Peter Grandich has it dead right on this one:

"how can you keep a long position if you told them not to be long in the first place?"

07 March 2011, 7:45 p.m.
By Daniela Cambone
Of Kitco News
http://www.kitco.com/

TORONTO (Kitco News) -

Thou doust protest too much!

Hi Bill!
I wont mention any names here, but there are a few well-known Cartel apologists that have suddenly started claiming that the rise in silver is specifically due to an internet and email campaign to promote the concept that there is a shortage. The same people who have snickered at GATA for the last few years and labeled our camp as conspiracy theorists are now falling back on an internet conspiracy of their own to explain why they have been wrong so often on the metals. That’s pretty rich...

And of course the same old mantra of abundant silver is being broadcast. Really? So there is all this silver just lying around. Okay... Why then are they not shipping it out as fast as they can line up buyers to take it off their hands at these 'inflated and unrealistic' prices?

I recall debating one individual at a conference a couple of years ago, and his main point was that if silver was artificially suppressed there would be a market reaction to buy up all the remaining inventory and end the manipulation. Doesnt that seem exactly like what is going on today? But we can turn the exact same argument around. If it is just a conspiracy of spreading rumors of shortage to drive up the price, wouldnt the market just take the other side of the trade and crush the scam? Surely the $20 spot price level would not have been surpassed if indeed there was plenty of silver to be had. Now silver appears to be taking aim at $40.

In my opinion the only reason things have gone so far out of balance for so long is that people trusted the system and believed that shorts were hedging against legitimate bullion inventory. It appears now at long last the market is waking up to the fact that no such inventory of physical bullion exists. Sooner or later the market will call your bluff and it appears we have reached that point. Once credibility has been lost it cannot be restored like flipping a light switch. The two-year investigation in silver manipulation at the COMEX is not doing much to build confidence. The open admission that bullion contracts are traded perhaps one hundred times more than the actual existing stockpiles is not helping restore confidence. The opaque settlement process and questionable reporting of the COMEX cannot be trusted. The entire process has the look of a ponzi scheme going down in flames, and it should surprise no one that buyers are showing greater urgency to secure real metal.