mostly unrestricted free-flow of information. Time to redesignate them as 'terrorists' or 'anti-gubment radical insurgents', and start controlling just what sort of info the 'useless eaters' have access to.


Mon, 12/20/2010 - 23:33 | 820115 Captain Benny
Captain Benny's picture

I'm a believer that we'll see a dramatic physical shortage come March, 2011.  I think we'll also see a great buying opportunity before that as the Fed lets the air out of the equities markets  (finally!).  The US equities are disgustingly overbought and all indicators say its purely digital hot potatoe as we're all aware.  When the stock bubble pops is when I'll commit my remaining ammunition.  It'll happen long before March.

Mon, 12/20/2010 - 23:57 | 820161 living on the edge
living on the edge's picture

Ditto on the March 2011 time frame. I expect a dip between now and then.

Tue, 12/21/2010 - 00:11 | 820179 DaveyJones
DaveyJones's picture

the u.s. equities are disgustingly overbought...just like the u.s. politicians

Tue, 12/21/2010 - 00:37 | 820222 Careless Whisper
Careless Whisper's picture

coal and oil have very bullish charts. weak dolla. inflation soon.

Tue, 12/21/2010 - 14:21 | 821533 Problem Is
Problem Is's picture

Quote of the Week:
"u.s. equities are disgustingly overbought...just like the u.s. politicians."


Tue, 12/21/2010 - 10:24 | 820666 Ace Ventura
Ace Ventura's picture

Forgive the novice inquiry here, but wouldn't the time to buy be BEFORE a stock market bubble pop? Once the market begins to head south at Mach speed, where will all that money be going? My guess would be to the same place you'd be going. The last thing you want to be is one wilder-beast amongst thousands galloping towards the same objective.

Best to have your metal stash mostly 'in-hand' before the restless herd starts stampeding?

Tue, 12/21/2010 - 11:40 | 820856 A Texan
A Texan's picture

Forgive the novice inquiry here, but wouldn't the time to buy be BEFORE a stock market bubble pop? Once the market begins to head south at Mach speed, where will all that money be going?


When the market went south in a big way (down to S&P 666), all of the metals went the same way.  People sold their metals positions to cover margin calls in the stock market, or to simply go to a safer place (which they viewed as being in cash or Treasuries).  I'd bet that the same thing would happen. 


Oh, not all people did this, but people with lots of resources did, and combined with efforts by the banks to crush PMs and drive people to Treasuries, they were (temporarily) successful.  The game is nearly up for fiat, IMHO, but there are a few gasps left.  If the stock market tanks, so will metals.  THAT is when you buy, because the metals won't stay down for long - not unless we enter a deflationary depression which would collapse demand for all commodities.

Tue, 12/21/2010 - 12:41 | 821118 Joe Sixpack
Joe Sixpack's picture

"If the stock market tanks, so will metals.  THAT is when you buy, because the metals won't stay down for long..."

The key will be to get your hands on physical during that small window of opportunity. It will be out there, but with 6-12 wks. delivery in many cases you will be on pins and needles, and may not end up getting it.

Tue, 12/21/2010 - 07:25 | 820488 A Man without Q...
A Man without Qualities's picture

Over here in Europe, the premium for silver coins and antiques has totally collapsed.  Only extremely rare objects command any premium, and "common" coins are being melted down.  What is clear is there are big buyers trying to get their hands on as much as they can and then melting down to make bars.  What is interesting is that the silver antiques market has a cut off date, around the time of Waterloo (1815), where objects made prior to that date still carry a premium.  The reason is that Napoleon seized silver all across Europe to melt down in order to pay his troops.  My guess, we might be reaching such a period again.  So, if you can find beautiful art deco style (1920s, 30s) silverware (and can get at a low premium) this might do far better than silver bars if you are looking to hold for decades.

As for JPM, I really doubt they have reduced their shorts as they claim.  History shows banking cartels will work together on this, so HSBC London, Barclays, etc, may have taken over.


