In the MUST READ article below, silver expert Ted Butler makes the case that JPMorgan has stockpiled over HALF A BILLION ounces of physical silver…the biggest silver haul in history:
A rare event occurred this past week; the CFTC charged a major food company, Kraft, Inc., with price manipulation in the wheat market.
The real question is why the selective prosecution of the law? Why is the CFTC going after Kraft on a complicated case with an alleged payoff that looks like chump change (around $5 million total profit to Kraft), when public data indicate JPMorgan shorts the silver market whenever prices rise to cap and drive prices lower in order to profit on those short sales and accumulate silver at unfairly low prices; with JPM’s cumulative illicit take running into the hundreds of millions if not billions of dollars?
Why is JPMorgan above the law?
According to global market data from the top Official Mints, sales of Silver Eagles originate overwhelmingly from public retail investment demand rather than by one large bank… such as JP Morgan.
I say this in response to the allegation put forth by silver analyst, Ted Butler who believes JP Morgan purchased half of all Silver Eagles since April, 2011.
Ted Butler, who has made this claim over the past several months, does so again in his recent article, The Perfect Crime.
I wanted to provide a rebuttal to Butler’s allegation that JP Morgan was the large buyer of Silver Eagles because his opinion takes CREDIT AWAY FROM THE PUBLIC, and puts it in the hands of the BANKERS.
While Ted Butler provides excellent information on the silver market, I believe his opinion on this matter is incorrect:
A couple of weeks ago, a long time subscriber correctly pointed out that I seemed to be speculating more than usual in my conclusion that JPMorgan was the big buyer of Silver Eagles and had accumulated as many as 300 million oz of silver, including Eagles and bullion. The subscriber noted that I usually relied on hard core facts that could be documented and not on speculation.
As it turns out, I believe there are sufficient number of hard facts behind my speculation, but I had failed to point them out.
So let me present the facts, as I see them, that point to JPMorgan having amassed the largest physical silver position in history.
Last week was downright horrific for precious metals owners. Hours after silver broke below $16/oz, Peak Prosperity’s Chris Martenson recorded this MUST LISTEN interview with silver expert Ted Butler on the causes of the prolonged abuse in the the precious metals sector, and how close we may be to its end.
Butler zeroes in on the heart of the issue: unfairly concentrated positions within the derivatives market, and makes the case for a near-term MONSTER RALLY in silver:
It is one thing to label (libel?) the world’s most important precious metals exchange as the most corrupt; but perhaps quite another to prove it in terms beyond reasonable doubt.
First, let me be clear in what I am asserting – the Commodities Exchange Inc. (COMEX), owned and operated by the CME Group, has come to control and manipulate the price of gold and silver, as well as copper, for the sole benefit of certain exchange insiders, most prominently JPMorgan.
There is no need in trying to prove precious metals manipulation, because it’s out in the open… right in front of your eyes. However, this doesn’t stop the silly games being played by some of the well-known analysts in the precious metal community.
It is the siphoning of the majority of the worlds fiat currency-funds into the Derivative-Paper Market that is guilty of manipulating the values of gold and silver. If a fraction of these funds moved into physical assets such as gold and silver, their values would rise to unimaginable levels.
The world will be forced to move into Gold and Silver one way or another.
My advice is… you better get some before it’s too late.
Ted Butler recently theorized that JP Morgan is the entity that is the buying 1 oz. silver eagle coins in record quantities this year.
Think about this: bullion banks and large buyers of gold/silver deal in bars and tonnes. Think about how many silver eagles it would take to piece together enough to re-melt and fabricate into a meaningful quantity of marketable bars. Not-withstanding the expense of doing this, it is an absurd notion that they would even bother with it. Especially when the Comex and SLV have plenty of bars that are available for hypothecation.
The enormous quantity of silver eagle sales are going to the growing legion of individuals in this country and Canada who understand that the dollar is going to collapse sooner or later. It is poor man’s gold. It is more fungible as currency than 1 oz gold coins. Ultimately, it is a possible signal that eventually the people will rise up and overthrow a completely corrupt system of Government and banking.
I believe Butler turned his ability to analyze the silver market – and the fact that he was one of the few people doing it for a long time – into a newsletter selling juggernaut. Now the only evidence he looks at and evaluates is the evidence that supports and promotes subscriptions to his newsletter. I stopped “absorbing” his analysis about 5 years ago.
His COT and open interest analysis relies on the all of the data being honestly and accurately reported. But from where is the data sourced? It’s provided by the big banks who run the Comex.
