Seriously Underpriced Silver

At breakfast I told the kids that I was instituting some new austerity measures around here, and they became so insistent that I heard all about how this was going to “ruin” them and their stupid social lives that I did not have to tell them that I was going to use the money to buy silver, which would have sent them ballistic.

The impetus for my New Mogambo Crusade (NMC) to acquire more silver came as a result of reading in Ed Steer’s Gold & Silver Daily where he noticed in the Comptroller of the Currency’s “Q1/2010 Report on Bank Trading and Derivatives Activities” that “the bottom-line numbers show that two US banks… JPMorgan and HSBC, USA hold between 97% and 99% of all the gold and silver derivatives held by all US banks.” Yow!

This is a result of naked short selling. Normally, to short something, you would have to borrow it from somebody, and then sell that. Now, to short gold or silver is as simple as getting somebody to pay money for a piece of paper that says it represents gold or silver. Easy! There is nothing behind it! (more)