Note: I have an “updates” section at the very bottom. The best Twitter responses and emails I get explaining this topic to me like I’m a 5 year old will get posted. I am NOT an industry insider and I’ve been asked questions recently I wanted to post to Fintwit. Have at it!!

Bottom Line – upfront for you gold fish out there: OPERATION UNWIND is an event meant to find the most egregious leveraged silver products out there and inform users to what it is actually is. Part 1 right now is a data call and to understand the market and claims being made. IF this indeed is 1,000:1, all you would need to do is to convince 1% of all of these holders to sell their product and buy physical silver, this would mean 10x the demand of the existing silver that is on the planet will need to be bought. That’s why I think 1000:1 isn’t real. It can’t be. That number comes out to be a $75T market.


I wrote something on Twitter at maybe 4AM. A 7 part Tweet essentially having what we call a “data call” in the IT industry. I have heard many people claim that for every physical ounce out there, there are 500 paper claims against it. I just read where Egon von Greyerz calls it 1000:1 ratio. I love Egon’s interviews! But I want to know where he gets that number. He probably has it, and it’s probably common knowledge to those in the industry 40 years. I just would like to know what it is.

In his article, it also says…”The LBMA and Comex clan has sold their physical silver up to 1,000X over”

In this article in 2014, they try and explain how it is a 250:1 ratio:

“Well, these $5 trillion represent the entirety of the « paper » silver market, including all « paper » financial products (certificates, options, ETFs etc.) derived from the real physical market and allowing investors to be « exposed » to silver.

This makes for a 250 to 1 ratio between the « paper » market and the physical silver market.

This would mean that, for every ounce of physical silver, there are 250 ounces of « paper » silver circulating in several financial products. In other words, only one contract or certificate issued out of 250 would be convertible in physical silver.”

So in this article, they discuss all kinds of things outside of the COMEX. Many people define this 250, 500, or 1,000 to 1 differently. So let’s dig deeper.

I bought Chris Marcus’ “The Big Silver Short” e-book last year and listened to it walking my dog every day. In it – guest after guest reveal they believe the paper to silver ratio is 500:1. Chris is asking industry leaders – and one after one are providing this information. I have to add something here – this seems to indicate 500:1 on COMEX and LBMA only.

This is why I am trying to understand this number more. All of the claims talk about 500:1 or 1000:1 in general terms. In the Marcus context, it was LBMA/COMEX only. This still appears to be aiming at north of 1.5b oz.

Most of this article, I’m going to suggest that this is 1000x all of the “investment grade silver” as listed by Egon.

What I WANT to do is understand this number better. For those of you new to reading my articles, I spent 6 years in grad school for two master’s degrees. I didn’t go to Harvard. Or MIT. But no matter what school you go to, sourcing for papers is extremely important. Yes, I have opinions. Lots. But I try and keep everything I say factual – or if I don’t know, I will make sure I spell out it is “what I heard” – or try to point you to the source.

So for every person claiming 250, 500, or even 1000 – this is NOT to call you out. God no. I am trying to improve my source material that I write with so I can answer tough questions. Where this came from was that I was sharing info about SLV to my buddy a few months ago who was a former IRS agent and a savant with accounting. I told him people seem to claim that all the silver isn’t there. He reviewed all of the financial docs (and sent me a link of some 10-x form, x being the letter I cannot remember at the moment). He said that their financial officers sign these docs stating that this metal is there, under penalty of jail. Literally a few days later, Ronan the Destroyer posted the article about how SLV changed their prospectus to state it all might not be there – and from my perspective – it seemed to be about a month before they were due for an audit at the EXACT time 110m oz supposedly made it into the vaults. So perhaps SLV had 80-90% of the metals, at worst, and couldn’t source the last bit which led them to change their prospectus.

What we THEN saw in the beginning of March deliveries – according to Bix – is Goldman took 15m out of SLV and then handed over in their COMEX deliveries. IF this played out as Bix says, this told me that the risk department of Goldman did not like this change to the prospectus and said “get it now while you can” and this closed out that sale. I don’t know. But this 15m oz handed over on day 1 of March deliveries was odd.

Now, if you look at all of the 1,000 oz investment grade bars in existence across all of the ETFs, COMEX, Shanghai exchange, Perth Mint, etc – it is estimated somewhere to be about 3 billion ounces. Give or take. Some have it closer to 2. I think the ETFs themselves are over 1 billion. COMEX at 360m. Let’s split the difference and go with 2.5b in 1,000 oz bars.

