Is JP Morgan Shorting Paper Metals While Acquiring Massive Physical Stockpiles?

*Updated

Manipulation explained, or pure disinformation orchestrated  to pre-emptively manage the fallout of the coming JP Morgan silver manipulation scandal?

As silver investors are likely aware, leading silver analyst Ted Butler has openly speculated whether JP Morgan’s alleged massive short silver position is held on behalf a client such as the Federal Reserve (with the intent to prop up the dollar by suppressing gold and silver) or the Chinese government (with the intent of acquiring physical gold and silver bullion at a discount due to their massive paper short position on the futures market).

The Doc has long privately wondered whether the bullion banks’ PM short positions could actually be leveraging their own physical bullion accumulation by artificially suppressing the paper futures price.

These thoughts originate in our following of Jim Sinclair, who has always maintained that the bullion banks will be the one’s making the lion’s share of the profits in this great secular gold and silver bull market.   One thing the bullion banksters are not is dumb, and they can see the writing on the wall for the US dollar as well as any SD or ZH reader.

New commentary from a bullion insider who claims to have personally managed the movement of 27 million ounces of gold from HSBC’s vaults into JP Morgan’s seems to substantiate Sinclair’s claims.

The industry insider has come forward claiming that JP Morgan’s paper short position is in fact a hedged trade (as Blythe Masters claimed here)- and claims that JPM is in fact MASSIVELY LONG PHYSICAL GOLD AND SILVER HELD IN THEIR OWN PRIVATE VAULTS while short the paper futures market. 
Is JP Morgan actually a double agent shorting the paper metals market for their own benefit?

 

The claim is not only rational, but it also would perfectly explain why the CFTC has opened three separate investigations into silver market manipulation, and has yet to charge anyone with manipulation of silver.

Clearly, if JP Morgan’s commodities desk was accumulating massive physical gold and silver inventories in their own personal vaults, they would be able to claim their paper short position is a legitimate hedge- essentially leveraging their physical position against the paper COMEX futures market itself.

Miles Franklin’s David Schectman states he has been in contact with the insider, who claims JPM is massively long physical gold and silver bullion stored in their own warehouses:

Whereas Ted Butler focuses on JP Morgan and “the Big Four Commercial Banks,” and their perpetual “short” position in silver (and gold), I don’t recall him ever suggesting that they actually own the physical silver to offset their short positions.

My friend Trader David R flatly states that this IS the case; he has seen the silver with his own eyes in London. In fact, he asked me to come with him last year and told me he would bring me to the vaults and personally show me the silver. Last winter he emailed me and said, “I will be going to London in May; if want to come along, I am sure I can get you a tour of a few of the major banks vaults (JPM included) and you can see all of the gold and silver for yourself ?”
 

For those inquiring minds wishing for a little background on this mysterious gold trader David R:

I worked at some of the largest bullion banks in the world over my career and I ran all types of books and did a lot of business with Central Banks around the globe.  I was involved in the largest gold hedge ever done in the history of the world back in 1996. This has been my life for the past 18 years. From 2000 to 2006 I was the gold trader at Barclays London. I have worked for AIG, Barclays, and UBS, some of the biggest bullion desks in the world.

I worked for three of the major bullion banks for 11 years and was in charge of Barkleys gold book and the hired 42 Brinks trucks to move our 27 million ounces of gold out of HSBC ‘s vault and into JPMs vault when HSBC raised storage costs on us, I am 100% positive that it’s there. I know we had 27 million ounces of gold on our daily balance sheet and the other big banks all had around the same amounts.

David R left Barclays and moved to Manhattan to work for one of the largest and most successful privately held hedge funds in NYC. He was in charge of the precious metals trading department, and supervised dozens of the most talented precious metal’s traders in NYC. I was told by a reliable source that every metals trader worth his salt would kill to work for that firm. The traders were not salaried, they worked on commission and they all made BIG money. That is where I met David. He gave me a personal tour of their trading department. His understanding of the gold and silver industry and his resume is as good as it gets.


The trader states that JPM is indeed massively long physical precious metals and set to vastly benefit from the coming mania, precisely as Jim Sinclair has long predicted:

They buy the physical silver at the same time they sell the future (on Comex) futures trade in contango (higher price than spot physical) they get zero interest rate cash from FED so borrow the money for free, they own the vaults to store the silver…. so as the future comes to maturity they can either settle against their physical long or roll the future to collect more free contango…. This is pure arbitrage paid for by the FED.  This has been going on for over 30 years and why shouldn’t they be allowed to have 25% of the Open Interest?  There is no manipulation because they are short the futures and long the physical and have “ZERO” price risk, but nice profits!  It’s brilliant trading and completely 100% legal and that’s why they will never be charged with manipulation because there is none going on. Sometimes it’s just that easy!

 

David R states there is no massive shortage of physical silver- it is just being hoarded by the bullion banks in their own private vaults ahead of dollar devaluation and collapse:
Let’s go and visit their vaults and you can see all the physical silver there… Lease rates are at full carry +.  There is no shortage what so ever and the banks are charging 40 bp for storage because they cannot find any more space to put it all, you can take all the physical you want!  The JPM manipulation is not a manipulation, but a way of trading that has been going on for years. JPM is short futures (due to contango) and long physical.  People need to understand that metals are just a derivative of the interest rate market and once people do, they will get a better understanding why the market moves the way it does.

I explained to you what HSBC and JPM do on the silver.  They get $ from the FED for free.  They own all the storage vaults, so they do not have to pay the fees for storage.  They then own the physical silver in their vaults and sell the futures contracts (which are in contango) at a much higher price than OTC price so then hold the both till delivery.  Since there is no cost for $ and no cost for storage, they made a fortune on earning the contango of the silver and gold market. It’s a brilliant strategy, which has made them a fortune.

If you sat with me for a day I could show you how this market really works.

Miles Franklin’s David Schectman states he has known David R for over four years, that he is legitimate and the real deal, and that although David states JPM’s short silver (and gold) positions are NOT naked, it is massively bullish for both metals, stating:
He is absolutely convinced that gold and silver are going MUCH, MUCH higher. He told me last week that with the Fed’s latest “open-ended” QE edict, the dollar and bond market are done, finished and the bull market in gold is guaranteed! As far as he is concerned, Bernanke has sold out our kids and grandchildren and it no longer makes any difference who occupies the White House!

