Precious Metals Market Analysis, By Michael Pennington (Copyright 2010 Pennco Coins)
During the past month, we have come to learn of the fraud on the Commodity Exchanges with Gold and Silver supply. Apparently there is also some consternation about the gold exchange traded funds (ETFs) and whether or not the gold is really there. Of course this doubt is caused mostly because of all those disclaimers and “nothing is my fault” stipulations in the prospectus, which, if you take a look at your brokerage agreement or any financial agreement, has all the same fine print.
There is a lot of controversy stirring up with regard to what could be the largest fraud in history, as gold available for delivery to people who think they actually own metal through paper intermediaries is being exposed as being only as safe as the entities that guarantee its delivery – in other words, not safe at all.
And, given the latitude that the Federal Reserve, the banks, the International Monetary Fund and all the other banks have given themselves, it’s amazing that ETFs are as conservative as they are!
I mean, for instance, the IMF and the Fed agree that they can lease out their gold, even to the point of delivering the bullion to somebody so that there is nothing left but an empty vault, but yet still count it on the books as being all there and unencumbered! REALLY?
But the obvious fraud of selling silver short at 100-to-1, or more, is not lost on everybody. Let’s look at the mathematics, as the entire world’s annual production of silver, at about 600 million oz., at $17/oz., is barely $10 billion, which is a mere 1/20th of the amount owed in these bullion accounts, which are dominated by JPMorgan which totals an amazing and outrageous $203 billion.
The actual figures indicate these market insiders sold-short futures for 12 billion ounces of silver, which is 24 times world annual production, and perhaps 100 to 160 times the actual supply of physical silver held in London for delivery against such accounts, which may be as little as 75 million ounces or less.
