Interesting thoughts re silver short term:

Below is an open letter to Blythe Masters, the commander of commodities for JPMorgan. It seems that hedge funds are now understanding what is going on in silver and they are buying the March contracts and they will stand for delivery plucking down the millions of dollars for those silver contracts. They intend to wait until the CME offers them 30% premium for cash settlement and then they will purchase the May contract with their proceeds. They will continue until the comex defaults.

They will let the sovereign wealth guy take the real physical to their shores. This is the background to the silver bears and here is the open letter to Bylthe Masters of JPMorgan:



And for those who are confused by the above, here is another explanation of what may be happening courtesy of a "letter" to Blythe (thanks John).



Blythe,

This is what I am hearing from your former traders (who made "very interesting career decisions"). Well it seem that they are on to a new scheme to corner the Comex and drive the price of silver up $10 to $15 dollars in a matter of weeks.

The strategy is as follows. We know that Comex only has 105 million ounces of silver of which only 50 million ounces are available for delivery. (I personally don't believe the Comex numbers are anywhere near that high, but that is neither here nor there for now.) Well, all it would take is 10,000 contracts on the Comex to buy up all the "available silver" at the Comex and 20,000 contracts to deplete it completely. The current front month March OI is north of 78,000.

Watch the OI closely. Blythe's former traders are advising major hedgefunds and billionaire investors to buy up as many contracts as possible as March 1 approaches and deposit the cash needed to stand for delivery for the month of March. The purpose is not necessarily to bust the Comex but to force the Comex to pay a premium (some as much as 30 percent) for cash settlement. Think about it. If a group of hedgefund gets together and bankroll $1 billion, they can buy more than 30 million ounces of silver. Of course, the contract sellers like The Morgue cant deliver the silver so a cash settlement is the only recourse. So what's wrong with $200 million in profit on a $1 billion investment that takes less than 4 weeks total?

Guess what Blythe? Your former traders are advising everyone they know to put on this trade come the first week of February. Is this what happened in the Decemeber contracts? Is this why silver went from $22 on September 30 to $29 by December 1? How much do you think silver will spike in February as we approach March 1? The traders think silver will be north of $45. Heck it went over $9 as we approached December and everyone who got a pay off in terms of a premium cash settlement will be back for more. And they are all gonna be bringing friends to partake in the bounty.

Your former traders are telling everyone who would listen that all they need to do is purchase a huge amount of March contracts near the end of February and stand for delivery and they will all make 20 percent in a matter of days. Is this what you are hearing Blythe? If so, shouldnt you let the price of silver move up so that you can get some physical to deliver before March 1?