 

As mentioned previously, if JPM is shorting gold and silver futures with the intent of eventually breaking the futures market/ physical price link to the metals, this would explain motive (pure profit- always the ONLY motive for a bankster), as well as the reason why the CFTC has been unable to charge JPM with manipulation of the silver market- even though they routinely fleece the specs using their algos and raids.


While we have always believed the bullion banks will be long gold and silver when it really matters at the end of this massive secular bull, there are several points about trader David R’s claims bother us- this trader claims JPM is simply arbitraging futures vs. physical using 0%  cash from the Fed- but there have been single days (May 2nd, 2011 and Sept 21st I think it was for starters) in which the COMEX volume surpassed global mining output for the entire year.   JPM’s physical holdings can not possibly equal their net paper short position (just on the COMEX, not to mention their OTC positions).

This trader also claims there is no shortage of physical metal, it is simply all being stored in JPM’s private vault and he has seen the metal himself.  Our thought is that he may have seen the metal, but that doesn’t mean it hasn’t been rehypothecated and there are 1,000 people who believe they own it.

Finally, when we ran this story by our friend Ned Naylor-Leyland, he believes it is pure disinformation, stating that the story is a bit like the Blythe Masters interview- and was orchestrated purely to pre-emptively manage the fallout of the coming JP Morgan silver manipulation scandal.


Comments

  1. I suspect that this may be true with respect to Gold, but not Silver.

    If the banks have tons of Silver, then why did the Hunts almost vanquish the banks by buying only a couple hundred million ounces of Silver?

    Jim Sinclair refuses to talk about Silver.  If you email him about Silver he pretends like he does not understand the Silver market even though his own website says that he was hired by the Hunts to help them unwind their Silver position in the 1980s.

    • I have been reading so much about manipulation that it makes you sick. Is that all there is to talk about! Guest after guest, trader after trader. People who know someone who know none of us will ever know. We all seem to be taking the word of fools, with no proof of anything. It amazes me that not one of these people can ever name the person who tells them about some secret. Hey I know someone who has 750 tons of physical silver who is going to sell next week and lower the price. I can’t tell you who they are because I said I would not tell anyone about all the silver they are going to sell. 

       Bottom line. If you know that something is wrong with the world, prepare. Don’t waste your time reading blogs.
      If you bought silver based on what you think you know, then  you know nothing. Not even these experts know anything.They change there mind and predictions daily. Always saying next month, year or coming soon that the price will rise. If they are wrong they will say it is manipulation, if correct they look like they are gurus.   

      It is not fair to the averge joe or joanne to be manipulated this way by sites.

              

       

    • @beingfrank

      Sounds like you got burnt or something frank…

      I just take a big, wide overview and filter out the BS.

      I got back into Silver strictly on the fundamentals, 

      and divine providence keeps me from spending 

      at the wrong time or losing money. With that 

      in mind, I need to spot check my stack for 

      fakes (very little chance of that, but…)

      and take inventory! 

      Step back and look at the big picture, don’t worry about the small stuff. 

      Keep Stacking! 
       

  2. As Custodians of the SLV, shouldnt JP Morgan have 9,500 Tons of Silver in their vaults???

    Hypothetically, if JPM does not have 9,500 Tons of Silver in their vaults, then wouldn’t they then be naked short Silver???

    Bill Murphy says that the JPM Silver scandal is imminent “because of what they have done.”

  3. I’d say ‘Yes’.
     

  4. Does it not seem logical that at a time in the near future, when currency debasement is the official policy of the Fed and the U.S. government, that JP Morgan and others who manipulate silver will choose to stop shorting silver and gold? It seems that the shorting helps maintain the value of the dollar, but that this is not in the long-term interest of the United States, who stands to benefit significantly when cheap dollars will buy them all the gold and silver they want. When the government of the United States, and governments of the world, own the gold and silver, what stops them from completely revaluing prices to benefit themselves?

  5. I am wondering how this fits in with the idea that JP Morgan is really just an extension of the Fed/US Gov’t?  So the Fed eventually loses but JPM & Co reap massive rewards and the end result is that it’s the same old club left running the show?

  6. The key part of the article is that JPM is long physical but short silver.  This allows them to obtain more phyzz at bargain prices.  When they feel like they have enough, watch the price take off as the shorting stops.

    • Hmmm.  Destroy all trust in the market with one tentacle, sever it (sacrificial counterparty) and then when the paper price crashes, they buy back the shorted futures for pennies on the dollar while keeping the phyz.  Nice scam if they can pull it off.  Unlimited margin from the Fed certainly helps. 

      I don’t think this is what they’re doing though.  There are so many advantages to keeping the Money Matrix running that the puppetmasters won’t let any minions risk wrecking it by hoarding large amounts of phyz.  More likely the silver has many different owners.

      Or perhaps a controlled demolition is brewing, with JPM as the sacrificial counterparty. When JPM dies, they will trigger the dead man’s switch attached to the derivatives neutron bomb in the basement. All paper securities will turn to radioactive goo overnight. You will be surprised how quick they implement the one world currency afterwards. Don’t worry, they will pinky swear not to let the same corrupt bastards run things.

    • Its called playing both ends against the middle. Only one way they lose: someone becomes a whistleblower that reveals laws have been broken and serious crimes have occured. Then they will lose big time. And that is the only way they lose. They must pay for the lives they have destroyed.

  7. A couple of thoughts.  Jim Sinclair may very well be moot about silver since he knows secrets about the US government and its position regarding silver. Anyone who worked with Volker, handled a billion dollar tranche of bullion capital and never talked to any extent about this transaction certainly knows more about silver that he is willing to let on.  In this country even presidents take secrets to their grave.  Imagine what Kissinger knows.   Maybe when Sinclair moves to his new home in a foreign country he might feel free to speak his mind.  Or maybe not.  The US can get to anyone any time
    As for anyone telling the world about overseeing movements of a few hundred tons of gold to and fro, I can say this.
    Back in my misspent yoot I was a Teamster.  We moved stuff. It might have been a high value and very heavy seet of military electronics, a large office move for a government contractor or just some household goods for an Admiral or General. This was back when the Vietnam War was in full swing and the government had to move stuff from offices to bases and back.
    With 3 semis and 3 men per truck we could move 100 tons of machines or other high value stuff in four hours   Gold?  Piece of cake.

