There are 49,436 contracts currently open for the next delivery month which is March 2012. Each contract represents 5,000 ounces. That is 247.18 million ounces of silver being traded for March delivery against a registered 36.56 million ounces. This is a subset of all the contracts going out over the year.
The is leverage of about 6.8 to 1. It 'works' because most contracts are speculative and settled for cash. Comex is not where one goes for the delivery of a large amount of silver.
I think that over time the US markets will become increasingly less relevant as a price-setting mechanism for a number of commodity prices including the metals.
The failure of MF Global and the blatant cheating of the customers, both before and after the fact, will accelerate the process of failure.
It really is shocking, all the more so because so few people see it and understand its significance in the coming crisis of confidence in the US markets.
Great leaders see the big changes coming and harness them. There is no one on the horizon that fits that prescription. What I see is failure repeated, but as history indicates, not endlessly.
