From the IMF: The Chicago Plan Revisited

[AgAuMoney]

Regards silver being more abundant than gold: I think you are correct concerning what's in the earth's crust and in garbage dumps, but not in available above-ground supply. Regards above-ground supply, all the articles I've seen state just the opposite to be the case.

Stockpile is not generally as important as production, and silver has a lot more production.

Also the silver stockpile is a lot larger than warehouse inventory counted as "above-ground supply."  A lot of silver is held by investors (either in ETFs or unallocated or allocated storage) and does come on the market when the price is right.

[AgAuMoney]

AgAuMoney, I thought that the investment banks DID now have controling stakes in the physical storage and delivery system for commodities

They do, but those are either as custodians or as publically accounted "warehouse" inventory.  JPM Chase is one of the biggest in both areas.  They have (maybe still are) custodians for several vaults used by investors, and they also act as custodians for many miners to bring their production to market.  They claim their massive short position is distributed primarily among those miners covered by that production.

They have huge positions in the options markets. I thought at certain times they can make "sacrificial" trades in the physical delivery spot market that move the market price such as to make the (much larger in USD terms) options trades profitable.

Options are futures.  I've not seen any evidence of significant spot trades, but my lack of knowledge means nothing.  Given they are net short, they have to move the price down.  The only way to do that is to sell, and sell under the prevailing price.  Usually they do that with options, but if they have the inventory they could sell it on the spot market.  I'm not sure how that would have any significant impact on futures.

The relationship between spot and futures are either contango (near futures or expected future spot to be cheaper than more distant futures, "normal" for most commodities likely due to carrying cost) or backwardation (near futures or expected future spot expected to be more expensive than more distant futures, occurs frequently with gold and silver, supposedly the "bird in the hand" syndrome).  It seems if they were making sacrificial trades it would result in some consistent pattern in trying to make their consistent shorts profitable, but no consistent pattern is evidenced in the spot market.  Only the futures.

[stone]

AgAuMoney, doesn't control of the physical supply allow the prices to pushed around hither and thither and options are the perfect way to harvest those price movements? With options, a small price change can make a big difference to the profit. An option can either expire worthless or be worth a fortune as the price moves past the strike price.

[AgAuMoney]

I'm now pushing deep into the fringes of my knowledge in this area. 

AgAuMoney, doesn't control of the physical supply allow the prices to pushed around hither and thither

When it comes to physical, they have to be willing to sell to push the price down, and buy to push the price up.

Basically the vast majority of transactions done with physical supply on the major U.S. markets are done via the maturation of futures contracts.  When a futures contract comes due it is either rolled or delivered based on the desire of the owner of the contract, and every contract is reported on the commitment of traders report.

This isn't anything like the London market where essentially everything is done confidentially at spot via the London fix process with only the report of the price and the quantity for the day.  The U.S. spot market seems to me to be much smaller (but that might be just perspective due to its more widely distributed nature compared to either futures or to London).

and options are the perfect way to harvest those price movements? With options, a small price change can make a big difference to the profit. An option can either expire worthless or be worth a fortune as the price moves past the strike price.

Are there any options on spot gold or silver?  Maybe in London?  I wasn't aware such existed but I don't do much with options and I do nothing with futures so I certainly haven't researched it.  (The only gold and silver options I am aware of are only on futures and allow one to buy or sell a futures contract and all options expire a month before the futures contract.  If that is the profit path I'm not seeing how it would be working for them.)

There is an analyst far more expert in this area than I. 

His name is Ted Butler.  Google his name with the words:  silver manipulation and you'll find plenty.  He seems to know what he is talking about re. these markets and has been watching them for decades.  (I used to subscribe to his newsletter but when I found his writing too repetitive and not actionable I switched to another to which he contributed but also ended that one a few years ago.  I now just see his stuff when he is republished online.)

Ted is firmly in the manipulation camp but I don't recall him talking about current manipulation in the spot market, just futures.  And to my (again possibly failing) memory I don't remember talk about options, just the actual contracts where JPM is hugely short so they must be trying to push the price down, which they must do in order to profit from that position, or else their short is (as they claim) merely forward selling physical production.  (or else it is sacrificial as you posited earlier in relation to spot, in which case they have some motive other than profit and are probably backed by someone even bigger than they)

Here is an excerpt from an article Ted wrote a month or so ago addressing the anti-manipulation arguments:  http://www.silverdoctors.com/ted-butler ... ipulation/  (It shows his pro-manipulation position fairly concisely.)

Ted recognizes the manipulation has to be suppressing prices and from that position recommends buying physical silver to both break the manipulation and profit from the resulting surge when it breaks.

I'd be interested in hearing what you think of his writings if (or after) you've read him.

(sorry if this is less coherent, gotta run)