  8. David Morgan also said that in September something big concerning JPM was coming out. Not now with QE3. The FED just saved JPM’s rear by becoming the principle buyer in mortgaged-backed securities. Getting rid of those billions of dollars of foreclosed mortgages and made it possible for JPM to continue purchasing gold and silver as they were doing after QE2. Remember when no one knew where the stimulus went? Didn’t go for jobs-it was a ploy to enable JPM to buy up as much gold as possible for $.96 an oz.!!! WHY? To prepare for the collapse of the dollar.

  9. So they will let gold and silver rise at the pre-arranged time, by reducing the shorts. Or else, the dollar will collapse first (again, at the pre-arranged time) and this will take out the shorts, because that is dollar based.
     
    So, silver is still a good thing to have – what a relief – I was worried for a while reading through this article. Crazy times.

  10. Just curious if this is the insider that GATA mentioned a few weeks ago?
    This makes a lot of sense.  Somehow I continue to believe that China is in the mix because they are also the biggest buyers of gold in the world today.
    Also, by causing rapid rises and raids in the market a bank could easily raise enough cash to get out of their short positions within a few months if they really wanted.  Five or six raids, if they are able control the price, where they drop the price from $35 to $30 is $5 of value.  Do this 4 times and you’re at $20 per contract of value which more than erases any loss from exiting their short positions. 
     

  11. JPM is the custodian for the SLV which supposedly holds 319 million ounces of silver and which is stored in London. The silver is not owned by JPM. If silver bullion is so plentiful why the need for a short position in SLV ? If silver is so plentiful why is there so much activity going on in the vaults every day ? Why is it now taking until near the end of the delivery month for all  the silver futures contracts to be served on the Comex if silver is so plentiful? Why are so many people settling for cash instead unless they are being paid a premium? If silver is so plentiful why is the LBMA refusing to allow large physical silver orders leave their vault system? Jeff Christian admitted himself at the CFTC hearing in March 2010 that the physical gold and silver markets are leveraged 100:1. Why would the west be helping China, Russia and countless other countries buy gold and silver at a discount if their intentions are to weaken and supplant the US dollar? It just does not add up. Western Bankers have been suppressing precious metal prices by dumping metal on the market for decades to support their paper dollar empire. JPM has been a big part of this. They are still doing so today.
     
    JPM may well be long silver but it would be of the OTC paper variety.

    • @59LesPaul – while I think most of what David R is claiming sounds reasonable, I think you are correct that he is mistaken that physical silver is not in short supply.  Even if he was shown a massive vault filled with silver, that does not mean that it has not been rehypothecated with 1,000 claims per ounce.  Who is the REAL owner is the question.

      That said, it is an interesting argument/theory that JPM is actually massively long physical.

      -Doc

    • This was my thought exactly…if the banks actually have silver (which I highly doubt), it’s been sold/leased a hundred times by now. We need to remember we’re dealing with a criminal cartel and they just can’t resist the thought of double dipping. Maybe they think since it’s under their physical control they can slip it out when TSHTF or create some kind of false flag where the ‘silver’ is just vaporized like the 911 towers. You know, we really did have the silver we owe you, but wouldn’t you know it, those pesky terrorists that hate our freedom had to dirty bomb our vault, so we’ll just have to settle your claim in worthless fiat.

    • I always figured they would nuke the London financial district to destroy a lot of evidence and “vaporize” the metal they already stole.  Just like WTC 7.  Question is, when?  To answer this, we have to consider their obsessions with occultism and numerology.  For example, the 9/11 attacks mainly revolve around the number 11, which represents something sinful and ripe for destruction.  Google 9/11 numerology.  You will find stuff like this:
      http://www.theforbiddenknowledge.com/hardtruth/destruction_of_the_trade_centers.htm 

      The Mayan solstice will happen at 11:11 UTC.  UTC time is defined in Greenwich, which is in London and so local time and solar time in the London financial district will be 11:11 at the time of the solstice.  The latitude line 51.5151 is just accross the street from the Bank of England’s empty vaults.  (5+1), (5+1), (5+1) = 666.  Looking at the date, 12+21 = 33 and (1+2), (2+1) = 33.  That’s the Mason’s most sacred number.  Fukushima was 3-11-11 locally.  Add to 9/11 (in Mayan time or UTC) and you get 12-21-12.  I think the puppetmasters will see that Lucifer is offering this opportunity on a silver platter. 

      They may even go bigger than a nuke.  The mass mind will be in a highly suggestible state.  This demands spectacle.  Epic UFO hoax?  Annunaki gold bugs beaming up the vault?  A derivatives neutron bomb and complete financial system reset, allowing them to miraculously reopen the financial system three days later with a shiny new one-world currency?  (The timing would represent the rebirth of Horus).  So many possible angles.  I may have to usher in the solstice with a tinfoil hat and a head full of shrooms.

    • @New World Chaos: If the royal family is still in town, it will have been a 3rd party thing, like diaper heads. 
      But I’m sure they will all be on vacay if anything like this happens that helps the bank$ter$. Bet on it!  

  12. I’m not so sure I buy this.  There are arguments both for and against.  If it is true, however, the end game will be an over- the -weekend devaluation of the USD.  On Monday morning your bank account would be corzined by at least a third, perhaps, half.  BTW, I keep only enough in the bank for bill pay; everything else is cash and shiny metal objects.

  13. So – JPM is then the Hunt brothers of 2012? And I don’t agree that this should be 100% legal, as they are abusing their out-sized market share and manipulate the price down, and they take the other side of every of their silver customers. 

  14. Doc, I think David R. fails to see the thrust of Ted’s(and our) argument: it’s not about having physical to deliver.  That’s never been the issue: the issue is how is it possible for 1, 2, 3, or 4 firms to have a collusive 55% market share on the short side….without that being directly manipulative to price?

    Assuming they had the silver to deliver, all that does is prove they’re not naked short, but that would still put them multiples over the new legal threshold limit in owning contracts in the first place.  He also doesn’t address that multiple other commodities have much lower position limits on both sell and buy sides.  Holding the price lower via collusion is a market crime, whether the purpose is dollar/t-bond/derivative propping……or whether it’s to “hoard” physical metal. 

    The concentration in market share itself is issue, not whether or not they can deliver to the longs.

