Sunday, 29 January 2012

Silver. COMEX.................from Rico

There are a LOT of 'paper' Silver contracts out there right now.
- The 'physical' Silver vaults are almost empty though.

There are 49,436 contracts with COMEX currently open for the next delivery month for Silver (March 2012). Each contract represents 5,000 ounces. That = 247.18 million ounces of Silver being traded for March delivery against a COMEX registered warehouse of 36.56 million ounces. Huh?

This is a leverage of almost 7:1.
- Ooooops.

Since most contracts are speculative and get 'settled' for cash, this 'works' (as long as you do not stand for delivery of physical). COMEX (aka CRIMEX) is NOT where you go for large deliveries of physical Silver these days...but, wheel barrows of paper cash? No problemo!
- But, if you get on the wrong side of this trade, you won't be shopping for Fwench Chateau's like John Corzine recently did.

The 'failure' of Corzine's MF Global and the blatant cheating of the customers (before and after the fact) will now only accelerate the process of failure and the increasing irrelevancy of the CME/COMEX in the marketplace that has already begun.

While "got Gold?' is a good question to ask today, it may be even MORE important to ask "got Silver?"

No comments: