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Scotia Mocatta Loses 60% Of Its Physical Silver In One Month To "Reclassification", Total Comex Registered Silver Now Under 30 Million Ounces

Tyler Durden's picture





 

About a month ago we indicated that Comex depository Scotia Mocatta "lost" 25% of its Registered (aka Physical) silver after the vault encountered a "reporting reclassification" which saw 5,287,142 ounces of silver moved from Registered to Eligible status, dropping the vault's true holdings from 11.8 million ounces to 6.5 million. Naturally, the response from the peanut gallery was that this was a tempest in a teacup and it was "temporary" and a-ha, any minute it would reverse, and all shall be well, everyone would live happily ever after, and the Comex would actually have silver available for delivery purposes. We decided to not hold our breath. Which after pulling today's most recent Comex warehouse data appears to have been a prudent decision, because for the first time ever total registered silver has dropped below 30 million ounces, after experiencing a 5% overnight drop across the board, primarily driven by yet another 1,456,488 ounce "adjustment" of warehoused silver from Registered To Eligible at Scotia Mocatta. As of last night, total Scotia physical silver was now 4,740,447 ounces, a 24% drop overnight, and a massive 60% drop from the total which we captured on April 20. Still think it's temporary?

Oh, and Scotia was not alone: there were comparable reclassifications at both HSBC and Delaware. But the kicker: total silver at Scotia Mocatta has barely budged. The only thing that has changed is the shift from real silver to "Eligible", or that which has no warehouse receipt issued against it, or as was described previously "a private arrangement" which has nothing to with the Comex. This is non-deliverable silver! Thus, starting with a ratio of 11.8MM to 8.8MM ounces of Registered/Eligible (or 57%/43%) a little over a month ago (on April 19), the most recent Scotia Moccata physical silver now just 23.4% of the "total."  And just as troubling is that the total amount of silver available for dlivery has just fallen to a fresh all time low. Luckily, we have margin call driven liquidations such as today which will probably buy a few more days before registered Scotia silver hits 0 (but don't worry: it's only temporary).

Source: Comex

As a reminder, here is the same chart from April 20:

 

 


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Wed, 06/01/2011 - 20:36 | Link to Comment lawrence1
lawrence1's picture

Dont believe you, you are just bullshitting, because nobody could be that fucking stupid, not even you.

Wed, 06/01/2011 - 21:19 | Link to Comment Rynak
Rynak's picture

c'mon, just five more junks and he gained another "achievement" :-)

Wed, 06/01/2011 - 18:01 | Link to Comment lolmao500
lolmao500's picture

Low price = people can get more physical = screwing themselves

High price (as it should be) = people can get less physical = not screwing themselves

If the bankers were bright, they would invest in physical silver instead of treasury bonds, let silver rise and let the US collapse.

But no, for some reason, they keep manipulating the market to the downside just because of those SOBs at JPMorgan. They are screwing themselves. When COMEX defaults, all those banks are in big trouble... So WTF are they doing?

Wed, 06/01/2011 - 18:09 | Link to Comment tmosley
tmosley's picture

Include in your analysis "infinite free money for those doing the bidding of the Federal Reserve", and it might make more sense.

Wed, 06/01/2011 - 19:25 | Link to Comment Transformer
Transformer's picture

Uhhh..... and maybe, just maybe they can make a little more money in fiat games, than they can buying silver.

Wed, 06/01/2011 - 19:49 | Link to Comment tmosley
tmosley's picture

Yes, you can.  Leonardo DiCaprio could have made quite a bit of bank looting the Titanic too.  IF he could get to the lifeboat just in time, and there was space left.

The leverage that exists against physical silver is so extreme that you don't really need anything else.

Wed, 06/01/2011 - 18:10 | Link to Comment SilverDosed
SilverDosed's picture

Buying time.

Wed, 06/01/2011 - 18:14 | Link to Comment LongBalls
LongBalls's picture

Gold and silver = finite resources (handcuffs) that cost resources to harvest.

Fiat dollars = near unlimited supply of paper with a little ink at little to no cost and buy/own the world.

One is backed by an asset and the other is backed by only confidence in it's purchasing power. 

Put a balance on that. See you at the coin shop mate!

Wed, 06/01/2011 - 19:25 | Link to Comment I_am_always_right
I_am_always_right's picture

INK!

There's the future. Buy ink!

Wed, 06/01/2011 - 21:21 | Link to Comment Mec-sick-o
Mec-sick-o's picture

Inkedin just got hammered today.  (New lows)

Wed, 06/01/2011 - 22:00 | Link to Comment I_am_always_right
I_am_always_right's picture

SELL INK!

 

That's what I meant.

 

Shut it.

Wed, 06/01/2011 - 23:56 | Link to Comment Rusty Shorts
Rusty Shorts's picture

Jackhammered or Monkeyhammered?

Thu, 06/02/2011 - 00:58 | Link to Comment Mec-sick-o
Mec-sick-o's picture

Feel sorry for the Monkeys.

Humans can be dumber, as they know what the hammer is for and they see every problem as a nail.

Wed, 06/01/2011 - 21:38 | Link to Comment XPolemic
XPolemic's picture


If the bankers were bright, they would invest in physical silver instead of treasury bonds, let silver rise and let the US collapse.

But no, for some reason, they keep manipulating the market to the downside just because of those SOBs at JPMorgan. They are screwing themselves. When COMEX defaults, all those banks are in big trouble... So WTF are they doing?

Here is the theory:

1) USG loaned banks all the Gold at ~0% interest.

2) Said banks sold the Gold, and used the proceeds to lend at >0% interest.

3) Banks borrowed the gold when gold was between 100 and 300 an ounce.

4) Gold is now 1500 an ounce, so if the USG were to ever want it's gold back, the banks that borrowed it are forked with a capital F.

5) Why would the USG want it's gold back? Maybe to (a) Sell it and pay off some debt (b) because it belongs to them (c) because a populist movement demands it or (d) all of the above.