    Like you, I believe, if silver wasn’t in short supply, how could two Texan oil brothers have brought the U.S. govt, treasury, Fed, and stock market to its knees…just by buying some?

    There isn’t freed up silver in size, and if the banks have it, so what?  No one should be able to swing a market 35% in three business days on no market news.

  15. As for me, all of this stuff could be a lot of jibberish. Has it ever occured to anyone of you on this blog that when there
    is a raid on Gold and Silver that 99% of all commodities go to the tank on Forex Futures? Does JPM influence every other
    commodity in the world? One thing is for sure concerning JPM is that the paper sales represent more Silver that has ever
    been mined in the entire world. I do own both physical and SLV. There is no mistake in my thinking that when I pulled the
    trigger to buy SLV, I made a huge mistake. Still at a loss. Supposedly SLV is supposed to follow Silver Spot, but with a premium.
    The premium two months ago averaged .77 to .81 and now is 1.10 less than spot. Go figure the looting there.

    Now I come to believe that conspiracy is afoot to scare Hell out of people to buy physical so the banksters can ply their fraudulent
    scheme of buying of physical with depreciating dollars before the dollar finds a new home in the proverbial toilet.  
    The doc reported that almost 2 million Silver Eagles were purchased over the weekend. Is this true or BS?

    Someone out there enlighten me. Silver not in short supply…BS. 8 years left of Silver to mine above and below ground? Rumor or
    Fact? Whose on First? What is the truth?

    Ranger from Texas

  16. About Silver-shortage: Yes Silver is short in supply, because JPM buys everything physical what’s left over after everybody else bought. They cannot buy away the silver what other market players would have bought, because this would lead to a price increase. They don’t want that. So they just buy what’s left over.
    JPM smack’s the price down in the futures market to get a low price for their own physical buys and to demotivate other’s to buy. But sometimes, the physical demand is to big for the current price and that’s the point JPM has to let the price rise (to reduce demand), otherwise, the shortage would become obvious, which would lead to a price increase and a potential game over.  

  17. Of course JPM owns the metal.  These banks makes money naked shorting.  If I could buy silver and then short 50-100 times that amount naked and collect the money from the short and then buy 50-100 times that amount more silver and collect the money from the short and never have to pay it back, who wouldn’t do it, since it is legal.  They do the same thing with oil and stocks and gold and copper and bonds and MBS, etc.  They do it with everything, that is the reason they own the casino.  The FED is bad bank, where they dump the bad bets.

  18. I have a couple of points on this. First, DavidR is describing a cash versus futures trade with zero carry cost courtesy of the Fed and the Morgue’s ownership of various vaults. Understood. However this is not what Blythe Masters described in her infamous CNBC interview. She said specifically that JPM’s short position in the silver market was a hedge of client physical positions. DavisR says the physical silver is on JPM’s balance sheet which means that it’s JPM’s position. So Miss Masters was still lying even if DavidR is correct. Why?
    Secondly, DavidR talks about this trade exploiting  contango in the silver market, but as far as I’m aware, Silver has been in backwardisation for quite a long while. Or am I wrong?
    Any comments on the above would be appreciated.

  19. I don’t think that we will ever know precisely what has transpired with JPM in the silver market. What we do know is that there are frequent raids and smack downs, and that JPM is clearly at the heart of them for whatever reason. The King World News “London Trader” has confirmed major physical shortages, and missing unallocated and allocated metal, pretty much as Jim Willie states. It is also very evident that they have been shorting the mining shares as well, and we must factor this into the big picture. I believe that the shorting of the shares will ultimately deprive the miners of operating funds and create bigger metals shortages down the road. This practice may be used to help the entire sector look terrible (and let’s be honest, it has successfully done so), or to create end game support for higher metals prices. So, it could support both hypotheses concerning JPMs blatant interventions. Whatever the case may be, it is my belief that the days of our ability to procure physical metals are now numbered, and we should make the most of what little time we probably have left by accumulating as many ounces as we can, while we can. 

  20. It`s complicated. You read something long enough, it starts to make sense. A person can rationalize damn near anything.

    The simple fact is : US currency has, is , and will continue to lose purchasing power.

    You figure it out from here.    

  21. All you really need to do to determine where Silver is headed.

    Keep these two links present on your desktop.

    Ten Year Bond. The Fed is going to buy U S Treasuries including mortgage backed securities.
    When the yield goes down into the 1.20 range…Silver will be sky high.

    http://finance.yahoo.com/q?s=%5ETNX

    As the U. S. Dollar continues the current downward spiral to the low 70′s in the related basket of currencies,
    Silver will be sky high.

    http://www.marketwatch.com/investing/index/dxy

    Ranger from Texas

  22. Anyone who says there is “no shortage” does not understand silver.  SILVER WILL SOON BE KNOWN AS UNOBTAINIUM.  All the world’s above ground silver is but a 38 foot cube.  Forget investment demand.  Industrial demand running at 700 million oz. per year will soon eat up what little silver is left.  What is shocking to me is that Apple does not buy up all the above ground silver.  They could do it with a portion of their cash reserves.  We will look back someday and laugh at the ridiculous paper Crimex games.  Silver will be the Apple of this decade.  Do you think anyone thought Apple would go to $700 when it was at $33?  Silver has much much stronger fundamentals than Apple did.  Silver will also go to $700 and beyond. 

  23. It would not surprise me if indeed there is a highly leveraged shortage of physical, but that the only ones actually owning it, are the BIG banks. They’ve pulled a Hunts, and covered their actions by a curtain of shorts. I feel stupid to have sortof accepted the simple shorts theory for real, although I always felt there should be more to it than that. Big money ain’t dumb indeed.
    So imagine that when counts are done for physical, and the big four raise their hands to be audited, they may be the big holders.

    What about this: JPM and others get the paper price down with a bunch of leveraged shorts. Then, they go underground, and buy physical outside the COMEX, all they can, at spot or even a premium. They know they prices are great, because they put them this low themselves. They know what will happen if they quit shorting, and just sit on their silver for a while. I bet they will not be easily convinced to sell it. Not even if a country kindly ask them, as they need it to mint a new currency.

    How many ounces does an average currency, just for daily use cash transactions/shopping, take? Say, a country of 100 million people. 3 ounces per person in their possession, and 1 in the various banks? That’s 400 million ounces. Just to replace current smaller bank notes, you know.  