In a recent column, silver analyst Theodore Butler presented information that leaves him somewhat optimistic that the Government Accountability Office (GAO) is looking into the possibility that the silver markets might be rigged or manipulated.
In the column, Butler labels as “phony” a prior “investigation” conducted by The Commodity Futures Trading Commission (CFTC).
According to Butler and the CFTC itself, this “investigation” lasted five years and included “7,000” man hours of work on the part of CFTC employees doing the investigating.
I too believe this alleged exercise in fact-finding was either bogus or clearly not worthy of the label of “investigation.”
As it turns out, I even have evidence to support my skepticism.
In December 2012, I received a phone call from the Government Accountability Office (GAO), and that led to me providing documentation about the silver manipulation and the CFTC that led to a number of conference calls with the GAO. The GAO’s mission is to make sure that all federal agencies are conducting their missions appropriately.
I kept my contact with the GAO private so as not to jeopardize any action by the agency, although I must tell you that I was quite excited about the situation. In time I was informed by the GAO that as the one government agency that reports directly to Congress that it needed to be directed by Congress to look into the matter. In May 2013, I sought to stimulate action by writing publicly about the matter and asking readers to write to their elected officials to urge the GAO to pursue the matter. A good number did just that.
Several months passed and, once again, I grew weary about any follow up by the GAO. I had heard nothing and assumed the matter was dead.
As it turns out, I was dead wrong.
It is said that history doesn’t repeat itself, but in the case of silver, I don’t see how that can be avoided. In more ways than not, silver today reminds me of the time when it traded under $5 per ounce.
As was the case back then, the thought that it might eventually climb more than ten times in value was widely disbelieved and openly scoffed at. That’s because silver was the most undervalued asset in the world, both then and now. If you didn’t catch the first run, you’ve just been given a second chance.
And it is also interesting that silver is registering as the most undervalued investment asset precisely at the same time when there is more total investment net worth and buying power in the world than ever before. The assets in hedge funds alone are now at a record $2.7 trillion; 1 percent of which ($27 billion) is more than the value of all the silver bullion in the world (if it could be bought).
The 100 million oz of new silver available for investment annually would take only one-tenth of one percent ($2.7 billion) of hedge fund assets. Unless hedge funds have stopped looking for undervalued assets, I can’t help but feel that’s a set up akin to a lit match and a barrel of dynamite.
Something negative did hit Bear Stearns in the first quarter of 2008; although there are remarkably few details of what went wrong. Since Bear had a significant presence in sub-prime mortgages and that market was in distress, it is assumed the fall of the firm was mortgage related. That may be true, but there was no general stress in the stock market through mid-March 2008 reflecting a credit crisis. Was there instead some specific trigger behind the company’s sudden collapse?
I believe that sudden and massive losses and margin calls of more than $2.5 billion on tens of thousands of short COMEX gold and silver contracts were the specific triggers that killed Bear Stearns. Let’s face it – Bear was so leveraged that a sudden demand of more than $2.5 billion in immediate payment for any reason could have put them under. Bear Stearns’ excessive gold and silver shorts on the COMEX are the most plausible reason for the sudden demise.
As has been the case for the past five years (since it acquired the concentrated short positions of Bear Stearns), 2013 was the year of JPMorgan in silver and gold. Everything important that transpired in silver and gold can be traced to JPMorgan, just as this bank will dictate what happens in the future. I realize I am being overly specific and that many different factors influence the price of any market; but the circumstances surrounding JPMorgan are so overwhelming as to render all those other factors combined moot when it comes to silver and gold.
From the very beginning of the year to the last two days of 2013, JPMorgan has dominated and controlled the price of silver and gold. Here are the documented facts:
In this MUST WATCH interview with Sprott’s Ask the Expert, silver analyst Ted Butler discusses how JP Morgan inherited Bear Stearns massive short gold and silver positions in early 2008 at the request of the US Treasury Department, and makes the case that requesting JP Morgan inherit Bear Stearns’ positions should not have been a license to steal and freely manipulate the gold and silver markets.
