Rob Kirby is one of the best investigative financial analysts out there and here he reviews some of the suspect silver data out of the CME and especially the LBMA.

Regards - VHF

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Kirby Analytics

December 7, 2010

Here’s the link to CME silver data:

Open interest is 135,876 contracts – by definition ALL PAPER

5,000 oz per contract = total ounces 679,380,000 [which happens to be roughly one year of global output from mines]

679,380,000 x 30.00 per ounce = 20,381,400,000

**silver option open interest is roughly 17,500 contracts [I haven’t even added this]

Now, remember, NY is not where the REAL ACTION is. The big volumes are traded on the LBMA

Here’s what the LBMA claims they are doing – as of Nov. 12, 2010:

Clearing Turnover Statistics: October 2010

Release Date: 12 November 2010

Clearing statistics for gold and silver rose across the board in October.

Gold ounces transferred rose 2% month on month, to an average of 17.1 million per day. The number of transfers rose by 8.9% to a daily average of 1775. The average fixing price rose 5.6%, boosting an increase in the average value of transfers to $23.0 million, a rise of 7.8%.

Measured year-on-year, gold ounces transferred fell by 17.8% and the number of transfers by 7.0%, but the continual rise in price pushed the average value of gold transferred up by 5.7%.

Silver ounces transferred rose 4.2% to a daily average of 92.2 million. The number of transfers rose 13.3% to 441 per day. The month on month rise in ounces transferred, combined with a 13.8% rise in the monthly price, saw total value rise 18.6% to $2.16 billion, the greatest daily average value since August 2008.

So, the LBMA claims they are “transferring” amounts roughly 1 / 7 of World Annual Mine Supply – EACH DAY. So, every seven business days the LBMA “transfers” world annual mine output.

There are 261 business days in 2010 – So the LBMA “transfers” world mine supply 261 / 7 = 37.29 times per year on their published “run rate”.

So, to specifically answer your question about BIS “chit chat” about 200 bln of silver shorts – if they know this – I wonder why they don’t show it in their OWN derivatives publication? [the silver numbers are buried in “other” in the table below]:

Click to enlarge: http://tinyurl.com/23uqrc7

I suspect this is done ON PURPOSE to obfuscate the true nature of the numbers which become glaringly apparent when you publish them in a transparent fashion. IMO, EVERYTHING in the world of precious metals is kept obfuscated by banksters – from the BIS on down the line.

The Fed admits they have done gold swaps – GATA has done FOIA requests in this regard – but won’t give any detail.

Lars Schall is having the same difficulty getting detail from the Bundesbank and their gold swaps.

Rest assured – the silver market is more polluted than ANY OF US can imagine.

Best,

Rob Kirby