I remain skeptical of anything that is posted on a web forum. However there is one aspect to that story that would make sense. I posted last week that it would be far more efficient for JPM to just buy back their contracts in the market to close out some of their short exposure ahead of first notice day. I believe they could cover out thousands of contracts that way and only bid up the paper price by a dollar or two, much cheaper than the rumors of 25-50% contract premium settlement in cash. But if the game is to keep the spot price down at all costs then perhaps it makes sense that premiums are offered in the dark.

One must believe that the 'unsecured creditor' threat is bogus. That would imply that JPM is facing bankruptcy over this. The losses would be huge for a COMEX default but I am sure the government would step in and mandate a price freeze with fixed settlement in cash and that would end the liabiilty for all shorts. If the FED was willing to pony up trillions to save the banks in the past, even losses of hundreds of billions to settle the silver shorts would be a minor book keeping entry in comparison.

Lets also keep in mind that JPM is the largest short but there are many smaller retail shorts that are probably scambling to cover even to this day. The action of these other independant players could contribute to a rise in spot silver even if some of the outstanding contracts in a delivery month are settled in cash. Therefore I do not believe the spot price can be contained for more than the impact of periodic raids. If demand remains strong, the spot price of silver will rise in tandem.

More to the point, if the Cartel had the power to contain silver they would have done so a long time ago at a much cheaper price regime. All the Cartel can accomplish is to slow the rate silver rises, and make the process difficult for spec longs through the freqent raids and manipulation.

At the end of the day, this is a shortage playing out. Paper games can distort the short term picture but if real silver is in demand and there is not enough mine supply, the price will rise.

cheers!

mike