Ted Butler: My Worst Fear- CFTC Confirms it Doesn’t Understand Silver Manipulation

Submitted by Ted Butler:

Recently, I have received a good number of emails containing conversations between readers and CFTC Commissioner Bart Chilton about the allegations of a silver price manipulation because of the large concentrated COMEX short position held by JPMorgan. Chilton had previously led the move to begin the current silver investigation in September 2008 and has always been quick to respond to those writing to him, a rarity for high officials. I couldn’t help but notice that Commissioner Chilton had recently begun to say things that seemed to try to explain away the allegations of a silver manipulation, much different from his former stance of promising to look into it. I found this change disturbing and it has influenced my thinking that the CFTC would never do anything about the silver manipulation. One particular response from Chilton to a reader prompted me to write to the Commissioner myself (aside from sending him all my articles) -

In simple terms, Commissioner Chilton’s response to the reader confirms my worst fear – the reason the CFTC hasn’t moved against the silver manipulation is that they don’t understand it. Even though the agency publishes remarkably detailed and accurate data on concentration in their weekly COT reports, they apparently don’t comprehend what it is they are publishing. As a big believer in the premise that recognition of a problem is 50% of the ultimate solution; I also believe that if a problem is not recognized, it is unlikely to be remedied. I’ve always considered Chilton to be one of the “good guys” at the Commission, so it is quite disheartening to see him so misinterpret his own agency’s data.

This is no small matter. The CFTC’s main mission is to guard against price manipulation, the most serious market crime possible.

 

The 1 oz .999 Silver Bullet Silver Shield Trivium Medallion is available now from SDBullion at only $2.99/oz over spot, ANY QUANTITY!

 

Dear Commissioner Chilton,

A reader sent me the following reply from you to him about the short concentration in COMEX silver –

> Hi Tom
> The Commitment of Traders report does not show net positions. So, simply adding all the largest longs up, or looking at one of them, only give you one piece of myriad portfolio. Those reports also don’t give over the counter positions. We look at all of that by trader. While there are a few (at times) traders that have been in excess of what our belated position limits would require, the sizes aren’t like they were a few years back. I saw one trader with 22 percent net short a while back. We obviously look to see what that trader did at volatile times. And, for those that claim they know who the traders are, I’m not sure how they make such determinations. Certainly it isn’t based upon our reports.
> Best,
> B

In all due respect, much of your reply is factually incorrect. Every long form Commitment of Traders report does show net (and gross) positions for every commodity by the 4 and 8 largest traders on both the long and short side of every market. The whole point of your agency keeping concentration data is to insure that no one trader or small group of traders hold such a large net position on a regulated exchange as to manipulate the price. For you to say otherwise is wrong.

While over the counter positions aren’t included in COT data that is beside the point. I am not alleging that the OTC market is manipulating the price of silver; the manipulation is emanating from the concentrated position on the COMEX, a market under your jurisdiction. A concentrated position on the COMEX (the world’s leading silver market) which manipulates the price of silver can’t possibly be excused just because an OTC position may have been created to take advantage of the manipulated price (by the manipulator itself). Nor would it be legitimate for an entity to acquire physical silver after manipulating the price lower via a concentrated short COMEX position. In other words, it doesn’t matter what positions may exist off the exchange, if the position on the exchange is so concentrated as to constitute manipulation.

I don’t know where you have come to learn this incorrect information, but it has clearly prevented you from fulfilling your obligations as a regulator. In the current COT, for positions as of the close of business December 4, the net concentrated short position of the 4 largest traders is listed at 38.1% (versus 11.3% on the long side).

http://www.cftc.gov/files/dea/cotarchives/2012/futures/other_lf120412.htm

This translates into 54,002 net short contracts held by the 4 largest traders in COMEX silver futures. By the way, since there are over 36,000 contracts listed as spreads in the companion disaggregated COT report that means the true net position of the 4 largest COMEX shorts is more than 51.1% of the market, not 38.1%. This is the largest concentrated net short position in COMEX silver in more than two and a half years.

 

As I have previously explained in numerous articles that I have sent to you and the other commissioners, your agency disclosed (quite inadvertently) the identity of the biggest COMEX short seller as JPMorgan, in explaining to various lawmakers that the large and sudden increase in the US bank category in COMEX silver futures in the August 2008 Bank Participation was the result of a merger earlier that year that could only have been the JPMorgan takeover of Bear Stearns. I’ll send you a sample copy on request.