6) Banks came close to running out of gold to sell (to suppress the price) in the late 90s. In 2001 there was massive gold robbery that went unnoticed, due to the buildings above the vault collapsing sometime after some aircraft ran into them. In 2003, gold bars started disappearing from Irape.

7) Once the WTC gold had been sold, and the Iraq gold had been sold, the price of gold started rising, causing a sort of 'virtual margin compression' in lending spreads. Of course, these losses are paper losses, unrealized until the banks are required to pay the gold back to the USG.

8) Obviously, if the gold ever had to be repaid, it would be better to do it at 300 an ounce rather than 1500 an ounce, so the banks (esp JPM) are desperate to keep the price down should those losses ever need to be realized.

 

But it's only a theory.

Wed, 06/01/2011 - 18:01 | Link to Comment ReallySparky
ReallySparky's picture

I will so enjoy watching the hearings of the CTFC folks getting bar-b-qued when this thing blows up.

Wed, 06/01/2011 - 18:07 | Link to Comment JW n FL
JW n FL's picture

no one will go to jail! and everyone will be so supirsed that JP and or whomever JP sold the shorts too (suckerz!) was in that position.. they did know, didnt have a clue.. no fucking idea.. meanwhile google jp morgan and silver shorts at the same time and...

About 3,550,000 results (0.16 seconds)  http://www.google.com/#sclient=psy&hl=en&source=hp&q=jp+morgan+and+silver+shorts&aq=3b&aqi=g-j1g-b3&aql=&oq=&pbx=1&bav=on.2,or.r_gc.r_pw.&fp=730dcb274e24d23a&biw=1266&bih=575 But these idiots had NO! idea what was going on, it was such a HUGE! Suprise to them! LMFAO!
Wed, 06/01/2011 - 18:28 | Link to Comment Iam_Silverman
Iam_Silverman's picture

"and everyone will be so supirsed that JP and or whomever JP sold the shorts too (suckerz!) was in that position."

I'm sure that everyones position is hedged with a safe and reliable CDS sold by AIG.

Wed, 06/01/2011 - 19:15 | Link to Comment DeadFred
DeadFred's picture

If we were able to see into the depths of darkness that is the JP Morgue we would see the strategy in place to save them form the obvious outcome of this drama. Alas, I for one am to pure of heart to see into those depths.

Wed, 06/01/2011 - 18:04 | Link to Comment Turd Ferguson
Turd Ferguson's picture

I wish Vlad the Impaler were still around to deal with Gensler, Chilton et al.

Wed, 06/01/2011 - 18:10 | Link to Comment Terminus C
Terminus C's picture

Be careful what you wish for Turd, Vlad wasn't very discriminating on who he impaled. Nor was the national razor (guillotine) after it removed the head of royalty.

Wed, 06/01/2011 - 19:29 | Link to Comment Transformer
Transformer's picture

Yes, guillotines are not very discriminatory.  When it was all said and done in the 1790's,  miss G had popped of the heads of about 350,000 "elites", in a country of about 4.3 million.  Maybe they got a few more than just the elites, huh?

Wed, 06/01/2011 - 19:39 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Vlad had impaled Bubba's babe on another thread. Bubba is dealing with it by pretending it never happened.

Wed, 06/01/2011 - 21:39 | Link to Comment Monedas
Monedas's picture

This would be a good time for us to pause and reflect on the fact that THE GUILLOTINE WAS A GERMAN INVENTION ! The French made it famous....can't deny it, but only an orderly, efficient, cost saving, precision oriented German mind could invent it ! Monedas 2011 World History Month Tour

Wed, 06/01/2011 - 23:15 | Link to Comment GoinFawr
GoinFawr's picture

"Maybe they (guillotines) got a few more than just the elites, huh?"

EEf yoo wahnt to make zee omelette...? Honh honh honh!

or maybe madame G just got to harvest a bumper crop of loyalist/royalist lackeys, sycophants, toadies, and schills to boot? Good riddance, I say.

Let that be a warning to you fuckers; you know who you are.

Wed, 06/01/2011 - 18:12 | Link to Comment tmosley
tmosley's picture

With a heavy heart, I will reluctantly accept that role.

Wed, 06/01/2011 - 18:28 | Link to Comment cossack55
cossack55's picture

Line forms at the rear, bud.

Wed, 06/01/2011 - 18:49 | Link to Comment hamurobby
hamurobby's picture

Seems it will "roll" 24/7 then.

Wed, 06/01/2011 - 20:39 | Link to Comment Vlad Tepid
Vlad Tepid's picture

Can I do the honors??

Wed, 06/01/2011 - 18:05 | Link to Comment Bay of Pigs
Bay of Pigs's picture

I'm sure Trav7777 has a good explanation. If not, let's ask AGoldhamster.

If all else fails, we still have Math Man.

 

Wed, 06/01/2011 - 18:14 | Link to Comment bob_dabolina
bob_dabolina's picture

buybuybuy

Wed, 06/01/2011 - 19:00 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Sorry Bob,

Forgot to include you with the silver stooges. Double your shorts with triple leverage, its crashing.

Wed, 06/01/2011 - 19:09 | Link to Comment bob_dabolina
bob_dabolina's picture

Covered my shorts several weeks ago near 33 (and stated it here when I did) 

I want you to just keep buying. buybuybuy.

Wed, 06/01/2011 - 19:34 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Caught the bottom perfectly? Maybe you should start your own blog since nobody around here can time things quite like you?

Or give Turd a call. I'm sure he could use your expertise on PM's.

Wed, 06/01/2011 - 18:13 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Meth Man has been sent to his room and won't be allowed online again until his Dad sees his end of school year report card.

Remedial Math (Man) is a bitch.

Thu, 06/02/2011 - 07:00 | Link to Comment AGoldhamster
AGoldhamster's picture

you just had to look at the charts - it was predictable since early European morning. But some prefer to delete posts which don't suit their agenda. Here, as well as there.

Though that doesn't change a yota of the truth, which is that end of July silver is 20-25% lower than today, as will be almost every other market. Except treasuries and the buck. Whether you like it or delete it or not.

