Jesse, today, writes on the current Registered silver inventory at Crimex, near record low:

http://jessescrossroadscafe.blogspot.com/2012/04/comex-silver-inventory-watch-heading.html

I would like to point out how fractional reserve banking was started. A snip from wikipedia:

http://en.wikipedia.org/wiki/Fractional_reserve_banking

"Savers looking to keep their valuables in safekeeping depositories deposited gold coins and silver coins at goldsmiths, receiving in turn a note for their deposit (see Bank of Amsterdam). Once these notes became a trusted medium of exchange an early form of paper money was born, in the form of the goldsmiths' notes.[3]

As the notes were used directly in trade, the goldsmiths observed that people would not usually redeem all their notes at the same time, and they saw the opportunity to invest their coin reserves in interest-bearing loans and bills. This generated income for the goldsmiths but left them with more notes on issue than reserves with which to pay them. A process was started that altered the role of the goldsmiths from passive guardians of bullion, charging fees for safe storage, to interest-paying and interest-earning banks. Thus fractional-reserve banking was born.

However, if creditors (note holders of gold originally deposited) lost faith in the ability of a bank to redeem (pay) their notes, many would try to redeem their notes at the same time. If in response a bank could not raise enough funds by calling in loans or selling bills, it either went into insolvency or defaulted on its notes. Such a situation is called a bank run and caused the demise of many early banks."

After mulling this over, I believe that Crimex is practicing reserve banking with both Registered and Eligible inventories. A lower total number of both Registered and Eligible inventories would cause customer/buyer/seller concern. If the total registered plus eligible Crimex inventory was less than 10 million ounces of silver, a bank/Crimex run would start. To prevent the run, Crimex would use fractional reserve banking on both types. If the real, honest holders of "eligible" silver had drawn down their inventories, it would be easy for the dealers to set up "false flag" eligible accounts populated with paper silver in addition to using fractional reserve vaulting for real, honest silver owners (never store your silver or gold in some other one's vault).

To meet deliveries, the dealers would naked short SLV and simultaneously buy SLV certificates. The dealers would then take delivery of the physical silver by surrendering their new SLV certificates. The operators of SLV would then show the same starting number of SLV certificates but the actual physical inventory would be depleted.

Since the keeper/operator of the SLV vault is JP Morgue, I would expect fractional reserve vaulting and the operators of SLV could claim plausible deniability.

It might be a long time before the fraud is discovered that both Crimex and JPM vaults holding SLV silver are disclosed to be empty. At that time, the price of silver will go to the moon.