Most of you are familiar with all this but here are the latest MIDAS excerpts re gold/silver:

GUILTY AS CHARGED: The Fed, US Treasury, Goldman Sachs, JP Morgan Chase, The CFTC, And The Comex

The slowest part of the gold year, by a wide margin, is the Christmas/New Year holiday season. Many gold traders take a week or two off at this time, so it is very easy to push the markets around … which is exactly what The Gold Cartel is doing…..

The Gold Cartel must want gold down in the worst of ways. After their first attack, gold rallied back $10 off a $1096 low, in extraordinary fashion, to $1106 for the PM Fix, indicating strong physical market demand. However, as soon as the Fix concluded, they attacked again,…

JP Morgan Chase continues to use silver as its personal investment play toy, as the CFTC continues its pitiful silence regarding its 18 month investigation into charges of silver price manipulation. This organization is a joke (while not putting words in his mouth, I think CFTC Commissioner Bart Chilton privately would say the same thing). As Dave from Denver put it regarding the CFTC, if there is no silver market manipulation explain the outrageous, concentrated position of JP Morgan Chase and explain why that position is not prima fascia evidence of such … especially when the CFTC is making a big deal of limiting positions in other commodities. Why bother if they are going to let JP Morgan’s silver short position be so egregious? Their staggering short position dwarfs that of any other concentrated commodity position.

The reason the CFTC won’t say anything is because the charges, by all reasonable definitions of market manipulation, are correct. They can’t lie without dismantling all their efforts over position limit restrictions in other commodities. But, even more of a problem, they don’t want to bring any attention and general scrutiny to the size of Morgan’s humongous silver short position. Their motto is to let the sleeping dog lie … and lie quietly. They know the inept, cowardly leaders of the silver industry won’t make a peep … so Morgan has free reign to jerk the silver market around anyway they desire, and when … like today….

by Jason Hommel, December 21st, 2009

Once again, the BIS data on derivatives is totally ignored by all gold and silver market participants and commentators. Nobody mentioned this new BIS data update from my last newsletter.

The BIS data proves the huge extent of the fraud in the banking system, particularly in all forms of paper silver accounts.

The "other precious metals" derivatives notional value, which are mostly all silver, (but also tiny amounts of platinum and palladium) grew, over the last 6 months, from $96 billion to $203 billion, for an increase of $107 billion.

But the size of the silver market cannot be significantly larger than annual production, which stands at about 600 million ounces, x $17/oz. = $10 billion.

Simple question: How can the banks of the world, owe $107 billion more in brand new "mostly silver" derivatives positions over a 6 month time frame, given that world annual production stands at a mere $10 billion, without that silver being mostly all fraud?

http://www.bis.org/statistics/otcder/dt21c22a.pdf…

The insidious aspect of the gold/silver price manipulation scheme is the CFTC already has the answers and knows exactly what the deal is. However, their Chairman, an active member of The Working Group on Financial Markets (President, Treasury Secretary, CFTC and SEC Chairmen), is a former Goldman Sachs honcho. Goldman Sachs is the Treasury’s bank. Much of the silver short position is held by JP Morgan Chase, which is the Fed’s bank.

GATA has been on this Goldman/Morgan case for more than a decade. Their role in the gold/silver price suppression scheme has been clearly laid out over the years, yet only the GATA camp raises a stink about the mess. The only generic positive on this issue is a growing awareness of Goldman and Morgan’s role in the derivatives markets as a whole…

Updated: Tue., Dec. 29, 2009, 3:25 AM

Deep in derivatives

By JOSH KOSMAN

Last Updated: 3:25 AM, December 29, 2009

Posted: 12:55 AM, December 29, 2009

Greed may be out of style, but risk is still good.

That seems to be the lesson big banks like Goldman Sachs and JPMorgan Chase have learned from the credit crisis.

The amount of risk they're taking, as measured by their exposure to losses from brokering derivatives, is still significant -- and in some cases has actually risen since the height of the crisis.

Goldman Sachs Bank is the biggest risk taker, with almost three times as much credit exposure as the next biggest gambler, JPMorgan, according to a third-quarter report recently released by the Office of the Comptroller of the Currency.

The amounts are so large that if the swaps and other derivative contracts the banks broker go bad because the parties on either side of the deal collapse, the banks could be in trouble.

Indeed, in 2008 Goldman received billions in rescue dollars that had been loaned to insurer American International Group, because of its huge role in AIG's derivatives program.

As of Sept. 30, Goldman posted $42 billion in derivatives and had $115 million in assets.

JPMorgan brokered $79 billion in derivatives against $1.7 billion in assets as of Sept. 30.

A source close to Goldman said its numbers include only Goldman Sachs Bank, and not the larger holding company Goldman Sachs Group, so the entire firm has less risk than it appears to in the OCC report. Goldman's investment banking is handled outside the federally insured Goldman Sachs Bank.

However, Goldman Sachs Group is not legally required to shore up Goldman Sachs Bank if the bank runs out of capital. Legally, the parties are separate, said a source with close knowledge of the situation.

Goldman declined to comment….

Former Fed Chairman Paul Volcker earlier this month said credit default swaps had taken the economy to the "brink of disaster" and "proprietary trading should be pushed out of investment banks and to hedge funds where they belong."

