Does this seem even remotely credible, given the obviously “tight market” which we saw last year? The answer to this conundrum is found when we add in the fact that bullion-ETF “holdings” have been added to silver inventories. As everyone familiar with the precious metals sector knows, demand for bullion-ETF's has exploded since 2005.

Regular readers will be familiar with my stance on (so-called) “bullion-ETF”s. With the exception of a few, reputable funds which explicitly guarantee that they hold actual bullion, the business model of these ETF's is openly fraudulent (see “Bullion-ETF's a multi-purpose scam”).

Previously, I have accused the Manipulators of using these scam-investments to divert a huge component of silver investment demand from buying real silver, into purchasing phony, “paper promises” to deliver silver. What is more, these “paper promises” are being made by the same bullion-banks who have been able to criminally manipulate Comex futures trading (thanks to the non-existent oversight of the corrupt, CFTC).

However, what is now finally apparent to me is that these phony, “bullion-ETF's” have a second, equally-important use (as a tool of the Manipulators).

At the beginning of 2005, total silver inventories had dwindled to a tiny amount of less than 200 million ounces – less than 10% of the recent high from 1990. Yet, today, despite the steady tightening of this market, inventories have supposedly tripled to about 600 million ounces.

The difference between these two numbers corresponds almost identically with the total holdings of “bullion-ETF”s. The reason why this “coincidence” is of such tremendous significance is because bullion-ETF's are considered part of global silver inventories.

Theoretically, the inclusion of these funds makes sense, since supposedly they are holding silver bullion. However, these bullion “holders” are never subjected to any kind of audit, nor are the Manipulators – the bullion-banks who supposedly hold all of this bullion for the ETF's.

As of today, the total amount of this “inventory” is now over 430 MILLION ounces, equal to roughly ½ of total, annual “supply” (if we take the GFMS numbers seriously). The larger this mountain of “phony” silver gets, the more that silver “inventories” supposedly grow.

It is just another outrage to the precious metals market, the most-heavily manipulated commodities market in history, that the Manipulators can grossly distort supply/demand fundamentals – simply by writing-in their own supply, demand, and inventory numbers.

Obviously, there are similar games being played in the gold market. However, the “game” being played by the Manipulators in the silver market is much different, and more dangerous (for them), due to one, overriding consideration: it is a widely-known fact that the vast majority of above-ground silver inventories has been literally “consumed” in various industrial applications.

Conversely, with gold, virtually all the gold ever mined is still available, somewhere, in some form. Thus, for gold, there are still (dwindling) supply sources which the Manipulators can use to shore-up supply. No similar stockpiles for silver exist.

In a follow-up to this commentary, I will speculate on what lies ahead for a market with fictionalized supply, demand, and inventories – in a world where the (real) above-ground stockpiles of silver have not been this low in centuries.

TrackBack URI for this entry

Comments (0)

Subscribe to this comment's feed