Global silver/gold demand trumps any attempt to mitigate JPM’s losses tied to their silver-shorts. Instead, look for more of what JPM is doing now, monopolizing the copper market as a hedge against their silver-short losses. WE ARE ALL HEDGE FUNDS NOW. ALL GOVERNMENTS HAVE FAILED.

Posted on December 5, 2010 by maxkeiser| 23 Comments

This entry was posted in Headlines. Bookmark the permalink.

23 Responses to Global silver/gold demand trumps any attempt to mitigate JPM’s losses tied to their silver-shorts. Instead, look for more of what JPM is doing now, monopolizing the copper market as a hedge against their silver-short losses. WE ARE ALL HEDGE FUNDS NOW. ALL GOVERNMENTS HAVE FAILED.

Belial | December 5, 2010 at 4:42 pm |

I think the price manipulation will come back to bite us eventually. And it will come in the form of loss of types of technology, loss of industry, jobs and potential for future progress.

Think about what would happen if the world “ran out” of copper. Artificially lowering the prices on commodities just ads to waste and encourages depletion.
flicks | December 5, 2010 at 4:46 pm |

This guy Mike Hancock MP is on the defense select committee I mean WTF is he doing employing a Russian ?

http://www.telegraph.co.uk/news/worldnews/europe/russia/8182177/Russian-spy-Lib-Dem-MP-Mike-Hancock-denies-researcher-facing-deportation-is-Moscow-sleeper-agent.html

They dont need spy’s anyway just look at how the UK comes to a halt with a bit of snow – best time to invade the UK – were all busy getting stranded on the M25 or somewhere up North in the middle of no where covered in a snow drift.
R | December 5, 2010 at 4:47 pm |

Considering that the Gov’t has spent the last nine years shredding the constitution and erecting a national security state; what will stop them from doing what they did during the last depression and simply take everyone’s gold and silver under the guise of national security? This time at gun point.
MirrorMirror | December 5, 2010 at 4:49 pm |

@flicks … “best time to invade the UK ”

Now just why would Russia want to invade the UK ?
.. they have enough snow of their own.
… and besides, they now also have the FIFA world cup don’t they ?
Mongo | December 5, 2010 at 4:57 pm |

Silver bitchez!

If that fails

Gold bitchez!
MMA | December 5, 2010 at 5:10 pm |

Well, off course there is a risk of price fixing, confiscation and other totalitarian desperate measures from our crooked governments. But at this level, the question will be : Do we submitt again to fascism or do we stand up and fight for our freedom, our property rights and for a free market?

Think of it, if you say, ok, I’ll bend over and get my silver bars confiscated cause I don’t want to go in jail and be molested, then guys, you WILL someday go to jail for any other reason and be molested cause you gave up resistance and the bullies for your government will know it.

At some point in time, people will have to say enough is enough and stand for their rights and silver deserves this because it’s the poor men gold.
MirrorMirror | December 5, 2010 at 5:16 pm |

Eye of the storm: The jaw-dropping image of an enormous ‘supercell’ cloud
By Daily Mail Reporter
Last updated at 10:32 AM on 5th December 2010

http://www.dailymail.co.uk/sciencetech/article-1334672/Jaw-dropping-image-enormous-supercell-cloud-Glasgow-Montana.html
doggis | December 5, 2010 at 5:21 pm |

max,

help me out with this copper/hedging argument. i fail to see the move as a hedge. Silver is a by-product of COPPER mining. if silver prices drive up silver production at the margin, then they are driving up the supply of copper as a result. more copper – lower copper price.

