SLV Adds Another 1,661,992 Troy Ounces of Silver

I don’t have a lot of stories, which I’m sure will suit you just fine.  The first is aBloomberg piece courtesy of reader Scott Pluschau. U.S. banks will close 5,000 branchesin the next 18 months as they face profit declines from decreased loan demand and lower fee revenue, said Meredith Whitney, the former Oppenheimer & Co. analyst who now runs her own firm.  Whitney also said that she sees slower growth in investment banking. U.S. securities firms may cut as many as 80,000 jobs in the next 18 months as revenue growth slows.  The link to this short story is here.

The next story came from reader ‘David in California’.  It appears that Mohamed El-Erian of PIMCO has poured gasoline all over the burning fire that is Ireland with his comment to his sister in Ireland that she should withdraw all her money from the Irish banks.  When the world’s leading bond-fund manager makes these sorts of statements, people tend to get a bit nervy. [No! Really!  Who would have thought that? – Ed]  This very short story, which is posted over at businessinsider.com, is a must read.  The headline states “El-Erian: “What You Advise Your Sister In Ireland Now Is That You’d Say Take Your Money Out Of An Irish Bank“… and the link is here.

Yesterday’s King Report provided the next story.  It’s a piece out of the Monday edition of The Guardian.  Financial markets were thrown into turmoil amid fears that an imminent collapse of Ireland’s beleaguered government would have a knock-on effect across the eurozone.  There were also concerns that Portugal, and even Spain, might also need their own rescue packages.  This sent the euro and shares falling while the risk of holding the debt of potentially vulnerable countries rose alarmingly.  The headline reads “€90 billion Irish bailout ends in turmoil – now Europe fears crisis will spread“.  The link to the story is here.

The next offering I have for you is one that was sent to me by reader Roy Stephens.  It’s a piece taken from the German website spiegel.de… which is headlined “Merkel’s Dilemma: Chancellor Faces Tough Sell on Irish Bailout“.  For the second time in just a few months, Angela Merkel will have to explain to voters why Germany must bail out a fellow euro-zone member state. Skepticism is growing — amongst voters, in the media and within her party.  The link is here.

Here’s a GATA release of a story that appeared in yesterday’s edition of London’s Financial Times.  Chris Powell’s headline reads “At secret meeting, Fed considered buying everything and holding press briefings“.  The FTheadline reads “Fed Considered Long-Term Rate Target in Secret”.  The “Creature From Jekyll Island” is certainly living up to its reputation.  If you have the time, the story is worth the read… and the link to the GATA release is here.

I only have two precious metals-related stories for you today.

As per my rather long commentaries on the world’s reserve currency, both in my column today and yesterday, James Turk wades into this issue with a short blog over at King World News entitled “Gold Separating From the Dollar“.  It’s a very short read that’s definitely worth your time… and the link is here.

Lastly today is a piece by silver analyst Ted Butler.  It’s something he wrote for his paid subscribers yesterday and bears the headline “The Final Warning?”  Over the years, Ted has made no secret of the fact that he’s diametrically opposed to pool accounts and unallocated accounts… and since he has taught me the dangers of these ‘investment’ vehicles… I wouldn’t touch them with a 10-foot cattle prod either.  Although I can’t post the entire commentary, here are a couple of paragraphs… plus a link to his prior article on this issue.

“At the time of my prior article, the price of silver was a little more than $13… it has since more than doubled.  So has the price of gold.  If, as I contend, no real metal backing stands behind the pool or unallocated accounts issued by these and other companies and banks, then investors in these and similar accounts, now have tremendous open profits and these issuers have equal [but undisclosed] open liabilities.  An individual issuer could easily be out tens and hundreds of millions of dollars… with the total liability of all such issuers running into the many billions of dollars.  You must remember that there is no central regulator governing pool or unallocated accounts… and no mark-to-market or clearinghouse protections exist.  If ever a problem existed, namely the metal didn’t exist [or the issuing firm didn’t have enough money to honour all claims. – Ed], there would be no way for an investor to find that out until it was too late.  Such investors may suddenly find themselves at the end of a long line of unsecured creditors… and not as a true investor in silver, grateful for big gains.”

“…my common sense tells me that there is a strong possibility that much, if not all, of the metal supposedly backing pool or unallocated accounts, simply does not exist… as I explained in the original article.  If I am correct, a horrible day of [reckoning] lies ahead for participants in such accounts.  and if you are questioning how something like this could go on for many years, the answer is that until pool account investors start to pull big money out of such programs, there is no actual cash drain to the issuers.  Silver [and gold] investors holding for the long [haul] have little reason to cash out of such programs yet.  The key word is ‘yet’.  If and when they do, it may be a very different story.”

I have warned readers about pool accounts ever since I started writing forCasey Research… and even before that.  I know some of you own them, so don’t say you weren’t warned if something goes sideways when you go to cash in your ‘gains’ when silver is some rather large 3-digit number.  Ted’s original commentary on this issue was posted back on January 30, 2007… and is headlined “Buyer Beware“… and the link to this absolutely must read commentary is here.