Currently, JPMorgan appears to hold 36,500 contracts (of the 54,002 contracts held by the 4 largest traders) on a net basis. After deducting spread positions from total open interest, JPMorgan’s net short position is more than 34.5% of the short side of the market, much greater than the 22% figure a while back referenced in your response.

From your response, it is clear that you are operating on faulty information which may explain why your agency hasn’t intervened in the ongoing silver manipulation. While this is surprising and disappointing at this stage of the manipulation, it also creates the opportunity of setting the record straight should you endeavor to do so. Many citizens and market observers feel your agency has dropped the ball on terminating the silver manipulation. I’m sure you would agree that it is not healthy for so many to doubt our important public regulators and this may present an opportunity to assuage such growing doubts.

Ted Butler

 

In simple terms, Commissioner Chilton’s response to the reader confirms my worst fear – the reason the CFTC hasn’t moved against the silver manipulation is that they don’t understand it. Even though the agency publishes remarkably detailed and accurate data on concentration in their weekly COT reports, they apparently don’t comprehend what it is they are publishing. As a big believer in the premise that recognition of a problem is 50% of the ultimate solution; I also believe that if a problem is not recognized, it is unlikely to be remedied. I’ve always considered Chilton to be one of the “good guys” at the Commission, so it is quite disheartening to see him so misinterpret his own agency’s data.

This is no small matter. The CFTC’s main mission is to guard against price manipulation, the most serious market crime possible. The reason price manipulation is the most serious market crime is because it distorts the free market, thereby affecting everyone, consumers and producers alike, not just active market participants. The one sure cause of manipulation is a large concentrated position held by one or a few collusive traders. That’s the whole purpose of position limits, namely, to diffuse and prevent concentration. Whether it was the Hunt Bros on the long side of silver in 1980, or the Sumitomo copper trader known as “Mr. 5%” on the long side of copper, or JR Simplot on the short side of Maine Potatoes in 1976, the common denominator of all market manipulations has been the concentrated holdings of one or a few traders. So it is with JPMorgan on the short side of COMEX silver today. What is shocking is that our most important commodity regulator, the CFTC, has seemingly failed to recognize this.

Of course, perhaps it is not that the agency doesn’t understand what is occurring in silver, but more that it doesn’t want to understand. Perhaps there were some guarantees exempting JPMorgan from future charges at the time of the Bear Stearns acquisition. Perhaps JPMorgan and the CME are so powerful and above the law that the CFTC can’t hope to confront them on such a black and white matter of excessive market share concentration. Most remarkable of all is that more market observers have written to the Commission about silver-related matters than the cumulative total of all other issues. Still, the agency doesn’t get it (or want to get it).

What to do about all this? I think the answer may come from none other than the CEO of JPMorgan, Jamie Dimon. Truth be told, were it not for silver, Mr. Dimon would rank high on my list of effective business leaders. I’ve followed his business career with admiration for many years. The best thing about him is that he comes off as a no-nonsense, to the point kind of guy. This morning, in a special broadcast on CNBC, Dimon was a featured speaker at a special conference. He talked about the greatness of America in so many ways and bristled at a suggestion that JPMorgan was too forceful in their dealings with the regulators. Mr. Dimon’s retort was that the Bill of Rights allowed everyone, including JPMorgan, freedom of speech and the right to petition the government. I agree with Mr. Dimon and that has largely been my approach concerning my allegations that it is JPMorgan manipulating the price of silver. As citizens, we all have the right to petition the regulators to move against perceived market crimes. I intend to continue to exercise that right and suggest you do the same. I’d also like to help educate the regulators as well, as far as understanding their own published reports. Lord knows, they could use the help.

Chairman Gensler ggensler@cftc.gov

Commissioner Chilton bchilton@cftc.gov

Commissioner Sommers jsommers@cftc.gov

Commissioner O’Malia somalia@cftc.gov

Commissioner Wetjen mwetjen@cftc.gov

Ted Butler

To subscribe to Ted Butler’s private newsletter, see www.butlerresearch.com

Comments

  1. The CFTC fully understands what is going on.  They are playing dumb. The system wont clear until enough people take physical delivery causing a default.  Fortunately it gives us time to keep stacking.