Wed, 06/01/2011 - 18:08 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Let's see if I can see any trends here. Market down all of May while the Crimex and partners have been steadily reclassifying available Gold and Silver. First day of June we get a 2% sell off one day after a margin relaxation on ES etc. CONgress won't pass a debt ceiling increase while QE 3 is supposed to be off the table.

Interesting.

Anyone else want to jump in here and add to the stinking pile?

Wed, 06/01/2011 - 18:12 | Link to Comment JW n FL
JW n FL's picture

Yes! wait.. dont buy! hold on to that Paper!

if the Fed Printed $3 trillion in debt.. and printed another $15 Trillion in Loans (this does Not! Include FED Swap Windows for the Euro and TARP / TALF and so fucking on...) over three years..

 

$18 Trillion divided by 3 years ='s $6 Trillion in New Supply is Printed a Year!

 

$6 Trillion Dollars divided by 365 days ='s $1,643,835,6164 a Day in in New Supply is Printed a Day!!

 

$1,643,835,6164 Billion a Day divided by 24 hours in a Day ='s $684,931,506 an hour in New Supply is Printed an Hour!!!

 

http://goo.gl/FnxBZ  Treasury Direct $14 Trillion Debt

http://goo.gl/TMl74   $15 Trillion in Loans

http://goo.gl/EXzal  / ='s $29T

 

 

so, you hold on to your paper while my Gold and Silver dont rise in price.. Good Luck with that program!

 

http://www.youtube.com/user/RussiaToday#p/u/3/kJ2Bkujik5M

 

No cash to pay your debts? We'll take your gold, Greece!

 

 

http://www.youtube.com/watch?v=CmD0s3us_vA&feature=player_embedded

 

Keiser Report: Gold Stands Rock Hard (E150)

 

http://finance.yahoo.com/blogs/daily-ticker/michael-pento-central-bankruptcy-why-qe3-inevitable-105819637.html

Michael Pento: Central Bankruptcy – Why QE3 is Inevitable

 

Just kidding! Luv Ya CD!!

Wed, 06/01/2011 - 20:59 | Link to Comment ebworthen
ebworthen's picture

Sector rotation.

Volatility needed to move in and out of positions, and to push slow money through rotation chasing returns.

PM's volatility must be reinforced to keep the masses away.

You must create a crisis to foment fear that then calls for remedy.

Pensions and retirees and everyone else in "slow" money (non-HFT inside source algo's) chasing return; perhaps they will chase after PIIG and Municipal bonds if Treasury rates go lower? 

Wed, 06/01/2011 - 23:20 | Link to Comment hound dog vigilante
hound dog vigilante's picture

 

Let's scare the retail rabble. It's an engineered pullback in certain assets. The little guy takes the hardest punch(es). Banks and the corporate cabal take paper losses. No biggie for them - early retirement and tropcal beaches are the reward for intergenerational larceny.  The rest of us face a lifetime of competition for everything.

Debt ceiling will be raised.  But not yet.  QEvomit is ending, and markets will get nervous. The same guys that blew this bubble will prick the balloon (like today's action?) The experts  sing doomsday (the keynesian chorus' finale), then bullshit spending/budget promises will be made and sold like snake oil.  QEinfinity will commence and the election season will torture us until November 2012. It's a script! These asshats think they can control and steer markets (and play politics). Oh how wrong they are.

A few bottle rockets up the tailpipe along the way... MENA boiling, russia plotting, europe failing, japan melting. China winning.

December 2012. The election is over. Who wins? Who cares. Every politician that votes to raise the debt ceiling will be challenged and most will lose (in primarys or in general). Red. Blue. Won't matter. 2010 was a warning, not a fluke. Sufficient turnover in congress will rock the boat and the rats will jump ship. Credit freezes and we all ride a bike to Iceland. After a few years, markets and life as we knew them will fade from memory. Hit the reset button on the american experiment. Start over.

 

Wed, 06/01/2011 - 23:28 | Link to Comment stephysat28
stephysat28's picture

sounds about right to me! Its our own damn fault!,  

Wed, 06/01/2011 - 18:09 | Link to Comment SilverDosed
SilverDosed's picture

I'm not even gonna try to figure out wtf they're doing, I'm gonna say thank you for the discount.

Wed, 06/01/2011 - 18:13 | Link to Comment PaperBear
PaperBear's picture

Under 30 MN oz ?

Was that 2 MN oz gone over the last week ?

WOOHOO

Wed, 06/01/2011 - 18:11 | Link to Comment AC_Doctor
AC_Doctor's picture
by HamyWanger
on Wed, 06/01/2011 - 18:01
#1330519

 

I've just SOLD all my GOLD and silver...

Pleasant move to ride, but now is the time for the bubbles to pop. 

Get out of the collapsing cave before it's too late.

 

The only collapsing cave is the empty space between your ears.

The signs of a silver price explosion just keep coming while the dolts like yourself compare this to the Hunt Bros. clusterflock in 1980.  Time to remember  your are living in 2011 dufus...

AC

Wed, 06/01/2011 - 18:30 | Link to Comment unwashedmass
unwashedmass's picture

rolling....ah yes, the smartest move now, now that the supplies are disappearing, is to sell everything.......

rolling......

 

Wed, 06/01/2011 - 18:38 | Link to Comment I_am_always_right
I_am_always_right's picture

"The only collapsing cave is the empty space between your ears"

 

Hahaha! Well put!

Wed, 06/01/2011 - 19:29 | Link to Comment Transformer
Transformer's picture

WE are Nelson Bunker Hunt.  Only we are smarter than he was, we have more money, and we didn't buy on margin, and we have no Comex exposure.  If he had been as smart then, the silver world would be a really different place today.

Wed, 06/01/2011 - 18:11 | Link to Comment PaperBear
PaperBear's picture

The run is absolutely on.

