The most fascinating aspect of silver today is how little of it is available for purchase. Of the 2 billion ounces of silver that exist in the form of 1,000 ounce bars, roughly 80% is owned by investors. 1.25 billion ounces is in silver ETFs and 350 million ounces is in the COMEX warehouses. There might be some overlap since the largest silver ETF holds 100 million ounces in NY with JPMorgan, the trust’s custodian. That silver is in the bank’s COMEX warehouse. (I asked JPM and BlackRock, the trust’s sponsor about this and received no answer.) That leaves only 400 million silver ounces, or 20%, of all the silver bullion in the world that is not tied up in ETFs or the COMEX warehouses.
As I’ve reported previously and confirmed in the U.S. Treasury Dept’s OCC quarterly derivatives report, not only did JPMorgan use the dramatic and engineered price smash of March 2020 to completely buy back and cover all of its silver and gold COMEX short positions, it put Bank of America and other banks deep onto the short side by leasing them 400 to 500 million ounces of silver – undoubtedly owned by the friends and family of JPM.
So, the bottom line is that not only is 80% of all the world’s silver bullion owned and tied up in the silver ETFs and in the COMEX warehouses, the remaining 20% (400 million ounces) not publicly accounted for is owned and tied up by those in JPMorgan’s tight circle. This leaves virtually no sizable quantities of silver in 1,000-ounce-bar form to be available for purchase at anywhere near current prices.
Are recent gold and silver price rallies indications of the start of the big move up? It’s downright dangerous to play it any way other than full pedal to the metal. Not only could this be the start of the big one, particularly in silver, it should be and is long (years) overdue. Can the COMEX short syndicate succeed, once again, in capping the rally and engineering yet another rig job lower? I don’t know and neither does anyone else.
But I do know we should be substantially higher in silver right now. The preconditions for an imminent price surge are more in place today than, well, forever. It is simply astounding that the master market criminal, JPMorgan, has pulled off the greatest financial swindle of all time and will undoubtedly escape any adverse consequences. Not only has JPM put any regulatory blowback to bed, it and its circle of connections are sitting on a mountain of physical silver and gold that they picked up on the down-low over the past decade and now have cast their short positions aside. To this point, JPMorgan is ahead by more than $25 billion on its 1.2 billion ounces of silver and 30 million ounces of gold and there are many more gains to come.
I don’t think the physical market in silver has ever been as tight as it appears to be currently. We are running on fumes in the tank as far as sufficient amounts of physical silver being available to new buyers. There appears to be little real physical silver available, just as there exists the greatest amount of world investment buying power seeking to uncover the next big opportunity. Talk about a mismatch that seems destined to blow up at any time.
For subscription info please go to www.butlerresearch.com