Eagle Summit Corporation Expects Rampant Short Selling of Silver Futures to Raise Prices
JPM has purchased a 3.3bn ounce "short" position on silver, which with the recent widespread purchase of silver must be leveraged against the $2.2tn of JPM assets.
- (1888PressRelease) March 24, 2011 - JP Morgan has been linked with massive silver shorting. The recent surge in Silver spot prices has caused a huge buy back in futures contracts.
JPM has purchased a 3.3bn ounce "short" position on silver, which with the recent widespread purchase of silver must be leveraged against the $2.2tn of JPM assets. Silver prices hit a 31 year record high earlier this month at $34.97. Normally the speculator may buy the contract back; this means there has to be someone willing to sell the contract to him. Finding a seller is not normally a problem in the futures market, because there are actually producers of silver willing and able to deliver the silver, however JPM's contract may be too large to physically deliver on.
However, silver is an extremely useful metals, and it is used in lots of industrial applications. Many of these applications actually "consume" the silver, in other words, it no longer exists after using it. Furthermore, the world demand and usage of silver is about twice the current world production rate, and the U.S. Geological Survey has stated below-ground supplies of silver are less than any other metal. The current market exhibits a high-demand metal with a strictly limited supply.
This means it will get more and more difficult to produce or deliver any silver, much less deliver 3.3bn Troy ounces.
To make things even worse, for the last 20+ years, there have been an inordinate number of shorted futures contracts on silver in the New York Commodity Exchange.
In fact, there are more shorted contract positions than can be covered by the current level of worldwide silver production. The total shorted positions to date are much, much larger than the current deliverable inventory of silver.
So far, this has not been a problem, because world governments have covered the deliveries through existing inventories. But now those inventories are virtually non-existent. We have essentially consumed the last 5,000 years of mined silver. When the shortage of real silver becomes apparent, all these shorted contracts will have to buy back their positions. The increased demand to buy back the silver contracts will push prices up.
This increase in price forces even more people to buy back their contracts since they lose money on positions already sold when the prices rises. Eagle Summit Corporation has held a large stake in many precious metal ETFs through its history, and these holdings are expected to generate a substantial return on investment in the near future.
-About Eagle Summit Corporation-
Founded in 2005 and based in Cyprus, the goal at Eagle Summit Corp is a simple one: to work with talented entrepreneurs and management teams to develop ground-breaking products and build substantial business enterprises around them. We have raised a series of partnerships, with current committed capital in excess of $450 million, and helped build hundreds of companies, 60 of which have gone on to successful IPOs and more than 45 of which have gone on to successful mergers.
-Contact Info-
Hector Kosko
Eagle Summit Media Coordinator
press ( @ ) eaglesummit dot com
www.eaglesummitcorp.com
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