Wed, 06/01/2011 - 18:19 | Link to Comment hampsterwheel
hampsterwheel's picture

I saw the Drudge headline today "Massive Depression" and said "here comes the PR for QE3 - then with silver going down hard - I knew it was happening - when they announce QE3 they need a good 30% margin on silver so as to keep the pop under the radar - $30 to $50 as opposed to $40 - $60 - eitherway  - buy physical on the dips...I have a bunch sitting at APMEX (which I bought three weeks ago) still waiting - should get an email from them soon asking me to sell it back to them.... {I charged $6k on a United Visa card offer for 2 free airline tickets on first purchase, then I opened a Discover card and get to roll over the whole $6k interest free for 18 months - making just a $100 payment per month - If discover would have let me rollover  $20k I would have gone for it - } an 18 month bet silver will be higher than now - and 2 free airline tickets .... I'm in }

 

Wed, 06/01/2011 - 18:27 | Link to Comment cossack55
cossack55's picture

You've learned the new rules. Congratulations.

Wed, 06/01/2011 - 18:16 | Link to Comment traderjoe
traderjoe's picture

On another thread I was being taught that silver has no value as a currency or a money and that I should stockpile FRN's. I'm confused. /s

Wed, 06/01/2011 - 18:32 | Link to Comment Iam_Silverman
Iam_Silverman's picture

" I was being taught that silver has no value as a currency or a money and that I should stockpile FRN's. I'm confused."

Because you can't wipe your butt with silver?  OK, you can, but you still need paper to dry your hands after you wash them.

Wed, 06/01/2011 - 18:34 | Link to Comment Johnny G.
Johnny G.'s picture

Yes, you are correct.  Stockpile paper.

Silver is bad, because it's heavy and bulky in your pocket; while FRNs are thin, light and efficient (you can carry thousands of little green paper rectangles quite easily). 

Most mens' wallets don't even have a coin purse - so that's how you know that silver isn't money.  Also, a silver bar doesn't have a picture on it - and as everyone knows, it has to have a portrait on it in order to be considered money.

Wed, 06/01/2011 - 19:50 | Link to Comment oddjob
oddjob's picture

All FRN's have traces of cocaine on them so you will be easily detained when needed.

Wed, 06/01/2011 - 21:30 | Link to Comment Mec-sick-o
Mec-sick-o's picture

Stop sniifing FRN's, the ink already dried up.

The dust collected there probably just some shed off skin dandruff.

Wed, 06/01/2011 - 18:44 | Link to Comment Fiat2Zero
Fiat2Zero's picture

In all fairness having a little paper around isn't a bad thing. It's reflexive safety, like buying bonds. It'll be a little while before people start accepting your junk dimes.

But they will learn, oh yes they will.

Wed, 06/01/2011 - 19:35 | Link to Comment Transformer
Transformer's picture

Like maybe a day or two.

Wed, 06/01/2011 - 18:52 | Link to Comment hamurobby
hamurobby's picture

/s = SARCASM

no?

You all need some protection so you can laugh off the paper games, all Im sayin...

 

Wed, 06/01/2011 - 18:16 | Link to Comment mynhair
mynhair's picture

Add:  ASEs sold out.

Wed, 06/01/2011 - 18:19 | Link to Comment AldoHux_IV
AldoHux_IV's picture

The $120+ question of the day is when the paper market realizes this and the Comex manipulation ain't good enough to stop the short squeeze?

Wed, 06/01/2011 - 18:26 | Link to Comment equity_momo
equity_momo's picture

With all due respect to silverbugs (because i do understand the difference between physical and paper) silver is not going to be the wealth preserver that gold is going to be in the continuing depression.  That isnt the only reason i prefer gold over silver - how does one store physical silver without owning a vault the size of a GM Yukon? Its just not practical for serious wealth preservation. I like gold over silver here.

Wed, 06/01/2011 - 18:33 | Link to Comment Quinvarius
Quinvarius's picture

Part of the interest in silver is the depletion of global stockpiles.  Gold is better money.  But silver has a lot of other things going on too.

Wed, 06/01/2011 - 18:33 | Link to Comment bob_dabolina
bob_dabolina's picture

Yea it does...like how an industrialized commodity reacts when it meets a deflationary gush. 

 

Wed, 06/01/2011 - 18:47 | Link to Comment Fiat2Zero
Fiat2Zero's picture

True but the investment demand is going to outstrip industrial real soon, if it hasn't already.

The proles learn quickly these days due to a "series of tubes". Also that serious food inflation is a dear teacher.

Wed, 06/01/2011 - 18:53 | Link to Comment bob_dabolina
bob_dabolina's picture

Gold is the vehicle to be in if you're gona' play PM's in this enviroment.

Bottom line.

Wed, 06/01/2011 - 19:23 | Link to Comment equity_momo
equity_momo's picture

Indeed. The demand-supply argument is solid but i dont see silver as a serious store of wealth in the monetary sense that gold is and will continue to be. Its too volatile and doesnt have the obvious qualities of gold. If we get deflation , banks go under , people panic and move even further into gold. I dont see the same argument for silver in deflation - softening economic data will eventually hurt all industrial commods (including oil for a while)

Wed, 06/01/2011 - 19:37 | Link to Comment Transformer
Transformer's picture

People will need money.  The holders of gold, will not have to break it out to survive.  Quickly, all the smart physical silver buyers, who didn't bother with food, water, guns, ammo, etc. will realize they need some of that stuff and junk silver will hit the marketplace.

 

Wed, 06/01/2011 - 21:16 | Link to Comment hamurobby
hamurobby's picture

Yes, opium comes to mind in history.

Wed, 06/01/2011 - 21:23 | Link to Comment XenoFrog
XenoFrog's picture

The holders of gold will be in an awesome position when they want to buy a chicken and the smallest amount of gold they have on hand is a .25 oz gold coin. Or, to couch it in today's terms, why would we bother having coins/small bills at all when we could just carry $100 bills? 

Thu, 06/02/2011 - 04:48 | Link to Comment zuuuueri
zuuuueri's picture

The gold isn't for buying a chicken. the gold is for buying a farm. as the saying goes,

gold, the money of kings

silver, the money of merchants,

debt, the money of slaves.

