Silver Whistleblower Interview on King World News

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Silver Whistleblower Interview on King World News

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/30_Andrew_Maguire_%26_Adrian_Douglass.html

100 to 1 paper to physical. Andrew Maguire talks about wealthy Asians waiting for the right moment to take down the naked short sellers of Silver and Gold.

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Re: Silver Whistleblower Interview on King World News

This could be really big.  The leverage is said to be 100 to 1.  Once asians and non-believers have done their due diligence, they will establish in their own minds that this is a naked short situation and squeezing is called for.

I'm sure others understand this better than I, and I hope they post.

It seems to me the way to play this is to buy physical metal and miners.  One wouldn't want a cash settlement.  One would want the real metal, or if not that, a miner.

What do you think?

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Re: Silver Whistleblower Interview on King World News

Good point made in the interview. 

If just ONE sovereign steps in on the physical OTC market and buys up big during a takedown, they'll expose (intentionally) the massive naked shorting, cause a naked short squeeze (is there any worse type?) and blow the COMEX and LBMA to pieces. 

 

The silver market is very small, thus easy to manipulate. But that sword cuts both ways. 

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Re: Silver Whistleblower Interview on King World News

Incredible interview, zeroenergy!!

-pinecarr

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Re: Silver Whistleblower Interview on King World News

Listened to this at work. No wonder the IMF wouldn't or couldn't sell the gold they had to Eric Sprott. There was another hedge fund manger who only got 100 million in his ETF Gold fund ipo earlier. Not sure if this is all part of it, but I wonder if the whole economy could collapse under any government willing to take it on. Or wether the whole world can continue this manipulation? Time will tell. Something big could happen this year!

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Re: Silver Whistleblower Interview on King World News

CFTC whistleblower injured in London hit-and-run

http://www.goldnewswire.net/cftc-whistleblower-injured-in-london-hit-and...

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Re: Silver Whistleblower Interview on King World News

From here on in its not just about trading the chart technicals.. Do that as well.. Even jump on some of these (short) manipulations (iam sure they will continue as the traders will be arrogant enough to not give a shit about this exposure).. But keep physical silver and gold.. Dont sell it cause you may never be able to get it back.. (for todays prices) This is a genuine supply crunch. As a game plan if the market gets smashed on the next deflation simply buy more physical.. Andrew Maguire is a great bloke.. He is doing the right thing.. Like he originally said "i feel sorry for those people not in the loop".. Well now we are in the loop.. The next silver break out  will be breathtaking..

100 to one is like adding another zero to the current price..

Iam absolutely shellshocked by that interview.. This is a war and the naked shorts are gonna lose.. Prepare for the Asian invasion!!

Regards

West

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Re: Silver Whistleblower Interview on King World News

 

 Denninger, smart guy but hates PM's has noticed the action....

 http://market-ticker.denninger.net/archives/2138-Dont-Invest-In-Ridiculously-Rigged-And-Thin-Markets.html

 Got popcorn ?

 http://www.youtube.com/watch?v=6k77IPLNlEo

 I'm hedging.. got PM's and popcorn... (stores well !)

 

 Ethical reasons to invest in silver - bearing in mind Chris's mineral depletion info..

 it's going to be more useful in the future.. it's running out.. so - save current production... instead of letting it be wasted while it's artificially cheap..

 

 http://www.youtube.com/watch?v=HGPvVjfNYgs

 

 

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Re: Silver Whistleblower Interview on King World News

FWIW, I made another silver purchase today (prolly my last as other preps will soak up excess cash for the forseeable [and I'm now 50/50 gold/silver]) and my very reliable and trustworthy coin shop upped their price from spot +6% to spot +12%.  They say the supply (of silver eagles) is tighter than it was...

YMMV.

Viva -- Sager

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Re: Silver Whistleblower Interview on King World News

 For me it's a confluence of factors,

1) it's useful, if I drop a .999 pure coin in a container of water (or milk) it kills bacteria.. the milk stays fresher.. (hence the "wishing well" superstition -- like: "I wish... i don't get dysentry")

2) It's depleting.. Peak oil + peak minerals + disposing of reserves.. = Peak silver production.

3) It's historical money..  if you look at the words... "dollar" and "sterling" .. you're looking at a definition in terms of silver..