Now, the CLAIMS are that for each ounce in existence, there are 250 to 1,000 paper claims against this. Here, I’m going to wildly guess at what the hell this is. Please – anyone making these claims, please clarify for me and others what exactly your interpretation of this is. Again – not calling you out – I have a specific reason for asking this in great detail.

Because if you start to really do the math here, you then take this 2.5 billion ounces that DO exist and start having really big numbers of paper ounces on the other side of this. This is why my article Friday referenced Krakatoa. IF these numbers are true, this will lead to utter financial ruin. To be fair – I used only 10x in the article to show ruin will happen at even THAT ratio – so I was tempted by the wild 500:1 ratio, BUT used a conservative 10:1 to show that if THAT was true, everything STILL goes Krakatoa. So I need to be more critical of these numbers and observations. I am taking the 500x at face value for this analysis.

Low end: 2b investment grade oz times 250 paper claims is 500 BILLION ounces sold.

High end: 3b oz times 1000 paper claims is 3 TRILLION (3,000 billion) ounces sold.

Remember, all of the ETFs combined right now are somewhere around 1.1 billion ounces.

Where’s the beef?

I mentioned in my Tweet that John Adams is doing good work exposing the unallocated accounts at Perth Mint, ABC, UBS, Kitco, etc. How many million ounces did Perth Mint sell unallocated? Does anyone have this number? John has claimed he helped move 14 tons of silver from unallocated to allocated or physical – which is 500,000 oz. I COULD make the argument that his work has then influenced others to give up their unallocated to move to allocated. Perhaps the Kitco, UBS, etc now have 10x moved from John’s initial claims. That’s 5 million ounces!!!

The problem here is……5 million ounces is not anywhere near 100 million. Or 1 billion. Or 3 trillion.

So how many ounces do all of these unallocated products have sold? Maybe 100m? Maybe 1 billion ounces across many more?

Now we’re getting somewhere….

3b in physical….

1 billion in unallocated across the kitcos, UBS, and Perth mints.

Where is the other 1499b ounces sold?

In Egon’s writing, he writes:

I have warned investors many times not to buy gold or silver ETFs or funds of any kind. The risks are multiple. Here are some of them:

  • It is a paper security held within the financial system
  • It has multiple counterparty risks
  • The gold/silver holdings are not segregated from custodians’ assets
  • It owns no gold/silver directly
  • The gold/silver is stored within the banking system
  • The gold/silver held is probably rehypothecated
  • The gold/silver is not fully insured
  • Investors have no access to their gold/silver

So we know ETFs have about 1.1b ounces or so. Give or take. Maybe the unallocated accounts are 1 billion ounces? Maybe we throw 2b in for allocated? Now we are seeing perhaps 4 billion in paper accounts linked to physical. This is maybe a 2:1 ratio at the MOST I can find.

Wait…what about the 800m oz on the futures market in open interest? These supposedly are mostly backed by the 360m in the COMEX and perhaps the major holders of SLV. For argument’s sake, I will round this up to a billion and assume for one second they are naked short.

This now has about a 2.5:1 ratio.

Jeff Christian and the 100x

I bring him up because he’s lately been made the villain of the silver story, and I think when Chris Marcus’ movie is being made, Jeff will be given a cat without hair to pet during these videos to make it look like Mr. Bigglesworth in Austin Powers.

See the source image
Dr. Evil to play Jeff Christian in “The Big Silver Short” to be released in 2025. Sporting Mr. Bigglesworth by his side

Now, everyone knows Jeff seems to love us WallStreetSilver folk. He is a futures guy and plays with paper. We talk about stacking bricks of silver. Apples and oranges, to an extent. He can tell you how the futures pricing works and say many words that mean nothing while also admitting they rig prices down for their clients at the exact same time saying that nothing they do affects prices. Thanks for pointing this out Bix!

Anyway – I digress. I had heard people talk about Jeff Christian discuss gold with the 100:1 ratio. Others said he said 92:1. And that is in gold.

But with the Jeff Christian stuff, let me throw out some numbers for you to see if this is part of where Jeff is talking HIS numbers. Every day on the COMEX, you can see about 75,000 silver contracts sold. That’s 375m ounces sold per day. Let’s say it’s a BUSY month, and you have 500m sold per day. And, to top it off, we have 20 trading days that month. You are looking at, in theory, 10 billion ounces of silver sold in a month. And the COMEX recently has been a lot higher in silver. David Morgan said he once saw the registered at 35m oz. So let’s say at a low point when Jeff was quoted here, there were 100m oz of registered in the COMEX. Under THESE conditions, one could claim that – “in a month, there was 100 times the amount of silver sold than existed in the COMEX”.