 

small day to day transactions will eventually be done as they were in the past. A mix of barter, small coinage, and, despite the above mention of debt as the money of slaves, of short-running tabs occasionally netted out in gold. Often people on the producing side saw only a couple bursts of cash a year when they sold a crop or a shipment of something they produced. They might run a tab with other folks for some months until then, and when the time came to settle it, a gold coin or a few would cover a fair bit of it.

 

The historical picture varies from place to place. In my native land, even farmers and craftsmen would occasionally have gold go through their hands, as i described. Laborers working for a daily wage were the ones who might not see much of that, but even then- in the country a laborer would

work for a season (a couple months, in the winter when the trees and harvest needed a lot of work), and during that time see no cash at all, just food to eat and a place to sleep. At the end of the term he might have one or two gold coins to take with him (quite often made conditional on the sale of the product first). In the city, it is true, laborers saw small cash day to day. silver if they were lucky. Cities are where there is more silver in circulation, in the country it tends to be done in kind, and over the longer term (seasons or a year) settled out in gold.

 

but then, this was in a place where there was widespread ownership of land by whoever could afford to buyit, and independently owned farms or estates existed down even to small sizes - not a land of nobles and serfs. In some respect the man who owns his own land is a little bit sovereign, so gold suits him.

 

this will vary from place to place depending on the ownership of land, on the kind of agriculture, on the amount and relevance of trade, size and composition of cities, etc etc.

 

but you wouldnt go buying a chicken with a gold coin anyway, except in times of famine (in which case, even a gold coin is cheap for a chicken, and the man with the gold coin gets a chicken and the man without a gold coin doesnt even get a chicken)

i have stories from my grandparents of people trading gold coins for a loaf of bread, during a war-induced famine.

 

 

 

Wed, 06/01/2011 - 21:17 | Link to Comment XenoFrog
XenoFrog's picture

There's not enough Gold to back the world's replacement currencies. Unless of course each new FRN is worth .0000000001 oz of the yellow stuff. Silver will be represented in the new basket.

Wed, 06/01/2011 - 22:38 | Link to Comment HellFish
HellFish's picture

Actually the number has been calculated to anywhere between $22K up to $55K per ounce to back all FRNs in circulation.

 

(.000045 to .000018 oz/FRN)  Someone check my math.

 

 

Wed, 06/01/2011 - 23:19 | Link to Comment XenoFrog
XenoFrog's picture

I apologize for my guess-timation error.

Thu, 06/02/2011 - 06:32 | Link to Comment Monedas
Monedas's picture

That's quite a range ? $22K - $55K  ? I think it's a low ball estimate, too ! They will have to issue new FRNs.....enough to cover all those "bearers" who demand physical ! I think the ultimate price for Gold is deliciously hideous ! They will have to float the currency in the world market....they can't just dictate a price ! I think Gold will just become universal money by weight ! It will be so valuable and used for major transactions just by weight ! Banks will have scales and assayers just like they used to ! Monedas 2011

Thu, 06/02/2011 - 04:49 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

And why is silver volitile? Well partly becasue there's less physical silver in the world than gold avaliable for investment; the comex have a greater grip on the market. Once their play is over and you can't buy physical at any bullion dealer for anything like the spot price the volitility will go.

I hold both, but 70% silver, 30% gold

Wed, 06/01/2011 - 19:50 | Link to Comment tmosley
tmosley's picture

Yes, that is the new troll party line.

Wed, 06/01/2011 - 20:47 | Link to Comment Hephasteus
Hephasteus's picture

And they'll let gold pump up past 1650 to make it happen. And then silver is going to blow. 75 90 won't even flinch till hundred.

Wed, 06/01/2011 - 21:04 | Link to Comment tmosley
tmosley's picture

I would be quite surprised to see that price action (for silver) anywhere outside of the physical markets.

Wed, 06/01/2011 - 21:16 | Link to Comment Hephasteus
Hephasteus's picture

September will be surprising for you then.

Wed, 06/01/2011 - 21:29 | Link to Comment tmosley
tmosley's picture

I think July will be more surprising for most people.

What do you think is going to happen in September to cause the spot price to rise so much?

Wed, 06/01/2011 - 22:58 | Link to Comment Hephasteus
Hephasteus's picture

Weird you should say that. Middle of July the fed and IMF should be getting the hint they are going to get their nuts chopped off. But you know they'll try to avoid it.

Thu, 06/02/2011 - 00:46 | Link to Comment Eternal Student
Eternal Student's picture

I'd say that it's more likely due to people getting back from vacation. September is a great "what was I thinking" month.

Wed, 06/01/2011 - 21:55 | Link to Comment delacroix
delacroix's picture

the supply will shrink, due to over 40% of silver, being  produced as a secondary metal

Wed, 06/01/2011 - 19:19 | Link to Comment DosZap
DosZap's picture

Quin,

In a SANE world, I agree 100%..

But, we cannot trust any of our leadership.

Wed, 06/01/2011 - 18:34 | Link to Comment edotabin
edotabin's picture

Hey man, if you've got it; flaunt it!

Wed, 06/01/2011 - 18:43 | Link to Comment Iam_Silverman
Iam_Silverman's picture

"how does one store physical silver without owning a vault the size of a GM Yukon?"

Take each 100 ounce bar and paint it dull black with watercolors (several coats).  Knock the legs off of your sofa and bed.  Stack bars until original height of furniture is achieved.  Any left over bars can be painted brick red and used as accents in the appropriate locations.  Buy the five ounce silver medallion coins and mount them to a cheap swag lamp chain.  When your friends ask "are those real?", you can laugh it off and say no, they are a gag gift I received from a very dear rapper friend last year.  If you have an electric stove, the area under the bottom drawer will hold many 100 ounce bars.  Just be creative and enjoy poor mans gold.  When you take the equivalent of $2,000 to barter for a necessary item, you might not get change.  On the other hand, a collection of ASE's are more barter-friendly.

