Bullion_Bob
4th December 2010, 09:36 PM
Great info if you aren't already reading it.
http://harveyorgan.blogspot.com/
"Before proceeding, many have asked me how many oz of gold and silver are really short. That is the 64 million dollar question but I will try and give you an approximate answer. In silver, Ted Butler believes that the total short position by the bankers is 3 billion oz. The comex for sure is 500 million oz short, but we must also include the silver deposits written by the bankers for many unsuspecting investors. This must be about 1 billion oz and then we have the OTC market between the bankers and this is estimated to be around 1.5 billion oz.
Butler estimates that we have no more than 300 million oz of silver left on the planet. With the price of 29.00 dollars the total market price of this silver is 8.7 billion dollars. With a shortfall of 3 billion oz, and a cost base of say 7.00 dollars to the bankers, we multiply 22.00 dollars (the loss) which will give us 66 billion usa dollars lost. The leverage in the marketplace is 66 divided by 8.7 billion or 7.5 to one. However much of the silver is in private hands and not in the dealers hands. Jeff Christian of CPM metals estimates that the leverage that the bankers use with silver in their possession is 100: 1. Now you can see the danger the bankers are in as each silver oz is withdrawn by customers. The bubble of shorts is so big that it cannot be covered.
In gold, we have a better picture because gold is never consumed like silver, and central banks do have gold as reserves. The short position by the banks of gold is around 7,000 tonnes, sold as forwards, but the bankers also short calls. The BIS data seems to suggest that the banks are short in the aggregate around 18000 tonnes or 576 million oz.
Let us say that the bankers cost is around 500.00 dollars (remember they sell massive calls against their inventory as well) then in dollars, the short is 518 billion dollars which must be covered (1400 dollars - 500 dollars cost= 900 dollars x 576 million oz = 518 billion dollars. No wonder the central bankers are printing massive amounts of paper money.
The demand for gold per year has been around 4400 tonnes per year with mining production at around 2500 tonnes on average. The 1900 tonnes of gold has been made up through the leasing of gold by the bankers.
These numbers are at best a guess but it should be pretty close to this. We believe that the leasing of gold has decimated all of central bank gold. They started in 1988 with 30,000 tonnes (excluding the 3000 tonnes of IMF gold). At best 12,000 tonnes remain. At worst, only 5-6000 remain and this is with China and Russia.
In silver, the demand for silver has been 800-900 million oz per year with a supply from the mines at 500-600 million oz. Scrap silver has been around 170 million oz and thus the remaining silver had to be made up with supplies from above ground. The usa had 2 billion oz in 1990 and today it has zero. It is believed that China is the supplier of that silver to the tune of 600 million ozs or so.
I hope that this gives you a better understanding of the total short positions and what it means. I tried to simplify things without going into the derivative calculations."
http://harveyorgan.blogspot.com/
"Before proceeding, many have asked me how many oz of gold and silver are really short. That is the 64 million dollar question but I will try and give you an approximate answer. In silver, Ted Butler believes that the total short position by the bankers is 3 billion oz. The comex for sure is 500 million oz short, but we must also include the silver deposits written by the bankers for many unsuspecting investors. This must be about 1 billion oz and then we have the OTC market between the bankers and this is estimated to be around 1.5 billion oz.
Butler estimates that we have no more than 300 million oz of silver left on the planet. With the price of 29.00 dollars the total market price of this silver is 8.7 billion dollars. With a shortfall of 3 billion oz, and a cost base of say 7.00 dollars to the bankers, we multiply 22.00 dollars (the loss) which will give us 66 billion usa dollars lost. The leverage in the marketplace is 66 divided by 8.7 billion or 7.5 to one. However much of the silver is in private hands and not in the dealers hands. Jeff Christian of CPM metals estimates that the leverage that the bankers use with silver in their possession is 100: 1. Now you can see the danger the bankers are in as each silver oz is withdrawn by customers. The bubble of shorts is so big that it cannot be covered.
In gold, we have a better picture because gold is never consumed like silver, and central banks do have gold as reserves. The short position by the banks of gold is around 7,000 tonnes, sold as forwards, but the bankers also short calls. The BIS data seems to suggest that the banks are short in the aggregate around 18000 tonnes or 576 million oz.
Let us say that the bankers cost is around 500.00 dollars (remember they sell massive calls against their inventory as well) then in dollars, the short is 518 billion dollars which must be covered (1400 dollars - 500 dollars cost= 900 dollars x 576 million oz = 518 billion dollars. No wonder the central bankers are printing massive amounts of paper money.
The demand for gold per year has been around 4400 tonnes per year with mining production at around 2500 tonnes on average. The 1900 tonnes of gold has been made up through the leasing of gold by the bankers.
These numbers are at best a guess but it should be pretty close to this. We believe that the leasing of gold has decimated all of central bank gold. They started in 1988 with 30,000 tonnes (excluding the 3000 tonnes of IMF gold). At best 12,000 tonnes remain. At worst, only 5-6000 remain and this is with China and Russia.
In silver, the demand for silver has been 800-900 million oz per year with a supply from the mines at 500-600 million oz. Scrap silver has been around 170 million oz and thus the remaining silver had to be made up with supplies from above ground. The usa had 2 billion oz in 1990 and today it has zero. It is believed that China is the supplier of that silver to the tune of 600 million ozs or so.
I hope that this gives you a better understanding of the total short positions and what it means. I tried to simplify things without going into the derivative calculations."