4) It kills werewolves...never met a lycanthrope personally.. but hey you can never be too careful.. :o)

 ( if the colloidal silver ppl are right, it kills a lot of other nasties too.. )

5) It's well below it's all time high... if David Morgan's graph is right.. WELL below.. and I'm big on history.

6) it does well in both of Dickens' "tale of two cities" scenarios.. "it was the best of times, it was the worst of times.."

 7) It's magic must be very powerful ... if the wicked witch wants to control them so badly..

 

 

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Re: Silver Whistleblower Interview on King World News

Very interesting interview. Not only are the prices of PMs being suppressed but information is also suppressed as all pre-arranged media (TV) interviews with GATA participants at the CFTC hearing were cancelled. The only source outside of the web I could find was the New York Post, which from the online edition looks like a bimbo rag.

http://www.nypost.com/p/news/business/jpmorgan_chase_story_in_uk_DsMN4PnXFoQG5KdevIsQ7N

In the UK the Financial Times reported the pendingCFTC hearing:

http://www.ft.com/cms/s/0/a8fed910-2171-11df-830e-00144feab49a.html

but seems not to have followed up with the explosive information that paper levers physical by 100:1.

I don't see any sovereign entity taking down this market as that would likely make September 2008 look like a mere ripple. Truly this has the potential to totally collapse the global fiat currency system and all governments are to a greater or lesser extent in the same boat.

 

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Re: Silver Whistleblower Interview on King World News

What's the short-term fix and how can we position ourselves to profit from the fix and the ultimate recogning?  Simply acquire and hold physical silver?

We all know that the powers that be will simply kick the can down the road a bit, rather than allow a total collapse (i.e. "this is a national security issue").  If "no regulator can stop it" as they state in the interview, what is the timeline.

By the way, the 100:1 ratio was a "for example".   They don't really say how bad the leverage is.

Edit:  They do say definitively that the ratio is 100:1 towards the end of the interview.

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Re: Silver Whistleblower Interview on King World News

I was surprised that there was no mention of the hit & run. My impression was that the interview was done after the incident, but perhaps not.

The 100:1 stuff is based entirely on Jeff Christian's comments in the CFTC hearing and IMHO is taken somewhat out of context. But net net, it still makes the important point that there's a big disconnect between paper and physical.

Erik

 

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Re: Silver Whistleblower Interview on King World News
Erik T. wrote:

I was surprised that there was no mention of the hit & run. My impression was that the interview was done after the incident, but perhaps not.

My impression was the same, but I was curious rather than surprised. IMO Andrew requested that it not be discussed. The other driver has been apprehended and in due course a court date will occur. Whether we will learn more remains to be seen.

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Re: Silver Whistleblower Interview on King World News

A couple more articles on the subject:

CFTC Commissioners Gone Wild

http://seekingalpha.com/article/196324-cftc-commissioners-gone-wild

Fun With the CFTC

http://seekingalpha.com/article/196158-fun-with-the-cftc

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Re: Silver Whistleblower Interview on King World News

Interesting that none of this information has moved the market for gold and silver (yet)

any thoughts on how soon we may see some impact to the spot price for gold and silver. (if any)?

 

Ken

 

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Re: Silver Whistleblower Interview on King World News

the spot price of "physical" (tm)... ( as defined by.. )  no idea..

 the true value.. is what it is.. scorned or adored.. it is what it is..  cf: I am, what I am...

 what's the spot price of plato1965 ? unknowable... not for sale..

 If we truly understood real vs perceived  values as a function of time.. , investing would be easy...

 

 

 

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Re: Silver Whistleblower Interview on King World News

zeroenergy21 - thanks for the great dig from King World News.  I thoroughly enjoyed the interview and immediately suspected that prices would rise.

Ken C wrote: 

Interesting that none of this information has moved the market for gold and silver (yet)

any thoughts on how soon we may see some impact to the spot price for gold and silver. (if any)?

Great questions...as I write this, silver is flat and gold is slightly down...what gives?  One would think that the heavy hitters must be all over this and rushing for the remaining physical.   What's up with the MSM not covering this story? 