Wed, 06/01/2011 - 19:27 | Link to Comment equity_momo
equity_momo's picture

Owning some silver rounds for barter situations is a must for sure. But theres practial limitations to storing serious wealth in it , which is why one should "follow the money"  : The rich are buying gold , diamonds ,  fine art , luxury real estate , wine , first editions etc. If you can afford any of that good stuff without margin , then thats where you want to be.

Wed, 06/01/2011 - 20:56 | Link to Comment XenoFrog
XenoFrog's picture

The practical limitations are over-stated by silver trolls. You can store 300oz of silver ($11k) in a box the size of a loaf of bread. Listening to you cretins and one would think you'd need a tractor trailer to carry this stuff around.

Wed, 06/01/2011 - 21:25 | Link to Comment Clay Hill
Clay Hill's picture

Haha, beautifully said.

A very heavy box the size of a loaf of bread, but then the same applies to ammo. Depending on the situation, just as useful.

Wed, 06/01/2011 - 22:18 | Link to Comment XenoFrog
XenoFrog's picture

If someone like me can carry around 300oz without any trouble, maybe someone who has issues with that should consider investing in a gym membership instead of buying dehydrated chicken soup and buckshot.

Thu, 06/02/2011 - 01:23 | Link to Comment Burnbright
Burnbright's picture

Best comment in this tread.

Wed, 06/01/2011 - 22:19 | Link to Comment I_am_always_right
I_am_always_right's picture

I have a frog.

Wanna swap?

Wed, 06/01/2011 - 21:32 | Link to Comment Temporalist
Temporalist's picture

You can't eat a Picasso.

Wed, 06/01/2011 - 22:46 | Link to Comment Captain Benny
Captain Benny's picture

I was so close to Picasso's guitars in the MoMA this last weekend, that yes I could have probably eaten a Picasso.  I think I'd be quickly arrested and my stomach pumped... but I would have been the only human on the planet to have "eaten" a Picasso :)

Wed, 06/01/2011 - 19:28 | Link to Comment JW n FL
JW n FL's picture

http://en.wikipedia.org/wiki/Medical_uses_of_silver

http://www.doulton.ca/silver.html

 

I could go on but this should be enough for you to venture out on your own.. why silver has more uses to man kind than gold.. by leaps and bounds!

Wed, 06/01/2011 - 19:36 | Link to Comment DeadFred
DeadFred's picture

Thieves with metal detectors broke in a friends house while they were on vacation. Hiding their silver in behind the drywall and various places didn't help. Not sure what the answer is paint won't fool the detector. Neither will steel since good detectors can distinquish metal types. Put it in a bank vault and let it get confiscated?? This is the biggest downpoint to PMs IMHO.

Wed, 06/01/2011 - 19:51 | Link to Comment DosZap
DosZap's picture

Dead,

That was an inside job from the get go.

Wed, 06/01/2011 - 20:22 | Link to Comment PaperBear
PaperBear's picture

In the modern age most of the public in the western world have not the first clue about gold/silver. Decades ago it was different.

I am wondering where to put my stash once it gets really big.

A safety deposit box in a bank I am told would run the risk of the government decreeing everyone sell their PMs to the central bank and the bank personnel would be present whenever someone goes to their safety deposit box and look for PMs.

PMs are only 1% of the capital market but FDR did it to gold in 1933 so perhaps some people without PMs would think the decree does not affect them so they would not object.

Wed, 06/01/2011 - 21:33 | Link to Comment Mec-sick-o
Mec-sick-o's picture

Do it the old way... just dig a hole.

Mark the map with an X.

If you are paranoid, use one-eyed Willy booby traps.

Wed, 06/01/2011 - 22:45 | Link to Comment Long-John-Silver
Long-John-Silver's picture

PVC pipe and caps work great. Toss in a descant bag so moisture is absorbed keeping your Silver shiny and new. Add a cement cover topped with a nice planter and flowers.

Wed, 06/01/2011 - 23:24 | Link to Comment mt paul
mt paul's picture

five holes 

had to draw myself a map...

sent a copy to my executer ..

Thu, 06/02/2011 - 00:56 | Link to Comment Eternal Student
Eternal Student's picture

" and the bank personnel would be present whenever someone goes to their safety deposit box and look for PMs."

During the 1930's, it was a representative from the IRS.

Supposedly some Banks didn't bother with that formality. They just declared your account inactive and took what was inside. Even if you were current.

The latter has been happening in California today. Putting stuff in a safe deposit box is not safe. It attracts the attention of the professional thieves. The best thieves that money can buy, as attested to by Hank Paulson.

Wed, 06/01/2011 - 21:08 | Link to Comment XenoFrog
XenoFrog's picture

Don't let people know you hold silver. Unless thieves are randomly choosing homes to check with a metal detector, your friend screwed up and told the wrong person.

  • Store in a safe, attached to the foundation of your home in a way that makes it very difficult to remove. If it means they have to go rent a jackhammer, so be it. Make them work for it and its more likely they get caught or just give up.
  • Keep your mouth shut about what you have in pms. This may mean not spreading the news about pms to people, so be it. This is difficult to do because you feel empathy for people as we head into the end-game. Every person you tell about pms, now knows you have some and will spread that info to others.
Wed, 06/01/2011 - 22:03 | Link to Comment delacroix
delacroix's picture

if your house is on a concrete slab, punch a hole in the closet, bury a portion of your stash. pour a concrete patch, and cover with carpet. buy a $100 safe at lowes. or hdepot. set it over your closet stash. and put 100lbs of bricks in it.

Thu, 06/02/2011 - 01:51 | Link to Comment Troy Ounce
Troy Ounce's picture

 

What about building a real house with bricks and mortar rather than these carton boxes?

Thu, 06/02/2011 - 04:48 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

Sir, can I have your address? I'd very much like to come around for a spot of tea

Thu, 06/02/2011 - 09:51 | Link to Comment zuuuueri
zuuuueri's picture

I always thought a hilarious way to protect one's Au from being stolen would be to cast it all into a big brick, with a huge "24K" on the top, polish it up to an absurd look, glue green felt to the bottom and glue a clock or a tacky cheap lamp to the top. Nobody would ever believe it wasn't fake.