Ted Butler’s full Ask the Expert Q&A session is below:
For the past few weeks I have been harping on JPMorgan’s massive long position in COMEX gold futures, stating that nothing comes closer in importance for the price. There has never been a case where a market corner wasn’t the prime price determinant. Preventing or eliminating market corners is the number one priority under commodity law. A market corner is the antitheses of how a free market is supposed to operate. A series of market corners and manipulation in the early part of the last century (the Jesse Livermore era) was what led to the formation of commodity regulation in the US in the 1930’s. It’s bad enough when entities such as the Hunt Brothers or the rogue copper trader from Sumitomo cornered markets; but it’s a whole different level of badness when the most important US bank corners a market, as JPMorgan has done in COMEX gold futures.
Submitted by Ted Butler:
One market participant, JPMorgan, determines what will happen price-wise in gold and silver (and other commodities). This is a crooked bank that has no business controlling the gold and silver markets by its easy to document dominant market position. It’s encouraging that there is wide discussion on the unnatural control that big banks have on LME metal warehouses and that the Fed is reconsidering the wisdom of allowing banks to deal in physical commodities. But the most obvious danger of all is allowing JPMorgan to hold dominant market shares in regulated futures markets.
What makes the silver (and gold) manipulation the perfect crime are a number of elements; short term price control through High Frequency Trading, compliant regulators and the fact that most victims don’t even realize they are being had, as the sellers are mostly just reacting to the deliberately-set lower prices. It’s hard to end an ongoing crime in progress when so many don’t realize it is in progress. Worse, there are still some who profess that there is no manipulation underway. And for the few who do realize what’s really going on, what can you do about it when the regulators are in bed with the manipulators? Perhaps the options are limited, but that’s not the same as non-existent.
I believe that an impartial review of the CFTC by the GAO could end the silver manipulation.
By SD Contributor Ted Butler
We’ve just crossed a few important anniversary dates that relate to silver that taken in proper perspective point to a disturbing conclusion. That conclusion is that the US commodities regulator, the CFTC, has done more public harm than good over the past few years. Simply put, the public and our markets would have been better off had the agency not been run by the commissioners in place, specifically including Chairman Gensler and Commissioner Chilton. In fact, rarely has so much promise for genuine regulatory reform been squandered as badly as has been the case over the past few years.
I single out Gensler and Chilton because they were once the good guys on the Commission or the only ones pushing for position limits. Since they have allowed position limits, the silver investigation and the unprecedented price declines in silver to fade into the sunset unresolved, they must be held to the greatest standards of failure. In a very real sense, Gensler and Chilton have done more harm as a result of first championing the important issues and then abandoning them.
With the record-setting trading volume Monday and on Friday, I would not be surprised if JPMorgan had eliminated its concentrated silver short position.
JPMorgan the big concentrated short seller and manipulator of silver and other markets, has made a boatload of money, many hundreds of millions of dollars, by short selling at higher prices than the prices they have been buying back at. I don’t begrudge JPMorgan for making large trading profits if they were doing so legally, but that is not the case. The trading profits being made by JPMorgan and the other commercials are as far from legal as is possible. That’s the only plausible conclusion a reasonable person could reach when answering the last open question – how do they do it?
Submitted by Ted Butler:
I’ll save the good for a moment, but the bad and the ugly seem to permeate the silver and gold and other markets. On Wednesday, I mentioned that one reason gold and silver failed to move higher after the Cyprus news was such a rally would have interfered with a planned takedown in copper, platinum and palladium, which was evident on Monday and Tuesday. For the record, there was the expected substantial commercial buying in copper and platinum, a bit less in palladium. My point is that commercial positioning on the NYMEX/COMEX is the strongest short term price influence, way ahead of anything else, including actual news and developments in the real world of supply and demand. This is so contrary to commodity law that I believe the regulators must be thought of as corrupt.
Even worse is that silver (and gold) investors seem to be confronted on a daily basis with the proposition that the US Government is working against the interests of silver investors. While every conceivable effort is undertaken by the USG to help push bond, equity and real estate markets higher, there appears to be an effort to depress silver prices that goes beyond ugly.
By Ted Butler
Every once in a while, someone utters a statement that suddenly galvanizes the issue at hand. That’s the first thing that came to my mind when I read of the US Attorney General’s words before a Senate hearing this week.
In a blinding moment of clarity, the answer to the whole “why isn’t the CFTC doing anything about the silver manipulation and JPMorgan’s stranglehold on the price” question flashed for all to see. Mr. Holder’s words couldn’t be any clearer and fit perfectly with the now-consensus view held by those who know that JPMorgan is manipulating the price of silver. The reason the CFTC is allowing JPMorgan to continue with their illegal behavior in silver is because the bank is too dam* big and powerful to rein in for fear of the unintended consequences.