In the interview there was mention that "cash settlements" could be offered in lieu of delivery.  Is extortion happening behind the scenes?

Many of our fine CM contributors have questioned the 100:1 ratio...subtle but a powerful point.  

Thank you Chris Martenson, many of us followed your lead, we're heavy in PMs and it continues to pay off.

Larry 

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Re: Silver Whistleblower Interview on King World News

Failure to deliver has been reported to have already occurred on the LBMA last September.

http://news.goldseek.com/GoldSeek/1255111200.php

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Re: Silver Whistleblower Interview on King World News

Notice the names involved in the failure:


Quote:

The unexpected immediate demand for substantial tonnage of gold bullion created utter panic in at least two banks who were counterparties to this trade – J.P. Morgan Chase and Deutsche Bank – because they simply did not posses the gold bullion which they had sold short [an illegal act which in trading parlance is referred to as a “naked short”].

and notice that there was reportedly a problem with the metal itself:


Quote:

Earlier this week, no less than two Central Banks became involved in effecting the physical settlement of this situation.  One of these Central Banks was British [that would be the Bank of England] – and reportedly, even they were only capable of providing less than pure, non-compliant gold bars that did not meet good delivery standards stipulated by the LBMA.  Like it or not, this is a testament to lack of physical gold available, folks.

  (wonder if perhaps some of those bars had a little something besides Au underneath their golden skin...)

I think I remember this being discussed here at the time... and wasn't there another set of posts in the past few weeks about an institution that was modifying the terms of its agreement with clients - saying that cash settlement was an option if physical metal was unavailable? and then they said that no, no, we didn't mean to imply that we would ever have any problems delivering the physical element...

While the tungsten story seems a bit out there, in the context of a market where people simply claim to have gold and sell paper vouchers on it into the market (but keep "it" 'safely stored' in their secure vaults) such a product might be very handy in a panic market where checking and tracking standards might not be quite optimal...

Say Larry - is everyone here stuck on heavy metal? what about good ole rock and roll?

Seriously, if this situation began to get out of hand maybe a decision would be made once again to make holding gold illegal...

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Re: Silver Whistleblower Interview on King World News


Quote:

...because they simply did not posses the gold bullion which they had sold short [an illegal act which in trading parlance is referred to as a “naked short”].

I invite anyone so inclined to cite a regulatory reference to support the assertion that a naked short in the futures market is an "illegal act". I'm presently short a whole bunch of stuff I don't actually own in the futures market and am not aware of any such regulation. In my "trading parlance", it's known as an entirely legal and quite routine short futures position.

The hyperbole and exaggeration in the metals discussion is rather amazing.

Erik


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Re: Silver Whistleblower Interview on King World News

These people agree with you Erik

http://www.kitco.com/ind/nadler/oct212009.html

Quote:

The market continues to be inundated with allegations of dastardly deeds and imminent collapses in orderly functioning. Intrepid Dow Jones reporter Simon Constable found one large piece of tinfoil littering the ‘Internets’ and set out to lift the veil of (non-existent) mystery from it all:

“A recent gold market conspiracy theory detailing nefarious activities by big bad banks should be dismissed as bogus.

The piece, by Rob Kirby published Oct. 9 on the popular GoldSeek.com Web site, stated "utter panic" broke out in London when certain banks that made "illegal" short sales of gold futures quickly found themselves unable to fulfill their obligations. The reason: Their customers demanded physical delivery of the metal. A shortage of metal in London meant that the banks needed to pay a premium above spot prices to buy metal in the spot market. Eventually, the Bank of England got involved, the piece states.

Kirby cites "impeccably reliable sources." He doesn't name them, though. The short takeaway: It's rubbish. Still, there was enough gold-market-specific jargon in the column to bamboozle a normally skeptical friend into thinking it might be true. That's a shame because there were clues contained in the text to signal its falseness as well as the author's lack of knowledge of how gold is traded. "They have absolutely no clue how the market actually functions," says Jon Nadler, a gold market analyst at Montreal-based bullion dealer Kitco.

I sent Kirby an email, but he didn't reply. There are too many off-target comments to detail in my column so I'll only dissect a few. A passage in Kiby's column says, "...they simply did not possess the gold bullion which they had sold short [an illegal act which in trading parlance is referred to as a "naked short']."