Also, china is on the edge of raising interest rates to cool off food price inflation. it will signal an end to their buying binge and strategic reserve storage of commodities – most importantly – copper. This is also bad for the price of copper……. if i was JPM i would be not be looking to corner the market of copper NOW as a hedge……

Which of course raises the question – what is really up?? JPM is the government – it is one and the same. what does the government want with this move?? or is this move, one move in a series of moves to achieve……..some defined goal??

help me out max…..

doggis…
Crumpet Muncher | December 5, 2010 at 5:22 pm |

@Max – flush with this success, you must spend most of your day on the rampage sporting a semi. You can tell us.
Sir David Rottentrousers | December 5, 2010 at 5:32 pm |

The guy lost me soon as he said, “He has a Masters degree, he’s knowledgeable.”

LOL!

An MBA doesn’t mean $#it! I wasted two years of my life and money on it. It might help you get laid in a bar full of dumb gold diggers but that’s about it….
LuzazuL | December 5, 2010 at 5:33 pm |

@ Economic Spy @ All > I’m wishing for admitance in this matters here, I’m illiterate. So my problem right now is to understand GDPs. Because I sense GDPs are not what they seem to be but rather something cooked for some culinary purpose. Where do I go to learn the BASICS about GDPs?
microhousehold | December 5, 2010 at 5:40 pm |

What about this?:

‘With a need to replace copper chip interconnects in sight, a potential successor is finally proving itself’

http://spectrum.ieee.org/semiconductors/materials/carbonnanotube-wiring-gets-real
Tim | December 5, 2010 at 5:40 pm |

Maybe this suggestion can bring some light to the situation:

http://www.youtube.com/watch?v=QLx6szAysLk
MirrorMirror | December 5, 2010 at 5:41 pm |

@LuzazuL

GDP .. Gross Domestic Product = anything the Govt. wants to count, inlc. Govt. spending !

GNP .. Gross National Product = what does the nation actually produce
doggis | December 5, 2010 at 5:46 pm |

WAIT MAX!!!!!!!!!!!!! IS COPPER BULLION ABOUT TO BE ADDED TO THE NEW METAL BACKED RESERVE WORLD CURRENCY????? ARE THEY TRYING TO TAKE THE BANG OUT OF SILVER BUYING BY BACKING COPPER AS A CURRENCY TOO????? GOLD/SILVER/COPPER????? THAT COULD POTENTIALLY GET THEM OFF THE NAKED SILVER SHORT HOOK IF THEY COULD MAKE THAT HAPPEN……………….

THOSE DIRTY RAT BASTARDS!!!!!!!!!!!! I AM GONNA KICK YOU IN THE BALLS JAIMIE DIAMOND. AND BTW DIAMOND – ‘JAIMIE’ IS A GIRLS NAME YOU FREAK!!!

DOGGIS
TMike | December 5, 2010 at 6:05 pm |

Making a ton of money from cornering a market is always a good idea, to offset losses from silver or not.

However, from a pure hedging perspective, the current (quarterly) copper correlation coefficient with silver is “only” about 0.4 (page 7):

http://www.gfms.co.uk/Presentations/Silver_market_2010_interim_report.pdf

The official version of the copper position was as a purchase for an upcoming JP Morgan copper fund.
Jack Kristeller | December 5, 2010 at 6:09 pm |

Hi
You pose an interesting question about the poss. ‘shut-down’ of the COMEX if PM prices are deemed by US Govt./CFTC/JMPC? to have risen too far, too fast. I think your original premise is wrong for a number of reasons.

1) Silver and gold trade almost 24 hours a day around the world on market days. It would therefore be impossible for US metal exchanges to halt prices escalating on other exchanges around the world if physical supplies, especially of silver, remain tight and get tighter.

