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Physical Silver Being Drained…

by Dave Kranzler, Investment Research Dynamics:

Thru today (Oct 28) the U.S. mint has sold 4,365,000 silver eagles.  This is by far the highest total for October on record, with 3 business days left in the month.   It remains to be seen if 2014′s yearly total will exceed last year’s  42,675,000.  But if November and December continue at the September/October 4 million-plus rate, 2014 will smash last year’s record.  Either way, the U.S. mint is selling more ounces of silver than all U.S. mines combined produce annually.

As most of you know the roughly 93% of the physical silver inventory – 1,062 tonnes has been removed this year from the Shanghai Futures Exchange – see this LINK.

Perhaps more interesting has been the drainage of silver from the Comex silver warehouses – since late February,  while the paper silver futures open interest has been soaring (source:  24hgold.com, edits are mine) – click to enlarge:

ComexEligible

An “eligible” vault account holds silver being kept by investors at the Comex but not available to be sold or delivered.  Close to 20 million ounces have been removed from the “customer” accounts since February, held in vaults operated by banks like JP Morgan, Scotia and HSBC.  Yet, at the same time, the paper silver futures open interest has soared to near all-time highs.  At the beginning of January, there were approximately 132k contracts of silver open interest.  As of yesterday, the amount was over 173,000 – close to an all-time high.

To put this in perspective, 173k contracts represents 865 million ounces of silver.  Compare this to the 66.7 million ounces reported by the banks to be in their “registered” vault account (registered = the silver available to be delivered).   In other words,  there’s 7.65x more paper silver that has been sold to investors/speculators than there is physical silver available to be delivered.  This is a Ponzi scheme that only the upper managements at Enron, JP Morgan and Madoff & Co. + the Secretary of the U.S. Treasury could appreciate.   No wonder investors holding their silver at the Comex are taking it OUT of the Comex.

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28 comments to Physical Silver Being Drained…

  • Frank Zak

    Kranzler is the same person whom told you not to buy real estate
    and instead buy silver.

    Why do you listen to people whom consistently call the markets wrong ?

    Greed. Silver insanity. Hypnotic spell to the get rich quick crowd.

    The play to your greed. They tell you what you want to hear.

    Buy gold long term. Buy and own your house.

    Be happy forever.

    • Eric

      My house has been the worst financial investment in the world plus I’m surrounded by complete morons.

      Perhaps the casino is your scene if you’re looking for a quick buck.

      The Open interest in silver will be interesting as December draws near.

      • Woodchuck

        I agree Eric. My community is falling apart. An example of the state of the nation. I’m determined to sell the place ASAP and move to a real rural area. I will cash out into all PMs, Beans, Bullets and Band-aids. When tings go down I could imagine the drunks and drug users will be pissed they cant get high or sedated anymore. They will be either trying to steal your preps or abandon their kids at your door to care for them. I have stopped trying to warn others because they tilt their heads like a confused dog. Most are unaware of the storm that about to hit.

        • Eric

          You and I both Woodchuck. They look at me like I just walked off the spaceship whenever I talk about the way things really are. Then there is the usual being met with hostility because they don’t want to realize that they have been wrong about most everything they think they know. I try to avoid most everyone that could pose a threat to my safety.

          My neighborhood isn’t too bad but it is in a major metropolitan area. I’ve been looking at retreat properties for 3 years but can’t get anyone else on board. It’s pretty hard to move to the country when you’re by yourself. I’m lucky to be removed from the city as much as I am. Americans are in for such a rude awakening and I see so many of them already starting to lose it. The anger phase is upon us.

          • Ed_B

            I agree with many of your comments, Eric, but I don’t think that we have arrived at the anger phase yet. That will come when the EBT and SNAP cards stop working. We’ve already caught a glimpse of this in the past few months when temporary glitches in those systems caused them not to work for several hours at a time. When they go down permanently, THAT will be when the anger really hits the fan. People have been trained to expect benefits through no effort on their part and they will not accept it when Uncle Sugar isn’t providing them any more. They will want to vent their anger on someone… anyone, really… and they will not be the people that any of us want to be around when this happens.

