Source: SilverSeek, Theodore Butler (3/30/09)
"This was the largest amount of gold and silver derivatives ever liquidated in a single quarter in history."
According to the OCC's latest data release, U.S. banks, led by JPMorgan Chase, caused to be liquidated, under intentional duress, more than $20 billion of gold and as much as $9.5 billion of silver in Over-The-Counter (OTC) derivatives transactions during Q408. These derivatives are highly leveraged transactions mostly held by hedge funds and other large investors on the long side and big banks on the short side. While the OCC declares it is responsible for regulating U.S. banks, there is no regulation of these OTC derivatives by anyone. This was the largest amount of gold and silver derivatives ever liquidated in a single quarter in history. More than 50% of all the OTC silver derivatives held by U.S. banks were liquidated in the fourth quarter.
These amounts are equal to 250,000 COMEX gold contracts and 192,000 COMEX silver contracts. It is not possible for such amounts to be accidentally liquidated within a three-month period. This was a very intentional liquidation.
The amount of paper silver (and gold) transacted in the OTC market dwarfed what took place in the real physical market. Further, since the OTC is so opaque, the transparent paper COMEX market was used to set the price for, and cause, the massive liquidation in the larger OTC market. The price that is disseminated from the COMEX is the price that the world goes by and prices all silver (and gold) transactions. Miners, refiners, industrial consumers, investors and paper hedge fund speculators all price off the COMEX. Control the COMEX price and you control the world of silver (and gold).