It's not illegal to sell futures contracts when you don't own the underlying commodity. In fact that's completely normal. Naked shorting is a stock market phenomenon not a futures market one. Kirby continues "...a number of well-heeled market participants 'bought' substantial tonnage worth of gold futures on the London Bullion Market [Association]."

That's curious because the LBMA is an over-the-counter market where forwards are traded, not futures. Gold futures are traded on the Comex division of the Nymex in New York. And then there's this from Kirby:  "...these banks did not have the bullion to honor their contracted commitments, [so they asked if they could settle on a] "cash basis."

There is so much gold in London vaults at present that the idea of not being able to deliver gold is silly," says Jeff Christian, gold market veteran and managing director at New York-based commodities research firm CPM Group. Silly, indeed.”

The Ministry of Silly Talks would certainly approve. Folks, use mental floss at your own risk.

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Re: Silver Whistleblower Interview on King World News

I could have sworn there was a difference between selling short. amd selling naked short.   (and i mean this lightly, cause I very well could be backwards or something)

One being what you do Erik, and the other involving selling an item, in this case silver, at a leveraged rate of 100-1.....in other words, They do not have physical ownership, yet they still sell it into the market as though they can make good on delivery (when in fact they cant)..

This is something that has been talked about for a long while, about the ETF paper markets being mostly crap, The big difference now is we have someone trying to blow the whistle on it. I dont see how this couldnt be big, AND, at least this guy is willing to talk.

(also, silver has gone up to 17.5 spot in the last 48hours......fairly fast rise, but the question is will it stay...)

 

Mike

 

 

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Re: Silver Whistleblower Interview on King World News
that1guy wrote:

I could have sworn there was a difference between selling short. amd selling naked short.   (and i mean this lightly, cause I very well could be backwards or something)

One being what you do Erik, and the other involving selling an item, in this case silver, at a leveraged rate of 100-1.....in other words, They do not have physical ownership, yet they still sell it into the market as though they can make good on delivery (when in fact they cant)..

This is something that has been talked about for a long while, about the ETF paper markets being mostly crap, The big difference now is we have someone trying to blow the whistle on it. I dont see how this couldnt be big, AND, at least this guy is willing to talk.

(also, silver has gone up to 17.5 spot in the last 48hours......fairly fast rise, but the question is will it stay...)

Mike

Mike,

As the excellent Kitco piece above said, what's going on here is that some pretty ignorant people are throwing around terminology they don't understand, and are coming to some pretty stupid conclusions as a result. I can certainly see how you and others have been confused, since unless you actually trade these markets the terminology can get quite confusing.

For the record...

An illegal naked short is a term that applies to the stock market, not the futures market. In order to sell something on the stock market, you have to have it first. (Or better stated, in order to sell something legally on the stock market, you have to have it first). To sell shares, you have to either own them (sell to close) or borrow them from someone else in order to open a short position (sell to open). An illegal "naked" short is when you sell shares you don't own and haven't borrowed. It's supposed to be impossible but it happens every day and the SEC is asleep at the switch as usual.

When we talk about the futures market, it's important to understand that the whole point of the futures market is to trade FUTURES - contracts promising to buy or sell things that we and our counterparties don't yet have. For example, when you buy December 2011 Wheat Futures, the seller obviously doesn't have the wheat yet. His intention is to grow the wheat between now and then, and he's doing the selling now to lock in a good price in case the economy tanks after he plants his seeds. So it's regular and normal to sell stuff you don't own in the futures market, and that's the whole reason it's called the futures market.

I forget the exact statistics, but the vast majority of futures contracts traded are never delivered. For example, that farmer who sold Wheat futures is probably not going to transport his wheat to Chicago to deliver on the futures contract. Instead, he waits until harvest time, then buys back the futures contract (closing his position) right after he sells his wheat locally on the spot market. The purpose of his futures trade was to offset his actual sale price (up or down) to lock in the net price that prevalied when he first sold the futures contract.

Quote:

.....in other words, They do not have physical ownership, yet they still sell it into the market as though they can make good on delivery (when in fact they cant)..