Mon, 12/20/2010 - 23:18 | 820079 Captain Benny
Captain Benny's picture

Unfortunately we will not hear anything in response to this.  The bulk of the CFTC will simply say "We washed our hands of this, its foreign now... we can't regulate it."  Which is a lie.  It contributes to instability in the US market, which the CFTC has a duty to oversee.  Unfortunately, one good soul at the CFTC cannot change corrupt organization until the shit hits the fan.

Mon, 12/20/2010 - 23:18 | 820080 f16hoser
f16hoser's picture

Ted Butler, what say you?

Tue, 12/21/2010 - 11:56 | 820663 TheJudge2012
TheJudge2012's picture

Ted Butler says Gensler walks on water.


From a reporter to

"He [Bart Chilton] was, in my opinion, beginning to make the point that the board receiving the reports meant nothing unless they would commit to act on the information. He either alluded to or insinuated that had been the long-term history of the board. Gensler interjected that the staff had done exemplary work in the past and that there was every reason to believe that they would file the reports to the board. (As if Chilton's point was to reiterate that the staff would be able to produce the reports.) Chilton attempted to tactfully take the discussion to the point that it was not the reports that were needed but that the board would act on the information once it was in hand. At least three times Gensler played stupid and reiterated his faith in staff to produce the reports.

Exasperated, Chilton said words to the effect that. "Well, I'll let this go for now." Then, I'm pretty darn sure that Chilton, with a flushed face, looked at Gensler and mouthed the words "For now!" which was caught on camera."

Mon, 12/20/2010 - 23:21 | 820087 ColonelCooper
ColonelCooper's picture

All you gold and silver bugs are the same.  When metal goes up, "See, I wipe my ass with your paper fiat."  BUT,,, anytime it goes down, "Manipulation!!! Blythe Masters is an evil whore.... Kill JP Morgan, buy even a single solitary ounce of silver.  It will break the back of TPTB." 

Grow the Eff up.

Mon, 12/20/2010 - 23:22 | 820092 ColonelCooper
ColonelCooper's picture

Oh, sorry  I forgot: </sarcasm>

Mon, 12/20/2010 - 23:32 | 820113 JLee2027
JLee2027's picture

I'm sorry too.

I've marked your post </useful idiot>

Mon, 12/20/2010 - 23:26 | 820103 Captain Benny
Captain Benny's picture

If you look at the PM trade, it has been clearly manipulated in unsustainable ways over the last few years.  When you look at it over the last four months, you see that the trade is absolutely coming to a panic.  Turd does a great job on a daily basis explaining his perspective.  And yes, he thinks Blythe is a P.O.S....   I've never called Blythe an evil whore, but I do see the coming end to this saga.

Mon, 12/20/2010 - 23:33 | 820117 Shameful
Shameful's picture

Blythe is an angel sent from heaven! A gift that allows this poor dumb kid to get some protection from the demon prince Bernanke. Thanks to the lovely Ms. Masters us late comers still get a discount when trading out our fun bux for the metals. If I had an address to send them to, I would send her flowers and a thank you card.

Tue, 12/21/2010 - 01:05 | 820279 DoChenRollingBearing
DoChenRollingBearing's picture


Yes, having kept the price low for awhile has allowed me to accumulate on the cheap I guess.


Since I am a married man I could care less how she looks.  Probably nasty though...

Tue, 12/21/2010 - 03:35 | 820421 Francis Dollarhyde
Francis Dollarhyde's picture

Selah. Let those with eyes see, and with ears hear. 


Mon, 12/20/2010 - 23:38 | 820124 Turd Ferguson
Turd Ferguson's picture

Thank you, Captain Benny.

Re this report from Adrian, who doubts this is true? The EE will scheme and connive until they are finally broken. A week ago, everyone was jubilant that "we had won" and "JPM was giving up". I cautioned then that the story seemed fishy and phony and it sure looks now like it was. This battle is far from over but we will win. 

Tue, 12/21/2010 - 01:35 | 820330 SheepDog-One
SheepDog-One's picture

They didnt expect everyone leaving the stocks and going to PM's. Theyre totaly desperate, theyve been working hard to hold the PM's down, its death to them if they cant keep it down.

