Silver And COMEX Inventory (Part 1)

November 2, 2015

During our recent Q&A interview with silver analyst, Ted Butler, the issue of frantic in and out movement of physical silver within the COMEX warehouse system came up more than a few times.

We asked Ted if he could describe how this movement literally works…

“Are these literally trucks?

“Is Brink’s a part of this?”

“Is this literally putting one thousand ounce bars on pallets, onto trucks and moving it?

Ted:       Well, that’s what’s happening. That’s why I noticed the issue starting four and half years ago and that’s why I’m persisting in talking about it today. John’s question is good. What the heck is going on here?

First off, it’s not Brink’s trucks. You might have caught the news a couple of weeks back, regarding the big silver heist. Ten million dollars worth of silver stolen from the Port of Montreal.

I believe they actually recovered it or they nabbed the crooks and basically what it was a lot of people were surprised when they saw it was a container. Like a ship container or a rail container. A container you would see on the highway interchangeable between boat and rail and truck. This is how they ship silver.

They don’t ship it in Brink’s trucks. They ship it on Mac trucks. One truckload is six hundred thousand ounces. That’s the equivalent of a hundred and twenty COMEX contracts.

It weighs about forty-two thousand pounds or twenty-one short tons . That’s a typical truckload. Think of this, the six hundred ounce is one truckload, that’s the normal movement. It’s never exact. It might be five ninety-three or might be six hundred and ten thousand ounces.

Much like a one thousand ounce bar is never one thousand ounces exactly. It’s always a little under or a little over.

These are big trucks that are taking these containers of  silver in and out of warehouses.

Every once in awhile you’ll get a transfer. But that’s rare.  These transfers are how J.P. Morgan’s inventories have grown up in their warehouse over the last four and a half years.

There is a daily release from the CME that shows what came in and out to the fraction of an ounce in six different warehouses. In other words, you can verify the ounces that come in and out every workday into the COMEX and it’s not the same.

You don’t know where the stuff is coming from if it’s not coming from another warehouse. You don’t know where the silver is going to if it doesn’t go in another warehouse – it’s just taken out.

It’s this constant and frantic movement – these truckloads of silver coming in and out of these various warehouses.

What the heck are they doing?

Well, it’s not make work. It’s done for a reason. There is great expense involved; labor and equipment. It’s not being done haphazardly. Nobody undertakes an operation like this unless it’s mandatory. It is required. It is real and it’s happening.

I can’t tell you, other than my best guess, as to why it’s happening. I would solicit every single one of you as I’ve been soliciting my subscribers for the last four and half years, to offer a different explanation.

This involves the second largest inventory on earth. The first is the three hundred and twenty million ounces or so in the SLV, – the largest stockpile of silver on earth.

The second largest, a hundred and sixty-seven or so million ounces is in these COMEX warehouses. This is not a minor factor in the silver market. I’m talking about the second largest inventory in the world and it’s a fully documented movement and it didn’t exist prior to four and a half years ago. But most importantly, it doesn’t exist in any other commodity, just silver.

Knowing all this you try and take these facts, the movement and what’s taking place and the whole logistics of the thing and common sense, and say, “Well, why is it being done?”

The best that I can come up with is that it’s an indication of tightness. Whenever inventory turns over frantically, it’s turning over for a reason. I would say the reason is there’s just a constant demand for silver. And new stock must brought in constantly to replenish inventory.

That is synonymous with a tight physical wholesale market condition that could very easy lead to a shortage. I can’t come up with any other reason. As I said, I’m open to any other explanation. You cannot deny that it is taking place. You have all these people involved. There are attorneys, accountants, auditors, warehouse-workers, and trucking companies. Are they all in on some conspiracy? I don’t think so. It’s happening. It’s not a phony number. The question is why it’s happening. I’ve given you my best interpretation but I solicit other interpretations.

This section of the Q&A begins at around 44 minutes.


Dr. Jeff Lewis is the publisher and editor, of He recently created a forum called the, a community of like-minded individuals active in the silver market. He also runs a private membership program called the Lewis Mariani Silver Letters.

The Fourth Coinage Act of 1873 embraced the gold standard and demonetized silver, known as the “Crime of 73”