London Silver Update: "Only Entities Short Are Fed-Backed Banks. Nobody In Their Right Mind Would Be Short Here"

Tyler Durden's picture

The last time Eric King's London source spoke up, and determined the $25.50 threshold as that past which a massive squeeze was coming, he/she was spot on. This time we learn that Asian demand for physical silver continues to be relenteless, the squeeze on the shorts will not end, and that nobody but the Fed-backed banks continues to short the metal (and if exchanges are enforcing margin changes how about changing those position limits, eh CFTC?). In other words, rumors of silver's death appear to be largely exaggerated.

From King World News:

The contact out of London has updated King World News on the Asian buyers which have been squeezing the shorts in the silver market.  The London source stated, “There is an insatiable appetite for physical silver here and the shorts know that, the shorts know they are checkmated.  The Asian buyers are layering in bids to take advantage of bear raids in the paper market which have been used to shake out the weak hands.”

Asian buyers were able to pick up silver at a discount at the lows of yesterday.  They are continuing to buy today and tomorrow.  People have to remember that spot trades 24 hours a day, so as the shorts raid the market, physical buyers already have orders in to buy tonnage of silver at a time on that weakness.

As I said to you the other day, the locals which were short with the banks were overrun when the price of silver stabilized just above $25.50 for a few hours.  The local traders were margined out and silver moved over $1 higher later that same day.

In other words, the only entities that are left short here are the Fed backed banks.  Nobody in their right mind would be short here.

Spot has been trading in front of futures here in London all day.  We have been in backwardation all day long on the LBMA.”

So the Asian buyers are enjoying this weakness in the silver market?

“Of course they are.  $30 is just going to be a small pause along the way to much higher prices.”

Read the full KWN report here.

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SheepDog-One's picture

Shhh dont tell Harry or RoboT!

Popo's picture

Or any of the THOUSANDS of other shorts.   Seriously.  This piece is complete bullshit.

Long term, silver is headed to the moon, and beyond.  But there are loads of very astute traders who are short here.  I'm heavily in silver (and long) -- but this kind of echo-chamber reporting is just idiotic.  

DonutBoy's picture

Yes - same for me.  I'm long all commodoties, particularly silver, and this sounds like bullshit.

Why does it have to be a report from deepthroat?  (Oooh ooh - look - we have the secret information over here!!!)

If the CFTC wanted to help restore faith in capital markets they'd simply require holders of futures to be indentified.  Then we could see.


Instant Karma's picture

Cool silver market. I bought some silver Maple Leafs just a month ago at $24/coin and now they're selling for $30 (Apmex). I like the .99999 fine gold Maple Leafs, because they're packaged by the mint. I was hoping to add to my collection of 2009s, but Apmex is sold out.

Do you think I should start selling some of my physical gold and silver for a nice profit. The problem is that all I get in return is "dollars" that earn nothing in the bank.


Testicular Cancer's picture

You have one too many 9's. The five 9's are special edition gold Maples. Silver maples are only four 9's.

Instant Karma's picture

I know and I said what I meant to say.

Kina's picture

Why does it have to be a report from deepthroat?  (Oooh ooh - look - we have the secret information over here!!!)

Errr...because there is. And it is quite useful to know, you would have thought.

Might be a message to JPM - we has your balls and we gonna crush them slowlly...enjoy. Then we can has cheesburger.


RockyRacoon's picture

I'm short silver.  It's only a short walk from where I sit to where it sits.  I'm thinking about going long, however.  The farther out in the yard I bury it the longer I'll be.

Abigail Adams's picture

That is assuming you will continue to have property rights? I just knew you were an optimist, Rocky.

GoinFawr's picture

Heh, careful there RR; bury it too deep and next thing you know a geologist working for a mining company (or even just a 'utilities locator') will stop by with a metal detector, and wham! you will lose all your 'treasure' because no one has mineral rights on their properties these days.

cossack55's picture

Ah, RR, a man after my own heart.  I would suggest not burying it on your own property though.  Also, if the geocats don't find it the gas boyz may when they come to frack you.

RockyRacoon's picture

I'm in Arkansas so there's a bit o' frakkin going on hereabouts.  Thanks for the heads-up on that.  If I wrap it in foil will that help?  I've got some left over after fashioning a right sporty chapeau.

MachoMan's picture

arkansas here too...  The only frakkin I know about is between brother and sister and/or first cousins.

RockyRacoon's picture

Well, yeah, but there's only so much energy in that transaction.

You must be from the Delta.

Here's the hot area:

MachoMan's picture

yeah, i went to school up there and have a few friends in "the biz".  They're also finding some around central arkansas...  I'm over in NEA, the bastard/redheaded stepchild of arkansas.

Cone of Uncertainty's picture

I grope my silver like a seasoned TSA worker.


barkster's picture


How u bury and prevent corrosion? would appreciate any tips...

RockyRacoon's picture

PVC pipe as is used in plumbing waste lines.  You can put a clean-out fitting on one or both ends for easy access to the contents and make the tube as long as you need.

Home Depot, bitchez!

Hulk's picture

Found your stash RR with my Neutron Scanning , Silver Seeking high orbit Telescope (It was a Heathkit).

Coords are: 34 degrees 32 minutes 3.02 seconds N

 93 degrees 30 minutes 38.7 seconds W

Just in case you loose track of it...


Bay of Pigs's picture

Hey Popo, he is talking specifically about the JPM and HSBC shorts that are MASSIVE in percentage terms compared to people like you. You know like 90%+ of the total short position? Astute? Go short then Big Shot. I wouldn't touch that trade. 