  24. The central bankers have always, ALWAYS held gold and lots of it.  They used to have access to a huge stock pile of silver, but it has been frittered away.  Look at the historical prices of gold and silver.  In the 1990′s they let gold run a little, but not silver, not at all.
    So gold moves to 1700 an oz without crazed zealots shorting it to death. Why? Could it be they are vested in gold, like all bankers?
    Rich people have demeaned silver since the sixties at least, as too cheap and heavy to bother with.  Not gold.  For all their verbal crappola, they hold some gold for themselves.  I think that is why, (the only reason) they let it breathe a little.
    Silver, no, they leased and sold and re-hypothecated it to the vanishing point, and here we are, waiting for the chickens to come home to roost.  If hey have cubic tonnage of silver, you can bet it belongs to many many others, and they are in a bind.  If there were no manipulation and skulduggery, Bart could have come out and said it years ago, instead of stalling and obfuscating for 3 years.  He said he will make a statement soon, but not imminently.  Get that?  When?  Soon……….

    • Yup, the Central Bank owners always end up with the physical gold and we know who owns these banks. Head office is getting moved to China to save their physical butts from the angry fleeced sheeple. Also, there is a new middle class in China to fleece. The elite have been at this game for centuries. However, WWIII, the Great Banker War has begun and it is the elite’s turn to lose. Power to the People. Peace Out.

    • Purdy Much with ya 100% there, ConaX! 
      Except this: Rich people have demeaned silver since the sixties at least 
      Meaning the 1860′s? lol 
      I saw lots of stuff in the archives, they hated Silver (money of the people)
      SINCE THE START! 
       

      Still going on & on & on…
      I read FOFOA, on GOLD ONLY. That bunch seems pretty smart. but tries not to appear to be Silver HaterZ 

  25. It makes sense except that when rates go negative JP should be massively unwinding.  Has that happened?  Its the easiest way to determine the relative veracity of the argument.  Last Fall lease rates went negative and I believe the major shorts started covering pretty heavily but didn’t come anywhere near flat.  That being said, explain to me the margin hikes at the same time of massive shorting shown up in CoT by the big bullion banks?  Why do massive spikes occur exactly as predicted by the traders and the GATA crew who testified before congress? 
     

  26. This news is massively bullish Silver. JPM (the FED) is long silver.  They manipulate the price for fiat profits and to keep the value of the dollar higher than is should be.  Also, I believe China also paper shorts Silver and Gold in US dollars, also to keep value for their 3 trillion in treasuries.  Remember, just like in Oceans 11 you have to be able to convert your stealing of dollars into real commodies to finish the theft.  Holding trillions of stolen fiat is worthless in the real world unless it is laundered.

    A bear in a bull market can still make money if he knows when there is going to be corrections.

    • Doesn’t make sense. Fiat is in a race to the bottom and the Fed wants the dollar to look strong? Something is wrong with this picture.

    • What’s the use of printing money if its worthless.  The dollar will not die, it is just going through a reverse bankruptcy, in Gold.  At some point, at least $10,000, gold will be redeemable in Dollars.

    • Silver Fox, I think the Fed wants to time the collapse, timing is everything.

  27. i can’t tell if this story is bogus.  I will stick to what I know and make a decision based on that knowledge.

    1. State governments are broke.
    2. Federal government is broke.  Deficit is $1 trillion a year. Debt is over $16 trillion.
    3. Chinese have largest foreign bond holdings estimated at $3 trillion.
    4. Chinese mine more gold than any other country.
    5. Chinese import a staggering amount of gold via Hong Kong in spite of #4.
    6. Chinese using yuan to settle payments with trading partners.
    7. Russia acquiring gold as well.
    8. China and Russia want a replacement to U.S. dollar as world currency.

    My guess is that the dollar will be replaced by another currency in world trade. This can only be bullish for commodities priced in U.S. dollars since it implies the dollar approaching zero. Every thing else is noise. 

  28. If I might weigh in on this conversation  Since we have pretty good intel on the nature of evil people, banksters, cartels, politicians and things that go bump in the night, it might be wise not to make specific note of the amount of physical metals we possess.  I may be paranoid but with the research available on this site and others and the ease with which anyone can be hacked, it would be a good idea to make yourself a small and very hard target.  Offer no angles or corners to work. 
    This site,  no doubt up on the list of places to survey by 3 letter agencies, does offer much intelligent dialogue.  Intelligent people who don’t follow the company themes are not to be trusted by those who’s intentions are contrary to a thinking person.  We like minded people attract the attention of those who’s intent is less than  honorable.  There was a phrase I read this AM that made it clear that some people, savages, insensate humans and intemperate men who are not fit for democracy.   They will, however, seek a form of government that suits their evil intent.  There are many like that in our goverment and it does not take a conspiracy theorist to see who they are and what they are up to.  Just sayin’

  29. “Gold and Silver are money. Everything else is credit.”  J. Pierpont Morgan
     
    (He probably left stacking instructions)
     
     

  30. Hedged or not, dumping millions of ounces of paper contracts within 5 minutes, is manipulation no matter what.

  31. what a load of crap. JPM must be hurting badly.
     why not change the title to “JPM stocked zillion oz of silver on Mars” 

  32. What about the London Whale? 

  33. For my two cents I estimate that JP is trying to get long silver to hedge their short position,but they are far from net qneutral! Along with the many reasons noted above, I would add that the may 2011 smack downjust doesn’t make sense if you are net neutral. They shouldn’t care where the price is if they’re net neutrals. They are dumping tons of paper to participate in a tight phyzz market? Theres no way that theyre taking in what theyre dumping. I can’t  see them as achieving net neutral in this market. They certainly haven’t been there for 30 years. When did they play catch up? 

    Anyway, final word is if they have all of this silver and someone can access it then show us some serial numbers!  

  34. While I have always believed the bullion banks will be long gold and silver when it really matters at the end of this massive secular bull, several points about trader David R’s claims bother me- this trader claims JPM is simply arbitraging futures vs. physical using 0%  cash from the Fed- but there have been single days (May 2nd, 2011 and Sept 21st I think it was for starters) in which the COMEX volume surpassed global mining output for the entire year.  I don’t believe JPM’s physical holdings could possibly equal their net paper short position (just on the COMEX, not to mention their OTC positions).