 

Wed, 06/01/2011 - 19:01 | Link to Comment breezer1
breezer1's picture

egon von getz said in an interview with james turk ( listen over at gata) that silver will never be used as currency by central banks because they don't have any ,whereas they do have lots of gold.  i guess we all may as well throw our silver away ...

Wed, 06/01/2011 - 20:16 | Link to Comment PaperBear
PaperBear's picture

The FRN must be used for public debt but the people can use whatever they want between themselves.

Thu, 06/02/2011 - 01:49 | Link to Comment Troy Ounce
Troy Ounce's picture

 

Your premise is that CB will call the shots in the future.

Thu, 06/02/2011 - 05:00 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

...so all the currencies of the world get backed by gold? Plus central banks hoard it? At what denomination would that be??

Hugo salinas price says mexico could back the pesso with silver by next year...

Wed, 06/01/2011 - 19:02 | Link to Comment hamurobby
hamurobby's picture

I agree, but there is a gap there that needs (is) filling, priced in frn's, and not everyone has a butt load of wealth to protect.

If you are trying to store alot of wealth, well it would be foolish to buy more silver than you can physically carry to the car.

 Buy Gold with the rest of it.

Wed, 06/01/2011 - 19:31 | Link to Comment hamurobby
hamurobby's picture

 "..And then there are other commodities, like frozen orange juice... and GOLD. Though, of course, gold doesn't grow on trees like oranges."

Randolf Duke. 

Wed, 06/01/2011 - 21:42 | Link to Comment Mec-sick-o
Mec-sick-o's picture

and frozen orange juice stays frozen.

Wed, 06/01/2011 - 19:19 | Link to Comment DosZap
DosZap's picture

I have both also, and I agree w/you.

As do a LOT of the BIG dogs in the biz.Lot's of disc on this topic on the Blogs of late.

If we stilll had a Democratic/Republic, and not a statist/fascist state in full throttle growth mode, I would feel differently.

Alas,sadly that feeling left in '08's election.I fully expect the STHTF when this puppy folds, or if, (really when) the kenyan ridgerunner gets re-elected.

I have issues w/ storage also,the sh** is heavy as hell.

Also, if one needs to exit stage left, (say like on a ship), you will be far better off hiding gold,and making it to wherever your going alive.

Wed, 06/01/2011 - 19:31 | Link to Comment equity_momo
equity_momo's picture

Check out >3 carat diamond prices too. Im too poor to get involved in that game but the Chinese have been piling into those stones as wealth preservers , not just to show off their nouveau money.  If youre not rich enough to be safe but not poor enough to not care , doing a runner to a new country with 1m in assets is easy if you do it in diamonds.....still , brave trade.

Wed, 06/01/2011 - 19:49 | Link to Comment hamurobby
hamurobby's picture

My brother inherited a "perfect", and I mean perfect, round cut 1.2c diamond. I told him the amount of wealth in a storm that that rock contains will do him no good if he needs to convert it in a pinch, to the prevailing currency. Gold by default, will always win. 

Wed, 06/01/2011 - 21:46 | Link to Comment Mec-sick-o
Mec-sick-o's picture

just try crossing 1m in physical gold to any country... in peace times.

Imagine doing the same while in the run.

Wed, 06/01/2011 - 22:43 | Link to Comment HellFish
HellFish's picture

Try reselling diamonds.  You'll get 10% of it's original cost.  Losing 90% is not a store of wealth.

Thu, 06/02/2011 - 02:53 | Link to Comment XenoFrog
XenoFrog's picture

I read a report once on a guy who bought a diamond engagement ring from a popular local store for $2,500. The next day, he had a friend return to the store and sell it back. The clerk (a different one) refused to offer more than $500 for it.

Gem stones are not investments, especially diamonds.

Wed, 06/01/2011 - 18:24 | Link to Comment Greeny
Greeny's picture

Hard to say what Silver is really worth.. All I can remember,

Nobody wants it long time in 2004-2009 in $14-$16 area.

I don't think that inflation since then rise 300%. The only thing

that keep us up so far is Worldwide currency doom and gloom.

Otherwise $20/oz Silver seemse reasonable. I have it since 2005 or so,

but I'm no way a buyer here.. Below $20 I'll get interested again,

if not, no problem I can live without it.

 

 

Wed, 06/01/2011 - 18:38 | Link to Comment Terminus C
Terminus C's picture

not likely you'll be interested any time soon.

Wed, 06/01/2011 - 18:27 | Link to Comment apberusdisvet
apberusdisvet's picture

I wonder when it will become common knowledge that there is, according to the Gov't geologists, perhaps only 20 years of silver left on the planet(at current rates of consumption, that is).  I wonder what the price will be in year 10, year 15, year 18?  What do YOU think, Hamy?

Wed, 06/01/2011 - 18:36 | Link to Comment PaperBear
PaperBear's picture

I heard it would be 2020.

Wed, 06/01/2011 - 19:45 | Link to Comment Transformer
Transformer's picture

Hamy sold all his silver

Thu, 06/02/2011 - 01:26 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

nice one, PB

Wed, 06/01/2011 - 18:42 | Link to Comment Terminus C
Terminus C's picture

could you cite that report?  Sounds a bit... fishy to me.

Wed, 06/01/2011 - 23:52 | Link to Comment CD
CD's picture

http://lmgtfy.com/?q=us+geological+survey+2010

This is really contrary to my intention, which is to try to compel you to look for this information yourself.

Read page 147. Note total global reserves, and annual mining production. Divide former by latter, and voila, you have the expected lifetime of existing silver reserves.

Wed, 06/01/2011 - 18:50 | Link to Comment Arnolds Love Child
Arnolds Love Child's picture

I think the world gold/silver production ratio for 2009 was 8.08. I think total US production for 2009 was 1250 tons. I think these assholes are terrified of what the remonetization of silver represents to their phoney criminal setup.