However, this is also misleading because if you bought a silver contract on Monday, you could have sold on Tuesday. Most of these sales, I heard, are high frequency trading. And, I heard with position limits now at 3,000 – these have to be squared up every week, so you could buy and sell the same 3,000 contracts every day dozens of times for fractions of a cent profit. So the SELL volume is high, but it’s the same contracts being sold back and forth. It’s not cumulative.

For example, go into your local coin shop. Get 10 guys in there to pick stuff up and sell back and forth between them. You may have had millions of ounces sold, but the damn building may have only 10,000 oz in the store. The transactions of sales x is irrelevant to the supply. So trying to say you sold 500x inventory in a month doesn’t matter if they are all selling back and forth amongst themselves.

The monthly numbers for COMEX are the closest thing I could put together to mimic a 100:1 ratio to explain this out – in relation to the COMEX paper price scheming.

While I think it is criminal – this is the only way I could see 100:1 with the COMEX. They are selling the same damn coins in the coin shop. You are looking at volume of sales with HFT selling the same damn things.

Where else to look?

Where else can we look?

The best I can figure is the options on things like SLV. While SLV has so many shares to support its 700m or so ounces, I could buy 100 call options tomorrow (10,000 shares) for June. And so could you. And so could others. For me to buy these contracts, it implies someone must sell them to me. Now, this can get a lot more complex with people “renting” out shares and the like, but I want to show you something.

What I see here is open interest for 5500 contracts for Apr 30th for SLV at strike price $24. Currently, SLV is $24.14. Now, the price to buy these is somewhere around $.40 a share.

Each contract is 100 shares. And there’s another 2100 at $23.50. So let’s say price ends at $24.49 on Friday. That would mean that I would have the option of buying those shares. That’s 760,000 shares. May 21st I see 13,000 contracts, or perhaps 1.3m shares. Even if all of these shares were sold short, you are looking at maybe 2m shares. SLV has like 700m shares. This is a drop in the bucket.

So SLV paper isn’t really the root of the issue here either.

A Twitter reader wrote the below:

So this would suggest 30:1 leverage – possibly backed by the COMEX futures longs? These people don’t WANT silver, they want to play the FOREX market against it.

But this most certainly is not 1000:1.

Recently, another Twitter reader wrote about the “wild west” Forex days (where you can trade against silver):

THIS might be where some of these claims started 10, 20 years ago. With newer financial regulations on leverage, could this leverage have indeed gone from 250:1 to 10:1? Could some still have this Forex leverage at 500:1 with AG? What instruments back this device?

Lastly – the only other thing I can think of is smaller firms that create their own products – but wouldn’t these have to be regulated? Maybe some of the smaller firms like Archegos-type have so much silver exposure and sell this to multiple entities? It’s criminal – but how can we ever tell? What I could consider is – if this ship goes down, how many of these “family offices” might have exposure to this?

Now we go to Goldmember

See the source image
Goldmember will play Jeff Currie of Goldman in “The Big Silver Short”

If you look at the Jeff Currie interview where he says, “the shorts are the ETFs”, in that interview he talks about a 25b ounce silver industry. I wrote an article about this, wondering where the hell this 25b oz is? What if this 25b oz is what HE considers to be:

  1. Physical ounces (3b in investment, 3b with “stackers”)
  2. Unallocated games (1b?)
  3. Allocated accounts (2b)
  4. Derivatives on things like SLV? (1 billion)
  5. COMEX and other futures instruments (4 billion across all exchanges)

That only takes me to 11 billion ounces.

One of my Twitter readers just wrote…

So – could I believe a 20x when it comes to short term instruments to hedge risk? Ok.

Why do I ask?

Because I’m about 1489 billion ounces short of any real number based off of the PHYSICAL ounces we know about. I also ask this because the 40m ounces drained from the COMEX since early Feb (including a few million moving from unallocated) along with maybe 40m off of Shanghai, along with MAYBE 20-40m that come off the COMEX in May will take me to 100m oz. IF this is indeed the 1000:1 paper to physical, by REMOVING these 100m ounces, you just then removed 100b ounces that people thought they owned from the markets.

I also ask because….

What if bank XYZ of Fakeland sold 50 billion ounces of silver to clients? You would know. Everyone would talk. “I buy from XYZ bank!”. Now, XYZ would have to account for this. The monies deposited would be there, but the silver would also show up on the balance sheet. See, 50 billion ounces of silver is a massive, massive, massive number that would potentially have this company owning over $1T in silver. And everyone in the industry would know XYZ.

