Saturday, February 19, 2011

Silver Bankers May Be Sitting on Big Derivatives Losses and the Fed May Be Funding Them By: Jesse's Café Américain

Jesse's Café Américain had a great article asking important questions concerning bullion banks, specifically JP Morgan and HSBC.  These questions include:



Why do these banks have such massive naked short positions in silver?

If this is legitimate, what is with the secrecy? 

The banks are in big trouble, this silver manipulation fraud is coming to an end.  It does not matter what the banks do at this point, physical demand is to strong.   Here is a quote from Harvey Organ recent post:

"The huge rise in silver price has caught the silver bankers totally offside on the silver banking. The BIS data released in November (www.goldexsextant.com) shows that the G 10 bankers have collectively sold forwards and swaps to the tune of 4 billion oz and short naked calls for another 3 billion oz. The total, 7 billion oz represents 10 years of production. If you just do the forwards, then it is 7 years of annual silver production.

Let us say the average cost of acquiring these derivatives and forwards equate to $15.00 for silver. Thus collectively the entire G10 bankers are feeling massive pain (losses) to the tune of:


7 billion oz of silver( 32.30-15.00) = 7 billion x $17.30 = 121.1 billion dollars of losses.
This is in a market of only 14 billion dollars. It begs the question to what economic need was this done.This is still off balance sheet.

If you include only the forwards or swaps (the lending of actual metal to which nothing has come back yet) then the losses are:

4 billion x 17.30 or 69 billion dollars.
Regardless how you look at it, the bankers are in serious trouble with this huge rise in silver prices. I hope you understand the severity of the situation."
There is blood in the water.  Think of JP Morgan and HSBC as a grenade.  Silver is the pin in the grenade.  When you pull the pin the grenade explodes.  Get ready the pin has been pulled.

Full Article Here

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