    • Exactly. Chilton is silver’s Uncle Tom. Jill Sommers and Scott OMalia are the banker puppets. Wetjen is still wet behind the ears, but Im sure he’ll be as corrupt and dumb playing as the rest soon. I read a pretty sucky little speach he gave the Derivative Dealer association. Gensler is inscrutable.

    • Chilton was obviously used to keep the public rhetoric down to minimum giving the impression that something was going to be done about it. They kept him going for as long as many believed he was actually working on it. If this were not true then he would have been canned when he first opened his mouth. This development could be a sign that the end game on silver manipulation is near.

    • I agree.  The regulators are appointed because they understand a couple of things.  They know the markets they are supposed to regulate and they know they are not supposed to regulate them.  Their pay is determined by how many lies they can say with a straight face.

  2. In disgust, I say F*ck ‘em, Ted.  Granted, it would be preferable that the CTFC do what they are paid (very well, too) to do.  But, no matter, we (the physical stackers) WILL prevail.  And those crooked elitist greedy bastards will succumb!  I only wish I live long enoough to see it!

  3. Forget the CFTC. Avoid further disappointments. Realize that silver bugs have to be the tiniest minority in the US, challenged only by the Flat Earth Society.  We have no political clout, contrary finances, we’re considered crazy old men, etc. Since we are no longer factually a republic but a democracy, you can’t expect the officials to help while being outnumbered this badly.
    In a land without the rule of law, only supply and demand are relevant.
    The bulk of demand is bled off into ETFs.
    The good news is- they are holding the price a few bucks too low.  Grab what you can and wait for the fireworks.
    Do your own due diligence, opinions are like-
    .. Bart Chiltons.
     

    • “In a land without the rule of law, only supply and demand are relevant.”

      That and the rule of men, where some men are connected and therefore above the law.  See Corzine, Jon.

      “Do your own due diligence, opinions are like-  .. Bart Chiltons.

      LOL!

       

    • Conax sounds like you have figured it out.  There are a few of us out here.

  4. Bottom Line; Don’t Trust A Banker They Are Puppets For The Elite.

  5. These scumbags know what is what. We also know what’s what, and will prevail. My children and grandchildren are being prepared, and well financed. The war continues.

  6. 2 words ~ Hidden Agenda.
     

  7. I love Ted Butler and respect everything he’s done, but really Ted, WAKE THE FUCK UP. I’m tried of hearing your excuses on why the CTFC fails to do what is in their mission statement. They don’t understand their own data? Really? Are you fucking kidding me? Of course they understand their own data, they just choose to ignore it. We all know the end game as we patiently await the depletion of physical inventory which appears to be happening as we speak….that will take care of the problem.

  8. Does anyone know what happened to Ned N-L’s Eastern silver exchange?

    And anyone know what happened to the whole “the rig is over”?

    I still remember Steve Quayle’s banker source saying people had until December… anyone know what happens in or after December?    

    • I dunno.  I’m still waiting to hear why the USS Enterprise got retired and scrapped instead of being used as the MUCH predicted false flag episode to draw the US into war with Iran.
       

