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Bix has been one of the most diligent sleuths in the world of silver price suppression and the big picture. While so much is opaque, many clues are evident and the unfolding drama seems closer to some major tipping point than at any I can remember since I started following silver closely in 2000. Bix does a great job of summarizing much of what he have learned up to now and of looking at some of the most likely outcomes in what would appear to be the not to distant future.

Enjoy this article at Silver Seek, a leading provider of real time silver and gold quotes with real time tracking of the dollar index.

SILVER: What happens when…

excerpts:
"…So let's talk about what happens when all the physical silver runs out and the very next silver investor wants to get their hands on a few ounces of the shiny white metal.

The first thing that we will notice is that delivery time frames on the COMEX will start to increase as the paper silver market riggers scramble to either fill orders or payoff in premiums to forgo deliveries. This is currently taking place as revealed by Sprott Asset Management in an update to share holders in the Sprott Physical Silver Trust.

http://finance.yahoo.com/news/Sprott-Physical-Silver-Trust-prnews-1872357399.html

"Frankly, we are concerned about the illiquidity in the physical silver market," said Eric Sprott, Chief Investment Officer of Sprott Asset Management. "We believe the delays involved in the delivery of physical silver to the Trust highlight the disconnect that exists between the paper and physical markets for silver."

We are also hearing that the Perth Mint is having problems supplying gold to customers because of the high demand. I'm sure that this problem is even doubled with their silver supply as the Perth Mint runs quite a large paper gold and silver operation with their unallocated pooled accounts and metal leasing operations.

Here's the latest from the Perth Mint:

http://news.tradingcharts.com/futures/1/9/151401791.html

"At the moment demand is such that we cannot meet all the enquiries that we are getting," said Nigel Moffatt, Treasurer of the Perth Mint, one of the world's largest gold refiners and distributors.

Ted Butler has written extensively about the risk of "pooled accounts" in both the allocated and unallocated forms and I agree 100% with his conclusions. The business model is massively flawed because the offering entity doesn't even charge enough to cover obvious expenses like insuring metal, storing physical metal, tracking, collecting, administration, etc. The Perth Mint justifies this by stating:

"The Mint realized that if it took deposits directly from investors, it could cut out the intermediary and create a win-win situation: the Mint wins by obtaining free funding for its inventory and investors win by getting free 100% backed storage."

http://www.perthmint.com.au/investment_invest_in_gold_storage_options.aspx

The Perth Mint goes on to claim:

Clients worried about potential delays in collecting metal in extreme circumstances, but with concerns about the cost of allocated storage, usually take a staged approach:

1. While the world environment is benign, they hold unallocated. They do not incur ongoing storage costs and fabrication charges.

2. When the environment becomes uncertain and risky, they convert to allocated.

3. When the world is at a crisis point, they take delivery of their physical metal.

BUT WAIT! Now Nigel Moffatt, Treasurer of the Perth Mint, is saying "At the moment demand is such that we cannot meet all the enquiries that we are getting,"

WHAT ABOUT THAT INVENTORY THAT IS PLEDGED TO THE UNALLOCATED POOLED ACCOUNTS?!

We might be at #2 above but their customers CANNOT CONVERT according to Mr. Moffett. And what about #3 which is an absolutely ridiculous statement considering they can't even live up to #2!

THE END RESULT: According to the Treasurer of the Perth Mint both #2 and #3 cannot be fulfilled for unallocated account holders! Cash settlement may be the only option. Is there any greater reason to get out of Pooled Accounts?!

The next thing we should see is extreme volatility in the price of silver as the market riggers try to wiggle out of their large concentrated short position while at the same time delivering physical…most likely leased from the large iShares Silver ETF(SLV). Whether it is leased or withdrawn the physical silver will still have to be delivered into the market to fulfill the demand from industrial users and silver investors who are getting smarter and smarter by the day about the difference between paper silver and the real thing.

What follows will be what silver investors have been patiently waiting for since the early 1980s…the official DEFAULT on the paper silver contracts and the physical silver price moonshot.

BUT this is not the first time that silver market riggers been perched on the cliff staring into the abyss.

At least twice in the last 20 years the paper market riggers have been able to keep the silver wolves at bay by using secret stashes of silver that were kept on the down-low. The first being the Manhattan Project silver (470M oz) in the early 1990's…

http://www.roadtoroota.com/public/135.cfm

http://www.roadtoroota.com/public/151.cfm

And recently, there have been more accusations of silver market shenanigans with a silver insider alleging that Clinton and his gang of market riggers got a hold of 300M oz of physical silver from China around the same time that the Silver ETF(SLV) came into existence…

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

I believe this to be true considering that the Clinton Administration is accused of many market rigging operations including coating tungsten bars with gold, instituting the "strong dollar policy" which many, like GATA, believe was implemented by rigging the gold price lower and dismantling one of the greatest national security facilities (Y12) ever built for its physical silver content.

