If/When Comex Defaults - What Then ?

[gunDriller]

"comex is in serious trouble as it scrounges the bowels of the earth in
an attempt to find available silver. This is very ominous."

http://harveyorgan.blogspot.com/

Harvey Organ goes into a lot more detail but, from the sound of it, Comex is on the verge of a silver default.

What does that mean ? Is it like a large bank failing ?

What would a Comex-less silver market look like ? How would the price be set ? Where would Kitco get their prices ? Would sellers like APMex & Provident still use the Kitco price ?

Anyway, I hear all this talk of a Comex default. So I'm curious what it will be like if they do default.

[Book]

There is no shortage of above-ground physical silver on Earth. This is either about somebody (Comex) cooking their books or somebody hyping the non-existent market for silver...lol.

The Hunt Brothers ran silver up to $50 decades ago and ever since it can't get past $20.

:D

[Ragnarok]

A Comex default would call for switching to a different type of gold rocket imo:
R. ;D

[Sparky]

I don't see why it's at risk of default, when they can change the rules to define/avoid default any time they need to. That's what they did in 1980. If they run into trouble again, they will simply rule that every ounce of silver held at Comex is equivalent to 10 ounces of physical reserve. If 10 isn't enough, they'll change it to 100. Problem solved. I've just grown so tired of the Comex default theory. It totally ignores the fact that the people in charge can do whatever the F they want.

[gunDriller]

I don't see why it's at risk of default, when they can change the rules to define/avoid default any time they need to. That's what they did in 1980. If they run into trouble again, they will simply rule that every ounce of silver held at Comex is equivalent to 10 ounces of physical reserve. If 10 isn't enough, they'll change it to 100. Problem solved. I've just grown so tired of the Comex default theory. It totally ignores the fact that the people in charge can do whatever the F they want.


i'm not sure it's a theory, as much as people wondering, "how do they get away with it ?"

but, like you said, they just move the goal-posts.

Viva la Physical !

[Gneisenau]

But suppose that all of a sudden there was enough demand for physical delivery that twice as much gold was requested for delivery as actually existed in both the COMEX and LBMA vaults. The answer is that this is a well understood risk, and that the markets are designed to accommodate it. Every [competent] futures or OTC Forward trader who buys a long contract understands what they are really buying: It’s a promise to that one of two things will happen if they choose to stand for delivery: Either they’ll get to buy the physical commodity assuming some is available, or they’ll get a cash settlement equal to the value of the commodity on the delivery date. Those are the rules: You’re never guaranteed that you’ll get to buy the actual metal when you buy a futures contract or OTC forward. If you want to buy the metal, you only get to take delivery if there is enough to go around, and if there isn’t, you’ll get cash instead. If you don’t like those rules, don’t trade in the derivatives markets where they necessarily exist!

http://www.financialsense.com/contributors/erik-townsend/debunking-the-precious-metals-fear-mongering-campaign

So I guess there is no need to change any rules as the contracts will be settled in cash. At that point the "physical market" (today 99% paper) will be a 100% paper market. Maybe there will be an option to take "physical delivery" in SLV shares. After a COMEX default the crowd will probably rush into physical silver in London and other trading places. If there is enough silver available the game goes on. If not *rocket*

[cedarchopper]

There is no shortage of above-ground physical silver on Earth. This is either about somebody (Comex) cooking their books or somebody hyping the non-existent market for silver...lol.

The Hunt Brothers ran silver up to $50 decades ago and ever since it can't get past $20.

:D




You must not have any silver? You forgot to mention it has gone from under $5 to $20 in a short time...that is a spectacular return and could have made most people wealthy had they taken the initiative (sold their house, stocks, and other investments and put it in physical silver ;]

Another beauty of silver is bandits can't hit and run on your investment...too heavy. I like gold, but a thief can run down the street with 100's of 1000's of dollars worth. With silver, try running with a $1000 face bag of silver...not going to happen.

[gunDriller]

Another beauty of silver is bandits can't hit and run on your investment...too heavy. I like gold, but a thief can run down the street with 100's of 1000's of dollars worth. With silver, try running with a $1000 face bag of silver...not going to happen.


that's a very good point.

plus, the $1000 face bags are quite resistant to the biggest thief of all - the United States Government.

[Saul Mine]

They get away with it because the people who deal there don't actually care about metal, they only want to leave with more money than they brought. Same as in a casino, the players don't care if the game is rigged as long as they can get a share of the loot. The ones who don't get a share are losers, and nobody cares about losers.

If you think about this until you can understand it, then you realize why it is a religious problem and it can only be fixed by Joe Average adopting a better standard of right and wrong. Please notice I didn't say anything about any particular denomination! The standard of right and wrong only needs to be commonly accepted; it does not have to be part of any particular denomination. What we have now is a standard of rejecting standards, and what we see are the results of our rejections.

[Phoenix]

i'm not sure it's a theory, as much as people wondering, "how do they get away with it ?"


How do they get away with it? They sold promises to people in place of silver, didn't they?