Everyone Reads Harvey and Turd

Harvey Organ that is.  Harvey tracks the gold and silver markets as well as other related tidbits at the Gold and Silver Report.  I gather he's focused on manipulation of the gold and silver markets and he passes on a ton of information.  I read his website faithfully hoping to get smarter but it's tough never having traded futures of any kind.  I'm missing the fundamentals, the lingo, everything.  Harvey and others have been talking about big happenings in the silver market:  some big banks are short silver and are getting creamed.  Somehow this could affect the Commodities Exchange viability.  But again, I really need someone to give me the Commodity Futures For Dummies explanation. 

Fortunately, another blogger, Turd Ferguson, penned a post at Along The Watchtower the other day that fits the bill and has a high learning density.  I'll attempt a brief synopsis here but you really should hit the link and read the entire piece. 

As of Feb 15, there were 59,851 open March silver contracts at the Comex.  Let's say you have one of these contracts to buy silver.  A contract is for 5000 ounces and at the current silver price of $34.19 that means the silver will cost you $170,950.  As the holder of the contract you have until the Feb 28th to show good faith intent to purchase by depositing the $170,950 in your account.  Most of the time coming up with the money is not a problem as the majority of contract holders have no intention of buying the silver and simply move on to speculate in later months.  With Feb 28 looming on the horizon, what's different is that there are still 59,851 open contracts, an unusually high number for so late in the cycle.

Silver is in "backwardation" meaning the price of silver for the current contract is higher than later contracts.  Silver backwardation is an anomalous situation implying strong demand for physical silver.  With strong demand as the prevailing mood, how many of those 59,851 contracts will actually pay up and purchase the silver?  If many chose to take delivery, is there enough silver to go around?  Reading Harvey and Turd this coming week will be like reading a whodunit--  every day the plot thickens.