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Silver: Is it the LBMA's Greatest Rig?

Discussion Jay Taylor and David Jensen on January 7, 2015

Topics

1) UK intends to criminalize manipulation of gold, silver, crude oil, interest rate manipulation

http://www.thestreet.com/video/12892447/uk-to-criminalize-manipulation-of-seven-benchmark-rates-before-election.html

  • by definition, trading of virtual gold and virtual silver to create large virtual positions of non-existent metal held on the LBMA manipulates the gold and silver price

  • institutions and sovereign investors have relied on the LBMA to create gold and silver positions held through the LBMA

  • creation of these non-existent gold and silver positions creates supply to market of metal that does not exist and by definition distorts the pricing of gold and silver

  • unravelling of this leveraged structure will occur and will lead to a market failure to deliver through the LBMA

  • daily gross gold trade volume in November 2014 at the LBMA is 207M oz. using LBMA's 10x net cleared volume vs daily gross trade volume based upon the LBMA's market survey report: http://www.lbma.org.uk/assets/Loco_London_Liquidity_Surveyrv.pdf

  • keep in mind that the LBMA asserts London trades 85% of daily global gold trading volume & the LBMA has an implied open interest of 400M to 600M oz of gold (much of which is not extant and can't be delivered) - London appears to steer the world's physical gold price by creating this non-existent virtual supply of gold

  • the virtual market rig only works until the small fraction of available metal is removed from the market thereby collapsing such a scheme

  • Greenspan states that gold is a premier currency stronger than all paper currencies

    • deflationary impact historically is that money (gold and silver) buys more goods

  • economic models promoted by central banks of inflation creating growth is snake-oil

    • central banks printing money to hide deflationary collapse created by excess debt

    • need to manipulate the gold price to hide the ongoing deflationary economic collapse due to removal of gold from the monetary system as John Exter (Fed Board of Governors) predicted would occur leading to currency failure and hyperinflation


2) Closer look at silver - is it the LBMA's greatest rig?

http://www.lbma.org.uk/Clearing-Statistics

  • silver is historically the daily monetary medium of exchange for enterprise while gold was used for larger transactions

  • new daily silver fix provided in part by Reuters - a traditional propaganda arm of UK Gov

    • why is UK government maintaining implied connection?

  • daily net cleared volume 172.3 million oz. in November 2014

  • using the LBMA's 10x gross trading volume vs net clearing volume estimate, London trading 1.7 billion oz per day gross trading volume

    • using 2x multiplier, 3.4 billion oz. silver open interest at the LBMA

    • using 3x multiplier, 5.1 billion oz. silver open interest at the LBMA

  • annual global silver supply (including 800M oz of mine supply) is estimated at 1 billion oz.

  • global refined silver stockpiles are estimated at 1.2 billion oz. of silver (including ETF holdings; note: CPM group estimates global silver stockpiles at 0.9 billion oz in 2014)

    • many ETF's have issued disclaimers that they cannot guarantee metal held by sub-custodians

  • artificial supply of silver appears to be created at the LBMA far exceeding global stockpiles of refined metal

  • it is a pain to take delivery of gold and silver but lifeboats are also considered a pain by ships' captains because they are bulky and take up deck space

  • beware the salesmen saying "everyone needs gold - but don't buy gold, buy paper" http://video.cnbc.com/gallery/?video=3000342885


3) Currency 'Wars' - Not

 

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