Andy Schectman, Co-founder of Miles Franklin, a PMs firm with over 9 billion in sales, outlines the epic moves ahead, in the gold and silver markets.
– Is rehypothecation in the PMs shares leading to price distortion?
– Are the numbers in the gold and silver markets being misrepresented?- How important is the Shanghai gold market to global demand?
– What could be the impact of gold export ban by China?
If you go to the Shanghai Gold Exchange website, for four weeks in a row, starting on the second week of March, we see commercial banks showing up and it’s on their website. We see commercial banks showing up at the Shanghai Gold Exchange and first, it was Deutsche Bank and then HSBC and then JPMorgan and then Standard Chartered. Now, I guess what I really feel is that in particular, the gold and silver markets, but mostly silver seem to have been trading and playing by a new set of rules.
…and when you have these massive short positions, where there’s 290 million ounces of silver traded per day on the LBMA and silver on COMEX is 1700% rehypothecated, you end up with some distortions in price.
He continues:
…but if you understand that coming out of Shanghai, you cannot export gold out of China, only silver…and I find it interesting that these four commercial banks who are very short in silver, just happen to show up the second week in March…
– With a dwindling supply of silver on several key exchanges, will the price surge?
I think what we see with silver is a draining of the world’s exchanges by the most sophisticated investors on the planet and a market that the LBMA has. I think some very interesting things happening with it right now and when you realize that the LBMA trades 290 million ounces of silver per day, right?
Most of it being naked in terms of nothing behind those contracts but commercial bank’s ability to create paper, it starts to get interesting.
– Are the global commodities markets being cornered by deep-pocketed investors?
– Is the global supply of available silver so low that a price advance is imminent?
– Will the Russian sanctions backfire against Western policymakers?
– Why is silver selling at $4 per ounce higher in Shanghai?
Andy’s Miles Franklin
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