            • Eric

              You’re right about that Ed. We don’t want to be around any of these people. I am seeing more and more at the end of their rope. It hasn’t really started yet but we are on the precipice of the anger phase. A lot of people are in for a super rude awakening. Even the ones that know a lot but didn’t prepare enough or didn’t feel the need to.

              Anyone who has a lot of love in their hearts, who have something to contribute, who are diligently and patiently working to better themselves, their surroundings, and want to learn new skills, these are the ones i want to be around. Not people who complain!

              Still working on getting out of here. Ready to run if need be.

              • Woodchuck

                I believe Ferguson is not just about race issues but economic ones. When the Arab Spring came to be it was about food. In Tunisia, Egypt, etc. They were chanting give us flour give us sugar. Something the MSM did not report, they wanted us to think it was about freedom of choice and the great Muslim Brotherhood. When the FED printed money here it exported inflation abroad. The average person in Eygypt spends 70% of their income on food. The wheat price went up and they were starving. A little reported fact was US shipped enormous quantities of wheat over to keep it to a dull boil. Food and water will be the future catalyst to all strife. We are going to enter a calorie economy.

  • willy

    Looks like only 15% is “drained”. Considering the US has been stockpiling silver for 50 years, I find it hard to believe the mint will have any trouble filling a single high month of orders.

  • WillyT

    So the question then is who is telling the “real” truth about the amount and the actual real supply of silver. Is everyone lying?. Nothing in the PM markets makes any sense today or for the past 2 years. Even the fundamentals on price discovery are flawed to say the least. Paper silver is garbage but that’s what seems to sell. So are all the alternative sights wrong with respect to how much silver is being mined or is the government wrong? Any one hazard to take a guess.

  • Angel

    BREAKING>>>

    Right on schedule, Yellen just announced the end to QE3. Time for a reality check, folks. Let’s see how long the economy can remain off life support. It’s ON.

    http://www.zerohedge.com/news/2014-10-29/fomc-ends-qe-dream-keeps-considerable-period-hopes-alive

    • The Truth

      Hey Angel, here is another Headline I saw on CNBC.

      “R.I.P. QE: Fed shuts off the printing presses”.

      Now this is what’s on the front page. When you click the link it takes you to this.
      “Fed completes the taper”.

      Now I am not the smartest person in the world,but they are actually sticking it in our faces now that they print money. Maybe this is the sign of destruction to come real soon real fast. We all know pride comes before destruction. And the fact that they have to gall to actually headline something like this on CNBS is actually revealing.

      http://www.cnbc.com/id/102132961?trknav=homestack:topnews:2

      • Angel

        @ The Truth:

        It’s in our face relentlessly. And what else can they do but play musical chairs and delay the inevitable?

        They can only think in the short term now. And all they need to do is to keep this thing intact through the mid-term elections and the “XMAS” season, but one thing I’m wondering is at what point do they lose the ability to so blatantly fudge the numbers to keep up the illusion? Because going forward, we’re going to see some fudge like never before.

        What card will they pull out next? Announcing a return to QE?

    • Ed_B

      It will be interesting to see whether or not they really do end QE or if they are just talking about ending it. These people are very good at distraction by waving one hand wildly while doing something else entirely different with their other hand… which is usually under the table. Could it be time for that industrial and financial power-house, Belgium, to ride to the rescue with a massive new order for UST bonds? Could be, even though it is incredibly obvious that they: 1) have not run a surplus in 2 decades; 2) cannot print their own currency; and 3) would have to pony up 1/3 to 1/2 of their GDP to make a serious purchase.

  • The Truth

    So QE3 begins and gold and silver fall. QE3 ends and the same thing happens. Is this a market or a machination? Nothing that is real will have fair value with a corrupt currency as the measurement of value.

  • glitter 1

    I just finished viewing Lindsey William’s latest DVD” Special Events Scheduled For 2015″.Per his Elite Connection(not his preditions).
    I know that many roll their eyes back into their head when they see/hear that name and that’s ok for those that think their own opinion is the final authority,but for those that have eyes to see and ears to hear here it goes:

    > The Elites expect a “Devine Intervention”,possibly a comet/asteroid/heavenly body crashing into the Atlantic Ocean creating an East Coast Flood.(my first thought was “Global Coastal Event”- Clif High,hmmm..)

