Current (2018) BIS “other precious metals” derivatives data vs. LBMA Vault Holdings: Silver

See also the data for gold: https://revealingfraud.com/2019/07/silver-gold/current-2018-bis-other-precious-metals-derivatives-data-vs-lbma-vault-holdings-gold/

BIS data of “other precious metals” compared to “LBMA vault holdings of silver” is not a perfect measure of excessive nature of the fraud of OTC “over the counter” futures contracts. But the large financial institutions are very stingy with their data, and this is the best data we have available to determine the size of the fraud they are perpetrating in the precious metals markets. In fact, this is relatively new data as well, only a few years old.

We will start with the BIS data at this link:

https://www.bis.org/statistics/derstats.htm

Click under: D5.2Commodity contracts, credit default swaps

https://stats.bis.org/statx/srs/table/d5.2

If you click on the actual number $65 billion, it goes to a table showing that in 2009, the numbers were as high as $200 billion notional value of “other precious metals” (mostly silver).

This category is “silver, platinum, palladium” notional derivatives, or, probably 90 to 95% silver. The fact that they bundle this data on silver, with “other precious metals” goes to show they are making a serious attempt to conceal this data.

Actual Value of Derivatives is only $4 billion. So, $4 billion worth of contracts, controls $65 billion of metal, showing leverage of 65/4 = 16.25 to 1.

“Current LMBA Vault Holding Data” is only $17 billion worth of silver.

http://www.lbma.org.uk/london-precious-metals-physical-holdings-statistics

The figure for LBMA vault holdings was only released starting July, 2016, whereas the BIS numbers were first publicized by me in 2009.

The $17 billion of silver that the LBMA banks have in the vaults, in many cases, cannot be used to back the derivatives of $65 billion, because a portion of their vault holdings are allocated to other owners, such as ETFs, bullion funds, or client holdings.

So, something less than $17 billion, backs up $65 billion, or up to $200 billion of (90-95% of which is) paper silver!

And average daily trading volume at the LBMA is $5 billion worth of silver!

http://createsend.com/t/j-7BAC8CCB4D422DCF2540EF23F30FEDED

So, some people are trying to buy $65 billion worth of silver that does not exist, or some other group of people are trying to sell $65 billion worth of silver that does not exist. (Even up to $200 billion!)

The vast majority of futures contracts are for less than 1 year.

World Annual Mine output of silver is about 1 billion ounces, at the current silver price of $15.07 is worth about $15 billion.

There is no possible way to satisfy $65-200 billion of contracts. The contracts are excessive, and their massive size indicates fraud!

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We have been able to do a similar comparison of the open interest compared to the warehouse stocks at COMEX, run by the cmegroup.

As of July 5th, the open interest in silver futures is 222,557 contracts for 5000 oz. = 1,112,785,000 oz. x $15.07 = $16,769,669,950 = $16.8 billion dollars worth of silver.

https://www.cmegroup.com/market-data/volume-open-interest/metals-volume.html

The actual silver in warehouses is listed in an Excel Spreadsheet you can download here:

https://www.cmegroup.com/clearing/operations-and-deliveries/nymex-delivery-notices.html

Registered: 92,874,986.699 x $15.07/oz. = $1,399,626,049 = $1.4 billion dollars of silver.
Eligible: 213,699,980.948
Total: 306,574,967.647

Only the Registered silver is available to be delivered against futures contracts. The Eligible category may be held by people who just want to sit on 1000 oz. bars of silver in a Brink’s warehouse for 10 years or more.

Again, we see the notional value of silver contracts far exceeds metal, at a ratio of 16.8/1.4 = 12 to 1.

To me, this indicates they have sold, on paper, 12 times as much silver as they have.

Or, another way to say it, 11/12 contracts for silver are like “naked short”, meaning, they did not first make sure they had silver or borrowed silver to deliver into a futures contract, before they sold the futures contract.

That, to me, indicates fraud. But that is standard business practice in America these days, and is not illegal as far as I’m aware.

Some have written that these oversized paper contracts act to suppress the price, and others write as if these large paper markets excessively increase the price of silver. So, which is it?

Well, imagine that people did not spend $4 billion on paper contracts of silver, but attempted to buy real silver.

Or, imagine that people did not try to buy $200 billion worth of paper silver, for far less, but rather, tried to buy $200 billion of actual silver? (This is far less likely, but also possible, given the vast amount of paper wealth that exists.)

Thus, I think the paper is a diversion, and that prices would be far higher if paper silver was not offered to people as an alternative to real silver.

Bernie Madoff ran a $65 billion fraud, whereby he never bought stocks with his “fund” of money. How is this substantially any different when there is no possible way the big banks ever bought nearly enough silver to back up all the silver futures contracts they sell?

If you knew, in advance, that Bernie Madoff was a fraud, would you still hold money in his fund? Of course not.

Now that you know the BIS, LMBA, and COMEX numbers, why would you, or anyone who is aware of this publicly available information, willingly participate in trading with those banks and markets?

