(This thread is in "U.S. Presidential, but I've been posting about financial events and trends. Should I ask Mods to split these posts off?)
I'll guess that most here will agree with me if I suggest that the U.S. financial industry is VERY corrupt. For example, during the 2010's JPMorgan engaged in fraudulent activity in precious metal markets. One crime they committed was "spoofing" -- creating orders for stocks, metals or derivatives that they hope will NOT execute, but which may cause other traders to misjudge sentiment. The two top precious metal traders at JPMorgan were convicted of felonies and sentenced to prison. The bank itself paid a fine higher than $100 million, probably less than the profits gained from the crimes.
The recent collapse in silver prices is probably another example. Many small or largish players were very LONG (bullish) in silver, buying future contracts on margin. Banks, led by JPMorgan, sold those future contracts; they were SHORT (bearish). The banks were promising to deliver silver on demand at some future date --
Silver they did not have. If you or I traded futures on COMEX and became "under water" we'd be liquidated, but the big banks have huge capital. Unlimited capital really since they're "too big to fail" -- The generosity of American taxpayers
* will come through to support Wall St. if/when it goes "belly up." (* - Or is it the gullibility of U.S. bond buyers we need, with tax-paying becoming obsolescent in our Brave New World?)
I got side-tracked.
What happened a few days ago was that COMEX suddenly and radically changed the margin requirements for those long silver, forcing them to sell at any price. Some White House fartings were the catalyst for the timing, but it was a conspiracy between CME/COMEX and the big banks that were the real cause.
Silver is unique because it has unusually inelastic supply AND (due to its rising use in high-tech electricals) inelastic demand. The price of silver has long been very volatile. In 1980, the silver price suddenly collapsed for the same reason-- COMEX suddenly changed its rules. At the time this was hyped as a good thing! Two billionaires (the Hunt brothers) were bankrupted.
But COMEX was "unfair" to change rules in the middle of the game, and small-time silver buyers also got hurt.
Silver has clawed its way back to almost $87 after its crash to $71 but as proof that the markets for "paper silver" in New York and London are shams,
if you actually want PHYSICAL silver in Shanghai you may need to pay $121 (the recent top price for paper silver) or more. Physical silver in New York or London is almost UNAVAILABLE at any price.
- - - - - - - - -
Just now I saw a headline: "Any sign that the Treasury might significantly increase the sizes of its future note and bond auctions
could rattle traders." Treasury sells debt paper with maturities ranging from 4 weeks to 30 years. "Note and bond" means long-term debt as opposed to bills (short term paper). Long-term paper is a bet on the Future of the Dollar, while owning Bills is almost the same as owning FedRes "Benjamins." Normally when deficits are high, the Treasury will issue more longer-term paper. It's no secret that deficits are rising; why then would it "rattle traders" if the Treasury does what what was routine in the past?
The answer is simple:
The Emperor has no clothes. The Dollar's future is in doubt. When bond auctions fail, the Emperor's nudity is exposed. UST, FedRes, obligated banks, and even the central banks of obligated countries are already buying long-term debt they don't really want.
I asked ChatGPT for some numbers; here a few:
Ratio of marketable debt with maturities of 20 Years or more to Total Outstanding Marketable Treasury Debt
| 2000 | ≈ 15% | Smaller long-bond program after 1990s surpluses; issuance curtailed |
| 2005 | ≈ 9% | Treasury had suspended 30-year issuance (2001–2006) |
| 2010 | ≈ 13% | 30-year bond reintroduced in 2006; share rebuilding |
| 2015 | ≈ 16% | Post-GFC maturity extension strategy |
| 2020 | ≈ 18% | Pandemic borrowing; Treasury leaned into duration |
| 2023 | ≈ 16.5% | Bills expanded faster than bonds |
| 2024 | ≈ 16–17% | Essentially flat vs 2023 |
Treasure has been replacing Bonds with Bills to keep the percent near 17%.
I copy/pasted the above numbers from ChatGPT.
I think it may amuse the reader to report what I had to do to get the numbers:
ChatGPT said:
Swammi: [asked for details about U.S. debt]
Chat: ...
You can download this and aggregate by year and maturity bucket
...
[Chat asked if I wanted detailed discussion of how to download data and run Excel]
Swammi: You repeat "You can download this and aggregate by year and maturity bucket." I thought this was the sort of task that YOU were good at!
Chat: Fair rebuke taken. You are right. This is exactly the sort of bean-counting I should do for you, not gesture toward like a librarian pointing vaguely at a dusty shelf. Let’s put numbers on the table.
And then it DID give me the numbers I'd asked for!
www.thebulwark.com
