JPs Silver Stockpile

[SpacePete]

So, JPMorgan is an uber-stacker?

Hard to say Pete. It seems that some say that metal is to sell to 3rd parties (perhaps those with shorts needing the metal to deliver to longs, etc). It that's true, wouldn't JPM be losing on every ounce they sell at these price levels (and lower?). I don't know why they would do that. Besides, it seems they only add to the stack as it's been growing steadily since 2012 per the article.

Would be interesting to know the real deal on all this. If I knew that they were stacking it for their own company, it would make me less worried about too much further downside (assuming they have better insight on where silver is headed than I do).


Jim

Yep, that's they key point. What's it really for?

 

[Pirocco]

Comex does not own the PM's. It is up to the short to supply the PM's when a long seeks delivery. Some erroneously believe that there is Comex silver and Comex gold, but all that metal is owned by some other party, not the Comex. It may be stored in what you call Comex vaults, but Comex is just the market. Kind of like saying the DOW or Nasdaq provide the shares of stock that are bought.

Here is a primer on how Comex works. Here is a snippet from the link below "The short will deliver to a COMEX warehouse the 5,000 ounces of silver (or turn in a warehouse receipt, if they have one -- it appears that they can buy them from bullion banks that have silver in the Registered category)".

http://about.ag/futures.htm

Jim

Again: if I say "Comex silver" then that isn't a claim that the Comex owns the silver, it's a reference to the silver inside the Comex Depositories.
So can you please cease this strawman?
JP doesn't own the Comex silver.
A (not the) function of JP Morgan is to provide storage for others. Notably the owners of the silver. Those owners decide if they wanna get their silver sold or not. That's what the difference between Registered and Eligible comes down to. And they can also decide to end that availability of it. Depending on price and whatever reason they may have.
A bullion bank, just like a dollar bank, doesn't own the product. A bank stores for customers, and customers decide / accept eventual lending out of the product.

 

[Pirocco]

Besides, it seems they only add to the stack as it's been growing steadily since 2012 per the article.

Well it was hard to drop before because it didn't exist then.
JP Morgan has a license only since march 2011.
http://www.cftc.gov/stellent/groups...ocuments/ifdocs/rul031511nymexandcomex001.pdf
About the bullshit that is spreaded to mislead people and place the focus away from those that wanna sell at any price including the high one, and need to find the required quantity suckers, this is a good detailed article for it:
http://kiddynamitesworld.com/precious-metals-charlatans-freaks-of-the-industry/

One may wonder why people wonder about a large exchange based commodity stock during a bear market.
That's what bear markets are: demand drop and/or supply increase. Means more commodity stays hanging in the shelves of the stores.

This a chart I found, it's pay-for data (sharelynx.com, hefty price tags for a reason) but this long term (1971-2009) one is pasted here:

Note how Eligible stock only 2001+
Note how in the years around 1992 the Comex silver stock hung around 260 Moz, 100 Moz more than now.
Note how in 1999 the stock sat on a minimum of 80 Moz.
A flat price doesn't indicate a flat market, if one price hangs while others prices rise alot then the product of the former is a bear market.

<year> <average price silver USD> <average price gold USD> <ratio gold/silver> <government net silver purchases Moz> <government net gold purchases Moz> <ratio government silver/gold purchases>
1970 1.635 35.94 21.98
1971 1.394 40.80 29.27
1972 1.976 58.16 29.43
1973 3.137 97.32 31.02
1974 4.391 159.26 36.27
1975 4.085 161.02 39.42
1976 4.347 124.84 28.72
1977 4.706 147.71 31.39
1978 5.930 193.22 32.58
1979 21.793 306.68 14.07 <- highest silver price during lowest Comex silver stock
1980 16.393 612.56 37.37
1981 8.432 460.03 54.56
1982 10.586 375.67 35.49
1983 9.121 424.35 46.52
1984 6.694 360.48 53.85
1985 5.888 317.26 53.88
1986 5.364 367.66 68.54
1987 6.790 446.46 65.75
1988 6.108 436.94 71.54
1989 5.543 381.44 68.81
1990 4.068 383.51 94.27
1991 3.909 362.11 92.63 <<< lowest silver price during biggest Comex silver stock
1992 3.710 343.82 92.67 <<< lowest silver price during biggest Comex silver stock
1993 4.968 359.77 72.42
1994 4.769 384.00 80.52
1995 5.148 384.17 74.63
1996 4.730 387.77 81.98
1997 5.945 330.98 55.67 0.7 -10.48 0.06
1998 5.549 294.24 53.03 -33.5 -11.67 2.87
1999 5.218 278.88 53.45 -97.2 -15.34 6.34
2000 4.9506 279.11 56.38 -60.3 -15.40 3.92 <- CUMULATIVE AVERAGES!!!
2001 4.3702 271.04 62.02 -63.0 -16.72 3.77
2002 4.5995 309.73 67.34 -59.2 -17.59 3.37
2003 4.8758 363.38 74.53 -88.7 -19.93 4.45
2004 6.6711 409.72 61.42 -61.9 -15.40 4.02
2005 7.3164 444.74 60.79 -65.9 -21.32 3.09
2006 11.5452 603.46 52.27 -78.5 -11.90 6.60
2007 13.3836 695.39 51.96 -42.5 -15.56 2.73
2008 14.9891 871.96 58.17 -30.5 -7.59 4.02
2009 14.6733 972.35 66.27 -15.6 -0.96 16.25
2010 20.1928 1224.53 60.64 -44.2 -2.48 17.82
2011 35.1192 1571.52 44.75 -12.0 14.63 0.45
2012 31.1497 1668.98 53.58 -7.4 17.19 0.31
2013 23.7928 1411.23 59.31 ? 11.86 ?
2014 19.0778 1266.40 ? ? ?
(read the <<< comments)

