A cornering of silver by a billionaire is in process? Really? Here’s the definition of Cornering of the Market from Wikipedia, “In finance, to corner the market is to purchase enough of a particular stock, commodity, or other asset to allow the price to be manipulated, by analogy to the general business jargon where a company described as having "cornered the market" has a very high market share. The one attempting to corner a market hopes to gain control of enough of the supply of the commodity to be able to set the price for it.”

Anybody who is just now trying to corner the market is late to the ball game! Just look at Silver American Eagle Sales over the last 5 years.

(in ounces/number of coins)
2007- 9,887,000
2008- 19,583,500
2009- 28,766,500
2010- 34,662,500
2011- 14,530,000
Total- 107,427,500

And based on yesterday’s report of COMEX registered silver bullion dropping by 13% overnight , COMEX available silver for May delivery has dropped from 41 million to 35.8 million ounces. This is a decline of 5,287,142 ounces of silver overnight! A big drop to say the least; but even if those 5 million ounces went to one buyer, what percentage of the bullion market would they now control if we only looked at just the past 5 years of American Silver Eagle Bullion sales? The true number is much smaller but we are just looking at a simplistic approach, we are not factoring in…

1. Extrapolated out since 1986 when bullion coins became available from the US Mint
2. If we considered all other types of bullion (Maples, rounds, Comex bars, etc, junk bags, the list goes on)
3. If we considered all other mint sales and direct mine or refinery sales from all across the world

If one individual removed 5,287,142 ounces last night from the Comex registered supplies and they were converted to American Eagles they would control 4.9% of the Silver American Bullion Sales since 2007. Now, I wish I controlled 4.9%, but is that really enough to manipulate prices of the entire silver market? State Street Corporation (who?) holds 4% of JP Morgan…nobody is accusing them of cornering the market of JP Morgan shares! The Hunt brothers accumulated PHYSICAL SILVER FOR YEARS IN ORDER TO COME ANYWHERE NEAR CORNERING THE SILVER MARKET!

Now for the REAL STORY.

There has been a silver shortage for years. Manipulated prices by the big banks have just expedited the process through suppressing prices (aka JP mentioned above….wonder why their stock is only trading at 9.94 Price to Earnings even when they pay a dividend of over 2%, but that’s a story for a different day!).

1. JP Morgan’s current silver short contract obligations are 3.3 billion ounces. (There is only 600 to 900 million ounces of above ground silver in existence by some estimates which would be equal to shorting 4 times the amount of silver physically available)
2. According to the USGS, at current consumption rates, there are 16 years of silver supplies left or 12.8 billion ounces.
3. 127 billion in silver OTC derivatives as of June 2010, as reported by the Bank of International Settlements (BIS). Houston…we have a problem!!

In conclusion, the only ones who are currently in the process of cornering the silver market are the individual silver bugs reading sites like silverdoctors. Now, could a billionaire come along and attempt to put a billion dollars into physical silver and launch the price 5-fold overnight?
Sure, but this wouldn’t be a true market corner, as THERE ARE NOT ENOUGH PHYSICAL SILVER OUNCES AVAILABLE ANYWHERE NEAR CURRENT PRICES TO CORNER THE SILVER MARKET! Almost all the available silver is held by little investors like us and our readers who will not release their grip on silver until VASTLY HIGHER PRICES!

If all this information sounds new to you…complete your homework and read your background articles on the silver market at SilverDoctors.com.

The COMEX will default in the near future, at which time silver’s price will return to fair market value. What you should be doing now is buying physical silver; the opportunity of a lifetime won’t exist much longer.

SilverDoctors

SilverDoctors specializes in precious metals commentary and trading, found at
www.Silverdoctors.com

© 2011 Copyright SilverDoctors - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.