So here we are again with the silver market riggers feet dangling off the cliff staring into the abyss. Will "THEY" come up with another scam to avoid the silver price explosion or will we finally witness the a silver moonshot? And what about that "SLING SHOT" effect I talked about a while back:

http://www.roadtoroota.com/public/366.cfm

Could "the system" stay in place long enough for people to get wise to the REAL silver manipulation story and try to move all their worthless paper silver into the REAL thing?

Truthfully, I don't think there is enough time as THE ENTIRE GLOBAL FINANCIAL SYSTEM sits right next to the silver riggers on the brink of the ABYSS!

Have you ever heard the term "PRICE IS NO OBJECT"?

SOON YOU WILL HEAR THAT ABOUT A MERE OUNCE OF SILVER!

May the Road you choose be the Right Road.

Bix Weir

Sign up for updates at www.RoadtoRoota.com

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Learned about this at Zero Hedge, which is always faster in reporting than the mainstream establishment financial media. We are only just past halfway through the month.

Given that the last year the US mint set a record and is going through almost all of the domestically mined silver in the United States, I wonder how they are going to meet their legal obligation to supply the increasing demand without buying silver off the exchanges? One thing is clear, the story on silver is becoming better understood by the day. As promised, I'll keep putting the most germane set of facts that I keep in my mind at all times in this manipulated market.

1. Silver inventories have declined from 10 billion ounces in 1940 to 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal
used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

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Anytime I post on silver I will continue to mention the facts that the Mainstream Financial Press studiously avoids reporting about silver because if the majority of the public new about it the prices would tripple in short order and because that is what Duffminster is all about.

Keep these facts squarely in front of you when investing in silver and or trying to decide whether to sell or hold. Particularly when the giant Bullion Banks that control our government attack silver as they do every single day by holding their massive concentrated short positions without let up.

1. Silver inventories have declined from 10 billion ounces in 1940 to 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal
used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

Now the update from Tyler at Zero Hedge:

European Silver Shortage Spreads To UK

"…On Friday we disclosed that major PM distributor, retailer and trading house BullionVault.com had run out of physical silver inventories in Germany (and possibly elsewhere) and was advising clients to seek the precious metal elsewhere. Today, we find that the UK joins Germany in what is now becoming the second round of the global silver shortage (the first one occuring in May 2010 when it was unclear just how the ECB would deal with insolvent PIIGS). Below is the warning by British BullionByPost notifying clients that the company currently has no silver bars in stock. Inventories are expected to be restocked later in February. In the meantime, as before, we urge customs agents to do a quick check of the cargo hold of all private jets (and time shares) registered to any banker making over $25 million. After all, surely the Tunisian president didn't come up with the idea to flee with 25% of Tunisia's gold entirely on his own…."

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Any wonder how within days of the appointment of former high level JP Morgan executive William M. Daley to the position of Chief of Staff of the White House that the CTFC voted to exclude JP Morgan's grandfathered positions from being subject to the same position limits as almost everyone else and that silver and gold have been under pressure ever since?

So now the company that has law suites against it for silver manipulation, including a CLASS ACTION LAWSUITE, and which has long been thought by many to be the primary reason silver has not been allowed to reach its actual value based on demand and supply has been exempted by the CTFC, pretty much assuring that the long running investigation into super concentrated short positions will be closed under the new exemption.

JP Morgan also is the custodian for the silver ETF, SLV and many have written about serious questions about the accounting of the silver and what happens behind the screen of complex derivatives.

So new we know that the corruption by the top Too Big to Fail Derivatives players is complete. However, like Luke, I will not give in to the Dark Side. Now it is more important than ever that the light be shown on the manipulation and fundementals of the market be put in pure view. The Dark Forces of derivatives manipulation given to the priviledged few that due the bidding of the Federal Reserve to manipulate perceptions and markets is an ongoing operation. This article gives an overview of what just happend. For the rest of us who know that silver is real money and has far more value than the Fed insiders club wants you to know, the knowledge that the dark lord of derivatives is still at work in its mechanations simply provides better buying opportunities for eventually the paper will burn in my opinion and only hard cold cash will survive. May the force be with us.

I highly recommend you go to Chris's site and read the propperly formatted version of this story but I do exerpt a major part of it below in native drupal format for reference:

JP Morgan Wins: CFTC Position Limits Do Not Apply (To Them) – From the Outstand Blog of Chris Martenson

"…Speaking of changing the rules…

Gold and silver are now down hard over the past two days, and the reason may have something to do with the fact that the CFTC utterly caved to JPM in their long-awaited decision on position limits in a 4-1 vote…."

"…While position limits will eventually be set, maybe, someday, the course of action taken by the CFTC grandfathers in JPM's (and HSBC, et al.) current outlandish positions…."