Theyve even deployed the media wing of the govt to tell horror stories of dead African kids in mines and how evil you are to own gold and silver, and unless you sell it youre basically a criminal. 

Well I think they can play all the games they want but its delusional, theyve already lost big time.

Mon, 12/20/2010 - 23:28 | 820106 gwar5
gwar5's picture

You pretty much fucking nailed it Col!

Mon, 12/20/2010 - 23:38 | 820125 eigenvalue
eigenvalue's picture

Any whore is way better than Blythe Masters. Whores only sell their bodies not their souls. They do sordid business but they never deny that. What about Blythe Masters? She appears to be an "professional" businesswoman but what she does is lying and manipulating!

Mon, 12/20/2010 - 23:41 | 820126 living on the edge
living on the edge's picture


 "Manipulation!!! Blythe Masters is an evil whore.... Kill JP Morgan

Glad you agree with us...

Mon, 12/20/2010 - 23:24 | 820096 lo574
lo574's picture

Its bound to happen.  The more regulation [position limits, margin rqmts, etc.] we're pushing everyone overseas.  Now what do they do with their Copper position?  As much as I hate to say it, *there is no spoon*

Mon, 12/20/2010 - 23:24 | 820100 eigenvalue
eigenvalue's picture

Which non-US bank can it be? People's Bank of China? Bank of Japan?

Mon, 12/20/2010 - 23:30 | 820108 living on the edge
living on the edge's picture

Which non-US bank can it be?

The Federal Reserve!

Mon, 12/20/2010 - 23:36 | 820121 Terminus C
Terminus C's picture

ding! ding! we have a winnar!

Mon, 12/20/2010 - 23:42 | 820130 eigenvalue
eigenvalue's picture

But the Fed is supposed to be a US bank and I think all the big banks even those European banks like Deutsche Bank and Barclays fall under the jurisdiction of the CFTC.

Mon, 12/20/2010 - 23:49 | 820145 Terminus C
Terminus C's picture

I think the point here was that the Fed is owned and run by the "international bankers".  Though international would imply that they ascribed to any sort of nationality, which I do not think that they do.

Tue, 12/21/2010 - 07:26 | 820489 Hephasteus
Hephasteus's picture

You will find bank of america is ganged with the exact same people as deutsche bank and credit suisse. It's all a gang and all gang violence. Deutsche got caught using cia type operatives but they still do it.

Tue, 12/21/2010 - 00:12 | 820183 tmosley
tmosley's picture

Probably some tiny banks that have never been heard of before that suddenly got huge infusions of currency from "unnamed US sources".

You know, First Bank of Patsy.

As soon as the big two are done offloading their shorts, the defaults will come.

Tue, 12/21/2010 - 09:18 | 820543 espirit
espirit's picture

Bank of Tehran?

Mon, 12/20/2010 - 23:25 | 820101 Thomas
Thomas's picture

The other oddity is that those big offshore shorts started right at the beginning of a wild upward run. Seems counter intuitive at best.

Mon, 12/20/2010 - 23:26 | 820102 boeing747
boeing747's picture

In oil peak of 2008, CFTC found out a swiss company holds 70% long contracts, who was behind that company?

Mon, 12/20/2010 - 23:33 | 820119 eigenvalue
eigenvalue's picture

The swiss company was said to be Vitol.

Tue, 12/21/2010 - 03:50 | 820430 ViewfromUnderth...
ViewfromUndertheBridge's picture

Barron's reported a trader in Australia made more out of oil in 2008 than Soros made shorting the Pound Sterling...over 2Bln at one stage...

Tue, 12/21/2010 - 05:30 | 820464 orgonor
orgonor's picture

probably JPM has already set up its Caribbean off-shore shell companies to do the shorting for silver just as Vitol did in 2008 with oil...and after all the manipulation they were fined by the CFTC $ 6mln ....pffffffffff...a full day's work...

Tue, 12/21/2010 - 07:24 | 820480 fiftybagger
fiftybagger's picture

So let me get this straight. The world consumes 30 billion barrels of oil per year and the CFTC applies position limits on it.  But there are only 600 million ounces of silver mined per year, 7-8 consumed.  The CFTC does NOT enforce position limits in silver.  Wow, my head is spinning.


