Ted Butler and the Silver Shorts
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Message: Holy, Moly...gold and siver back to positive
According to Ted Butler's latest, (snip below), 8 traders are now short over 370 million ounces of silver or 211 days of world mine production, the largest ever concentrated short position. It is dangerous, he says, and I don't doubt it.
What happens if one or more of the biggest shorts get squeezed to the point they have to go belly up and walk away from their obligations? If one of the biggest shorts is coming out of China, would the Chinese government make some kind of deal with the US to bail out their guys, if they can't suffer it anymore? Would they let them just walk away? Could there be a remake of the Hunt fiasco when, as I understand it, the shorts were saved at the expense of the longs and the price collapsed? And so on.
Dangerous it is, and it appears the small group of shorts keep piling it on. To me, they seem trapped or else enjoying their beer while they wait to spring the trap. A mystery to me that will have to be resolved sooner or later, IMO.
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Snip from Ted Butler with URL:
"The extreme market structure in COMEX silver (and gold) continues to get more extreme. In other words, the concentrated net short position held by the largest four and eight traders in COMEX silver continues to grow.
The most recent Commitment of Traders Report (COT), for positions held as of Feb. 12, indicates the four largest short traders now hold a record position of 59,564 contracts, or almost 298 million ounces, That’s 170 days of world mine production. The eight largest traders are now net short 73,987 futures contracts, or nearly 370 million ounces, That’s 211 days of equivalent world mine production. Let me repeat, these are all records. Never have there been larger concentrated short positions in silver.
Since this data comes directly from the COMEX and the CFTC, the figures must be assumed to be correct. Why would they make it up, since it makes them look so bad? The regulators should be ashamed of themselves to have allowed such a lopsided short concentration to develop. History shows they never would permit four large long traders to hold 300 million ounces of COMEX silver futures. After all, they charged the Hunt Brothers and their associates with manipulation when they held a position only a third the size of what the big shorts hold today. "
The rest at:
http://news.silverseek.com/TedButler/1203445598.php
What happens if one or more of the biggest shorts get squeezed to the point they have to go belly up and walk away from their obligations? If one of the biggest shorts is coming out of China, would the Chinese government make some kind of deal with the US to bail out their guys, if they can't suffer it anymore? Would they let them just walk away? Could there be a remake of the Hunt fiasco when, as I understand it, the shorts were saved at the expense of the longs and the price collapsed? And so on.
Dangerous it is, and it appears the small group of shorts keep piling it on. To me, they seem trapped or else enjoying their beer while they wait to spring the trap. A mystery to me that will have to be resolved sooner or later, IMO.
--------------------------------
Snip from Ted Butler with URL:
"The extreme market structure in COMEX silver (and gold) continues to get more extreme. In other words, the concentrated net short position held by the largest four and eight traders in COMEX silver continues to grow.
The most recent Commitment of Traders Report (COT), for positions held as of Feb. 12, indicates the four largest short traders now hold a record position of 59,564 contracts, or almost 298 million ounces, That’s 170 days of world mine production. The eight largest traders are now net short 73,987 futures contracts, or nearly 370 million ounces, That’s 211 days of equivalent world mine production. Let me repeat, these are all records. Never have there been larger concentrated short positions in silver.
Since this data comes directly from the COMEX and the CFTC, the figures must be assumed to be correct. Why would they make it up, since it makes them look so bad? The regulators should be ashamed of themselves to have allowed such a lopsided short concentration to develop. History shows they never would permit four large long traders to hold 300 million ounces of COMEX silver futures. After all, they charged the Hunt Brothers and their associates with manipulation when they held a position only a third the size of what the big shorts hold today. "
The rest at:
http://news.silverseek.com/TedButler/1203445598.php
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