ed steer of casey research makes a number of salient points, among them:

1) 2 banks are short 82% of the commercial short position in silver

2) 87% of precious metals derivatives are held by jp morgan chase

3) the cftc investigation is going up against all the money in the world

In a nutshell...it's the same old, same old routine as we've seen for the last decade or so. The '4 or less' traders in the Commercial category [U.S.bullion banks] continue to take the short side of virtually every long trade. They do it because there are no willing free-market participants that are stupid enough to take the short side of the trade at these prices for either gold or silver. If the bullion banks weren't there to take the other side of the trade, the prices for both metals would already be at the outer edges of the known universe...which is exactly what the U.S. government, the Fed and the U.S. bullion banks don't want to happen...as their precious US$ would disappear in the blink of an eye.

Well, you say, how am I so sure it's the U.S. bullion banks that are involved. A couple of things. The first is called the monthly Bank Participation Report [BPR] which, coincidentally, was also issued yesterday...and also for positions held at the end of trading on February 3rd...the same as the latest COT. Both are snapshots of positions held at the exact same point in time...the close of business on Tuesday. So let's see what it says about what the U.S. bullion banks are up to. Firstly, silver...where it reports that two [or less] U.S. banks are short 27,189 contracts. The two [or less] U.S. banks have zero long positions. [As a comparison, there are thirteen non U.S. banks that are long 8,416 contracts and short 1,871 contracts.] Now...in the Commitment of Traders report yesterday, the silver net short position in the Commercial category was reported to be 33,173 contracts. So, by straight division, two [or less] U.S. bullion banks are short 82% of the net silver short position in the Commercial category on the Comex!!! Any questions?

Now in gold, the Bank Participation Report [BPR] says that three [or less] U.S. bullion banks are short 111,190 contracts (a record high by a long shot!). They are long 3,629 contracts...so net, they are short 107,561 contracts. [As a comparison in gold, there are twenty-three non U.S. banks that are long 33,434 contracts and short 42,335 contracts.] In Friday's Commitment of Traders, the gold net short position in the Commercial category was reported to be 177,589 contracts. So, once again by straight division, three [or less] U.S. bullion banks are short 60% of the net gold short position in the Commercial category on the Comex. And if you remove all spreads in both metals, these short positions by these U.S. banks go from obscene to grotesque! Yet the CFTC says they're still studying the issue. The link to the Bank Participation report is here...and you'll have to scroll down a bit.

Two paragraphs ago, I said that there were a couple of things that proved it was U.S. banks that were responsible for these huge concentration numbers. Here's the last thing. I've mentioned it before, but I'll bring it up again...so it can put into the context of both the COT and BPR I've already spoken of...the 'final nail in the coffin' so to speak. Two weeks ago, the third quarter derivatives report was issued by the Office of the Comptroller of the Currency [OCC]. I don't have the report at hand, so my numbers may be off a bit, but they're close enough for the purposes I need them for. In the precious metals report, it showed that 97% of all these precious metals derivatives were held by the following U.S. banks....Citigroup 2%, HSBC USA 8%...and JPMorgan a whopping 87%. The other 3% of the derivatives were held by the other 597 reporting U.S. banks. So, let's guess who the '3 or less' or '2 or less' U.S. bullion banks are [as stated in the BPR] that are short all that gold and silver on the Comex. I hope you're straight on this now.

I think you can begin to see why the CFTC is having such a hard time bringing this silver and gold price management scheme to an end, as they are up against all the power and all the money in the world...three big U.S. banks, the Fed, the Treasury...and the U.S. government itself. The CFTC and the SEC have known this for decades and have stonewalled every effort to get at the truth. They are, themselves, complicit. And it's actually worse than that. To use legal terminology...they are 'aiding and abetting'.

Before leaving this subject, I feel it necessary to point out that the red flags are flying for gold, because the bullion banks in the Commercial category are now short 17.8 million ounces of gold...well into the danger zone of a possible price correction. Will we get one right away? Beats me. We could tack on another couple of hundred bucks or so and drive the open interest [and short position] to even higher levels before the pin gets pulled. There's no feeling of froth or 'irrational exuberance' anywhere in the gold and silver markets that I can sense. The other thing that is strange is that the short position in silver is so low compared to gold. The dichotomy between the two is enormous. But with all the bad economic, financial and monetary news out there...I'm still 'all in'.

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