Btw note the terminology above the chart: "Comex silver". Your interpretation strawman, remember?

What can be concluded here: that a big Comex silver stock indicates a bear market, and a low Comex silver stock the start of a bull market. On this, long, term!

To add another note: the Comex silver stock (no part-of-the-story focus on JP Morgans part) sits in a downtrend. Begin 2014 it was 177 Moz. In meantime it dropped to 160 Moz.

 

[wrcmad]

About the bullshit that is spreaded to mislead people and place the focus away from those that wanna sell at any price including the high one, and need to find the required quantity suckers, this is a good detailed article for it:
http://kiddynamitesworld.com/precious-metals-charlatans-freaks-of-the-industry/

Pirocco, nice to see you are finally reading educational articles and making sense of the market, rather than being one of the suckers.
A big change from the early days.
Thumbs up to you.

 

[Pirocco]

About the bullshit that is spreaded to mislead people and place the focus away from those that wanna sell at any price including the high one, and need to find the required quantity suckers, this is a good detailed article for it:
http://kiddynamitesworld.com/precious-metals-charlatans-freaks-of-the-industry/

Pirocco, nice to see you are finally reading educational articles and making sense of the market, rather than being one of the suckers.
A big change from the early days.
Thumbs up to you.

I was never a sucker due to belief in what precious metals charlatans claimed.
My reason for being a sucker was believing that the Federal Reserve's newly created dollars on balances were being/going to be spent. Instead, they started to pay their member banks (an interest rate that wasn't set as a negative figure - would make it too clear - instead its definition inverted) to NOT lend it out. The former was given mega media attention, the latter was never mentioned.
And what you name here and now "finally", is years ago now. Your thumbs up is as late as a clock past midnight.

 

[wrcmad]

And what you name here and now "finally", is years ago now. Your thumbs up is as late as a clock past midnight.

Yep, years ago, but I can count them years on 2 fingers, the difference being about $20 spot.

 

[phrenzy]

The theory I've heard goes something along the lines of they (possibly or probably acting on behalf of some other wealthy person) is shorting paper to accumulate physical, the price of which they expect to diverge from paper.

I don't think we have any proof of that, but whichever way you slice it one or a couple of very high net worth individuals or institutions is paying a very hefty premium plus storage fees to hold tens of millions of ounces of physical. I know at least some of it is in ASE's with premiums a couple dollars over spot per ounce. I'd be very very interested to know who it is and hear directly from them why it is they're accumulating. Have to wonder if similar caches exist in private vaults without reporting requirements.

Maybe there's a forgotten Hunt brother in the mix.

 

[systematic]

Maybe there's a forgotten Hunt brother in the mix.

[youtube]http://www.youtube.com/watch?v=TxaYtdp4U3Q[/youtube]

And maybe a few old royal families have to put their stash somewhere ... just dangle it ... and maybe get something for it ... but not make a loss ...

 

[Pirocco]

And btw, about that decades chart of the Comex silver stock:

- using 1979 with its highest average silver price and thus highest amount ounces as a reference point, an estimated 55 Moz bottom
- using 1992 as an on average biggest stock of 270 Moz
... gives a stockpiling rate of (270-55)/(1992-1979) = 16 Moz per year.

- using again 1992 with its lowest average silver price as a reference point, a 270 Moz stock
- using 1998 as an on average lowest stock of 80 Moz
... gives a destockpiling rate of (270-80)/(1998-1992) = 32 Moz per year.
(yea haha, they sell twice as fast as they buy)

- we are now in a bear market, where the stock rose to over 180 Moz, and again dropped to 160 Moz. If we assume a repeat of that lowest stock of 80 Moz and a same average destockpiling rate of 32 Moz per year, then that's (160-80)/32 = 2.5 bear years left.