The Silver Conspiracy

Mon, 12/20/2010 - 23:27 | 820104 Shameful
Shameful's picture

I love the shorting, it gives us young guys with an income but little savings a chance to buy in. The longer it gets held down, the longer we can live in the illusion of property and the longer I can build my little stash.

The game ends when they default on the long contracts that stand for delivery and another mechanism has to be found for physical price discovery. Naturally the big boys will get legal immunity from Uncle Sugar, national security and all.

Tue, 12/21/2010 - 01:10 | 820288 DoChenRollingBearing
DoChenRollingBearing's picture

Keep buying PMs and keep thinking Shameful.  For a young guy, you seem very smart and informed.  Odds are good you will come out of this OK.

Mon, 12/20/2010 - 23:29 | 820105 High Plains Drifter
High Plains Drifter's picture

My, my, all of this discussion over some poor man's gold.  Why would this bank, worry so much about little bitty silver?

Mon, 12/20/2010 - 23:49 | 820142 Threeggg
Threeggg's picture

A $5 Dollar move in the Gold market represents the "ENTIRE" silver market.

So you can see it is much smaller.

But, you already knew that.

Right ?

Mon, 12/20/2010 - 23:58 | 820162 jeff montanye
jeff montanye's picture

fofoa wonders too, quite convincingly.  excellent earlier post.  i'm long silver miners but he made me question it.

Tue, 12/21/2010 - 00:16 | 820188 tmosley
tmosley's picture

Don't.  Silver will reach parity with gold before this is all over.  This is not unprecedented, as silver traded at a multiple of gold for at least a thousand years in Egypt, and traded at parity in Europe in the 1400's, before the bounty of the Potosi mines was brought back from the New World.

Supply and demand works.  There is no silver, and a huge amount of demand.  Price must rise.  Gold is money, but silver is money made rare through consumption by industry.

Tue, 12/21/2010 - 01:19 | 820296 DoChenRollingBearing
DoChenRollingBearing's picture

tmosley, I really admire your hard and scientific take on many gold (and other) related issues, but I have to go with FOFOA re gold.

On the other hand, if YOU have silver right, well I've got more oz of Ag than Au.  More, much more $ in gold though.  Diversification works for guys like me who have no idea what is going to happen, other than that it will probably be REAL BAD.

I cannot predict the future, anyone here would marvel at my track record (years ago) of being 0 / 6 in buying puts betting that stocks would go down...

Tue, 12/21/2010 - 09:42 | 820585 tmosley
tmosley's picture

You won't do poorly.  

FOFOA is a smart cookie, but he either doesn't know all the facts about silver, or doesn't care to consider them due to some prejudice against silver.  Further, he bases his arguments on some false premises, namely that you can separate the functions of money.  Thing is, you can't.  

Since you can't separate those functions, Freegold winds up just being another justification for government money printing.  Taken to the limit, it will inevitably collapse back into a gold standard.

Tue, 12/21/2010 - 12:41 | 821119 zero-g
zero-g's picture

I noticed the same flaw with freegold, but the other HUGE problem, is the 'tranactional currency' is dependant on a tradional nation state currency, which will just inflate away as usual.

Tue, 12/21/2010 - 16:33 | 821955 redrob25
redrob25's picture

Bingo. Now is anyone willing to admit FOFOA is a banker shill using Internet blogs to turn metal bugs to the dark side? Why would they only rely on MSM when it is clear it is not working?

Tue, 12/21/2010 - 00:30 | 820203 living on the edge
living on the edge's picture


I expect silver gains to far exceed gold up to a certain point in this big mess. With that being said I intend to exchange my silver for gold at some point down the road.  

Tue, 12/21/2010 - 01:30 | 820317 What_Me_Worry
What_Me_Worry's picture

fofoa cherry picked his data to try and sell his bill of goods.  History shows a silver standard has been used much more and much longer than a gold standard.  He focuses on the period right after the comstock lode and other silver deposits put a huge push on silver inventories.  Obviously, the price of it would have fallen if not for manipulation.  Those inventories got run down, to almost nothing.

