sorry but thats simplistic and partially misleading
@Verily1 - as well as being pretty biased
what you are calling 'paper fraud' is actually relatively normal in all commodity markets. silver futures have been in existence for centuries
futures contracts are paper agreements representing agreement to buy/sell silver (or other commodity) at the agreed price - with delivery days 5x a year. in silver futures, each contract represents 5000oz of silver.
next delivery day is 3 days prior to end September - the next after that is 3 days before end of Dec i believe.
there are 2 key things to understand
1) is they are massively leveraged - typically around that 5000 to 1. ie currently you pay $19.16 to buy the right to take delivery of 5000oz of silver
https://www.investopedia.com/articles/active-trading/042915/introduction-trading-silver-futures.asp2) majority of futures traders historically have been either financial gain/loss focused or miners/smelters doing hedging (ie locking in price to ensure profit) - they dont actually want to take receipt of the silver. so they would close out their positions prior to the end of the futures contract. so thats always made the futures markets susceptible to downside bias.
so what verily1 and silver bulls have been complaining of for years is that basically JP Morgan has been capping the 'true' price of silver by using that massive leverage to place sell/put futures on the NY Comex exchange
they bought up huge amounts of physical silver - then used that asset base to place big silver puts into the futures market to suppress the silver price - knowing most buyers would not stand for delivery and so would sell prior to contract delivery date - hence causing the value of futures to fall
ie they only need to spend say $us5million to place a 'sell' worth $us2.5billion at a given price. that would impact silver buyer psychology - hammering /weakening the silver price futures. ie looks like massive supply overwhelming demand - with JP Morgan knowing there was little risk theyd have to deliver most of the implied silver ounces they were selling
whats changed recently with both silver price plunging and a lot of silver production going offline plus massive money printing and gdp slowdown worldwide increasing silver's appeal - is that institutions are now standing for delivery against futures contracts
this is a massive change vs whats been happening for prior 20+ years
as a result you saw US silver price actually ramp into the June delivery close. which meant JP Morgan had to deliver a huge amount of its silver inventory to those clients, same as in March.
the estimates vary - but its highly likely JP Morgan now holds at least 30% less silver than it did 4 months ago. it could be as little as 50%
the more its silver inventory lowers - the less put value futures it can place (under US laws its not allowed to sell against silver ounces it doesnt have)
that why
@Verily1 keeps banging on about Macquarie taking more and more silvers contracts - its an example of a major institution buying up silver - enough instos around the world do that and JP Morgan will have to get out of silver capping game or it will be blown up
the level and pace of demand for those physical silver ounces is gobsmacking. if that continues into September futures contract expiry you are likely to see the beginning of a major silver price boom - because JP morgan wont want to stand in the market and deliver sells against all those contracts
ie it will make more money by holding its silver inventory and benefitting from the rise in silver value. but it would lose control over silver market pricing it has enjoyed for +10 years
