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SilverSeek.com
reports that BIS admits $190 billion silver fraud.
(emphasis mine) [my
comment]
BIS
Admits $190 Billion Silver Fraud
By: Jason Hommel, Silver Stock Report
-- Posted 6 April, 2009
(Almost, if you know where to look!)
Silver Stock Report
In the past, I've pointed out various frauds in the silver market such as,
the excessive futures contracts on the COMEX, the excessive trading in
"London" silver, and the excess silver in the new ishares Silver
ETF, SLV.
In 10 years of reading and writing and searching, I've never known the
numbers of paper silver in the OTC "Over the Counter" market until
a reader informed me, just today.
This is directly from the BIS, the Bank of International Settlements. This is
good data.
http://www.bis.org/statistics/derstats.htm
At the link above, see
21 Amounts outstanding of OTC single-currency interest rate derivatives
"21C By instrument, maturity and counterparty"
That's this link:
http://www.bis.org/statistics/otcder/dt21c22a.pdf
See the center middle column towards the bottom, under "Other
Precious Metals", which excludes Gold. This would be Silver,
Platinum, and Palladium. We can exclude Platinum and Palladium as nearly
irrelevant, because those markets are much smaller than silver, and very few
people hold paper instruments of that type. Furthermore palladium is much
like silver in that the market is dominated by industrial demand, and
investor demand is less than 5% of the market.
The number of "Single currency interest rate derivatives in other
precious metals (SILVER)" from June 2006 to June 2008, in two short
years, more than doubled:
From $84 billion to $190 billion!
That's about 40 times larger of a fraud than I had thought.
This is serious news. This is original reporting. Will any other news agency
cover it? Probably not.
How much new paper silver is that?
Well, the physical silver investor market annual demand is about $1.3 -$2
billion per year! And yet, they sold $100 billion in new paper silver in the
span of 2 years, which is over
50 times as much paper silver as exists in the world annual physical silver
investment market!
Previously, I had written and exposed that one or two banks sold, over the
span of about a month, 130 million ounces of silver at COMEX to depress
silver prices, which is only 1.3 times as much as annual investor demand.
I'm shocked at the figures. Most people who are thinking that they are
"buying silver" are still just trusting banks and brokerage firms
that have no silver.
Real silver investment demand has therefore not yet really begun, because
those banks have not bought any silver. Just wait. It's going to get
absolutely crazy.
I just watched a History Channel show last night on the Madoff Scandal. This
is nearly 4 times as big! It's the same kind of Ponzi scheme, as they have
not bought the real silver that they owe their clients.
People kept saying that the Madoff Scandal was the biggest Ponzi scheme in
history. It wasn't. The biggest is not even this silver scandal. It's paper
money; that's also a Ponzi Scheme!
I know many people who have most of their wealth with the brokerage
houses, and just "some" of their assets "in silver" with
the same firms. It's time to pull 100% of your assets out of those firms [Agreed].
Put most of it, if not all of it , into silver first, palladium second,
and gold third [A silver dealer will have a bias towards silver. I
personally believe gold first, silver second, palladium third (most people
don’t know what palladium is). However, I expect all precious metals to
do very well.]. Let the diverse metals be your diversification.
Spread it around in several locations if you have a lot. Buy the vaults you
need to protect it.
Buy it now, when the silver market is relatively calm, when silver is
available.
We offer about $78,000 worth of physical silver at auctions nightly at
seekbullion.com. And it's available for immediate delivery, unlike many of
our competitors who offer silver for delayed delivery.
Below is a
screenshot of the BIS report mentioned above.
My reaction: I own both silver and gold. I believe both metals will do
well. Points to take away from article above:
1) COMEX gold (and silver) futures makets are tiny in comparison to the OTC
derivative market for precious metals.
2) Notice the large amount of call options for precious metals. These options
were not written by producers, who have been closing down their hedge books.
3) There is a lot of data missing from data above. (gold leases aren’t
included in numbers above, for example)
Conclusion: Central banks (mainly the fed) are on the short side of
gold/silver derivatives, either directly or indirectly. That is to say, even
if the fed didn’t write the 400+ billion call options on gold, it will
most likely have to bail out the banks which did (JPMorgan, etc…).
Eric de Carbonnel
Market Skeptics
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