"…Here's the background (emphasis mine):

On July 21, 2010, the Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the Dodd-Frank Act amended the Commodity Exchange Act to:

•Require the Commission, as appropriate, to limit the amount of positions, other than bona fide hedge positions, that may be held by any person with respect to commodity futures and option contracts in exempt and agricultural commodities traded on or subject to the rules of a designated contract market (DCM).
•Require the Commission to establish position limits, including aggregate position limits, for swaps that are economically equivalent to DCM contracts in exempt and agricultural commodities (collectively, economically equivalent swaps). Such limits must be imposed simultaneously with limits on DCM contracts.
(Source)

The only wiggle room in the Dodd-Frank bill is for "bona fide" hedge positions, which, I should state, I think is not a good idea because the exact definition of a 'bona fide hedge' is elusive.

For example, you and I could decide to engage in a massive short-hedged position where you short a commodity but buy calls from me. Your 'hedge' is only as good as my credit. Or perhaps you decide that oil and natural gas have enough negative correlation that you are 'hedged' by being equally short and long on both substances. What if your correlation blows out? You're not hedged, is the answer to that question.

Continuing into the meat of the new position limit ruling, we find these discomforting items:

The Commission’s proposed regulations call for:

Position limits to be placed on 28 core physical-delivery contracts and their “economically equivalent” derivatives.

Establishment of position limits on physical commodity derivatives in two phases:

•Initial transitional phase: spot-month position limits only, based on deliverable supply determined by and levels currently set by DCMs.
•Second phase: spot-month position limits, based on the Commission’s determination of deliverable supply, and position limits outside of the spot month.
Translation: Only the front month of any contract will be subject to the position limits initially. Later, at some undefined point "early next year," out months will be included. But for now it's just the spot month.

Impact: Watch out for crazy out-month behaviors as JPM, et al. seek to skirt this rule.

Okay, that's not too terrible.

But this is:

Spot-month position limit levels set at 25% of deliverable supply for a given commodity, with a conditional spot month limit of five times that amount for entities with positions exclusively in cash-settled contracts

That's just horrible.

For anybody like JPM that has no intent of taking physical delivery, they will be prevented from accumulating a position that is more than 125% of the total deliverable supply. What sort of a limit is that?? That's like trying to limit the damage from auto accidents by 'limiting' freeway speeds to 'no more than' 175 mph.

Also, anybody who might want to actually buy the physical is limited to 25%, so any potential Hunt Bros. need not apply. The outer limits of this game have been exclusively reserved for speculators and manipulators.

That's not even remotely the outcome I was hoping for. This 'ruling' tantamount to saying "carry on!"

And what does 'deliverable supply' mean? Does it refer to COMEX warehouse deliverables in current storage or can special players receive additional preferential treatment by including 'deliverables' available to them via contractual arrangements with the LBMA? Lots of questions are emerging for me here.

But it gets worse:

Exemptions for bona fide hedging transactions (based on the Dodd-Frank Act’s new requirements for such transactions) and for positions that are established in good faith prior to the effective date of specific limits adopted pursuant to the proposed regulations.

Translation: "JPMs silver position is in complete violation of even these generous new 'rules' so we're just going to let them keep it."

Impact: Just check the price behavior of gold and silver for the impact. The gold and silver markets have traded upwards of late in part because of the thought that JPM would finally be forced to play fair and reduce their outlandish precious metals short positions. Nope. Guess not.

Once again, all sense of fair play has been abandoned in the interest of giving a special handout to a set of large banks that are reporting near-record earnings. When, I must ask, is enough enough?

The message that I receive from this ruling is that US markets are now hopelessly and irrevocably captive to the behind-the-scenes wishes of the banking class, for which "everything and then some" seems to be not quite enough.

Worse, an already-battered faith in the markets has been kicked again.

Here's my prediction: Someday the US commodities markets will experience a very painful set of failures, big banks will be caught on the bad end of that experience, and they will simply, once again, lobby to have the rules changed in their favor.

To everybody who hopes to make money by being on the opposite side of that trade, good luck collecting your winnings. They will simply be rule-changed right out of your hot little hands.

Thank you for playing sir, and sorry about your luck; would you care to try again?

The CFTC is now playing the role of Lucy holding the football. If you don't wish to be the Charlie Brown in this story, I'd advise that you take delivery.

Here's CFTC Chairman Gary Gensler describing the rationale, such as it is, for the CFTC's ruling [with my reactions inserted in-line]:

Position limits help to protect the markets both in times of clear skies and when there is a storm on the horizon. In 1981, the Commission said that “the capacity of any contract market to absorb the establishment and liquidation of large speculative positions in an orderly manner is related to the relative size of such positions, i.e., the capacity of the market is not unlimited.” [So far, so good!]

