I try very hard not to keep my work life and personal life separate. What I write about here and in the Sons of Liberty Academy, I very rarely talk about in my real life. The biggest reason why I don’t talk about it,is that it is too large of a subject to cover in such a short amount of time. Far too often,eyes roll into the back of the head of the unsuspecting civilian after about 2 minutes of talking.
This past week was a good week for all of us. Not only did we see gold breakout to to new nominal highs,we saw silver this week break the consolidation since the Silver Drive By Shooting. Yesterday,while I was finishing up on some work while redoing the Academy,I checked the Registered CRIMEX silver warehouse inventory and saw it was down another 500,000 ounces yesterday. As I was about to shut down the computer for the night,my lovely wife looked over my shoulder and saw the CRIMEX chart. She said,“Wow,what is that a chart of!?”I replied,“the silver inventory.”She said,“there is no denying that is going down.”Any chart showing such a steady drawn down in inventory like silver’s is not good. (Well at least for the silver shorts.)
The CRIMEX has lost 2/3rds of their registered inventory in three years. The average withdrawal rate per day for the past 3 years was 55,000 ounces a day leaving the vaults. In the past 3 months,its rate has triple that at 155,000 ounces per day.
The most interesting aspect is that while the decline looks orderly and in a channel,the withdrawals are actually going at a fast pace against a smaller inventory. The rate of decline of 55,000 ounces out of 87 million ounces was only .06% decline per day,now it is 6 times that rate with a much,much smaller inventory. As these withdrawals continue,the effective default date draws closer. The combination of the rapid decline and with smaller inventory has brought the projected default date where the CRIMEX can no longer keep this ruse going has dropped from November 2012 to January 1st 2012 only 5 1/2 months away. There have been months where we have seen 12 million ounces leave the vaults in no time at all. With hundreds of millions of paper contracts trading silver,only a small percentage of paper players need to stand for delivery to break the back of the CRIMEX.
Keep stacking,our Default Day is closer than we think. It could be a default of the CRIMEX or of the entire world economy. When it does happen,there will be no ‘do overs’. It will not matter at what price you bought or what form of physical silver you bought. The only thing that will matter is that you did buy while the rest of the world was high on debt.