Citi and JPMorgan declined comment.

josh.kosman@nypost.com

Jason H went on to say:

Many people ask me, "When will the short selling of silver end?" It will end when you, the collective "you" in the marketplace, stop giving them the silver to short sell!

I have had many conversations with people who own this kind of paper silver. They think their bank will not default on them. They have already defaulted. They just released the numbers which prove they cannot possibly have the silver.

If any commercial bank or brokerage house is storing your silver for you, it is likely NOT THERE, and is likely ALL FRAUD.

***

His claim is not without merit. Indeed, he has a very recent precedent to back up his charges.

In June of 2007 Morgan Stanley settled a class action lawsuit filed in 2005 in which clients were charged for storage of precious metals from February 19, 1986 through January 10, 2007. … for which they paid in full. One problem: Morgan Stanley was only storing air for their clients.

GATA’s Adrian Douglas recently commented on the same issue:

To lend support to the idea that all the gold in the world has been sold several times over I cite the case of Morgan Stanley, which was sued in 2005 for selling imaginary precious metals to its customers. The firm had the audacity to charge storage fees for metal that didn't exist. Morgan Stanley settled the suit out of court but no criminal charges were ever filed against the firm. If Morgan Stanley was doing this, you can bet that it is the tip of the iceberg.

As further evidence just look at the monster over-the-counter derivatives market. Standing at approximately $1,000 trillion, it is multiples of the liquidated value of all the assets and currency in the world. Clearly derivatives must be selling some sort of claims to assets that cannot be fulfilled because there are not enough underlying assets…

Douglas' reply is worth thinking about:

"The Comex data is so strange that I believe it is falsified. We have circumstantial evidence of it. I have seen Comex data indicating that very little metal moves in or out and for days on end, as well as data indicating that no silver at all moves in or out of the dealers' silver inventory.

"I know people who have bought metal and collected it from the Comex, and they report that the warehouses were very busy and that the staff were complaining that they were being run off their feet. One person gave days of notice for taking delivery of his Comex silver but when he showed up they couldn't produce his bars and only after several hours did they hand over his silver. Even then the metal had a label on it with someone
else's name. (No doubt someone else who gave notice of collection was given the runaround too.)

"There are the rumors of cash settlements instead of metal delivery.

"One of my subscribers called the Comex and asked why warehouse movements don't match the delivery notices. The Comex representative said it depends whether there is cash settlement. When my subscriber pressed about how prevalent that was, the Comex staffer clammed up and said my subscriber would have to call the warehouse. When he did, no one would give him any information about cash settlement.

"There is also the fairly recent rule that 'exchange for physicals' can be done at the Comex using metal ETF shares.

"I don't know what it means yet but just this month Goldman Sachs and JPMorgan Chase have showed up accepting (stopping) nearly all the delivery notices while Bank of Nova Scotia issues them all.

"What is going on? Since the start of this month are all the buyers of gold and silver clients of Goldman Sachs and Morgan Chase and all the sellers clients of Bank of Nova Scotia? That's just not possible, especially when you throw in the anti-gold cartel aspects of Goldman Sachs and Morgan Chase.

"I don't know what it all means, but the Comex warehouse data is obviously suspect and I am documenting it each day because one day it will make sense. In the meantime it shows that Comex metal doesn't move even when we have all-time record gold prices and the government mints are suspending coin production due to a lack of metal.

"Still, I think the Comex is a sideshow. The real problem for the gold and silver price suppression schemes is the London over-the-counter market. In fact, I wonder if they don't deliberately make the Comex look suspicious so it acts as a decoy and we keep expecting a default there, even as they make sure that they either cash-settle or make undocumented deliveries to try to discredit the people who are forecasting a default and to smear as a 'conspiracy nut' anyone raising questions. This would discourage big-money people from asking for their gold from the London OTC market. The big-money people wouldn't want to be thought of as nuts.

"Protecting the OTC gold market is the great goal, because any trouble there could lead to the mother of all bank runs.

"But the most valuable commodity in the world, trust, has been destroyed in the last year, and so more and more large institutions and sovereign states want to take delivery of their gold and hold real metal, not paper. Unless the anti-gold cartel can work some magic or alchemy, I don't see how they can escape the mother of all bank runs."…

Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses

By Tyler Durden

Created 12/29/2009 - 11:53

It appears that even after thoroughly dominating the US legislative, judicial and executive branches, the long tentacles of the squid have been no better than the Mongolian hordes at overcoming the Chinese Wall (which is ironic seeking how easy it is to ignore the same construct internally between the firm's prop and flow traders...and yes, we will be posting our response to Goldman shortly, we have not forgotten). In the meantime, half a world away, a small Chinese power generator, Shenzhen Nanshan Power, is blatantly refusing to honor contracts with Goldman Subsidiary J. Aron for $80 million in derivative losses, and it appears that China itself has decided to stand behind the small company.

http://www.zerohedge.com/article/small-chinese-company-tells-goldman-take-hike-refuses-pay-80-million-derivative-losses

-END-

If only the leading gold and silver companies would stand up and be counted too, the entire manipulation scheme would end in short order.