Silver Slammed

Starting after the NYMEX closed on Sept 21, in NY Globex it was slammed from over $40/oz to just under $40.  The following day (Sept. 22), it was taken down starting in London, and continuing thru NY trading, it was slammed from the around $38 down to $35.   Finally, on Friday (Sept 23), it was further slammed down to just over $30 - closing the day at $30.93, with markets closed worldwide for the weekend.

It came to light that the CME arbitrarily raised margin requirements - like they did in early May (5 times in 9 days) from 21600 to 24975 (16% increase).  The end result, is that futures traders have to liquidate their position (or come up with more cash).

This move smacks of desperation on the part of the CME.  There are currently rumors of low inventories of silver for delivery, so this could be move to try to save the entity that has the massive short position in silver.  If asked to deliver, it is widely believed that they would not be able to, and the result would be a massive increase in price.

The CME has a history of acting in unilateral manners, so the best move during times like these, is to BUY physical silver at discounted prices, and take if off the market.  This reducing the overall supply of silver, and can only drive up prices in the long run.  The cheapest way to get guaranteed silver is the US Silver Eagle bullion coin - as these sell for a few dollars over the spot price of silver.

Options expiry takes place on Tuesday, and this drop in price probably saved the shorts from having to deliver millions of ounces of silver they probably did not have.

The COMEX has announced (as expected) that they will not implement position limits for trading of precious metals (which saves the possibly too big to fail bank which has this massive short position).

See the work of Adrian Douglas at Market Force Analysis and GATA for further details of how bad this short position is for whoever holds it.

See the video from the CFTC meeting in April 2010 for disclosure of market manipulation exposed by Bill Murphy of GATA, and Andrew McGuire.

See various commentary of market manipulation as silver was struck down from $50 down to $33.

This could be the biggest open secret on Wall Street.  The only question is, "Who is this secret supposed to be kept from, if everybody knows about it?"