Wed, 06/01/2011 - 18:42 | Link to Comment Iam_Silverman
Iam_Silverman's picture

" 20 years of silver left on the planet"

But, if you listen to the peak oil folks, we will run out of the fuel to mine it wayyyy before then.

Wed, 06/01/2011 - 20:16 | Link to Comment hamurobby
hamurobby's picture

Well then, we will have to fuel mining with SWEAT, just like in the old days, five bucks an ounce id say, lol.

Trav, what do you think? peak oil by then?

Wed, 06/01/2011 - 21:38 | Link to Comment Temporalist
Temporalist's picture

You can just pay Methboy to dig it up for $5.  He'll be the only one still taking FRNs then.

Wed, 06/01/2011 - 18:28 | Link to Comment chubbar
chubbar's picture

it's pretty clear they are trying to control the PM's by strangling liquidity. First they use derivatives to cap them then they withdraw liquidity and crash the stocks. The capping serves to place doubt in the minds of PM buyers and the crash serves to chase them out of the market giving the PTB a chance to cover the derivatives and short sales. Rinse and repeat. The wild card is when physical gets too hard to deliver during the derivative phase. We are approaching the liquidity event and the PTB has to use ever increasing amounts of derivatives to cap the price. If they can keep the price captured until the liquidity event hits then they have a chance to cover. If not, they may not get the price down to a meaningful level to continue the game. Keep buying the physical. When they are forced to give up the capping it will be unknowable and you won't be able to climb back aboard the rocket.

Wed, 06/01/2011 - 20:20 | Link to Comment hamurobby
hamurobby's picture

Absolutely, the key factor is that central banks are now net buyers of gold, that was the tipping point. When it blows up from here is any one's guess. Whom ever is buying in large quantities, (including China) will not try to push prices from here for fear of creating a shortage, just like the past 40 years.

Wed, 06/01/2011 - 18:31 | Link to Comment Tunga
Tunga's picture

Its temporary in a transitory train of thought.  

Wed, 06/01/2011 - 18:38 | Link to Comment jmc8888
jmc8888's picture

Scotia Mocatta's no doubt toeing the company line...namely that everything's: "hakuna matata"

But as ZH points out....only for another (additional) few days

Glass-Steagall

Wed, 06/01/2011 - 18:35 | Link to Comment Enceladus
Enceladus's picture

Also notice that JPM added 720K oz.

Seems like the 'strong hands' from 5/1/11 dip took delivery EOM w/ their 100% margin

Wed, 06/01/2011 - 18:39 | Link to Comment DutchR
DutchR's picture

Just got my Philharmoniker today, €31,7 per coin

A lot better then my april Silver Eagle at €39,65 per coin

Funny thing is, they both ring true.

But paper, ok, burns better....

 

 

 

 

 

Wed, 06/01/2011 - 18:44 | Link to Comment Quinvarius
Quinvarius's picture

I wonder how many SLV shares got redeemed today in that paper hit.

Wed, 06/01/2011 - 18:48 | Link to Comment spanish inquisition
spanish inquisition's picture

Repost: seems a lot of people want silver.

http://community.nasdaq.com/News/2011-06/silver-eagles-sales-through-may-best-since-1986-turkish-silver-bullion-imports-surge.aspx?storyid=78536

Bloomberg reports this morning that Turkey imported 25.7 tons of silver in May, up from 61 kilograms in April, the Istanbul Gold Exchange said in a report on its website. This is a huge increase in demand and suggests that Middle Eastern demand for silver, which has not been noteworthy to date, may soon become an important catalyst for higher silver prices.

Wed, 06/01/2011 - 19:01 | Link to Comment Fancy Bear
Fancy Bear's picture

A zero intercept on the ordinate would be much more dramatic.

Wed, 06/01/2011 - 18:49 | Link to Comment Teddy Turner
Teddy Turner's picture

I love how people think gold and silver are going to save them.  The bastards control the money supply.  They can increase it or SHRINK IT.  They will do whatever screws you over best.  Either way WE LOSE.

Wed, 06/01/2011 - 18:54 | Link to Comment ffart
ffart's picture

Who will want to hold debt money when the debtors (the US taxpayer) default in mass because the money supply has contracted?

Wed, 06/01/2011 - 18:58 | Link to Comment Teddy Turner
Teddy Turner's picture

The banks will gladly take their housing and land and throw the people on the streets.

Wed, 06/01/2011 - 19:04 | Link to Comment ffart
ffart's picture

And the GDP would tank and bond interest rates would skyrocket and foreign governments would vomit their dollar FX reserves everywhere and the US government would default on the debt. Obama would have to panhandle for renminbi under a bridge somewhere.

Wed, 06/01/2011 - 19:14 | Link to Comment Teddy Turner
Teddy Turner's picture

Not when you can only buy oil in dollars.  When everyone was running for the hills in 2008 where did every go to.  That's right the dollar.

Wed, 06/01/2011 - 19:20 | Link to Comment ffart
ffart's picture

China and Russia is already setting up deals to trade rubles/renminbi for middle east oil. How do you think the dollar would fare through a nuclear exchange?

Wed, 06/01/2011 - 19:41 | Link to Comment Teddy Turner
Teddy Turner's picture

How are they gonna do that when the American empire militarily controls the middle east?  I guess WW3 is on the way.  And in that case buy buy buy all that you can get your hands on.  But until it's official I am cautious.

Wed, 06/01/2011 - 19:48 | Link to Comment Transformer
Transformer's picture

But what happens when the empire runs out of money, or similarly, that money is of little value?  It has happened over and over again through history, empires expand their military, until it breaks them.  Sometimes, another strong country is there to bail out the empire, like we did Britain.  There is no country standing by to bail us out.  Likely, it just ends one day, as did the USSR, when nobody is fooled anymore. 

Armies have to eat, need medicine, clothing, water, etc.  It all costs money.

Wed, 06/01/2011 - 20:32 | Link to Comment Teddy Turner
Teddy Turner's picture

You're not listening.  When WW3 happens buy, but until then be cautious.  This empire will roll over anyone in it's way.  It's not going to collapse, It could be the first ever to succeed.

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