JP Morgan has humongous contracts to deliver silver at lower prices - but they don't have the metal to deliver.
this similar to the situation that was papered over in 1998, the collapse of LTCM. they had a 400 tons of gold, naked short position. i.e. they contracted to deliver and didn't have the metal.
Another part of the silver market is that there are 45 to 100 ounces of paper silver & gold that are traded for every physical ounce of metal. so for every physical ounce that leaves the market - it takes with it 45 to 100 paper ounces.
to get insight into the actual numbers,
http://harveyorgan.blogspot.com/you would have to read him or Ted Butler going back a few months ... or years.
one place to monitor looming shortages of physical is the APMex Top 40 page. normally they have everything. notice that now they are short about 5 specific silver products -
http://www.apmex.com/APMEXTop40/Default.aspxthe bottom line of JPM's silver situation is that they face multi-billion dollar losses as they resolve silver short contracts. they have to buy metal for more than they agreed to sell it for - a great way to lose money.
one would have to analyze all their short contracts and check their cash reserves to find out what amount of silver price rise will cause $X billion worth of losses.
the US already uses more than the current annual US silver production in the creation of silver Eagles. same for China - they keep all of what they mine for gold and silver. in other words, both countries are net importers of silver.
Mexico & Canada are net exporters.
i believe the campaign to break JPM by buying silver is doable.
for example - if 100,000 silver investors each bought an extra 20 ounces a month, that's 2 million ounces a month, 24 million ounces a year. i mean people who bought silver when it was $5 or $15, coming back into the market and buying at $25 (it got down to $25 a week ago Tuesday, Nov. 13 I think.)
the immediate effect of that would be physical shortages.
in the silver market, they use the futures/options market to perform price discovery, and that sets the prices in the physical market.
what happens when the futures market is manipulated to drive precious metal prices down - a key part of the "strong dollar policy" adopted by the US some years ago - is that all you can buy is 1000 ounce industrial bars. e.g. when silver fell from $20 to $9 in 2008.
i won't just imply it, i'll say it - JP Morgan and HSBC naked short positions in the gold & silver markets have been a key factor in maintaining the value of the dollar -
relative to other currencies. it helps to watch the markets "live" -
while it is possible for Max Keiser's idea to hurt JP Morgan profits, there is an aspect of silver investor psychology to consider. now that silver has been in the $25 to $29 range for a few months, many older silver investors won't buy when silver gets above $27. because they are waiting to buy on the dip. if silver got above $30 they would say, "it's been fun, Max, but ..."
but yes, if a group or country with a lot of money wanted to bankrupt JPMorgan, they could do it by allocating $50 to $100 Billion and buying physical silver. that would drive the price of silver to un-knowable highs, and would force JPMorgan to close out their naked short contracts by buying silver at those new high prices.
there is some threshold, maybe $60, maybe $80, maybe $100, that will by definition bankrupt JPMorgan because they don't have enough money to deliver on their short positions and would default.