BTW the Shanghai stock market is giving up its (artificial) gains from yesterday, dropping again below the 3,000 level.

The Chinese Silver Fox
Bill Holter | Jim Sinclair's MineSet
Jan 14, 2016
http://bit.ly/1mZrMMu

[snip]

I recently had a long and very interesting conversation with John Embry of Sprott Resources. It is always good to speak with him as I consider him one of the five sharpest economic/precious metals minds I know of and certainly value his opinion. John’s name came up a couple of days ago when someone asked “where is all this silver coming from” to meet the outsized physical demand? I said “this is the number one question John Embry and Eric Sprott have been asking for about a year now”.

Our conversation was quite broad but let’s zero in on the “silver supply” aspect because I believe it is more important than anything else in our world today. That is a very big statement but stay with me as you will see toward the end why I believe this. John asked where IS all the silver coming from? Let me first say what follows was my best educated “guess” and I know of no one who has the firm and hard answer; I told him during the 80′s and early 90′s the amount of “scrap” could be a very logical explanation.

Then during the 90′s and early 2000′s the silver deficit could be explained by the huge amount of silver recovered from the “Manhattan Project” estimated to be nearly 1 billion ounces. I also believe the Chinese lent somewhere around 300 million ounces of silver to the U.S. back in 2003 for a 10 year term which expired in that “magical year” 2013. If this was true, it would explain the massive paper takedown in May of 2013 because the lease was “up”. I believe silver had to be taken down as the price was getting away and threatening $50. A collapsing price would allow the U.S. to say “don’t worry, you will get your silver back as we have the price under control”.

Here is where I believe the silver to meet delivery has come from, CHINA! But why? First and foremost, China was a “silver nation” and had used silver as money for longer and in greater quantity than any other nation. In other words, the silver has come from the only place it could have because China had it. OK, but even if China was the only large stockpile, why would they “throw good money after bad” if they were already defaulted on?

I believe they wanted the crowned jewel of the West, Gold! They had silver but the West had the gold accumulated during the 1900′s and especially after WWII. Yes the U.S. dishoarded in the 50′s and 60′s but we did still have 8,000 plus tons left and are (were?) custodian for other Western gold holdings. It is my contention a deal was made where silver has been supplied by China to prevent the Achilles heel (silver) from defaulting and blowing up everything. In other words, keeping the game going for longer would allow China to accumulate gold and drain what is left, had the game blown up in 2013, China would not have had the ability to accumulate what they have since then. Call this “dropping pennies to pick up dollars”.