Also good to read Ed Steer's weekend report.The physical...

Also good to read Ed Steer's weekend report.

The physical shortage in silver at the wholesale level continues unabated -- and how much silver is left in these depositories that is available for sale at current prices is something that Ted has been going on about for a long while now -- and he's of the opinion that there isn't a lot. Whatever that number is, we're getting closer to it with each passing week...although it certainly appears that JPMorgan is providing silver to some ETFs and mutual funds as required. This is particularly true of the silver being provided to cover the short position in SLV.

The vast majority of precious metals being held in these depositories are by those who won't be selling until the silver price is many multiples of what it is today. That's particularly true of shareholders in PSLV.

Not only is there an obvious shortage in wholesale silver, but the fact that central bank gold demand exploded to 1,136 tonnes last year, means that there's a lot less gold in good delivery form around too. That amount, plus the 551 tonnes that was reported being held by Russia's sovereign wealth fund a month or so ago, most likely means that the wholesale physical market in gold is getting tight as well. It's a good bet that it's gotten a lot tighter in the last month because of the banking crisis -- and that fact has already appeared during the April delivery month -- and now in May as well. It has also shown up in the U.S. Mint's gold bullion coin sales in both March and April.

Turkey's purchases of 68+ tonnes in January, another 57+ tonnes in February, plus 21+ tonnes in March, is an indication that the central banks of the world are still at it. However, the World Gold Council did report that there wasn't much gold buying by central banks in April. China imported a lot of gold in March...close to a record amount...plus a very decent amount of silver as well.

Turkey's silver imports in March were a record high 123.2 tonnes...3.96 million troy ounces -- and they're on course for record imports in both silver and gold this year if they keep at it they way they have during the first quarter of this year. I'm hoping we'll get their gold and silver import numbers for April sometime during the coming week.

And as you're more than aware, this extraordinary demand in both of these precious metals has not yet been allowed to manifest itself in their respective prices. The Big 4/8 commercial shorts still have them in their iron grip -- and that fact was on full display yesterday.

As you're also already aware, the short position in SLV imploded down to 16.27 million shares as of this past Tuesday's short report -- and Ted is of the opinion that the almost 8 million troy ounces that was deposited into SLV on Monday, April 24 was also being used to cover more of what's left of that short position. However, whether that's the case or not, won't be known until we see the next short report on Tuesday, May 9.

These large amounts of silver are coming from the stockpiles of JPMorgan & Friends -- and Ted is of the opinion that the silver is being leased to whoever is covering their short position in SLV -- and will have to be returned some day. Whatever day that is, silver will be many multiples of the price it is now.

Then there's that other little matter of the 1-billion ounce short position in silver held by Bank of America...with JPMorgan & Friends on the long side. Ted says it hasn't gone away -- and he's also come to the conclusion that they're short around 25 million ounces of gold with these same parties as well...which I point out elsewhere in this column