Another writer, Ronan Manley, explains similar things in the gold market.

From: https://www.bullionstar.com/blogs/ronan-manly/lbma-clearing-vaulting-data-reveal-absurdity-london-gold-market/

Key Excerpt: “On a monthly basis, the London Gold Market looks to be trading about 130,000 tonnes of gold (assuming 22 trading days per month). On an annualised basis, the 189 million ounces (5880 tonnes) of gold traded each day in London (based on the August clearing figures and a 10 to 1 trading multiple) and assuming 250 trading days in a year, would imply that 47.25 billion ounces of gold are traded each year in the London OTC gold market, or 1.47 million tonnes of gold.”

“However, there have only ever been about 190,000 tonnes of gold mined throughout history, with nearly half of that said to be in the form of gold jewellery, and only 38% held in central bank and private hoards. Therefore on a monthly basis, the London gold market looks to be trading about 68% of all the gold ever mined in the history of the world, and on an annual basis, the London gold market looks to be ‘trading’ more than 11 times the amount of gold ever in existence, even though nearly all of this above ground gold is never in fact traded at any given time.”

16 replies on “Current (2018) BIS “other precious metals” derivatives data vs. LBMA Vault Holdings: Silver”

  1. Thanks, Jason. I think this type of fraud has been going on since at least 2009. I don’t see that the ones in control of the precious metals commodities futures in the so-called Federal government have any intention of stopping this fraud.

    1. Right. Fraud like this were never stopped by those in power, when those in power profit from perpetrating these kinds of fraud. Rather, frauds like this end due to market forces, defaults, meaning, failures to deliver the metals, and the public wising up to decide to no longer be deceived by these kinds of frauds.

  2. Jason, I agree that there is more “paper

    Jason, I agree there is more “paper” gold being traded than actual gold metal that exists in the world. Having said that, much of that “gold” traded on the London and other markets could have been bought and sold several times in a week or even in a day, in time of a volatile market place. I have done this myself. Activity like this will skew the figures significantly, computer trading is probably the worst offender in this case. I would suggest that if only actual gold metal could be traded the price would be much higher than it is. I would use Bitcoin as an example of this train of thought.

  3. Jason,, it’s called speculation,, happens in all markets. I trade a Dow etf symbol DIA, I keep track of open interest and almost every day the ask side is 100’s of x’s the actual existing options. I don’t do it often, but I have gone ‘naked’ on DIA and also the main gold etf, GLD. Made good $’s shorting/going naked, on those opts too. Since it’s legal, kinda hard to call it fraud. The various markets only create a marketplace,, where speculators do their best to make money, that is the name of the game after all :). You do have to be approved @ Options Trading level 4 ( highest level) to ‘go naked’, it’s the riskiest type of trading there is. There’s never any connection between actual holding of any listed enity and the amt/value of the options being offered at/for trading. If everything had to be backed up by reality, there’d pretty much be no markets at all…

    1. Shockingly, yes, there were markets during the gold standard that lifted the USA from an empty nation, to being the strongest nation in the world, strong enough to win back-to-back World Wars. You forget your history, or maybe you never knew it. The USA used gold for money since the founding of the nation in 1776 all the way until the founding of the Federal Reserve in 1913. Then, we went off the gold standard first in the Great Depression, and again in 1971 under Nixon.

  4. Well, well, well….This fraud was a long time in the making, thus less noticeable. Once the majority had accepted the “new” norm (fiat currencies) the fraud could then be put on steroids. Now even cash is too “honest” a way to allow people to operate. We will soon be cashless, where the real fraud and control on our finances will proceed to hyper drive. As the fraud expands and grows, we will at some time, see an ever increasing population forced into realizing that the fraud is real and enormous. It’s sad that so few even consider that this is even going on. That fact will become clear, but much to late for the majority od citizens to realize it and move to protect themselves in time. Certainly not a pleasant thought.

    1. I deleted part of your post, and I suggest you consider doing the same. Reason is, no need to say such things online. For your own security.

  5. Jason,

    I admire your courage. When you had the silver stock report, you were unjustly attacked by those who hated you spreading truth and light to others. May God richly bless you and your loved ones.

    I suspect that the fraudster’s will NEVER allow the PMS to shine as they would now or only allow the price to explode after most/all of the hard working, honest people are relocated to re-education centers.

    Gold is golden, silver doth shine BUT a spirit of love is what I’ll mine. Priceless and untouchable by evil and wickedness.

    1. I brought exposure to many fraudsters in the past, and I’m sure I will continue to do so in the future. They don’t like that. Some of my enemies have since gone bankrupt. And some are still in business. Thank you for your views! I am optimistic that gold can rise, despite the attempts of fraudsters to prevent that, because now, we have substantial price action over the last 18 years!

  6. Jason,

    Please go ahead and say what you have to say. I am interested. You said that you were all done with saying anything several years ago, but not only am I interested; other people will be too because you speak the truth, and your analyses of silver are spot on.

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