Mike, the basic issue here is that you've been completely misled by some people who should know better but who fundamentally don't understand the functioning of the futures market and who choose to flaunt their ignorance rather than educate themselves. Nobody is sellng anyting "as though they can make good on delivery"! They are selling futures contracts in the most common and normal manner of selling futures contracts, which is to say that they sell them with the intention of closing the positions before the first notice date, and settling in cash. That's how the futures market is intended to operate, and nobody is doing anything sleazy or inappropriate by selling futures contracts when they don't own any metal.

The 100:1 comment made by Jeff Christian was taken completely out of context and misrepresented as having great relevance when it never did. Just as the vast majority of wheat contracts are closed out and settled in cash before they expire, the same is true for gold and silver. In that sense, it's certainly true that (at most) 1 out of 100 metals contracts bought or sold ever get assigned for actual delivery. That's perfectly normal, and I would even go so far as to say that anyone trying to make a big deal over it fundamentally doesn't understand the market and you'd do well to ignore anything else they have to say about any aspect of metals trading. GATA is loosing credibility fast in my book.

Best,

Erik

 

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Re: Silver Whistleblower Interview on King World News
that1guy wrote:

(also, silver has gone up to 17.5 spot in the last 48hours......fairly fast rise, but the question is will it stay...

I meant to cover this in my last post but forgot...

There is absolutely no reason to conclude that the move up to 17.50 in Silver had anything to do with this hearing. You gotta pay attention to the charts, not the rhetoric. Gold, Silver, and to a lesser extent, equity futures all moved up coincident with a big move down in the dollar index. That's why the move up.

Erik

 

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Re: Silver Whistleblower Interview on King World News

Thanks Erik,

Well I had a feeling i had something backwards.....and i did, LOL.  So it seems to me, that for the most part futures contracts is a bet more on price of the item rather then said item, although if one chose to, they can take delivery for said price. Sounds to me like this market is naturally leveraged to some extent....hmmm, this leads to another hypothetical question...

If the leveraging within the futures, or more specificly, PM's is inffact so high couldnt even the smallest percent of people actually taking delivery still cause a default? (grant it  this seems to be more of a grey area rather then illigal....)

SIDE QUESTION since i got the first concept backwards--Defaulting in futures is infact a non delivery of product or cash right, which every the holder chooses?

 

Am I close?

Mike

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Re: Silver Whistleblower Interview on King World News

In terms of the CFTC here are some points from the latest Jason Hommel article.. To clarify point 9

1.  A CFTC commissioner asked:  Why are there exemptions to position limits granted to "bona fide hedgers"? 

 

2.  CFTC asked:  What is the difference between a bona fide hedger and a speculator, when one reason to hold gold and silver bullion is to hedge against the inflation of the dollar?

 

The day started with a startling admission:  There is no enforcement of position limits unless they are excessive, which is defined if there are "sudden and unwarranted changes in the price".  CFTC asked their own DMO if that has happened, and the answer was, "Yes, it was volatile in 2008", I believe in reference to silver.

 

3.  Even more shocking:  CFTC asked:  If an entity has an exemption to position limits, and they are under "accountability levels" then what happens when they exceed those accountability levels?  (Answer, the Division of Market Oversight (DMO) does nothing, and nor does it sanction such activity by doing nothing.)

 

4.  CFTC asked, "What justifies exceeding the accountability levels"?  The CFTC's DMO answered, "nothing".

 

5.  Bart Chilton even said that hiding the names of the large traders that have such exemptions leads to less transparency, which is not the goal.

 

6.  It was pointed out that revealing the names of market participants is prohibited by statute.

 

7.  But Chilton pointed out that if they are so large that it reveals who the trader is, then that kind of proves that there is an "issue"!  I almost applauded.

 

8.  Chilton pointed out that current position limits appear to be like speed limits on a dark desert highway that nobody enforces.

 

9.  The DMO pointed out that the largest ETFs do NOT hold futures contracts

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Re: Silver Whistleblower Interview on King World News

Here is Jason Hommels opinion of Jeff Christian trying to protect his baby from criticism..

