Comparing Digital Metals

[valerb]

Craig Hemke | Thursday, November 16th


With total Comex silver open interest near the 200,000 contract level, we thought it would be enlightening to once again discuss the total volume of physical mine supply versus digital metal supply on this futures exchange.

We've written on countless occasions about Comex alchemy and the fraud of digital metal. As a refresher, you might review both of these links before we continue:

• https://www.sprottmoney.com/Blog/42-years-of-fract...

• https://www.tfmetalsreport.com/blog/8252/econ-101-...

Today, we just thought we should remind you of the scale and scope of the fraud, particularly as it relates to silver. Again, under this current fractional reserve and derivative pricing scheme, price is "discovered" through the trading of derivative contracts, the supply of which is controlled by The Bullion Banks. These same banks are then responsible for managing and delivering physical metal at the digitally-derived price.

Currently, the total open interest (supply of contracts) in Comex silver is 199,899. For the sake of simplicity, let's round up and call it 200,000. At 5,000 ounces per contract, this represents 1,000,000,000 ounces of digital silver. That's a lot...especially when you consider that Keith Neumeyer told us last week that the world is on pace to mine about 800,000,000 ounces in 2017.

If we divide 1,000,000,000 digital ounces by 800,000,000 ounces of annual production, we find that total Comex silver open interest represents 125% of global mine supply. Is this a lot? Is this extreme? Is this evidence of a gross distortion of the price discovery process? Perhaps we should consider some of the other "metals" traded on Comex for perspective.

Let's start with Comex gold. How does Comex open interest compare? Well, the world is projected to mine about 2,800 metric tonnes this year or about 90,000,000 ounces of gold. With each Comex contract representing 100 ounces, the current total OI of 533,054 contracts equals 53,305,400 ounces or about 59% of total mine supply.

http://silverseek.com/article/compar...l-metals-16957

[silverheartbone]

Craig Hemke | Thursday, November 16th

With total Comex silver open interest near the 200,000 contract level, we thought it would be enlightening to once again discuss the total volume of physical mine supply versus digital metal supply on this futures exchange.

We've written on countless occasions about Comex alchemy and the fraud of digital metal. As a refresher, you might review... {snip} ...or about 59% of total mine supply.

"My bits are better than your bits,"

Any real discussion on bit envy would cause sparks to fly, but it could never be juicy.

Anyhow, I was a bit surprised to see the lack of any Bitcoin mention, the most significant of today's digital metals, within your analysis..

To quote from your article... "Do you see a little bit of disparity here???"

[silverheartbone]

When comparing actual metal,
I can present empirical evidence (until I'm gray in the face)
which indicates that the natural silver to gold ratio (SGR) is currently close to 9 to 1,
and not the bankster contrived 75 to 1.

Therefore one could assume that,
if the bankster control is ever removed,
then the ratio might normalize.

Being an old software creator, I know a lot about digital.

I like and quite often use Boolean logic, the basis of Digital Metals.

Therefore, for the remainder of this comparison of two digital metals

⛧SILVER and ⛧GOLD

we will assume that one of the metals is correctly priced.

Truthfully I believe that both are severely undervalued.

However for this analysis, the Boolean constraint that one and only one of the two conditions can be true,
(XOR also known as "exclusive or") is used.

IF

the current price of ⛧GOLD is correct
XOR
the current price of ⛧SILVER is correct

AND

the actual SGR is 9,

THEN

__________________________________________________ _

There are two correct answers for this logic
__________________________________________________ _

If the current price of ⛧GOLD is correct, then the correct price of ⛧SILVER is $143 [ $1285 ÷ 9 ]

If the current price of ⛧SILVER is correct, then the correct price of ⛧GOLD is $153 [ $17 x 9 ]

My intuition tells me that $143 ⛧SILVER is closer to the truth
than one hundred and fifty three Federal Reserve Casket Notes for ⛧GOLD.

I don't have any digital metal, so this analysis should not apply to me.

Yet somehow it does.

[valerb]

There is one major flaw in your argument, people actually care about Gold and they don't so much about Silver, other than us diehards that is.

Governments don't stock pile Silver anymore and they don't place that much value on Gold for that matter, at least nothing like they did for the past several thousand of years.

Just imagine what the price of Gold might be today if governments around the world sold off all their Gold, it might very well be selling at $153 an ounce or far less.

Gold was selling for under $300 an ounce back in the 90's when governments did stock pile Gold.

Supply and demand and there would be one hell of a lot of supply if the governments stopped holding Gold like they have Silver.

The world has changed in the past century and some people need to look at it in a different light now that candles are no longer needed.