Today’s proposal would implement important new authorities in the Dodd-Frank Act to prevent excessive speculation and manipulation in the derivatives markets. The Dodd-Frank Act expanded the scope of the Commission’s mandate to set position limits to include certain swaps. [Still good]

The proposal re-establishes position limits in agriculture, energy and metals markets. It includes one position limits regime for the spot month and another regime for single-month and all-months combined limits. It would implement spot-month limits, which are currently set in agriculture, energy and metals markets, sooner than the single-month or all-months-combined limits. [Okay, spot-month goes first, before single-month and all-months combined. Got that. With the grandfather and 'bona fide hedge' exemptions of course. Left that part out...]

Single-month and all-months-combined limits, which currently are only set for certain agricultural contracts, would be re-established in the energy and metals markets and be extended to certain swaps. These limits will be set using the formula proposed today based upon data on the total size of the swaps and futures market collected through the position reporting rule the Commission hopes to finalize early next year. ["Will be set?" Early next year? Isn't that a year from now? Why so long?]

It will be some time before position limits for single-month and all-months-combined can be fully implemented. In the interim, if a trader has a position that is above a level of 10 and 2 ½ percent of futures and options on futures open interest in the 28 contracts for which the Commission is proposing position limits, I have directed staff to collect information, including using special call authority when appropriate, to monitor these large positions. [For silver, this amounts to some 5,300 contracts. Well above the 1,500 contracts Ted Butler called for based on the 1% of world production limit. It's too high.]

Staff will brief the Commission and make any appropriate recommendations based upon existing authorities for the Commission’s consideration during its closed surveillance meetings at least monthly on what staff finds. [Oh, so this is not a regulatory action, but a fact-finding mission? It's rather unusual to find a government body that takes care to under-interpret a congressional mandate for regulatory power, but we seem to have one in the CFTC. Odd that such a loss of regulatory nerve only seems to occur when the interests of big banks are on the line...]

(Source)

Let's close with a statement of regret by Bart Chilton, who tried very hard to do the right thing, but couldn't get the other four commissioners to see things his (and my/our) way.

Statement of Commissioner Bart Chilton at the 9th CFTC Public Meeting on Rulemaking under the Wall Street Reform and Consumer Protection Act

January 13, 2011

As regulators, I think we have one key mission. It is embodied in the Commodity Exchange Act. We have a singularity of purpose to ensure efficient and effective markets and to prevent and deter fraud, abuse and manipulation. Quite frankly, I think we can do better. We can because the new Wall Street Reform and Consumer Protection Act requires that we develop what many of us consider to be some fairly precious parameters.

Today, I am hopeful we will move forward to propose a position limits rule, a most precious parameter that we should have proposed much earlier in a way that would have implemented the provision as Congress intended. That's not happening.

Yesterday, eight U. S. Senators told us to move forward on limits. That follows two other senatorial letters from last month.

This is a Commission of five individuals, a group of people who make these decisions. That pretty much ensures no individual will get their way all the time. I'm certainly not getting my way on position limits, nor are the Senators who wrote to us.

I am thankful that we will have position points in place as a kind of glide path to position limits. As I've said repeatedly, points are not limits. However, they will help us learn more and do better as we go forward in further developing important—and precious— parameters.

(Source)

Thank you for trying Bart. I am grateful for your efforts. I wanted to give Gary Gensler, the former Goldman Sachs executive, the benefit of the doubt, and I did that. All benefit and all doubt now removed. Once a squid, always a squid, I guess.

I am still trying to get my arms around this ruling and its likely impact on gold and silver prices going forward. Long-term this changes nothing, except to reinforce my conviction that I have no interest in playing in rigged markets.

Further, given the opportunity to do the right thing in an open and transparent manner, the CFTC, quite predictably, caved to large interests – the same large interests that are helping to shape, if not drive, current fiscal and monetary policy.

For more on rule changing, please read yesterday's piece, Don't Worry, They'll Just Change the Rules. I guess I should append the following to that title "…or decline to enforce them."

Here are some of my own reference articles on the subject which I'll be adding to later:

Prohibition of Market Manipulation and Disruptive Trading Practices

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Here is a comment I wrote on CNBC in regard to the article entitled "Central Banks Cloud Commodity Outlook: Economist," which discussed ECB talk of raising interest rates and the idea that the Fed will actually discontinue QE near term:

"…This is management of perceptual economics (MOPE) designed to help the central banks change market direction (short term).

The Fed can not actually remove QE and here is why:

If the Fed removes QE the bond market will collapse because the Fed is now the primary buyer of most of the US debt.

If interest rates climb much, it will cause the US budget deficit to spike because even at 5% interest, most of the money in the US federal budget would have to go towards paying the debt service, rendering the US not only technically insolvent but functionally insolvent.

If the bond market collapses, interest rates fly. If interest rates fly the already extremely weak real estate market nose dives.

If the Fed stops its QE program and its related Permanent Open Market Operations programs, then the stock market will crash. This is because the primary money keeping the stock market afloat is coming from the Fed primary dealers who use the POMO money to buy the index futures.

