“This game is getting so stretched that it’s going to break. You don’t think the Chinese know this stuff. If we get a close above the 200 day moving average in the mid 30’s on silver, watch silver immediately pop $2 or $3. Silver is totally incredible. There is nobody in COMEX silver contracts anymore, other than casino players. The only way they have been able to keep silver depressed is by borrowing silver from SLV to meet immediate demand. That’s the only reason silver isn’t trading $10 to $15 higher right now.
There isn’t enough silver for investors to buy (in large amounts) so they have been using SLV as a flywheel. SLV is over 20 million ounces short on the silver they are supposed to have in the vaults to back the shares which have been issued. The silver isn’t there. So there are people who purchased SLV to own physical silver, but all they have is shares that aren’t backed by the physical silver.
Part of managing the price of silver recently has been for the central banks to attack the gold market. But what is interesting is how this manipulation of the gold price was effected. Obviously, the bullion banks, which are working with the central banks, have inside knowledge as to the timing and just how much gold is going to be available to them.
So, in order for the bullion banks to maximize the effect of the physical gold they get from leasing, they add high scale paper leverage. They then short-sell just enough tranches of COMEX contracts to surgically take out three important support pivots....