this is from casey research, which explains yesterday's action on the comex. it appears they were going after the traders who were playing the silver/gold spread. with the ratio at 62-1, silver must have looked attractive. so the traders who jumped on undervalued silver were promptly clobbered when the crooks trashed the silver price, and moved the spread to 66-1. if you use leverage, bad things can happen to you.

as another sign of the disconnect between physical and paper silver, the silver etf added another 1.7 million ounces.

Gold and silver both showed signs of life early in London trading yesterday morning, and really took off on the Comex open and the release of the 'employment' numbers. But then the boyz showed up and hammered them both hard. Gold managed to close with a smallish gain, but the bullion banks were really going after the silver market.

Ted Butler says that they were after the "short gold/long silver" spread trades. With the gold/silver ratio moving from 62-1 to 66-1 in four hours, a huge portion of the traders playing this particular game must have been blown out of the water. Ted says that the bullion banks have now declared all out war on leveraged long positions in both gold and silver.

Neither the CFTC, the SEC or the COMEX will step in to stop the bullion banks from using whatever method, legal or otherwise, to cover all the short positions that they can...and to hell with the mining industry and their shareholders. After yesterday's activity in the silver market, there is no way of knowing when the bottom will be in. You can toss the rule book out the window.

However, on a more positive note...Ted says that once the bullion banks have covered as many shorts as they can, there will probably be a moon shot rise in the price of both metals. As I've said before...I must have been from Missouri in another life, because of the all the blood in the streets right now...so I'll believe it when I see it. He does have a point though. The current physical demand for both gold and silver is off the charts, and the bullion banks can't allow this sort of drain on their reserves to continue for much longer.

http://caseyresearch.com/displayDrp....