Gold is great, don't get me wrong, but silver shines just as bright in my eyes.  I own both and would feel foolish to only own one over the other.

Tue, 12/21/2010 - 09:26 | 820555 espirit
espirit's picture

Study the acts of the Venetian banksters of the 11 thru 15th centuries. They flip flopped gold and silver and hedged one against the other until they owned it all. What they couldn't buy, they stole. History repeats.

Tue, 12/21/2010 - 10:54 | 820754 CrazyCooter
CrazyCooter's picture

Regarding the recent FOFOA article, I actually read the whole post and chewed on it for quite some time.

First, I don't think anyone actually knows what will happen, at least in the long run. I think most agree fiat is toast, so the 1MM question is really "what replaces it" and how orderly that transition will be. If we ultimately move to some commodity basket backing currency, there will be a point to roll metals into something else before the panic/chaos subsides. In that scenario, PMs are dry powder which will play into some future move. If PMs become the new money, well, that is covered too. I think any real wealth producing asset will fare well (e.g. producing farm land, factory, oil well, etc).

But back to the point, gold is money, but so is silver. It becomes a nuananced debate of history as to which may take over next. If you look at nucleosynthesis over at wiki ...

... and skip down to the distibution of elements by weight, it is pretty clear that both gold and silver are "rare" elements (its a log chart). Since neither can be "printed" and both are sufficiently rare, I think both are good candidates for wealth storage given their historical roles. Given that gold is not typically consumed and has low industrial demand and given that silver is the opposite a good chunk of what silver has been mined is likely consumed in processes where it can't be recovered.

Having a money supply based on an industrial commodity does seem like a folly in the long term, and that is the biggest point I got out of the FOFOA article. But that also makes silver extremely underpriced, which is why I own some.


Tue, 12/21/2010 - 12:44 | 821134 Crime of the Century
Crime of the Century's picture

Two points stand out for me. Arab oil in the ground is promised to Western gold in the ground, and Europe marks her gold to market. Gold has fantastic potential going forward. Having said that, anyone who forsees hyperinflation or dollar repudiation in any form, and neglects to hold silver close will sorely regret it.

Mon, 12/20/2010 - 23:30 | 820109 AUD
AUD's picture

Maybe more gold & silver is being deposited with non US banks than previously?

Mon, 12/20/2010 - 23:31 | 820114 gwar5
gwar5's picture

They must be pretty desperate to do this sort of thing. So I'm more bullish than ever.

If silver was going sideways without manipulation, I would not be so bullish.

Asia is picking up PM at low prices and taking delivery. I don't care how much these pricks short, it won't be enough. 


Mon, 12/20/2010 - 23:32 | 820116 Spalding_Smailes
Spalding_Smailes's picture

Devin Hester .... pure dollars, the best.

Mon, 12/20/2010 - 23:51 | 820150 Turd Ferguson
Turd Ferguson's picture

I hear ya, SS. And I've got the f-ing Vikes. Nuts.

Mon, 12/20/2010 - 23:45 | 820133 max2205
max2205's picture

Funny but if the fed wants silver and gold surpressed how are they losing control of CPI comots which make them look even stupider ( new word)

Mon, 12/20/2010 - 23:44 | 820134 Caviar Emptor
Caviar Emptor's picture

This new offshoring strategy can be summarized with 3 little words:  "To The Cloud!" :)

The International Brotherhood of Banksters are busy little beavers this holiday season. Gold and Silver bull runs that won't quit are keeping them on their toes. And so is the 24/7 job of hiding all those trillions of dead-money, interdependent derivatives that threaten the debt matrix. The closets in those Euro banks are stuffed full of 'em and the doors don't shut so well. But that's cause they bought those worthless pieces of paper off their kissing cousins at US banks. But business is slow these days when you can't just sell 'em to 8 friends, who each sell to 8 more etc etc etc.....

Tue, 12/21/2010 - 00:00 | 820166 jeff montanye
jeff montanye's picture


Mon, 12/20/2010 - 23:45 | 820135 Johnny Dangereaux
Johnny Dangereaux's picture

Bought a 1 oz. Canadian Maple(paid $35) and put a few other bids in tonight. $30+/oz on ebay, even for the 100oz bars.