(Before I start, I should note that Jeff Christian should be nominated both for the Moron of the Year Award, and also for the "worst and most unconvincing liar award."  I note he claimes to have helped pioneer the invention of the futures contract, so it seems like he's trying to protect his baby from criticism.  He also gathers the industry statistics on silver supply/demand, which is what you would need to walk this tightrope of trading futures safely, and yet, while the fundamentals appear wildly bullish, it appears he earns his money from the short side of the street, working for the shorts, and being one of their apologists.  Clearly, they can afford to pay more.  If you could say the silver market fraud is not a conspiracy, but rather it must be the actions of one insane main, it would be him -- but he's probably not short himself, but long.  I think he's both a deceiver, and a rather deceived and pathetic character in this amazing drama of our age.)

Sorry last post forgot to include link

http://www.24hgold.com/english/contributor.aspx?contributor=Jason+Hommel&article=2770694054G10020

West

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Re: Silver Whistleblower Interview on King World News
that1guy wrote:

If the leveraging within the futures, or more specificly, PM's is inffact so high couldnt even the smallest percent of people actually taking delivery still cause a default? (grant it  this seems to be more of a grey area rather then illigal....)

You're exactly right that if all of the longs (people who bought contracts) suddenly opted for physical delivery rather than closing their positions for cash settlement, there could be a shortage of actual product (be it metals or anything else) and there would be a failure to deliver. In that case there would be a forced cash settlement declared by the exchange: People who wanted to take physical delivery would have to settle for cash equivalent to the price at expiration instead of taking actual delivery.

But there's no great conspiracy here and nothing unique to the metals market. Think of this as akin to fractional reserve banking. If every depositor suddenly tried to withdraw all their funds, the bank wouldn't have the money. The classical run on the bank. But in regular and normal times, the reserves on hand are adequate to cover routine withdrawals. There has to be a fallback plan if the unexpected happens and more people want to withdraw (or take delivery) than there is supply available. In the case of banking, the fallback is FDIC insurance. In the case of the futures market, the fallback is cash settlement. The rules are spelled out in the exchange rules and all competent futures traders understand that if they elect to take physical delivery - which is actually an unusual occurrence - it is possible there will be insufficient product and a failure to deliver resulting in forced cash settlement. It's just part of the game.

Again, nothing about this is unique to metals. For example there might be far more open interest (contracts outstanding) in wheat than the actual size of the crop. Most of the longs were speculators who close their positions and prefer to settle in cash before expiration, so by the time the contract expires, most contracts have been closed out and only a few are actually settled through delivery. If all the longs suddenly and unexpectedly demanded physical delivery, there wouldn't be enough to go around and a fail to deliver and cash settlement would be the result.

that1guy wrote:

SIDE QUESTION since i got the first concept backwards--Defaulting in futures is infact a non delivery of product or cash right, which every the holder chooses?

Am I close?

Not too far off. First of all, some futures contracts are cash settled, for example the dollar index. For those contracts, nobody takes physical delivery ever - it's not even allowed (or possible in the case of an index like the DXY). For contracts where physical delivery is an option, the contract has something called a First Notice Date - a deadline by which you always have the option to close out the contract (settle in cash) and be done with it. Once the first notice date has come and gone, a short position can be assigned meaning it is matched up with a long that has indicated it wants to take physical delivery. After that date you are in default if you don't deliver the physical goods by the delivery date. But so long as you close the position before the notice date, the deal is done and delivery is never expected or required.

Also, FYI, the vast majority of futures brokers don't even allow their clients to enter "delivery situations". So for example if I screwed up and forgot to close my short position before the notice date, my broker would automatically close it for me whether I wanted them to or not. Actually taking physical delivery of a futures contract is pretty rare, and only a few brokers even allow those transactions.

Erik

 

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Re: Silver Whistleblower Interview on King World News

The real issue will be a fairdinkum short squeeze on the bullion banks...

The latest from John Rubino.

Because the bullion banks have promised to eventually return the borrowed gold to the central banks, they, in effect are “short” gold. That is, at some point in the future they are obligated to buy gold in order to repay to the central banks. The bullion banks thus benefit when gold is available at a low exchange rate, and are hurt, potentially very seriously, when gold rises.