Of course, this is all very rough calculating.
But the goal is to wipe as much possible other elements out of the equation since the price is influenced by some many variables (even population growth since 1970 is a possible big one), and starting from a simple hard untamperable figure like a weight of metal, may give a good clue. The current bear market has a component that shouldn't be ignored: unlike in aboves period, other prices didn't rise. So a silver price hang, or even drop, is less "bear" than then. The currency fluctuations became a more prominent element (just look at the people that complain that the price dropped but not in their currency) and this is a supporting element for this judgement.

 

[SpacePete]

The theory I've heard goes something along the lines of they (possibly or probably acting on behalf of some other wealthy person) is shorting paper to accumulate physical, the price of which they expect to diverge from paper.

I don't think we have any proof of that, but whichever way you slice it one or a couple of very high net worth individuals or institutions is paying a very hefty premium plus storage fees to hold tens of millions of ounces of physical. I know at least some of it is in ASE's with premiums a couple dollars over spot per ounce. I'd be very very interested to know who it is and hear directly from them why it is they're accumulating. Have to wonder if similar caches exist in private vaults without reporting requirements.

Maybe there's a forgotten Hunt brother in the mix.

1. Slowly accumulate physical silver under the radar
2. Choose an opportune moment, then:
2. (a) Short Paper
2. (b) Smash the market by dumping all that silver in one go
3. Profit?

 

[Pirocco]

And what you name here and now "finally", is years ago now. Your thumbs up is as late as a clock past midnight.

Yep, years ago, but I can count them years on 2 fingers, the difference being about $20 spot.

If 2015-2011 counts as 2 to you then your difference may be an elementary school or not - one.
Can't really use "finally" either, since there was no pre-2011 silver story for me.
So your post was as redundant as bringing a bucket sand to the beach.

 

[Pirocco]

The theory I've heard goes something along the lines of they (possibly or probably acting on behalf of some other wealthy person) is shorting paper to accumulate physical, the price of which they expect to diverge from paper.

I don't think we have any proof of that, but whichever way you slice it one or a couple of very high net worth individuals or institutions is paying a very hefty premium plus storage fees to hold tens of millions of ounces of physical. I know at least some of it is in ASE's with premiums a couple dollars over spot per ounce. I'd be very very interested to know who it is and hear directly from them why it is they're accumulating. Have to wonder if similar caches exist in private vaults without reporting requirements.

Maybe there's a forgotten Hunt brother in the mix.

Of course there is silver in private vaults.
But for the price trend, that doesn't matter, a price mechanism only sees what passes in front of it.
The market, its depositories, reflects (also indirectly since anything that happens "outside the radar" results in a net remainder that is thus indirectly monitored) the part that is traded.
Look at it from both sides:
- JP Morgan stores more silver (here it doesn't even matter whether its own or others)
- Other people decided to store or sell more silver at or to JP Morgan.
What is the "why" then?
Well haha, a BEAR market. People buy BULL. People sell BEAR.
I wonder why some people see JP Morgan as the initiative taking side in eternity. JP Morgan has a couple roles on the market that are conform the so called "guaranteed counterparty". Alike a dealer that buys at any current price. Of course, it performs some hedging activity to avoid ending up at the sucker side lol.

Also to not forget: JP Morgans depository is one of the depositories. Beware selective / partial stories. If JP Morgans depository goes +1 Moz, and the others -2 Moz, then the net change is a DROP.
This is also what happened: earlier 2014 (feb 24) JP Morgans depository held 48 Moz. Total Comex then was 177 Moz.
Last report now shows JP Morgan at 70 Moz and total Comex as 161 Moz.
What does this do: reducing this entire JP Morgans story to a mere shift from A to B within a same market-environment, and a wrong claim on the whole.

 

[Pirocco]

Oh and btw, let's talk about new year, I wish everybody including myself alot ounces silver at decades-bottom prices in all their respective currencies. Thanks to the common currency snake in the tunnel - monetary policy of the world level central planning, our amount purchased ounces shouldn't differ in crazy degrees!
Don't forget: in a zero sum market any gain implies a sucker suffering a same loss. The market place is what we make of it. Try to shift the sucker side towards the central planning thieves, by understanding how they operate, then use a foot on them instead of your money.

Btw if you might pass doors with names like Silver Doctors, Zerohedge etc, please order the dog to pee.

 

[wrcmad]

And what you name here and now "finally", is years ago now. Your thumbs up is as late as a clock past midnight.

Yep, years ago, but I can count them years on 2 fingers, the difference being about $20 spot.

If 2015-2011 counts as 2 to you then your difference may be an elementary school or not - one.
Can't really use "finally" either, since there was no pre-2011 silver story for me.
So your post was as redundant as bringing a bucket sand to the beach.

It wasn't as far back as 2011. It was only a couple of years ago you were talking rubbish, and paying the price with bad purchases.
But hey! I am giving you a compliment ... not looking for an argument.