Let's all send Blythe some flowers----Black Roses!  (Spaulding, you in ORD? BTW-You'll get nothing and like it!)

Mon, 12/20/2010 - 23:49 | 820144 Spalding_Smailes
Spalding_Smailes's picture

I'll buy some miners in the spring as gold hits 1,200.

Mon, 12/20/2010 - 23:54 | 820155 Terminus C
Terminus C's picture

Good luck with that.

Tue, 12/21/2010 - 00:08 | 820174 bankrupt JPM bu...
bankrupt JPM buy silver's picture

we'll see $2000 before $1200, sorry champ.

Tue, 12/21/2010 - 00:08 | 820175 Jasper M
Jasper M's picture

Spaulding may be closer to right than you think. Note that gold couldn't manage to get within $30/oz, of a high it made just last month, during a freaking war scare. Granted the NK's nuke is undeliverable, but it would make a nasty mine, and a bombardment of Seoul would have been bad for business. And we got a rise . . . but not a new high. That sounds like exhaustion to me. 

I love gold, But I think it is overpriced now. One good market downdraft will wipe out all the 'purchasing power Bernanke and congress, together, have done, and more. 

Tue, 12/21/2010 - 00:21 | 820193 tmosley
tmosley's picture

What war scare?  There was never a chance of that Korean bluster moving any further than it has.

We just got done with OpEx.  It will take off now, once again.  This is the paper price.  Once the US banks are done offloading their shorts, the foreign banks will default and those who hold gold and silver will be vindicated.

But hey, I'm buying if you're selling.  Weaklings like you don't deserve gold.

Mon, 12/20/2010 - 23:54 | 820157 TheGreatPonzi
TheGreatPonzi's picture

Yes, that's part of the new anti-gold campaign launched by the mass medias last week.

Gold bugs make the poor Africans suffer, thus the moral choice is to buy stocks.

Tue, 12/21/2010 - 00:03 | 820168 jeff montanye
jeff montanye's picture

cause goodness knows they treat their workers (and investors) well.

Tue, 12/21/2010 - 01:29 | 820314 SheepDog-One
SheepDog-One's picture

Yes youre now an inhuman monster if you buy and own PM's, responsible for the deaths of millions of children of course. These fukin cocksuckers have to be put down, theyre a blight upon humanity theyre a cancer that should be cut out. All the media whores, politicical apparatus fraud, bankster criminals, all of them need to go.

Tue, 12/21/2010 - 03:51 | 820428 akak
akak's picture

Yes, never you mind about the exploitation of children laborers in the cacao plantations of West Africa, or the rampant child prostitution/slavery of Southeast Asia, or the dump-inhabiting children garbage pickers of China ---- those are purely noble and worthy pursuits.

Tue, 12/21/2010 - 13:54 | 821417 Confuchius
Confuchius's picture


Maybe we should now count all the thousands of tonnes of Au held by central banks as the best reason for their "suicides" in atonement for the evils done to the "children".

Yeah. That's IT!! We get rid of the MFs NOW & 4ever!



Mon, 12/20/2010 - 23:46 | 820139 KidDynamite
KidDynamite's picture

This is exactly what Jeffrey Christian said would happen in his CFTC testimony:

"The proposals at hand most likely would do nothing to improve the efficiency, honesty,
integrity, and fairness of metals commodities markets. Instead, I believe they would drive liquidity into less regulated and less transparent overseas and over the counter markets, reducing the efficacy of U.S. regulated derivatives exchanges, skewing the price relationship between U.S. regulated markets and global commodities markets, and costing the United States economy jobs, revenues, and tax receipts."

Tue, 12/21/2010 - 01:23 | 820304 JLee2027
JLee2027's picture

How does this cost us jobs, revenues, and tax receipts again?

Tue, 12/21/2010 - 03:51 | 820431 akak
akak's picture

You mean "Loose Lips" Christian actually told the unvarnished truth --- for once?