    > There is going to be a Stock Market Crash.

    > There is going to be a Housing Market Crash.

    > There is going to be a Derivative Meltdown.

    > The Health Care System(Obamacare)will collapse.

    > There will be a Financial Collapse during September/October.

    > The price/value of Gold will sky rocket.

    These are the things “That Will Not Happen”

    > There will not be Riots.

    > Gun confiscation will not happen.

    Lindsey made a point to say that The Elite(s) are not god(s),even though they may think they are.Even though this is their plan(s) and time table(s),dynamics of events could cause revision and changes to the plan,but these are the scheduled events for 2015.
    He also pointed out that he is no longer doing interviews and requests that the DVD not be uploaded to the Internet(you tube).

    • Eric

      Thanks glitter. Sounds about right. I’m not expecting mass riots everywhere or massive gun confiscation across the board either.

      They keep trying and they will continue to try to erode our rights away, but I just expect more idiots waking up and being angry about it as this entire system collapses. And thank goodness. It’s about time it does!

      They are definitely not gods. They are just regular arrogant assholes who think we are all dumb sheep. Obviously not all of us.

      I can’t wait to kick ass and chew bubble gum. Except I’m out of bubble gum.

      • Angel

        No, they are not gods, but some might be non-human entities who believe themselves to be superior to us.

      • glitter 1

        My thoughts are this,considering Harvey Organ’s,V’s call for a PM Derivative Blow-Up(170,000 OI Contracts(Chinese?)for December) before the end of 2014,Jim Willy’s call for the same sometime between now and mid-February for the same reason(s)and others.A PM derivative blow-up could very well be the catalyst for the long awaited Derivative Collapse Event that will set everything else in motion.

        He has a small session with an electronics “expert” where they discuss howThe Smart Meters/Cell Towers have been installed that causes a massive “Dumb Down/Controlling Effect”(through certain microwave frequencies(~900 mega hertz),which is part of their plan for no rioting.The jury is still out on that subject for me.

    • glitter 1

      I left one additional major event from LW’s DVD:

      > Several large bank failures.

      As I see it,all that has to happen to get the whole ball rolling/initiate the cascading failure events is for The (Chinese?) to stand for delivery of their OI of 173,000 long silver contracts for December and it will be the start of game over.

      We don’t have long to wait to see!

    • lastmanstanding

      Regardless of whether or not there are riots, the blood will be knee deep in the street.

      Producers have fucking had it with the takers. In fact, the earth has had it with both in most cases.

      No one lives forever.

      • glitter 1

        Just because tptb don’t expect rioting doesn’t mean there won’t be any.When the EBT Cards stop working,it won’t be long before there is chaos.imho

  • James in NY

    My money (converted FED currency) is on hard assets. I love silver for specific reasons and have for a long time. I’m not shakin by anything happening in the markets. Everything is a manipulation these days, including the Mass Media, (AKA) Mass Manipulation, (AKA) Psyops,…whom I no longer watch at all and won’t ever again. Even the internet is reported to have paid GOVERNMENT TROLLS romping around alternative media sites, etc. creating their own version of Psyops.

    Hang in there. We could all be wrong about Silver, but with the assets there are for us to pick from and the roads most of us have already traveled,….It’s the best choice in my opinion. Not just Silver any PM’s. My rule is if I can hold it,..it’s real. I can monitor it, I can guard it, I can spend it. Sure currently I have to convert it back to currency but I did say currently. Plus as has been said before,…If entire countries are swallowing all they can get,….well the writings on the wall.

    So what if you bought in at $30 or $40 an ounce. Buy more, now you can average your holdings. Go into bunker mode and be determined to stay in bunker mode. Keep your head down and ignore the hysteria. Be committed to your ideals and your intended outcome. If we all do this we will be better for it. What’s your gut telling you? Listen to it. It’s kind of like they tell you in school on a test, your first choice your gut,….is most likely the correct answer.

    Brace for impact. A good friend whom is a Financial Attorney said and I quote,…Buy Ammo. He didn’t elaborate and I didn’t need to ask.

  • Great stuff, Dave! We’ll all get through this grating time for our comrades, and come out heroes on the other side.

    Keep hitting homeruns, sir!
    -WW

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