The goal would then be to ask XYZ where this 50b ounces are, and if we can audit.

The problem is, this doesn’t exist.

The largest horde anyone knows of is SLV, I believe, at about 700m oz. I believe the LBMA is somewhere north of 1.1b oz total give or take.

I am asking because IF indeed there’s 1,000:1 paper leverage on 3 billion in investment grade silver, we would know what instruments they are because the richest people would know and talk about them to each other and those in the industry.

So…I’m asking…what are the biggest paper instruments out there? How can be arrive at this 1000:1? Is the suggestion that SLV has 1m oz of silver and they claim to have 1 billion? Is the suggestion that the bars in the COMEX are sold 500 times over? To who? Where? What instruments?

If we can identify the LARGEST instruments…we can then work “OPERATION UNWIND” to get these instruments to provide audits and clear title of the bars they own.

The problem is this….

The claim of 1000:1 I find hard to believe because that comes out to be 3t ounces of silver. Or, roughly, at $25 silver prices, $75T in money invested in silver. Then, you work backwards. If there are 400 billionaires out there, who do they buy silver from? Wait…they don’t buy silver, they buy gold? So….who the hell bought $75T in silver?

Circling back….

If the Perth Mint unallocated IS backed by the Australian government, it would then stand to reason the government would know:

  1. The number of millions of ounces sold
  2. The number of ounces they have
  3. What contracts back up the rest
  4. The insurance vehicle they are using to transfer this liability

Surely, some form of freedom of information act exists in Australia, of some sort to find this?

Maybe this is a 100:1 scam? 500:1? OK.

But where is my other 1489 billion ounces?

What I’m suggesting is this:

  1. Where the leverage is high, unwind. Maybe we find the highest leverage items are the unallocated. Perhaps this is only 1 billion ounces worldwide. OK. Let’s work to unwind this derivative by providing owners information on what the product is. They may not know silver isn’t there, at all.
  2. Get better data for the 500:1 claims. IF you do have this claim, list what vehicles you know do this

I get it. You will bring up re-hypothecation. I agree. But tell me who bought $75T in silver. I could agree to rehypothecation in single digits, not 1000:1. There just isn’t the money out there to support this claim of 3b known physical ounces.

Here’s also a better way to describe this:

  • For years, people in the silver industry claim there are 500 paper claims for every physical ounce of silver. Upon review, it was more accurate to cite specific industries and products – such as the COMEX that may sell 100 times the amount of metal it has in stores in any given month in volume. Or, perhaps mint products that might sell 30:1 of what they have in the vault based on what is in the pipeline and in the ground with contracts. However, the widespread claim of 500 ounces per one ounce of physical silver is unfounded, at this time, pending more research.

IF we can understand this 500:1 or 1000:1 claim better, we can get THOSE people who bought THIS crap into REAL silver.

I believe the fractional reserve industry itself functions at 10:1 and gets stretched at 50:1. Could I see Perth or those types running at 10:1 or even 30:1? Yeah. It’s sort of like how our entire banking system works. But is it 1000:1? THAT is where you are running into compliance and regulatory issues – and THOSE products need to be identified.

Unlocking the price

Where I think John Adams is doing well with exposing the unallocated – he’s documented about 500,000 oz moved. If there are vehicles out there that have 100:1 leverage, this information would be extremely important to the holder of this silver as well as to the shareholders that could have a LOT of risk of exposure as silver price goes up and more people want to take physical possession into their hands.

By finding the MOST egregious vehicles out there, we can help to then influence the owners of these products to take physical into their possession or leave the product for an alternative like PSLV. The idea here is to find the highest levered areas to get the biggest bang for the buck For example….

Perth Mint may have sold 5 million ounces and 500k were taken possession of. Perhaps they had a 10:1 ratio.

But what if there’s a product out there that sold 100m ounces and has 500k on the books for a 200:1 ratio? Finding THAT whale could move a LOT of people into a PSLV to do some whale hunting.

The problem is – those products may not exist. At which case we must then concede perhaps these ratios may be significantly lower than we have been told? Even a 5:1 ratio at this point could bankrupt many entities on rising prices with people taking possession.

If we have some good feedback on this – I will post below in UPDATES section. Please give us information on this 500:1 and I will log answers so we can all collectively educate ourselves here.

UPDATES Section – this is for future comments to add to our collective knowledge. Where is the 500:1 or 1000:1 leverage? Here are the best answers for feedback….