Tue, 12/21/2010 - 08:53 | 820521 snowball777
snowball777's picture

That's a junkie's rationale you're using there, Kiddo.

Tue, 12/21/2010 - 10:15 | 820641 KidDynamite
KidDynamite's picture

I didn't use any rationale. I made a simple, accurate, factual statement. this is precisely what Christian said would happen.

Tue, 12/21/2010 - 11:08 | 820778 CrazyCooter
CrazyCooter's picture

What is the link to your blog again KidD? You got linked to by a contributor a while back, but I was on my phone and didnt save the bookmark.

I read through a bit of material, which is contrary to my current position, which is why I want to keep an eye on it.


Tue, 12/21/2010 - 12:02 | 820948 KidDynamite
KidDynamite's picture

cooter:  it's probably not contrary to your current position - i'm bullish on the metals too.

Mon, 12/20/2010 - 23:51 | 820149 Oh regional Indian
Oh regional Indian's picture

As we've all seen discussed over and over here, the big boys have many tricks up their sleeves. This is yet another trick up said sleeve.


Now imagine that instead of currency controls (been done before, all the "black" channels move what is required anyways), they place metal controls. Physical movement of metal is banned due to xyz circumstance. 

That would immediately sever global metal pricing into local metal pricing.

All of our price inflation/deflation scenarios would be out the window, eh? Same with availability.

Given that a war seems about to be served up, I have a feeling we'll see this happen sooner rather than later.

Talk about the perfect get out of jail card for JPM/HSBC and their ilk.


When All Resets.


Tue, 12/21/2010 - 00:29 | 820207 Snidley Whipsnae
Snidley Whipsnae's picture

"That would immediately sever global metal pricing into local metal pricing."

...PM pricing is already local in SE Asia. Viet Nam physical gold sales are considerably over spot. The people in SE Asia have a long memory/history of fiat currencies going belly up, consequently a lot of wealth is held in PMs and big transactions are settled in PMs.

When the Vietnamese gov recently attempted to limit the amount of gold entering the country the black market grew by leaps and bounds and the price of gold over spot shot up immediately.

Easterners and Westerners have a different view of gold. The Asians will not be convinced that any fiat currency is a store of value. Westerners are going to find out what the Easterners already know. Future Westerners will look back at this era of fiat backed by nothing and be dumbfounded that their forefathers were taken in by the Fed and other central bank BS artists.

Merry Christmas!

Tue, 12/21/2010 - 00:42 | 820237 Oh regional Indian
Oh regional Indian's picture

True Snid. But there is still a high degree of connect, mostly when bullion dealers/governments can use the arbitrage to their advantage.

In fact, India has different spot rates for every major city too (at least the big ones).



Tue, 12/21/2010 - 01:52 | 820354 DoChenRollingBearing
DoChenRollingBearing's picture

Naah, ORI, respected commentator at ZH.

Just put in a box of gold with your next bearing shipment overseas...

There is almost always a way to solve your problems, mi amigo!

"There are more of us than there are of them".  I forget who first said that (Glenn Beck maybe), but we who are careful and prudent will likely be OK after the global reset.


Oh, and do check out our emerging website (as Charlie is not done yet):

especially if you are into auto parts...

Tue, 12/21/2010 - 03:04 | 820412 Oh regional Indian
Oh regional Indian's picture

:-) Indeed DCRB. I'll remember the Golden Bearing trick (maybe silver bearings, given my curent leanings!!!).


The site is taking long to download, maybe got held up. Maybe mucho flasho? Will check.

Do you supply to India?

I have some Peru related questions for you. Let me know if you up for a little mailing.




Tue, 12/21/2010 - 03:19 | 820415 DoChenRollingBearing
DoChenRollingBearing's picture

My name above at gmail dot com, all one word.

Our website is a work in progress, we depend on a 22 yr. old Peruvian guy to do this...

Because the bearing business so competitive, it is likely that that we in Peru / USA could NOT make you any money...  Still, I like communication with anyone, esp. as I had a business for awhile with Indians running a Qatari business years ago.

Best to you!  Send me yr email (sorta secretly if possible) and we will take it from there.

