A Few Questions; One Answer
Please
read this article carefully because I’m disclosing for the first time
that the U.S. government has given JPMorgan the green light to
manipulate the silver market. This fact explains the shenanigans in the silver market. It answers all the questions and exposes this tawdry affair for all to see.
The
scandal recently became more outrageous. The June Bank Participation
Report, as of Tuesday, June 5, along with the COT confirmed that
JPMorgan’s silver short position has increased by at least 5,000
contracts in the past two reporting weeks. That is the equivalent of 25
million ounces of silver, truly an enormous amount in a two week period
and about equal to all the silver produced and consumed in the world in
the same period. I calculate JPMorgan’s net short position in COMEX
silver futures to be between 16,000 and 17,000 contracts. JPMorgan has
been the sole net commercial silver short seller over the past two
weeks. That is the clearest proof yet of manipulation. A market
dominated by one buyer or seller is the ultimate definition of
manipulation.
Had
JPMorgan not sold short 5,000 or more net additional contracts in COMEX
silver over the past two weeks, the price of silver would have climbed
even higher. Why? Because without JPMorgan selling, someone else would have had to sell in their place. Those sellers would have demanded a higher price. Furthermore,
JPM’s short position alone equals the entire 16,500 contract total net
commercial short position in COMEX silver. In other words, if JPMorgan
did not hold a 16,000 to 17,000 contact net short position, there would
be no commercial net short position at all. The additional proof of
silver manipulation includes the two massive price takedowns of last
year, when the silver price fell more than 30% in a matter of days,
benefitting JPMorgan more than any other trader.
How
can I continue to get away with accusing JPMorgan, arguably the most
powerful bank in the US, of the most serious market crime possible and
get no reaction from them?
An objective reading of the past four years,
since the time I first publicly identified JPMorgan as the big silver
short, has resulted in the bank being universally recognized on the
Internet as the big silver crook. The reputation of a systemically
important financial institution is always of prime concern from the
board of director and senior management level on down. Why have I never
been threatened by them?
The
same question comes to mind when applied to the CME Group, owner and
operator of the COMEX, where the silver manipulation is centered. The
allegations that the CME is aiding and abetting in the silver
manipulation are serious because the CME has been officially designated
as a self-regulatory organization (SRO), meaning they have a legal
obligation to prevent any attempt at manipulation in their markets. Like
JPM, the CME is tough as nails and, presumably, could step on me should
they choose to. (Yes, I send everything I write to JPM, the CME and the
CFTC).
Unlike
JPMorgan and the CME, the Commodity Futures Trading Commission (CFTC)
has not remained completely silent. The agency has initiated a number of
reviews and investigations into allegations of manipulation in silver
over the years (at my prodding), including a current Enforcement
Division investigation, now approaching the
four-year mark. The allegations of a silver manipulation were always
credible, since they were based upon data from the agency itself and
compared to how the Commission reacted strongly to past instances of
concentration. The CFTC had to at least go through the motions of
pretending to care. After all, many thousands of silver investors have
consistently petitioned the agency on this matter over the years.
It’s
been all talk and no action from the Commission when it comes to the
silver manipulation. I can’t tell you how many times I have asked myself
after I have just explained another undeniable proof of silver
manipulation, “why can’t these regulators see this?” Why is the
Commission conducting an expensive and formal silver investigation in
the first place, when all it has to do is explain why a US bank holding a
silver short position equal to 25% to 30% of both the paper and
physical total world market wouldn’t be manipulative to the price (in
and of itself)?
To
this day, I have been baffled by how CFTC chairman Gary Gensler can
preach the Holy Gospel of true regulatory reform of transparency,
position limits and no concentration, while ignoring the clear evidence
of manipulation in silver. I think what has caused his and the agency’s
failure to terminate a highly-visible silver manipulation has nothing to
do with a lack of understanding of the silver manipulation. It took me a
while to figure it out, but better late than never.