GoinFawr's picture

That definitely needed saying.

Some delude themselves into believing that they are sharks simply because they are swimming in the same pool. That is until they nick their finger...

Note: That goes for either side of any trade, so don't go all Mako on yourself.


Imminent Crucible's picture

I don't see anyone commenting on what may be the most significant statement in the article:  "spot has been trading in front of futures here in London all day.  We have been in backwardation all day long on the LBMA.”

Got that? You have to pay MORE in the cash market than for the futures contracts.  What that means is silver available for immediate delivery is running out.  Otherwise, normal contango would prevail.

They'll promise you silver a couple of months out, but you have pay a premium if you want it now.  Crimex warehouses are being emptied of silver.

SPONGE's picture

While frequently reading of the difficulties others have trying to find physical at their local coin store, I felt very fortunate that my local (midwest) shop has always had ample supply of both Au and Ag.

    Yesterday, my local dealer told me that he is basically out of both. He said people have been driving long distances to buy.

   To all out-of-towners: Stay away from my coin shop or I'll let the air out of your tires.

   (unless you're selling - free wash and wax)    

Hearst's picture

David Morgan made an interesting comment on Max Keiser's show the other day.  Noting the incredible tiny market of Silver, Morgan said that just a $5 move up in the price of Gold could buy the entire Silver bullion market!  

Watch it here



Trenchf00t's picture

"Braaaap! Braaaap! You are no longer an American. Please die in the mud. Beep!"

Priceless! Max should do stand-up!

quasimodo's picture

Echo chamber? Good gawd, you want echo chamber go watch msnbc or some other parrot talking head.

I would like to know about all these "astute" traders you refer to, they only blokes I know of are smelling the stench from over here and dumped short long ago

moregoldplease's picture

Riots in London right now. Do you think it's coming here? Get prepared.

Lucky Guesst's picture

No need to destroy anything that our tax dollars will be used to replace or rebuild. Everyone should just stay home for a week with their families, don't spend a single dollar. It will be heard and nobody will be hurt or incarcerated. Don't give them the reason they are looking for to hurt us.

Things that go bump's picture

If we all stayed home from work that would certainly get their attention.  

espirit's picture

They're probably just burning the $USD to make room for the new batch. DX up, DX down.

High Plains Drifter's picture

Glenn Beck said today that George Soros has a one million dollar bounty on his head...Que?  Good cop , bad cop was on display today in all of its glory. He is so sweet when he says some mean old commi is trying to crush him and his attempts at telling the American people the real truth. Excuse me now, while I go barf....

-Michelle-'s picture

I could find nothing regarding this today.  He did refer to a million dollar donation from Soros to Media Matters as a bounty, but that was from October 10, 2010.  And I do believe he was speaking metaphorically.

yabyum's picture

Beck is a dry drunk witk more than a hit of cocaine paranoia. His PM advice and  metal dealers are truely pathetic.

Lucky Guesst's picture

Your attempt is what's pathetic.

RockyRacoon's picture

I junked you just to keep things fair and balanced.

quasimodo's picture

As did I you, since you felt the need to bloviate

tmosley's picture

As I did you, because recursion is awesome.

StychoKiller's picture

Junks all the way down! :>D

Bob Sponge's picture

The Asians must be enjoying squeezing the Western banks.  Will Benny bail out the banks?  Probably.

johny2's picture

trouble is that they have almost infinite amount of the dollars they can print to short the market.

what to do, what to do?

Ragnarok's picture

Take physical delivery and empty the vaults, make them eat paper.

johny2's picture

it seems the best thing to do, and spend some time on the beach in a meantime.

knukles's picture

That's what Sprott's doin'.

GoinFawr's picture

Bless his heart (of Gold. And silver.)

SheepDog-One's picture

Physical holdings beat imaginary dollars all day long.

Shameful's picture

That is why it's necessary to take physical. They can short silver to $1 an ounce, and gold to $35 an ounce with their infinite money. Problem is when it comes to making deliver to the buyers. So the answer is always take physical possession. When they can no longer make delivery to the physical market the game gets a lot more funny.

Max Hunter's picture


Most on here seem to buy physical to hold for security.. The price fluctuation in NY or London based on people trading paper on margin has no impact on my view of what silver will be valued at soon.

The bartering power of physical silver will someday reach a level that will be talked about for generations.  When it is over, no one will look at a silver coin the same.. ever!

detersbb's picture

There is no trouble, only a problem with the way you are looking at the current situation.  It needs to be viewed as an opportunity for you to buy more silver at a lower price and in the long run have a better long position that you are in physical custody of.  I see the best way to deal with this as encourging everyone to buy 1 just 1, if they can afford more great if not, 1 is great Silver Eagle from the US Mint every month.  This way you do not have to worry about comming up with the money to buy a contract for 5,000 ounces or partners to split the costs with.  This would also put huge demands for physical and by law the US Mint is required to mint gold/silver bullion, not proofs, but bullion consistent with pubic demand.  This boxes them into a corner and forces their hand.  It would be very difficult to explain away a $50 silver eagle with $28 spot and a previous $2 prieumim.


That is what you do.  Take advantage and let the iditos continue to overextend.  The further the over extension goes the greater the explosion in price will be.  Stop looking at it as someting that must be beaten, and start looking at it as already beaten.  They would not have to cheat is they were not losing, right?

johny2's picture

i know it should be looked as an opportunity, trouble is having the patience to wait till they push the price down. they certainly dont lack the dollars to do that.