Wednesday, June 1, 2011

Paper Silver Games!

Let's look at the current situation at the Comex silver warehouse. The Comex inventory of registered silver has been declining everyday and was at 32.132mn ounces as of May 25th. This is a 15 year low. Availability of physical is declining concurrent with falling derivative futures prices. Hmm....

As of May 25th, there were 86,928 silver futures contracts outstanding. Each silver futures contract is a claim for 5000 ounces of silver. Total futures claims for physical silver stands at 434.64mn ounces.

So, that's 32.132mn ounces of silver in the warehouse to back outstanding futures positions, with 434.64mn ounces of futures claims on the physical silver. If only 7% of investors currently long silver futures were to request physical delivery, the Comex would certainly be in a difficult position, to say the very least!

Invest in real, physical silver. Let others play their little silver paper games!

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