Outflows from retail and insider sales have been very high for months.

I didn't have more space in the comment field. But the other aspect of the MOPE has to do with recent Fed comments and China's President's visit to the White House.

For that side of the story, I'll defer to Jim Sinclair in his article this morning at jsmineset:

"…The MOPE has started on President Hu’s visit from China. Sure there will be some face saving statements at the photo op, but nothing more.

The Federal Reserve says it will not bail out Main Street. Screw the little guy and bail out the Fat Cats. Of course that is MOPE.

You have local to state government rolling over and any recovery whatsoever goes directly into the tank. If the Fed keeps it up more bodyguards will be required to protect the Hall of Ivy building from the Main Street no account unwashed have-nots.

In other news, all the Bears in the woods are out again speaking on the price of gold.

Gold has a habit of drawing negative technical formations and then turning around and violating them bullishly. Fundamentally gold will look back at $1400 from $1650. Sir Dean Harry’s concern with the price of gold is highlighted in his most recent HSL Group letter titled, "Wake me up at $2400."

Consumer confidence falls, but the bullish excuses why proliferate the media. That is not dollar positive. The 2011 bull predictions are looking weaker by the day. For equities it means very little as QE2 is the real driver.

Jim Sinclair’s Commentary

Honest people are scorned, but then again they are from Main Street and who cares about them. Certainly not the Federal Reserve.

Screw the Sheeple and let them still sleep on.

Christie Bankruptcy Remark Amid Bond Sale Draws Flak
By Brendan A. McGrail – Jan 14, 2011 4:29 AM PT

New Jersey Governor Chris Christie’s comments that rising health-care costs might “bankrupt” the state, made on the same day of a planned bond sale, drew criticism for their poor timing and may have driven borrowing costs higher.

About 20 minutes after Christie, 48, made the bankruptcy reference in a town-hall meeting in Paramus yesterday, the New Jersey Economic Development Authority cut its tax-exempt school bond offering by almost half to $777.5 million.

“He is scaring some people when he says the state is going bankrupt,” said Gary Pollack, head of bond trading at Deutsche Bank Private Wealth Management in New York.

“It wasn’t timed well,” said Pollack, who oversees $6 billion and said he continues to buy New Jersey bonds.

Linking the governor’s remarks with the decision to reduce the debt sale is a “completely bogus interpretation and an irresponsible connecting of unconnected events,” Michael Drewniak, a spokesman for Christie, said in an e-mail to Bloomberg News. A spokesman for the Treasury Department also denied any connection, as did the deal’s main underwriter.

More…

Jim Sinclair’s Commentary

The operation to hold gold below $1400 is massive MOPE and destined to fail.

Any idea that all is well or even getting better has its foundation in sand.

New Hit to Strapped States
Borrowing Costs Up as Bond Flops; Refinancing Crunch Nears
By MICHAEL CORKERY And IANTHE JEANNE DUGAN

With the market for municipal bonds tumbling, cities, hospitals, schools and other public borrowers are scrambling to refinance tens of billions of dollars of debt this year, another sign that the once-safe market is under duress.

The muni bond market was hit with the latest wave of bad news Thursday, prompting a selloff that sent the market to its lowest level since the financial crisis. A New Jersey agency was forced to cut the size of a bond issue by about 40% because of mediocre demand, and pay a higher rate than expected. And mutual fund giant Vanguard Group shelved plans for three new muni bond funds, citing market turmoil.

"We believe that this delay is prudent given the high level of volatility in the municipal bond market," said Rebecca Katz, spokeswoman for the nation’s biggest fund company.

The market has fallen every day this week, and investors have been net sellers of their holdings in municipal-bond mutual funds for nine straight weeks, according to fund tracker Lipper FMI.

Yields on 30-year triple-A rated general obligation bonds shot higher to 5.01% on Thursday, reflecting a spike in perceived risk, according to Thomson Reuters Municipal Market Data. The last time those bonds yielded 5% was Jan. 30, 2009, during the financial crisis.

More…

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Stories Like this and More are to be found at the new community of alternative news and opinion editorials at The Duffminster Times.

Given that inventories of available above ground silver are dramatically less and demand is increasing around the world as are new industrial and technological applications for silver, its just a question of time before those economic factors break the long term and on-going concentrated manipulation of silver prices. If you read back through this blog or the articles at The Duffminster Times, you'll see that today's news about India's increasing interest in silver and new well financed entrants into the silver market could easily throw these manipulators off their game as the fundamentals and the increasing demand for real hard cold cash (gold and silver) in lieu of "promises to pay nothing," portends far higher silver prices.

Those massive naked shorts that are massive derivatives and paper manipulators are coming under increasing scrutiny and despite the leverage they wield in the markets, the newer entrants now clearly understand the games they play and how to leverage the short raids to accumulate more physical silver during the raids and halt the effectiveness of the short's tactics. This article is just one more data point in a very clear story of supply and demand and long term decreasing inventory in available silver.

