JBmurc buying more bullion as funds allow
BANK PARTICIPATION IN FUTURE CONTRACTS
SILVER Short Futures - US Banks
1/7/2008: 6,199 (30,995,000 ounces)
5/8/2008: 33,805 (169,025,000)
= an increase of more than 5 fold
-> coincided with a silver price drop from $19.55 in Sep to $12.22
GOLD Short Futures - US Banks
1/7/2008: 7,787 (778,700 ounces)
5/8/2008: 86,398 (8,639,800 ounces)
= an increase of more than 11 fold
-> coincided with a gold price drop of $150
Rob Kirby suggests this is the work of a few US Banks. JP Morgan now sports 93 billion + of gold derivatives!
In Rob Kirby's own words:
"Ladies and gentlemen, the OBSCENE amounts of these financial instruments being thrust through the system – allegedly in the name of 1 bank, amounting to MULTI-TRILLIONS per quarter – CAN ONLY BE THE WORK OF A PRIVATE CENTRAL BANK [read, the FED], because no public entity – bank or otherwise - has the balance sheet maneuverability in an impaired credit environment to conduct such business.
The current track is NOT SUSTAINABLE. This is evidenced by the recent “decoupling” or widening of spreads between the futures [COMEX] price of precious metals and the prices being paid to acquire physical metal. We see the same type of divergence in the interest rate complex where LIBOR is set [effectively by 3 month Eurodollar Interest Rate Contracts] at contrived rates where banks are UNWILLING to lend money.
Under our current monetary regime the distortions outlined above will continue to intensify.
This is why I believe it is so important that people consider having an appropriate amount of physical precious metal, which is getting harder to purchase despite recent price bashings.
I would suggest to you all that recent price declines in precious metal, although nasty, have been largely “linear” in nature. My concern is that on our current path, we will reach a point where confidence is shattered, resulting in a geometric advance in the nominal prices of all things real.
Are you protected?"