As you know July is an active month for silver futures contracts at the Comex.
On paper at least, the Comex warehouses seem to be well stocked, with two relative newcomers CNT and JPM having built up some significant stockpiles. I was particularly taken with CNT.
I have broken out the registered (deliverable) from the total inventory in the second chart to show that while there is quite a bit of inventory on hand, only a modest portion of that is 'for sale' at these current prices. And a big chunk of that is held at CNT, a privately held family business in Massachusetts that grew from a single coin shop called Coins 'N Things.
CNT has become the largest wholesaler of gold and silver to the US government and has become a major reseller of American Silver Eagles. The company does not report its numbers and has no outside investors.
I wonder if they are subject to regulatory oversight or independent audits of any sort. Presumable Comex applies the same blanket disavowal of liability to silver as they do to gold in their authorized warehouses.
I don't think it is an overstatement to say that the near term deliverable silver market at the Comex is systemically dependent on CNT. An unfortunate event or a misstep at that relatively small company, or a major failure by one of their counterparties, would quite possibly trigger a silver market dislocation of sorts. And I would not rule out a declaration of force majeure.
This is not to say that it will happen, but rather that from a systems perspective that this is a major single point of potential failure with significant cascading results. It points to a locus of potential fragility.
These graphs are from the Data Wrangler from Down Under, Nick Laird at Sharelynx.com.