    This trader also claims there is no shortage of physical metal, it is simply all being stored in JPM’s private vault and he has seen the metal himself.  My thought is that he may have seen the metal, but that doesn’t mean it hasn’t been rehypothecated and there are 1,000 people who believe they own it.

    Good discussion and debate by all.
    -Doc

    • Looks to me like BM is still lying, saying all this short selling is simply “for clients” when it is for JPM themselves?
      What do you think, Doc?

      -undeRGRound

      PS: I have a few ideas for “ask the Doc” articles, might be worthy of more than one…
      But I expect I could get it all into 2, if not 1 

    • @undeRGRound – feel free to send them to silverdoctors@gmail.com

       

      -Doc

    • OK! 
      On a sick day today, but working 7 days until late November.
      If I get one in today, great, but if not it will be later.
      The main article would be some thoughts on “When to SELL”
      based on the average Stacker needs. I have a decent stack,
      at least before the boating accident, and it was a partitioned
      stack, having most for wealth preservation, and a lesser amount
      for necessary liquidation. I think you see where this is going… 

  35. There is ambiguity in this logic that JPM is shorting their physical long hoarding. To what end? To defeat the purpose of gaining on the upside while loosing on the shorts?
    The only logic is that they want to acquire more at a lower price, which is illegal in itself, it’s pure market manipulation.
    Beyond that one would have to construe that it has the aura of also being for the purpose of criminal intent.
    Dump massive amounts of shorts, shake out the longs and cover.
    Somehow it is naïve to believe that David R. would tell the truth about who is behind the raids and rat on his former employers and become a complete pariah with no prospect of ever getting employment again in any company bar a janitor. He would have as much credibility as any other shill from the ‘inside’.
    Given all the crimes perpetrated by JPM et al it is no stretch to assume that they are on the wrong side of the law in the silver manipulation game they’re alleged of.
    JPM boasts of perfect quarters where they make 100m per day on their ‘trading desk’ alone, every single day.
    Is that an indication that they are loosing big time on their silver plays and have to lay off traders because of it?

    • Very good points

    • LOL! EXACTLY!

      “David R” wants to appear as someone who is an insider, but comes across
      as a JPMorgue apologist, more than anything. BTW, I doubt JPM’s “holdings”
      exceed the Comex’s requirements, even by a single bar. Prolly “short” there, too! 

  36. If this is true, that means Bill Murphy’s prediction on JPMorgan scandal in September or early October is bogus. 

  37. Suppose you knew the date of a COMEX or even full system default/reset. What one thing would you do in the time leading up to it? Shorting silver seems like an interesting option.
    It’s like 911. No-one knew it would happen, but some offices urgently moved out of the WTC buildings, and there was some really shady pre-trading going on. People may well have witnessed and scratched their heads over that, and then showed up for work the next day to talk about it…
    JPM, whatever it is, knows something we don’t or can only speculate on. Usually, reality is more bizarre than imagination. As with QE3′s goal. take toxic mortgages off the bank’s balances, and onto the people’s. And possibly rehypothecate them into derivatives. I am awaiting confirmation on the latter.

  38. JP Morgan, it seems, commits fraud whenever they can.  From MBS to Jefferson County to LIBOR, to robo signing and on and on and on….  I don’t believe for a second that what they are doing in silver is “legal and brilliant.”  Past behavior is the number one indicator of future behavior and it appears JPM commits fraud when honesty would still be profitable.  If you believe for a second that JPM is doing a legal and brilliant thing here then you just aren’t paying attention.  David R is full of shit.

    • Amen, Stick to the fundamentals like consider the source, by their fruits you will know them, etc. etc. etc. there is enough wisdom in the world if one wants to be wise, this article had my bullshit meter racing into the red.

  39. This is really a fabulous speculation that the volume of interesting responses illustrates. Of course, if any entity is defrauding folks out of metals by market manipulation, their ‘holdings’ are tenuous, at least. I have a feeling that, as is the case with governments and banks worldwide, a ‘warchest’ of gold is probably being amassed by bullion ‘banks’. This is a glaring example of why the poly-metallic specie monetary scheme is critical to the interests of ordinary folks, so they’re not left economically subjugated to ‘financiers’ who over or under value gold according to their own self-interests. Where silver and copper compete in commerce against gold, the effect is to ameliorate harmful manipulation, ultimately, of optimal valuation for people’s labor. Indeed, determination of a proper ‘price’ of gold, is to discern a proper ’price’ of time itself.

    • good insight, thanks for sharing, especially like the price of time, ultimately holding physical precious commodities is the only way to disarm the bankers, people will eventually figure it out and then the bankers are done

  40. Ratio of gold and silver sold by US mint is 1:191

    USA and China are rivals and USA will make sure China buys silver & gold at a higher price.

    So price will not fall further. Buy silver and gold and cancel all your short positions.

  41. There is dispute going on between China and Japan for Uninhabited islands and I think they have fired at each other.

    There is good possibility Japan may try to harm China financially and push silver and gold price higher.

  42. I think this is pure disinformation. Think about it. Why should we believe anything that comes out of jpms mouth? 

  43. IMO, the fundamentals of Silver remain TOTALLY UNCHANGED. 
    Mining Data indicates we have fallen well below 10:1 AG/Au output, (8.89:1)
     http://www.usdebtclock.org/gold-precious-metals.html 
    and reserves are barely above a 10:1 ratio.

    SGR in PM trading will not be far behind, if this “revaluation” is coming soon. 

    All that remains to be seen is how high Gold goes, then Silver will likely shoot up to 
    at least 10% of that value, per ounce. If not higher because of investment scarcity.

     

    • I thought I heard that gold reserves are like 60 years worth of mining, and silver more in the region of 1 year? Of was the latter greatly understated?
      Any idea what reserves there are among non-bank stackers? 

    • XC, it may be that the reserves are calculated due to the melts and new mining. 
      This would account for private stackers as well. You are correct that the Gold Reserves
      are from long time frames, this is mostly from the higher value of the metal, and much lower
      industrial use, and higher recycle rates. The 1 year rates are compared on the left, (8.89:1)
      indicating new mining. The standard figures most “silver pundits” use is 1B oz/year new mining.
      It seems we are well below that for this year, I project under >800 million ounces by years end
      (at current rates). Some have suggested, (and others have said), that mines should (and do)   
      hold back on production a bit, until the cartels loosen up or lose hold entirely.
      Not sure what impact this has had, or the extent of the mines dropping production.
      They still have to meet some production to keep cash flow. 