Silver Demand Surges 6 Fold in India and World's Richest Man Enters the Silver Market

From the International Business Times:

"…(Bloomberg) Silver is 'common man's gold' in India as bullion expensive

The metal is still 48 times cheaper than gold per ounce.

Demand for silver in India, where imports of the metal surged more than sixfold in the first half of 2010, is increasing as investors seek an alternative to higher-priced gold, according to a trader.

"It is increasing day by day," Ketan Shroff, Managing Director of Pushpak Bullions Pvt, said in a phone interview. Demand probably climbed at least 20% to 30% in the past six months, he said.

Silver futures in New York reached a three-decade high of $31.275 an ounce on Jan. 3, after rallying 84% in 2010. The metal is still 48 times cheaper than gold per ounce, data on the Bloomberg show. Gold for immediate delivery reached a record $1,431.25 an ounce on Dec. 7.

"People are accumulating silver since gold is getting unaffordable to the common man," Shroff said in an interview on Jan. 7. Silver "has become the common man's gold."

Weddings and festivals, and higher gold prices will likely fuel demand for silver in the medium term, broker Karvy Comtrade Ltd said in a report Nov. 2. Imports surged more than six times to $1.7 billion in the first-half of 2010, according to Karvy.

(FT Alphaville) World's Richest Man Enters the Silver Market

Here's some juicy stock market RAW to kick off 2011 – Carlos Slim, the world's richest man is looking to enter the silver market in a big way.

And that big way, according to KingWorldNews, is a bid for Fresnillo, the Mexican based mining company that is poised to become the world's biggest silver producer…."

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Stories like this and in much greater detail will be posted at Progressive user driven publication The Duffminster Times.

Now that Obama has appointed a Banking Executive who was the Midwest Chair of JP Morgan and is expected to appoint former Goldman Sachs consultant Gene Sperling to head the National Economic Council, I think we can expect an increase in attempted efforts to suppress silver and gold prices and that every effort will be made to keep the Casino and Bookie operations of the These Two largest beneficiaries of the Financial crisis they helped create gaining ever more control of government.

Looks like straight up fascism to me. With the Primary dealers selling their bonds back to the Fed as quickly as possible, it is clear that the Fed is monetizing the US debt and at record rates. Anyone who really evaluates the way the seasonable adjustments are increasing from the BLS, I prefer BS" on the non farm payrolls report knows how bogus the employment numbers are.

So much for the change we need. Giant Too Big to Fail Financial Amalgamations like JP Morgan and Goldman sachs were responsible for the global financial meltdown and subsequent economic meltdown and as a result of the mayhem they intentionally created they are bigger and more profitable than ever even as the People, the Citizens, suffer and are being threatened by the bought off politicians in Congress who now work for Banks and not for us plan to cut our Pensions, Social Services and other commitments that were made by previous generations and more honest politicians so that a few at the very top can continue to fleece ordinary American's of their quality of life, of any sense of security for the elder years and to try to further destroy true democracy, equality and civil liberty at every opportunity through one tactic or another of fear, deception and force.

One of the few things we can do as citizens to protest this phony markets and the phony representation we are getting in our political system is simply to trade in the monopoly money for silver and gold coins. I personally like junk silver because it is readily recognized and easily converted to almost any currency wherever you are at the appropriate bullion spot price, which is published everywhere.

Obama's appointments have represented his commitment to continuing and increasing many Bush era policies and wars and the attack on civil liberty. If he thinks he'll get the support of the progressives in 2012, he needs to think again. He may be half African American, but he does act like any of the Social Justice Democrats I have believe in. He is no Martin Luther King and that is a certainty. If anything he is moving more towards a Policy of McCarthyism and an Attack on All who Speak Out against their Corrupt Policies. Free speech and Freedom itself is under attack by these Authoritarians masquerading as representatives of the Land of Free and the Home of the Free.

Some reference reading for today:

From the Nation:
Rahm Redux: Top Banker for Obama Chief of Staff

From the Public Record:
Obama Continues Most Of Bush’s Wiretap Policies

From Zero Hedge:
Primary Dealers Scramble To Sell All Recently Auctioned Off Treasurys To Fed

From Democracy Now:
From Wall Street to the White House: Obama Taps JPMorgan Exec William Daley for Chief of Staff

Stop the FBI Witch Hunts
Stop the FBI Persecution Against Peace Activist

From the Washington Independent
Obama Supports Bush Secrecy About U.S.-Sponsored Torture>

For a Constitutional Scholar, I find that his support of these policies to be a complete contradiction of the campaign he ran on in 2008. I voted for him because I thought he would finally reverse the march towards a neo-conservative fascism started under Bush. Instead it appears to be increasing.

