Happy One Monthiversary!

It is currently 3:00 EST on the 11th so we have officially completed one full month as the greatest, most comprehensive and fun precious metals blog on the planet. What a month its been! I was amazed when, the very first day, we picked up a couple of "followers" and got 2,500 pageviews. Having some experience in starting a website/web-business from scratch, let me assure you that 2,500 pageviews is a lot. This week, we had 3 days of 12,000+ pageviews and we now have 126 followers. For the first month, we accumulated 166,442 pageviews. These are truly amazing and mind-blowing figures. Thank you all so much for making this a success and I don't mean materially (though your generous donations are greatly appreciated). The success I feel comes from you, my dear reader, recognizing value in my posts and the terrific comments your fellow readers make. That value is vindicating and very rewarding. Again, from Mrs. Ferguson and I, thank you very much for being a part of the fun!


OK, two quick things to consider over the weekend. First is a new report from Rob Kirby on the derivative exposure of the Evil Empire and assorted other TBTF banks. Rob runs a subscription-only site so I can't give you a link to the full report. Harvey Organ, however, posted a summary today so, I figured, I can probably copy and paste what Harvey wrote, right? Well, anyway, here goes:


Conclusions:

• The BIS tells us that total global outstanding “other precious metals” derivatives are 127 billion.
• General market wisdom [gleaned from OCC Commercial Bank data] suggest that J.P. Morgan and HSBC are the two dominant players in silver [other precious metals]
• Yet, the U.S. OCC tells us that J.P. Morgan and HSBC combined – make up 13.577 billion of the 127 billion BIS total [roughly 10 %].
• The U.S. OCC tells us that Morgan Stanley and B of A and Goldman have an additional combined 70 TRILLION in derivatives – at the Bank Holding Company level – but they give us NO HINT as to what portion of these totals consist of precious metals activity. We are left to assume that this is because the OCC is only mandated to regulate Commercial Banks – while Bank Holding Companies fall under the purview of the Federal Reserve.
• Unless J.P. Morgan and HSBC are LYING to regulators as to the extent of their silver market activity – there are other MASSIVE players in the silver price suppression game. Who ever these ‘players’ are – metaphorically, they MUST BE BLEEDING FROM EVERY ORIFICE with silver’s parabolic run up in price over the past few months.
• Most likely among American entities are MORGAN STANLEY, B of A and Goldman Sachs – since together they are operating a 70 Trillion derivative “BLACK BOX” about which we know LITTLE to NOTHING as it pertains to precious metals.
• Any way you slice it – precious metals data reporting on the part of American regulators is atrocious. Simple MATHEMATICS tells us a gold / silver ratio at 48:1 is EXTREMELY contrived and REEKS of manipulation on the part of the Federal Reserve and the Banks they are charged with regulating.

Got any physical Gold and/or Silver yet?

Harvey then added his own comments:

The BIS 3 weeks ago recorded that the total G10 banks and Switzerland had a derivative risk in silver of 127 billion dollars.  The BIS is only interested in risk and they net out all longs from the shorts.   They are only concerned with a risk of a failure to deliver.  The OCC which monitors all of the USA banks with respect to derivative risk  (and they report this to the BIS) reported just recently that JPMorgan and HSBC have a derivative risk of 13.557 billion dollars out of the 127 billion reported by the BIS.  The key question is: where is the remaining  114 billion dollars worth of derivatives for silver? And with a total market for silver of around 16 billion dollars, why on earth do we need 127 billion dollars in derivatives?
The bulk of the shortfall with respect to JPMorgan and HSBC are made up of forwards done at the LBMA.  This is the true short as they must supply the metal at a forward date in time. It seems that JPMorgan and HSBC has called upon their co-conspirator banking friends to quell silver's advance by underwriting massive calls without any backing at all.
We saw evidence of this in November when 4.5 million oz of options exercised for silver hit the floor of the comex.  This sent the comex scouring the planet for much needed silver to supply patient longs standing for delivery.  This was happening at the same time that Ireland was having problems with their debt and their banks, and the mints having record sales of silver. The Sprott silver fund PSLV finally got their licence to proceed to acquire the 22.3 million oz that is now in their possession.
The huge rise in silver has now caused our banks to bleed  profusely as silver has advanced 65% during these past 6 months  ($28.00 from$ 17.00) whereas gold has advanced only 15%  ($1380 from$ 1200).

This is the primary reason for the raid by the banking cartel.  They are trapped and cannot get out of their mess.  JPMorgan and HSBC have the bulk of the derivative forward risk.
The remaining banks have massive calls written on silver not owned by them.  The banking cartel have further problems with the huge paper silver deposits taken in all over the world by banks with no silver backing.  In gold, we are hearing that the banks are trying to get their hands on allocated gold to settle on very litigious longs that cannot get their desired physical.  (see KingWorld News..Jim Rickerts).

In London England we are witnessing gold and silver both go into backwardation as the spot owners refuse to risk their physical for a fiat gain. Collectively, they have determined that the physical supplies in silver and gold are extremely sparse.  A default will occur in London before it collapses on Comex. end.

Alright, now that you've read this stuff, it puts context into what Dan Norcini discusses on the "Weekly Metals Wrap" segment on KWN. I encourage you to take a few minutes to listen this weekend and every weekend. Kick around Eric's entire site, too. Lots and lots of good info there. Here's the link to KWN:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/12/11_KWN_Weekly_Metals_Wrap.html

That's all for now. I'm going to go watch Army-Navy though I never know which side to root for. I met a guy yesterday who just completed his third tour in Afghanistan in Special Forces. Amazing, great guy. I think I'll root for Army today just for him.

Turd out.