    • RGR, is hear ya.
      There may be some free reserves still, just getting a bit scarce, resulting in the rumors we hear about LBMA starting to show some attitude towards customers.
      If I were the big banks, I’d come up with good reserve figures, and make a projection on how long the free reserves could last. How some physical could be squeezed out of the stackers, and then determin a date to reverse from suppressing to boosting the silver price. All it would take is a few sensational scoops (planted or naturally occured) of empty vaults. Cell phone pictures would do well here, as if a guard wanted the world to know he is being paid to guard an empty vault. See prices skyrocket. Bankers coming on TV and admitting that the situation is dire, and they are encouring miners to get their act together, to not let the industry take further hits in these testing times. Yes, we have some reserves of our own, but we’re trying to keep those for truly last resort instances, to support the global community, as we always have and will do. We are bankers, you can rely on us. In fact, we’ve just send a few tons to Apple, else your iPhone6 would have been delayed.
      That’s how I’d play it. And see my silver balance bounce expressed in all currencies. Grow in purchasing power, daily, against everything on earth that is for sale. But of course only exchange large quantities for land or other assets, after the prices has been sufficiently crashed intensionally. Silver as the banks’ tool current tool in their quest own the whole earth and all its future value?

  44. This report is truly amazing as it tops all of the BS I have read in the internet against the silver shorting “conspiracy”. Based from what this trader says I can now understand that when banks short the US’s entire annual silver mining supply in 10 minutes (as it occurred on this past Friday) this is only a hedge and has nothing to do with making real money (gold & silver) look cheap and the banksters paper illusion fiat garbage paper look valuable. No no you conspirators, don’t you dare think that these very same banks that engineered the stock, housing and bond bubbles / crisis could ever want to manipulate a market (PM) that is an exact mirror reflection of the value of their paper……. – after all when you manipulate with $300T worldwide in LIBOR you then need to transact with honesty in some market and that is exactly what they are doing with the gold / silver markets.

    Now getting to the meat of the BS, why would anyone hedge against physical silver purchases when the actual purchases are already and unequivocally a 100% attempt from investors to hedge against currency debasement? Why even buy silver in the first place? Don’t tell me that it’s because of storage fees because that’s laughable, these guys make trillions of dollars just by lending money into existence at 0 cost which dwarfs any arbitrage made from borrowing from the FED and speculating in the PM market. After all if the banks can create money out of nothing this clearly shows that controlling the value of those worthless pieces (by making gold and silver look cheap) of paper is far greater than any short term profits in any markets because by maintaining the illusion these criminals can remain literally the masters of our civilization. So to me the manipulation is without any doubts 100% done deal.  

    I must say that I am shocked with how many readers from this site actually bought this guy’s explanation. Perhaps we should all forget the fact that industrial buyers (and even Eric Sprott’s PSLV fund)  are having to wait months on end to get the metal (from current production) after purchase because these banks simply cannot deliver on these shorts – otherwise why on earth would there be such a backlog? Perhaps we should not take into account that all of the futures traded in the CRIMEX or SLV contracts have a cash settlement clause that as soon as buyers want to take large physical delivery out of the system they might not be able to…… and this is the ultimate evidence and even a clear warning of how there is NO bullion backing all of these floating claims. If these banks really had all of this inventory than why even have such a clause on these contracts?? Why do we hear nearly every month a new story of some poor investor who paid for years storage fees for bullion being held at some bank when in fact nothing was there? Why didn’t the CME back all of the long holders from MF Global (like Gerald Celente) when they went bust if these bullion banksters  have all the PM they say they have?? This story is ludicrous in so many fronts that I will not extend myself any longer – hope you folks got the point.

    Thanks 

    • It could still very well be that the shorts are up to or over 100x the volume of the actual physical holding put against it, right?
      So the physical shortages can be real at the same time that there are silly huge shorts flushing the COMEX.
      The shorts are discouraging others to takee delivery while big banks take whatever they can get at or close to spot prices. Perhaps even off the COMEX, to not raise the prices they just manipulated down with paper. Nothing keep them for buysing cash physical from hedge funds which then lose their physical coverage, but have small print to show their customers that cash settlement was too be expected.
      In the end, I can see the banks hoarding all the silver there is to be had, and the Comex and hedgefunds running dry. By the time it’s totally dry, news will come in the papers, physical premiums will skyrockets, paper will follow (especially if they quit the shorting and go long). They’ll make some money dumping the longs and just sit on their stack. The Hunt brothers all over again, just executed better, and in duet with FED, COMEX and FOMC etc.
      I could see this being close to reality. Not saying it is. But banks would be stupid (and what are the odds of that being the case?) not to be long physical in the most undervalued asset ever. They’d just hoard all they could, keep the price as low as they can (who want to pay triple digit for silver for the bulk of one’s stack?) and then only sell silver when the price is right. Shortage is good for business, when you have all the merchandise.

  45. Out of respect for the Doc, I held nearly all of my more pointed comments, because I think he really 
    softballed the interview. However, it is sometimes necessary to just let them talk, and read between the lines…

    “ IMO, the fundamentals of Silver remain TOTALLY UNCHANGED. ”
    I said this to highlight that no matter if this info is true or false (I believe the latter)
    the Fundamentals Remain. No way JPM can have tons of unaccounted phyzzz that
    would change the Fundamentals. NO WAY.

    Good post   Mau

    • I agree. And even if they do, that there are more reserves, and the big banks (there is more than just JPM, let’s not play along giving them 100% of the attention as we’re asked to) do have extra reserves previously unknown, it means they mean serious business with silver, and they’re essentially working FOR US, in the long run. If they want to monopolize silver, get prices to skyrocket (why else hoard if they in fact do), they drive up the prices for us to sell at. Be it paper or physical prices, we’ll benefit.  

  46. The only danger there is if this house of cards lasts long enough for them to:
    PUMP & DUMP before the dollar crashes. Our stacks would go down quickly.
    And this is assuming the big banks have huge stores of unaccounted Silver,
    unaccounted in the world reserves. But this too, will get depleted…
    Not a huge downside for us, it would be a big BUY signal, and we know it
    would eventually go back UP.

