I'm going to take a few minutes of your time and walk you through the July Bank Participation Report.
In silver you will notice that 'X' number of U.S. bullion banks are long 257 Comex contracts and short a whopping 31,803 Comex contracts. As the numbers show... the 257 long contracts represent 0.2% of total Comex silver open interest which is stated here as 118,962 contracts. The 31,803 short contracts represents 26.7% of total open interest.
But what the silver numbers doesn't say is how many U.S. banks hold those positions. The CFTC used to publish them, but once Ted Butler discovered the Bank Participation report and started to write about it, the bullion banks screamed bloody murder, so the CFTC changed the report so that if there are less than 4 U.S. banks holding either a long or short position... the number is not shown. They don't show the number of non-U.S. banks either, because if they did... by the process of subtracting that from the total number of banks involved, you could figure it out all by yourself, dear reader... and we mustn't have that now, must we?
From past historical BPR data, the number of U.S. banks has pretty much always been two... and I see nothing in these numbers that indicate that this has changed. I can also pretty much say that 95% [or more] of that 31,803 Comex contracts held short... is held by JPMorgan... and the other 5% [or less] is most likely held by HSBC USA. So if you subtract 0.2% from 26.7%... you will see that JPMorgan and HSBC are short 26.5% of the entire Comex open interest in silver... and if you take out all the market-neutral spread trades... that shoots the percentage to well over 30% of the Comex silver market that is held short by these two banks. Any questions so far?
Looking at the six [8-2=6] non-U.S. banks' Comex silver positions... they hold 2,284 long positions and 614 short positions... for a net long position of 1,670 Comex contracts. This represents 1.9%-0.5%=1.4% of the total Comex open interest in silver.
Two U.S bullion banks are net short 26.5% of the total Comex open interest in silver... and 6 Non-U.S. banks are net long 1.4% of the total open interest. Who controls the silver price on the Comex, dear reader.
I'll leave gold up to you... which is a couple down from silver. There are 4 U.S. bullion banks here, so they show all the numbers. But even a cursory glance shows that the 4 U.S. bullion banks are net short 137,756 Comex contracts in gold [13.77 million ounces]... which represents 23.8% of the entire gold open interest on the Comex. And I'll bet you dollars to doughnuts, dear reader, that 95% of that 13.77 million ounces is held short by Morgan and HSBC. The 14 non-U.S. bullion banks are net short a whole 6,253 Comex contracts... which is 1.1% of total Comex open interest.
So, once again, 23.8% of the entire Comex open interest in gold is held short by two U.S. banks... the other two banks are virtually immaterial. But 14 non-U.S. banks are net short 1.1% of the total Comex open interest. Who controls the price?
This is a JPMorgan operation from one end to the other. But in all fairness, JPMorgan is only the executioner. They receive the order to swing their axe from either the Federal Reserve, the U.S. Treasury... or both. It's as simple as that. Then the boyz at Morgan pick up the phone, call the other bullion banks, set up the date and time... and then collectively pull the trigger... just like they did yesterday... and July 1st. That's all there is, dear reader... there's no more to it then that.
Nice analysis and commentary. I have only one question: WHY?? Why are the major U.S. bullion banks, particularily JPM, so heavily short silver?
Does it make sense for the Government to fear high PM prices? Total value of AU/AG is such a small % of world wealth, maybe 1-2%, it seems trivial to even be concerned what the prices really are. What am I missing??
silver, not gold, is the preferred precious metal medium of exchange for everyday purchases. In this regard it is a direct competitor with the $. Remember the liberty dollar mint the feds raided a couple years ago? That was silver.
Gold is the preferred precious metal medium for saving wealth. I would argue that silver leads gold rather than gold leads silver.
The higher silver goes the more useful it becomes as a dollar substitute.
You are starting to see some grocery stores and gas stations accepting silver.
Because silver is more common than gold, the sheople have a chance of becoming familiar with silver as money again. Familiarity is a big part of what everyday money is all about. Most sheople really have no chance of becoming familiar with gold ... to be honest, in all of history, they never had, it wasn't for them.
Silver is the keystone of power, whoever controls it controls the familiarity bias, which means they control the money, right now the banks control that keystone.
The government manipulates PMs to keep the dollar strong. They can print infinite paper dollars, but PMs are limited. You can't just create another trillion dollars worth every time you feel like it.
The printing press is our governments biggest weapon.