Hi Scruff!

I am inclined to believe the COMEX will default, but the regulators will just change the rules to allow the shorts off the hook with minimal damage. I think some sort of smokescreen will be cooked up to justify a force majeur declaration and a fixed contract settlement price IN CASH for all open contracts. This will represent a big loss to the bullion banks that I also believe will be quietly settled behind the scenes in a bailout package that goes unreported.

When the last ounce of silver is gone from the shelves of the COMEX warehouses, there will be an announcement that trading has been suspended. The settlement at a fixed price in cash only will be decided as a measure to 'ensure market stability' or some such nonsense. Those legitimate hedgers that have wanted to lock in a price for silver to sell will still be called to deliver on their obligations, but the industrial consumers of silver on the buy side will be locked out.

Now this will be extremely bullish for the metals in general. Actual end users of silver will still have to scramble to source real bullion, from mine supply or other stockpiles outside of the COMEX. There will no longer be the intervention to sell paper metal to cap prices. I think silver will move much higher once this manipulation collapses. But I do not see a big short covering squeeze for the protected banks that have been part of the scam all the way up. They will be let off the hook.

cheers!

mike