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In another typical example of orchestrated "Management Of Perception Economics" the establishment media focuses on the questionable ADP and challenger job numbers ignoring the substantial deviation with the ISM Employment Index and these terribe CMBS numbers and continuing poor housing prices numbers.

The decline in the ISM employment index indicates that the strong ADP employment number has substantial statistical distortions and should be considered cautiously as many other factors such as falling real estate prices indicate the economy is not really recovering even under massive fiscal and monetary stimulus.

Here is an atricle on the CMBS numbers:

excerpt:

"…Trepp, LLC, the leading provider of CMBS and commercial mortgage information, analytics and technology to the global securities and investment management industry, released today its December 2010 Delinquency Report. This month’s report contains a special section on the Major CMBS Events of 2010 as well as Delinquency Rate and Triple A Spread charts covering the past 10 years (full report available at http://www.trepp.com).

The U.S. CMBS delinquency rate rose again in December with the percentage of loans 30 or more days delinquent, in foreclosure or REO climbing 27 basis points to 9.20%, the highest in history for U.S. commercial real estate loans in CMBS. The value of delinquent loans now exceeds $61.5 billion.

The decline in the delinquency rate in October 2010 now appears to have been a blip, as the rate has since increased by 62 basis points. December’s 27 basis point jump comes despite the fact that new issues continued to make their way into the calculation and servicers continued to resolve troubled loans. …"

Personally, I think its much worse than that.

If you are a real progressive, truth seeking and opinionated reader who wants to hear something other than the 24×7 infotainment propoganda motor mouths on Faux and the increasingly in-bedded establishment news come join the Duffminster Times, get your own blog, forum and occassionally, if worthy, front page article.

The Duffminster Times (a work in progress)

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As Dan Norcini points out in his most recent post at JS Mineset, we are seeing commodity index re-weighting in the first week of the new year.

If you were looking for a technical pullback to get into silver and gold this may be one of best ones of the year if not the last in my opinion. With the clear and present shrinking available sinking silver inventory (see previous post), silver has nowhere to go but up, especially as the world understands the way the big bullion banks play the paper game and what the real status is on physical silver and as new and trustworthy physical silver trusts that are great for IRA's like the Sportt Physical Silver trust PSLV begin to take deliver of physical silver and in the process take away silver from the John Lacklands of banks of the paper derivatives bullion variety and Fed Lackey function. As the rules are understood, the smart financial entities simply buy on every paper raid these bosos make.

Here is an excerpt from Dan Norcini's article today (link above):

"…Every year around this time some of the big commodity indices that are used as benchmarks by various fund managers are reweighted with the percentage of the commodities making up the basket tracked by each particular index varying depending on the methodology employed by the owners of the index.

Two of the larger commodity indexes are the Goldman Sachs Commodity Index (now called the S&P GSCI) and the Dow Jones – AIG Commodity Index).

My preliminary read of the GSCI index shows a heavier weighting in both silver and copper over the weighting given to each last year (2010) and a bit of a lighter weighting given to gold than last year.

Copper and silver are both being increased 2.7% over last year while gold is being reduced 2.5% compared to last year. Disclaimer – I hate reading through these reports issued about the various indices as my head goes numb from looking at the all the calculations so these numbers should not be taken as gospel until I can confirm the exact change. For now – this is my preliminary read.

Generally what this translates to in terms of the average market watcher is that the commodity style funds that commit investment funds into the commodity complex, must match the percentage of their holdings to these various indices. Depending on which index they choose to benchmark against and what changes may or may not be made for the new calendar year, such changes may result in an increase in buying for some commodities and an increase in selling for others. The reason is that the fund managers must rebalance their holdings to bring them into line with the new weightings in the index.

Since the largest portion of the money driving our commodity markets these days is the result of these commodity funds, the changes can sometimes explain some of the price action that the various commodity markets will experience during the rebalancing phase. This phase tends to last a few weeks as the index re-weightings become published and disseminated through the investment community and are then implemented by fund managers.

Keep this in mind as we watch the price action over this month.

Also keep in mind that any fresh money coming into the markets for investment for the new year is going to find itself being spread across all of the various commodities making up each commodity index. Sometimes that new money is more than enough to offset the selling of the older positions from the previous year as the fund managers rebalance. For those markets where the percentage weighting has been increased from the previous year, the combination of fresh, new investment money for the new year in combination with the increased need by the funds to buy extra positions in those commodities, can be quite a powerful combination for any market already in a bullish uptrend.

I have yet to examine the DOW JONES AIG index. When I do, I will report back to our readers.

…"

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This story is an example of what you will find over at the Duffminster Times in the Gold and Silver Forums. These are message boards where you can get involved. Yes its a liberal/left slanted community but conservatives and republicans are welcome. No matter what your political disposition, do yourself and the nation a favor, go to Netflix and download/stream Loose Change 9/11: An American Coup (2009) and then depending on how it makes you feel, tell your friends and relatives to watch it and then come back on over to Duffminster and lets talk about it and what might be done to put things right. If you don't subscribe to netflix, you can watch it on YouTube, right here in 8 parts Loose Change.