    More likely, they are stacking for “after the crash” and it may be for a new Bi-Metallic system, or
    strictly a Gold Standard, which IMO would benefit us MORE.
    If Silver is fixed to gold (at ANY MEASURE) it hurts our overall gains.
    I predict that Silver will surpass Gold as it gets used up. Then even our “relatively modest”
    stacking efforts will really pay off… Imagine Gold at $1800 an ounce now in today’s money,
    but Silver around 10 times as much? Most of us on here would be MILLIONAIRES & BILLIONAIRES.  
    But that last port, not “fixing” a Silver/Gold Ratio, is just my opinion.  

    • RGR, we think alike bro!
      I envision myself swapping silver/gold over the coming decades. Perhaps buying land/housing on the way up, from PM profits. I am starting really small, will never be a corperate bastard, hate to exploit customers or employees, so I’ll never make tons of money. I invent stuff, but usually open source it. I’m that kind of fool.
      Anyway, ratio trading was my new big plan to become rich anyway. A fixed ratio would kill that plan nicely. A bi-metal currency, anywhere in the world, would offer a one-time jump in prices, and then it would be back to the 1900′s of boredom.
      Not sure any country will be as foolish to introduce a face value currency. It’s got to be a weight-specific set of coins and bars, with names not values. This would allow money to appreciate (quickly, deflation?) and then come to rest IMO. I do not think there’s even enough silver to supply one moderate country with enough silver to make grocery and clothing shopping possible without fiat. People would need so much of it, a couple of ounces per person adds up for a whole country, and banks need some, too. There is plenty of gold, but coins would be tiny, they’d fall right through your pocket. Metal detecting heaven. 

    • O.O

      Like looking in the silver mirror…

      I’m an inventor also, working on something electronic, may need replicators in the future…
      Sound interesting? 

      I posted some stuff here, but MaryB smacked me down hard, said “OverUnity Charging has been debunked many times”
      LOL! That is why my setup, based on a small, slow, relatively low efficiency (600 to 1200% initial indicated efficiency)
      is going to dispense with batteries ENTIRELY, and just provide POWER. Hopefully…

      Also, I decided against battery charging at least 2-3 years ago, before the SMACK  ;)

      It’s planned to be OS, and replicators will get (of course) rights to power up their own system, and more…
      Message me if this is of interest, OK? if you are electronically inclined, at least.  

       

  47. If we take the following assumptions which have been widely postulated and are mostly verifiable, then David R’s assertions are errant nonsense and obviously designed to mislead.

    ·     JPM is the government’s market operator.
    ·     The ESF is in the market to manipulate, and manipulate it does; Gold, Silver, Stocks, Futures etc.
    ·     The ESF has been advised by Larry Summers, his thesis is, erroneously, that Gold is the culprit, the fly in the ointment of the financial system, so Gold must be suppressed. Of course this dunce has got it backwards; Gold is not a determinant, but an indicator of the true market for interest rates. But that’s the ‘advice’ our government is seeking and getting. Also Summers has spent a lifetime with his snout in the public trough while conniving and lobbying for the Banksters as a taxpayer funded employee, and has, at the same time, been collecting humungous fees from WS for ‘consultations’.
    ·     Hence the ESF/Geithner/President’s directive to JPM, bereft of any logic, is to suppress Gold and Silver and support Stocks and Futures.
    ·     JPM’s entire business model is based on fraud, and manipulating Gold and Silver with massive short positions and regular raids is but another day’s work for them.
    ·     What’s the logic in offsetting a (massive) long position when all fundamentals and indications are that the market is inexorably moving higher, much higher?
    ·     Andrew Maguire has already completely discredited assertions that the Bullion Banks aren’t involved and in fact was very specific over the involvement of these Banksters.

    What better way seed a ruse than to tell them to a trusted friend who will faithfully post it in his newsletter? David R’s vigorous assertions and cocky challenge to a wager have shades of desperately grasping at credibility.

  48. I have no doubt that the banksters and the gubberments have tons of gold and are trying to get all the rest too. Can someone explain how the math works in a simple way that I can understand. If JP is one ounce short at $x and one ounce long at $x, if the market goes up what is the math and if the market goes down what is the math. I would really appreciate it, thanks. For that matter what does it mean to buy or sell short or long in easy (kindergarten) terms? Doc, maybe you could do some tutorials on some market words – like open interest etc. if you can swing the time.
    Another thought, I watched Lauren – Reuters – interview someone, can’t remember who, so many great guests, who was theorizing that one way JP would never get justice is if the “hedged” customer was the Fed or the Treasury and the manipulation could be declared classified for national security reasons, then JP walks.
    Hey did I just coin the term WWlll The Great Banker War or has anyone heard that anywhere before? Coin the term lol I kill myself.

  49. • JPM is the government’s market operator.
    • The ESF is in the market to manipulate, and manipulate it does; Gold, Silver, Stocks, Futures etc.
    • The ESF has been advised by Larry Summers, his thesis is, erroneously, that Gold is the culprit, the fly in the ointment of the financial system, so Gold must be suppressed. Of course this dunce has got it backwards; Gold is not a determinant, but an indicator of the true market for interest rates. But that’s the ‘advice’ our government is seeking and getting. Also Summers has spent a lifetime with his snout in the public trough while conniving and lobbying for the Banksters as a taxpayer funded employee, and has, at the same time, been collecting humungous fees from WS for ‘consultations’.
    • Hence the ESF/Geithner/President’s directive to JPM, bereft of any logic, is to suppress Gold and Silver and support Stocks and Futures.
    • JPM’s entire business model is based on fraud, and manipulating Gold and Silver with massive short positions and regular raids is but another day’s work for them.
    • What’s the logic in offsetting a (massive) long position when all fundamentals and indications are that the market is inexorably moving higher, much higher?
    • Andrew Maguire has already completely discredited assertions that the Bullion Banks aren’t involved and in fact was very specific over the involvement of these Banksters.

    If we take these assumptions which have been widely postulated and are mostly verifiable, then David R’s assertions are errant nonsense and obviously designed to mislead.
    What better way seed a ruse than to tell them to a trusted friend who will faithfully post it in his newsletter? David R’s vigorous assertions and cocky challenge to a wager have shades of desperately grasping at credibility.

  50. It doesn’t matter if JP Morgan is suppressing gold and silver’s prices for their own benefits because by doing that, they are also helping us acquire more physical gold and silver very cheaply.

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