Today marks the expiration date on the March Silver Option. In what has become a sick industry joke, silver magically lost a few bucks per ounce. As I reported months ago, JP Morgan was outed for manipulating the silver market through the use of Silver Put Options. Industry insiders learned that, almost like clockwork, a flood of Put Options would drive the silver price down near the Silver Option expiration date of each and every month. I expect silver to continue its upward rise the remainder of the month.
Shrewd investors would buy Puts alongside JP Morgan and benefit from a windfall that came at the expense of those holding Call Options. For the unitiated, a Put Option is a bet that the price of silver will go down. A Call Option is a bet that the silver option will go up. JP Morgan, a Rothschild/Rockefeller concern and a beneficial owner of the private corporation that prints our money, the Federal Reserve, has a vested interest in maintaining the illusion of financial stability.
Therefore, they stand accused of manufacturing multiple silver options for every real ounce of silver that exists. In fact, it is estimated that 100 imaginary paper ounces exist for every real ounce of silver bullion. When all that paper falls out, which it will, silver will be worth 100 times its current value.
Options are based on commodity contracts. A commodity contract is sold by silver mines, and others, in order to get a fixed price on silver coming into production in the near future. When they expire, the holder of the contract takes physical delivery of the silver. Apparently, they can also be settled in cash when the silver is "unavailable".
My sources are telling me there are a whole bunch of silver commodities contracts being settled for cash instead of delivering the physical silver. One individual claims they received 50% more cash than the silver was worth! Comex, which manages these transactions has been in trouble with charges of fraud before:
"As of 2009, holders of COMEX gold futures contracts have experienced problems taking delivery of their metal. Along with chronic delivery delays, some investors have received delivery of bars not matching their contract in serial number and weight. The delays cannot be easily explained by slow warehouse movements, as the daily reports of these movements show little activity. Because of these problems, there are concerns that COMEX may not have the gold inventory to back its existing warehouse receipts. As a result of the CFTC's March 2010 Metals Hearings, position limits will likely be imposed on Comex Precious Metals Futures Contracts, according to CFTC Commissioner Bart Chilton, in order to avoid continued charges of unfair concentration and manipulation." (Sources)
Last year, the CFTC Commissioner issued the following statement on silver manipulation:
On October 26, 2010, as everyone that follows PM markets knows by now, CFTC Commissioner Bart Chilton released the following statement (see Mr. Chilton’s full statement here):
“I take this opportunity to comment on the precious metals markets and in particular the silver markets. More than two years ago the agency began an investigation into silver markets. I have been urging the agency to say something on the matter for months. The public deserves some answers to their concerns that silver markets are being, and have been, manipulated.”
“The legal definition of manipulation under the law is a high bar to prove. It is a much different test than what the average person might consider as manipulation. Under existing law, to prove manipulation, the government is required to demonstrate not only specific intent; we also need to prove that as a result of the intent and market control, that activity caused an artificial price — a point that can certainly be debated by economists. Attempted manipulation is less difficult to prove — requiring an intent to manipulate and some overt act in furtherance of that intent. There are also other violations of law that could contort markets and distort prices.”
“I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act have taken place in silver markets and that any such violation of the law in this regard should be prosecuted.” (Source)
Stating the obvious. Look for silver to hit $60 per ounce by May and $100 by mid-summer. Supplies are diminishing most dealers but, not for me. You can still expect delivery in a few days, or 2 weeks, depending on the order size.