Tue, 12/21/2010 - 05:44 | 820466 Oh regional Indian
Oh regional Indian's picture

hey DCRB, the doing business in India question was purely out of curiosity/interest. I'm sure it's cut-throat. 

Timkins, who I'm sure you are familiar with, have a huge business in India, as do some big Japanese majors. Most Indian companies are toadies (partners) to the big guys. 

Will mail (sorta secretly of course!!!) re. peru!


Tue, 12/21/2010 - 06:58 | 820481 jahbless
jahbless's picture

...and I'm a freelance programmer who does websites for good causes...lemme know if your 22 year old needs any help.

aaah, the power of the people.


Tue, 12/21/2010 - 09:25 | 820554 Oh regional Indian
Oh regional Indian's picture

Hey jahbless, what to help me with this?


it's a good cause. As good a cause as any. 


Tue, 12/21/2010 - 12:23 | 821032 RKDS
RKDS's picture

That site is an abortion.  And the markup's a mess too.

Tue, 12/21/2010 - 22:08 | 822933 Oh regional Indian
Oh regional Indian's picture

Thanks RKDS, knowing you have a problem is the first step in getting helped right? 

Since I'm not selling anything, not sure what the mark-up is?

I know I have a problem! ;-)


Tue, 12/21/2010 - 22:11 | 822940 Oh regional Indian
Oh regional Indian's picture

Thanks RKDS, knowing you have a problem is the first step in getting helped right? 

Since I'm not selling anything, not sure what the mark-up is?

I know I have a problem! ;-)


Tue, 12/21/2010 - 10:18 | 820648 RockyRacoon
RockyRacoon's picture

About the website, DCRB, folks don't like seeing "Loading" and waiting!  ..and then "Play Intro".   Flashy is not better when we have products to sell.

Get some instant graphics up there pronto, save the video/music for later.  I have nothing but product on my first page -- coins & stamps!

Just my 2.5 cents worth.

Tue, 12/21/2010 - 14:04 | 821459 Confuchius
Confuchius's picture


May we make humble suggestion to most honourable round eye?


DO NOT USE "FLASH" on your new homepage. (Or maybe anywhere else)

It will simply be skipped over by most of your customers...



Tue, 12/21/2010 - 00:04 | 820169 Atomizer
Atomizer's picture

Turd commented on his blog this afternoon|| "FUBM"

Tue, 12/21/2010 - 00:24 | 820173 tahoebumsmith
tahoebumsmith's picture

I'm really getting tired of this shit. When is the Government and the SEC going to do its fricken job? The masters have found every way out of their gambling mistakes by putting it on to somebody else. How long do you honestly think this shell game can go on before it totally implodes? What ever happened to anti-trust and monopoly laws? It's bullshit and they are just laughing in the face of Americans while they continue stealing trillions of dollars from my kids and seniors that thought they had reached the so called golden years.

Tue, 12/21/2010 - 00:27 | 820204 Misean
Misean's picture

You assume that the govenment's job is the fanstasy taught to you in 4th grade civics class.  It isn't.  And it IS doing it's job.

Tue, 12/21/2010 - 00:47 | 820245 tahoebumsmith
tahoebumsmith's picture

meaning what? Protect the CRONIES instead of the people?

Tue, 12/21/2010 - 01:31 | 820318 StychoKiller
StychoKiller's picture

The purpose of a system is what it does.  What is the system doing?

Tue, 12/21/2010 - 02:28 | 820391 hidingfromhelis
hidingfromhelis's picture

Heckuva job Ben!

Tue, 12/21/2010 - 09:02 | 820528 Widowmaker
Widowmaker's picture

the correct word is "counter-terrorists" not cronies

Tue, 12/21/2010 - 00:53 | 820256 Terminus C
Terminus C's picture

Government of the people, by the people, for the people... or some such garbage.

I guess it all depends on your definition of "people".

Tue, 12/21/2010 - 08:58 | 820523 snowball777
snowball777's picture

Nowhere is it written that these sets of "the people" are not mutex.

...of the (little) people, by the (bought) people, for the (wealthy) people....

Do NOT follow this link or you will be banned from the site!