2) This is not like 1980 and the Hunt Brothers – as Max says, we are all ‘micro-hedge funds doing on a micro scale what Eric Sprott is doing on a macro-scale. Buying silver and taking it off the market. Sitting on it (ouch!). We have no margin, we have not gone into debt to obtain our physical silver (I hope not, anyway. Please say you haven’t borrowed from the bank to buy your silver!). We buy on the open market and make it unavailable to exchanges to sell it over and over and over and over (sorry, got carried away) again by the means of derivatives and unbacked certificates. This is why exchanges are finding it harder and harder to supply those who have ‘stopped’ their open contracts, funded their exchange accounts and are waiting for physical delivery. Reports are now surfacing that silver longs who ‘stopped’ their Dec. 2010 contracts were offered a hefty cash premium to liquidate (close) those contracts. Under commodity law, this is illegal, for obvious reasons. If you stand for delivery of a commodity and you have funds deposited to pay for it, the exchange is legally bound to honour that commitment, that contract. If they do not, it is breach of contract. Imagine that happening in wheat, or in cotton or in, say, copper. A ludicrous idea, isn’t it? Imagine a clothes manufacturer who ‘stops’ a few thousand cotton contracts on the COMEX and the exchange says: sorry we’re all out of cotton at the moment – will you accept cash instead? What is the clothes manufacturer going to do with cash? He needs cotton to make clothes with. Cash is no good to him! Why should it be any different for silver – or indeed for gold? Silver, remember, is a vital industrial metal so there are sound economic reasons as well as sound legal reasons for this behaviour (‘stopped’ commodity contracts bought off with cash) to be strenuously opposed – although the CFTC will look the other way, of course, at least for the time being. Eventually, they will have no choice but to act because all US commodity markets will be shunned. So will the LME if they try the same tactics. It is therefore too risky, politically, and will only exacerbate the currency wars which are currently raging.
It will, therefore, ensure that this and any other exchange which practices such illegal abuse to be by-passed by those who want/need physical (and have come to distrust said exchanges) are brought into disrepute.

3) In my opinion, most or all industrial users will eventually buy directly from refiners or even from mining companies who have production which they are stockpiling. What little need for the exchanges will dwindle at which point price-discovery for the metals will shift to the most efficient (i.e. the most honest) exchanges or will take place outside the exchanges. They may even buy their own silver producers (mining companies)! True price discovery is already happening to some extent in the form of premiums applied by retail dealers in order to maintain/ensure supply and, therefore, an orderly retail market. That’s also why you see dealers shutting up shop when demand outstrips supply. (I think you’ll see a lot more of that).
TMike | December 5, 2010 at 6:12 pm |

Mr. Hollister: Just how obscene an amount of silver are we talking about here? Profane or really offensive?
Edward Lewis: Really offensive.
Mr. Hollister: I like him so much.
evolutis | December 5, 2010 at 6:28 pm |

@Sir David You nailed it.

What is this a religion? Or What? “I’m smart and you’re dumb because I know what the real problem is?” Well Jeb, these ol’ boys is a fixing to build a newfangled bridge to sell us; gonna line up fer that, yup.

… not sure these ol’ boys meet your standards … “A semi-chronological series of quotes from pertinent historical figures as related to economics. Includes: William Paterson, Thomas Jefferson, John Adams, Napoleon, Nathan Rothschild, Andrew Jackson, Amschel Mayer Rothschild, William Gladstone, Abraham Lincoln, Otto von Bismarck, James Garfield, James Weaver, Woodrow Wilson, Robert L Owen, Lord John Maynard Keynes, Reginald McKenna, Louis McFadden, Franklin Roosevelt, Sir Ralph Hawtrey, Henry Ford, Sir Josiah Stamp, and Karl Marx.”

The dismal science of monetary, economics hasn’t come up with an antidote to greed … it’s in the flawed structure
nutPuppet | December 5, 2010 at 6:32 pm |

JPMorgan buying copper? Should we start to panic if they start buying lead?
Curious | December 5, 2010 at 6:55 pm |

Cornering the copper market will force Higher production of Copper and also will increase production of Silver as it is byproduct of Copper.
LuzazuL | December 5, 2010 at 8:01 pm |

@ MirrorMirror > hmmm. So basically we should get real, right?
RandPaulRocks | December 6, 2010 at 7:50 am |

We keep buying, thats all, they can’t stop everyone. It will end them and the price control would not work.