 

[Pirocco]

Yep, years ago, but I can count them years on 2 fingers, the difference being about $20 spot.

If 2015-2011 counts as 2 to you then your difference may be an elementary school or not - one.
Can't really use "finally" either, since there was no pre-2011 silver story for me.
So your post was as redundant as bringing a bucket sand to the beach.

It wasn't as far back as 2011. It was only a couple of years ago you were talking rubbish, and paying the price with bad purchases.
But hey! I am giving you a compliment ... not looking for an argument.

"Rubbish" isn't an argument. Not today and not your "couple of years ago".
Anyone that bought your "couple of years ago" made a bad purchase.
But hey! I am giving you critic... and I know you never look for an argument, that's why you never have.

 

[wrcmad]

If 2015-2011 counts as 2 to you then your difference may be an elementary school or not - one.
Can't really use "finally" either, since there was no pre-2011 silver story for me.
So your post was as redundant as bringing a bucket sand to the beach.

It wasn't as far back as 2011. It was only a couple of years ago you were talking rubbish, and paying the price with bad purchases.
But hey! I am giving you a compliment ... not looking for an argument.

"Rubbish" isn't an argument. Not today and not your "couple of years ago".
Anyone that bought your "couple of years ago" made a bad purchase.
But hey! I am giving you critic... and I know you never look for an argument, that's why you never have.

 

[Jim4silver]

Comex does not own the PM's. It is up to the short to supply the PM's when a long seeks delivery. Some erroneously believe that there is Comex silver and Comex gold, but all that metal is owned by some other party, not the Comex. It may be stored in what you call Comex vaults, but Comex is just the market. Kind of like saying the DOW or Nasdaq provide the shares of stock that are bought.

Here is a primer on how Comex works. Here is a snippet from the link below "The short will deliver to a COMEX warehouse the 5,000 ounces of silver (or turn in a warehouse receipt, if they have one -- it appears that they can buy them from bullion banks that have silver in the Registered category)".

http://about.ag/futures.htm

Jim

Again: if I say "Comex silver" then that isn't a claim that the Comex owns the silver, it's a reference to the silver inside the Comex Depositories.
So can you please cease this strawman?
JP doesn't own the Comex silver.
A (not the) function of JP Morgan is to provide storage for others. Notably the owners of the silver. Those owners decide if they wanna get their silver sold or not. That's what the difference between Registered and Eligible comes down to. And they can also decide to end that availability of it. Depending on price and whatever reason they may have.
A bullion bank, just like a dollar bank, doesn't own the product. A bank stores for customers, and customers decide / accept eventual lending out of the product.

I am not "arguing" any position on this. If you read my posts, I made it clear I don't know the answers on this issue. I come to sites like this to try to obtain knowledge, not prove anything to anyone.


Jim

 

[Pirocco]

Maybe there's a forgotten Hunt brother in the mix.

[youtube]http://www.youtube.com/watch?v=TxaYtdp4U3Q[/youtube]

And maybe a few old royal families have to put their stash somewhere ... just dangle it ... and maybe get something for it ... but not make a loss ...

About the Hunt brother and his brother, it doesn't need a Hunt-degree stockpiler, just alot smaller fish, and actually, back end 197x and 1980, the Hunts weren't alone in purchasing silver, they had alot "help", and it wasn't silver alone, the central-planned oil crisis caused alot of concerned savers that thought they'd lose purchasing power of their savings, silver was just one of the many products they attempted.

 

[Pirocco]

It wasn't as far back as 2011. It was only a couple of years ago you were talking rubbish, and paying the price with bad purchases.
But hey! I am giving you a compliment ... not looking for an argument.

"Rubbish" isn't an argument. Not today and not your "couple of years ago".
Anyone that bought your "couple of years ago" made a bad purchase.
But hey! I am giving you critic... and I know you never look for an argument, that's why you never have.

http://s2.quickmeme.com/img/5b/5b1ffd37c9f5f13bf4c2a9ee5e27d13a7be09958eb62ac819b12f648104544e9.jpg

Your post here is as void as your first and all between.
If they were a movie people would have yawned.

Just saying!

 

[Pirocco]

I am not "arguing" any position on this. If you read my posts, I made it clear I don't know the answers on this issue. I come to sites like this to try to obtain knowledge, not prove anything to anyone.

Jim

Me too, but there is alot misleading around, what you read may easily inflict one a wrong view, and that's what my posts were about.
This wasn't arguing so far, you interpreted my "Comex silver" as Comex-owned silver, told you that was wrong, yet you continued that way.
So to repeat: what I (and others) named "Comex silver", references the silver stored in Comex depositories, regardless owner.
As published on http://www.cmegroup.com/delivery_reports/Silver_stocks.xls !