By the end of 2002, I estimate that the amount of gold that central banks had loaned out was at least 12,000 tonnes, or about 385.8 million ounces. That’s almost five times the world’s annual gold production, worth about $160 billion. If the banks have borrowed this gold at an average of $350 ($11.25gg), and gold rises to $400 ($12.86/gg) (leaving the euro out of this equation for simplicity), the bullion banks are looking at a loss of $50 times 385.8 million ounces, or $19 billion. If the banks borrowed at $300 ($9.64/gg) on average, they’re facing a potential loss of $38 billion, more than enough to bankrupt some of the more aggressive players.

As the cost of acquiring gold begins to rise, the bullion banks might be tempted to cut their losses by covering their shorts (i.e. buying back their gold) en mass. In the stock market this is known as a short squeeze, and it often results in a buying panic, in which everyone heads for the exits at once, sending the price of the security in question through the roof. For the bullion banks the short squeeze is a terrifying prospect because of the potential losses they might incur. For the central banks, a short squeeze in gold is equally terrifying  because the result will be, in effect, a massive devaluation of their currencies versus gold, potentially undermining the monetary status quo they try so hard to maintain.

In any event, the failure of one or more bullion banks (remember, these are among the world’s biggest financial institutions) might threaten the entire global financial system, a prospect that no doubt has central bankers shaking in their boots.

Viewed this way, the recent gyrations in the gold market make perfect sense. When free individuals, observing the debasement of the world’s fiat currencies, begin to bid up the exchange rate of the one money that’s immune from debasement, the bullion banks run to Washington (or Paris or London) for a bailout, and the central banks oblige by pushing gold back down. But the game is just about up. The bullion banks’ short positions have reached unmanageable proportions, and gold’s exchange rate is surging into the danger zone. A short squeeze is coming, and for the world’s central banks (and bullion banks’ shareholders) it will be a disaster. But for those who value and understand gold’s enduring role as money, it will be a classic case of poetic justice.

http://www.24hgold.com/english/contributor.aspx?contributor=John%20Rubino&article=2770894708G10020

Oh yeah time to rock n roll 70s style

West

Erik T.'s picture
Erik T.
Status: Diamond Member (Offline)
Joined: Aug 5 2008
Posts: 1234
Re: Silver Whistleblower Interview on King World News
West Oz 9999 wrote:

Here is Jason Hommels opinion of Jeff Christian trying to protect his baby from criticism..

(Before I start, I should note that Jeff Christian should be nominated both for the Moron of the Year Award, and also for the "worst and most unconvincing liar award."  I note he claimes to have helped pioneer the invention of the futures contract, so it seems like he's trying to protect his baby from criticism.  He also gathers the industry statistics on silver supply/demand, which is what you would need to walk this tightrope of trading futures safely, and yet, while the fundamentals appear wildly bullish, it appears he earns his money from the short side of the street, working for the shorts, and being one of their apologists.  Clearly, they can afford to pay more.  If you could say the silver market fraud is not a conspiracy, but rather it must be the actions of one insane main, it would be him -- but he's probably not short himself, but long.  I think he's both a deceiver, and a rather deceived and pathetic character in this amazing drama of our age.)

Sorry last post forgot to include link

http://www.24hgold.com/english/contributor.aspx?contributor=Jason+Hommel&article=2770694054G10020

West

Mr. Hommel seems prone to baseless ad hominum attacks and very little substance. I followed the link and skimmed over his ramblings, but didn't find any substantive justifications for his attacks on Jeff Christian.

The 100:1 thing is true of many futures contracts (not just metals), and has nothing to do with "leverage". It's about the number of futures market users who cash settle (by choice on the part of both shorts and longs) versus the number who use the market to actually transact metal.

The moron here is Hommel, not Christian. It's true that Christian did mis-speak at one point and Gesler called him on it. But among all these conspiracy idiots who are screaming about the "outrage", what I see is 95% flaunting ignorance about what futures markets are and how they function, and 5% substantive real issues pertaining to actual manipulations.

The concentrated short positions making huge trades in short order for the obvious purpose of manipulating the price (as Mr. Epstein testified about quite succinctly) were very real and very important. The real tragedy of this story is that there is a strong argument that the market is being wrongfully and illegally manipulated. But retards like Hommel are hurting rather than helping their own cause by writing volumes of commentary that serve to flaunt the ignorance of the authors rather than to intelligently argue the real issues.

Erik

 

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