Unlike most Democrats, the left over on our side are perhaps in many ways a little more like Ron Paul in regards to the Federal Reserve, the idea that we shouldn't be in two wars that we can not afford and that there is a lot of corruption and extreme in-efficiency in our systems. Unlike Paul, most of believe in the idea that as a nation who's founders actually believed in the teachings of Christ, that social justice, taking care of the children, the elderly, the poor and those who are looking hard for work and can not find it and that bringing high paying jobs back to America shouldn't just be a campaign slogan but a fact.

Unlike most Democrats, I believe that when Nixon defaulted on the US gold obligations and took our currency completely off the gold standard, we made a massive ethical and moral error. Today we Federal Reserve Notes backed by Bonds which are backed by Reserve notes. In other words when it says "In God We Trust" it means, those notes are backed by next to nothing. Frankly, I'd rather have a dollar that was backed by Gold and said "In Gold We Trust."

In any case, here is the story on silver, which by the way has been and remains real money, along with its big sister Gold.

Amazingly the Financial World routinely ignores these facts. Is this because of the undue influence that certain of the Too Big to Fail Bullion banks in the U.S. and Britain in both giant naked short positions in the primary silver exchanges and the establishment media or it just simply mass ignorance? I'll start with a few articles in this large forum post. I'll post other articles in response later. But this article is a good starting point. Just so you know, I'm all in on silver and I think it should be trading at somewhere above $300 per ounce based on the basics of supply and demand and the massive spring back potential energy created by long term massive price suppression and the unwinding of that as the multiple law suites, including class action suites against JP Morgan and HSBC continue along with public statements by the CTFC in regard to their findings of manipulation of the silver markets by certain very large financial organizations.

This article is a great update to the silver supply discussion in my opinion.
Silver; Past, Present, Future
"…
In 1940, there were approximately 10 billion ounces of silver above ground in the world, with half owned by the US Government. At that time, there was about a billion ounces of gold. Ten times more silver existed in the world than gold. After more than 60 years of over-consumption of silver, of drawing down and depleting the inventories built up over hundreds and even thousands of years, the relationship of how much silver exists above ground compared to gold has flipped. Now there is much more gold left in the world than silver. Currently there are up to 5 times more gold in the world than silver, depending on how you define inventory. Silver inventories have declined from 10 billion ounces in 1940 to 1 billion today. The U.S. government, the largest owner of silver in 1940, with over 5 billion ounces, now owns zero ounces. Gold world inventories, including jewelry, have increased from 1 billion ounces in 1940 to 5 billion today, according to all reputable sources like the World Gold Council.

I ask you to think about that for a moment, there being more gold than silver above ground, as this is one of the most important factors in silver today. It is also one of the least known facts, even though it is easily verifiable and has evolved over such a long time. When people first hear or read it, they instinctively disbelieve it. 99.9% of the people on the planet, to this day, would tell you that it can’t possibly be true that there is more gold than silver in the world. Or even that there is an equal amount of gold and silver. None of this 99.9% has ever taken even a minute to think about it or read or try to verify how much of each remains above ground. They don’t have to. Their verification comes everyday, as it has everyday for decades, from one simple source – the daily price of each. The price of silver and gold is broadcast constantly, to every nook and cranny around the world, that there are 60 to 70 to 80 times more silver in the world than there is gold. That’s what 99.9% of the people in the world think. And I’m not just talking about uneducated people in third world countries. I would include the most sophisticated, wealthy and educated people, who have come to believe that the price doesn’t lie. I do hope 99% of the people here don’t think that.

It is this simple fact, that the relative price of silver compared to gold is so distorted, relative the their respective quantities in existence, that is all anyone needs to know to buy silver. This is not a knock on gold. I will stipulate to and accept as true every bullish argument that anyone could make on gold. You could spend hours or days lecturing me on all the good things that gold has going for it, and I will accept them without dissent. When you are done giving all the bullish gold arguments, I would just add two things. One, all those arguments apply to silver as well, and two, there is less silver than gold.

I’m compressing hundreds and even thousands of years of silver history into a few minutes of time. For many centuries, the world dug up and used silver for money and beauty and wealth. In the last century or so, we discovered incredible new uses for this age-old material and continued to dig it out of the ground, in ever increasing quantities, basically consuming all the newly mined silver plus almost all of the old stuff as well. And even though this is a fairly easy set of facts to verify, only an infinitesimal amount of people are aware of how little silver remains. And in spite of the growing rarity of this age-old cherished and desired material, its price, on any objective measure, is dirt cheap. There is less silver in the world on a per capita basis, than in history, yet the price still reflects super abundance. At the risk of over using a statement I’ve made in the past, I couldn’t make this up if I tried…." I added the bold for emphasis.

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