For several months now, I've been explaining that Chinese banks buy silver cheaply in New York and London, only to resell it in Shanghai, where it trades at a much higher price. But some irresponsible financiers have done the exact opposite: they've sold silver "naked short »  in Shanghai before buying back the same amount, much cheaper, in London or New York.

Now, at COMEX, instead of making a physical delivery, they either compensate you in cash or give you an EFP (Exchange for Physical), leaving it to the LBMA to deliver the requested metal.

But remember that in October, London was unable to deliver 1,000 tons of silver to India. The market has been completely frozen.

COMEX was unable to fulfill a massive demand for delivery of 7,330 of 5,000-ounces contracts, submitted in one block on the last day of trading, November 30. It took 10 hours of negotiations for the buyer to agree to settle 6,816 contracts in cash, at a premium of $65 million. The demand was for 36.65 million ounces (Moz) of silver, and COMEX was only able to deliver 2.57 Moz!

Throughout December, up to and including the 29th, 12,946 contracts were requested for delivery to COMEX, representing nearly 65 Moz of silver. The bars were placed under protection, with a ban on their removal from the warehouses. Ultimately, 95% of the delivery requests were settled in cash.

The CME raised margins again on December 31st. 

During the previous panic at the COMEX, margins jumped from 4% to 15%, while open interest was 250,000 contracts. Today, as of December 31st, margins on silver raised to 30% for only 125,000 open contracts. Margins on gold have just been increased to 9%, platinum to 25%, and palladium to 22%.

About a dozen years ago, an insider told me that when the “Reset” happened, no one would be able to bet on precious metals with leverage anymore. So, in the coming weeks, we can expect 100% margin calls on silver and platinum, and sooner or later, on gold.

Silver and platinum must first return to their historical ratios relative to gold... before a devaluation of fiat currencies against gold.

Precious metals are already signaling an ongoing currency devaluation:

  • Platinum rose from $1,000 in April to $2,600 on December 29.
  • Palladium rose from $900 in April to $2,150 on December 29.
  • Silver was worth $29 in April and $83 on December 29 ($89 in Shanghai, $95 in Dubai).
  • Gold rose from $3,000 in April to $4,600 on December 29.

 

It's worth recalling several pieces of information dating back to late November or the very first days of December:

Panic in Shanghai

"A trader attempted to close massive naked short positions of 400 million ounces (Moz), or 12,441 tons, by offering prices 3 to 4% above closing prices."

These 12,441 tons of silver simply don't exist anywhere. This trader will therefore be forced to search for physical silver, whatever the price.

Increase in margins in China

Remember that on Friday, December 12, after the close, the SHFE increased its margins to 17% on futures and to 26% on cash, a historic high.

ICBC secures

On December 16, the ICBC published this document, which came into effect on December 19, to secure the EMS:

 

Le 15 décembre, la Banque industrielle et commerciale de Chine (ICBC) a publié un communiqué indiquant que, pour s'adapter aux évolutions du marché et protéger les droits des investisseurs, elle renforcerait sa gestion des opérations de négoce de métaux précieux pour les particuliers.

 

And the financier who failed to obtain delivery at COMEX is now trying to buy back his short positions in Shanghai, either in US dollars or in Treasury bonds, which nobody wants anymore.

 

Des rumeurs circulent en Asie au sujet d'une banque qui proposerait des paiements en cash très importants et des garanties sous forme d'obligations pour reporter les livraisons physiques d'argent.
 

China is reportedly attempting to calm the market by banning new purchase orders

 

SGE a cessé d'accepter les ordres d'achat des membres.

 

The SGE has further increased its margins.

Some official suspects

 

Positions shorts sur l'argent

 

  • The London market was frozen in October.
  • The New York market was blocked at the end of November, then completely paralyzed in December.
  • The Shanghai market is also on the verge of being blocked at the end of December.

One or more financial institutions are thus caught in a short squeeze of exceptional magnitude.

 

In politics, nothing happens by accident

Franklin D Roosevelt

 

I haven't changed my mind: all these events had been magnificently orchestrated (Read my article for GoldBroker)

  • In May, the Fed published an accounting document suggesting a revaluation of Treasury Gold Certificates.
  • In June, the Chinese government issued instructions to relevant ministries, triggering a sharp rise in gold and silver prices.
  • In August, an article on the Fed's website recalled previous revaluations of gold by several foreign central banks.
  • In November, the United States officially added silver to its list of "critical minerals."

We are now at the beginning of the "Reset."

Keep an eye on the gold/silver ratio: there could be major surprises.

And don't forget platinum, whose potential could prove even more spectacular.

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The information contained in this article is for information purposes only and does not constitute investment advice or a recommendation to buy or sell.