The
answer to all the above questions lies with the President’s Working
Group on Financial Markets. Largely in response to the great stock
market crash in October, 1987, President Ronald Reagan signed an
Executive Order in 1988 creating the Working Group to prevent a
recurrence of a market crash. http://www.archives.gov/federal-register/codification/executive-order/12631.html
There
are four members in the Working Group; the Federal Reserve Chairman,
the Treasury Secretary, the Chairman of the Securities and Exchange
Commission and the Chairman of the CFTC. The Treasury Secretary is the
Chairman of the Working Group. The purpose of the group is to promote
market stability and prevent disorderliness by working with the
exchanges and major market participants in times of stress.
Such
a time for the financial markets existed in March 2008, when the
investment bank Bear Stearns failed and, undoubtedly, the Working Group
was heavily involved. The Group, along with exchanges and major market
participants, oversaw the transfer of Bear Stearns’ giant short
positions to JPMorgan, in the process indemnifying JPM from any concerns
of dominance and overt control of silver and gold prices. As a result,
JPMorgan orchestrated (and was the biggest beneficiary) the more than 50
% decline in silver prices into late 2008 with the Working Group’s
permission.
Things
then quieted down in silver until the fall of 2010, when prices started
to make an historic move into the late-April 2011 price high near $50.
At that point, JPMorgan’s giant short position began to hurt and it
moved to cover some of the silver shorts into the very top. At that
point, it looked like JPMorgan would get crushed by the physical silver
shortage and the growing losses on their short positions. Instead, JPM
appealed to the Working Group for relief and, working with them and the
CME, JPM caused the silver market to crash, starting on Sunday night,
May 1. Later, the Working Group teamed with JPMorgan and the CME to smash prices by 35% in 3 days in late September 2011.
The
President’s Working Group on Financial Markets answers all my
questions. It explains why JPMorgan and the CME remain silent about
allegations of manipulation. They have been given legal cover by the
Working Group. This also explains why the CFTC says they are
conscientiously investigating silver when it is clear they are not. The
agency can’t come out and disclose silver was smashed with the full
knowledge of the Working Group, so it pretends to go through the motions
of investigating. What is going through Gary Gensler’s mind? Is he not
tormented by the blatant silver manipulation which runs contrary to all
his public utterances? Commodity law is being broken.
If
my analysis is correct, what does this mean for silver from here? It
will prove to be wildly bullish for the price; maybe not immediately,
but on a long term basis. It sets the stage for the really big move in
silver. This overt government
interference in the silver market will boomerang at some point, just as
every attempt at artificial price setting has failed. Just let the word
start to spread about Working Group involvement in causing the price of
silver to fall and the natural reaction by the world’s investors will be
to take advantage of the bargain created.
This
is an attempt by the government to influence the price of silver lower
by favoring the paper short sellers and not by dumping physical silver
on the market. That’s because neither the US Government, nor any other
world government has any physical silver to dump. All the Working Group
can do is aid the paper silver short sellers by permitting vicious price
sell-offs designed to scare existing holders. There is an easy way
around that scam and that is buying real silver, not the junk
represented by COMEX paper contracts. If, as and when the role of the
Working Group in the silver manipulation becomes known, the best reason
yet for buying silver will come into focus.
I
know that many have long suspected that some type of government
involvement was present in gold and silver. But rarely have those
suspicions been as clearly documented as they are now in silver.
Questions about a silver investigation that never ends, or price moves
beyond reason or historical precedent, or why the nation’s most
important bank and exchange are up to their eyeballs in the silver
manipulation have been explained by the Working Group. Too bad the
Working Group took the side of a few short manipulators and not the many
silver investors and producers of the world. No doubt someone has sold a
bill of goods to the regulators, falsely convincing them that terrible
things will happen financially should silver explode to its true market
value. Well guess what? The rotten state of world finances has nothing
to do with the price of silver currently, nor will it in the future.
Ted Butler
No comments:
Post a Comment