    • I sometimes get bored and ask myself questions, like,
      are the Hunt brothers behind the scenes somehow orchestrating revenge for their failed attempt to corner silver? Do people consult with them, or are they involved in the silver un-rigging process?
      I often ask myself who stands to benefit from…this…and this…or that. I often wonder how much cointelpro is involved in the AG community. Who’s on whose side? Some people with feet on both sides of the line?
      And something pastor Williams said that I like is that the elite are not all-powerful, only the loving God of the Bible is, and the devilish elite must change their plans due to their non-omnipotent/non-omniscient natures. Not even their master, that dark one who is already defeated (Satan … which by the way, any of you dark arts types out there…. I’ll say the same thing to you as God said to rebellious Israel in the Bible… come and let us reason…. you seriously want to serve a defeated liar who doesn’t care about you and who finds excitement in YOUR ultimate demise in a torturous Hell??? come now, Jesus is more powerful than your master, because He created him and He is omnipotent/omniscient, and Jesus, unlike your dark master, actually loves and cares about you… do come to your senses all you in the dark ways [that was not aimed at you in particular ed_B])
      A lot of the questions I ask boil down to: The people who know don’t talk, and the people that talk don’t know.  
      As for an incident to provoke America crushing the wacky and dangerous Shiite crazies running the lovely country of Persia (called Iran today), how about the bombing of the Marines and French commandos in Beyrouth in the 80′s… how about orchestrating, encourageing, funding, supplying and training men to destroy and kill as many Americans as possible in Afghanistan and Irak?
      How about taking over Lebanon initially throgh AMAL and then succesfully through Hezbollah and trying to oppress the Druze, the Christians and the sunnis?
      How about bombing the Jewish Community Centre in Buenos Aires?
      How about threatening genocide against the Jews? (Jews have had the atomic bomb since the 60′s and never used, and the Arabs in Gaza and the West Bank have mushroomed in population… so much for Israeli genocide on its enemies ha!)
      How about sending thousands of their own children to run over Iraki landmines in the 80′s war? Sick stuff. And you thought the western elite were a sick bunch of nuts!
      How about torturing and killing Christian converts and women who aren’t as virtuous as they should be (the Ayatollahs are no saints, they excuse their secret sins with the cloak of being Allah’s annointed, and kill anyone who speaks against them).
      How about calling America the Great Satan and announcing its destruction by Allah. 
      How about bombing Jewish tourists in Bulgaria?
      How about intimidating the Iranian expats in Canada to support Iran and trying to recruit them on Canadian soil (most Iranian expats in Canada HATE the Ayatollahs and WANT America to liberate their country… Persians are desperate… Iran can blame America’s CIA all it wants for the fact that Iranian youth have the highest drug abuse rate in the world [sorry South Central]… but the progressive-minded and intellectually proud Persians are DEPRESSED, they’re FED UP, they are IMPLODING EMOTIONALLY from the AYATOLLAH’S SHIITE DRUDGERY [enjoy your Iranian tax payer-funded paycheck from state-controlled PressTV Max Keiser!], and apart from turning to Jesus for hope [thousands of Persians are, which is freaking out the Ayatollahs hehe], the only alternative is to self-destruct through drugs, loose sexual morals and jaded existentialism, to try to chase the pain of living in a despressing Shiite theocracy)  
      How about threatening the crush the U.S. economy (act of war… ahem) long before they were kicked out of SWIFT? 
      Yeah, I’d say America has good reasons to crush Iran.   Problem is, the elite WANT a stronger Iran, because the elite, who are into the dark arts of the occult, hate the Jews who bear God’s commands, and the black-robed occultists want an apocalyptic show that will see the Jews wiped out for good.
      In light of Iran’s constant threat the wipe out Israel, allow me to quote Psalm 83:
       Keep not thou silence, O God: hold not thy peace, and be not still, O God. For, lo, thine enemies make a tumult: and they that hate thee have lifted up the head.They have taken crafty counsel against thy people, and consulted against thy hidden ones.They have said, Come, and let us cut them off from being a nation; that the name of Israel may be no more in remembrance.For they have consulted together with one consent: they are confederate against thee:The tabernacles of Edom, and the Ishmaelites; of Moab, and the HagareneGebal, and Ammon, and Amalek; the Philistines with the inhabitants of Tyre;Assur also is joined with them: they have holpen the children of Lot. Selah.Do unto them as unto the Midianites; as to Sisera, as to Jabin, at the brook of Kison:Which perished at Endor: they became as dung for the earth.Make their nobles like Oreb, and like Zeeb: yea, all their princes as Zebah, and as Zalmunna:Who said, Let us take to ourselves the houses of God in possession.O my God, make them like a wheel; as the stubble before the wind.As the fire burneth a wood, and as the flame setteth the mountains on fire;So persecute them with thy tempest, and make them afraid with thy storm.Fill their faces with shame; that they may seek thy name, O Lord.Let them be confounded and troubled for ever; yea, let them be put to shame, and perish:That men may know that thou, whose name alone is Jehovah, art the most high over all the earth.
         
      :)  

    • The battleground of good and evil is much larger than our earthly realm and has been going on for a very long time.

  9. I’ve read Ted a bit and it seems that he has trouble accepting the utter evilness of the people behind the mega banks, the Fed,  Treasury and the White House. It’s a serious case of cognitive dissonance and normalcy bias being broken on the rocks of reality
    If it helps, I think the best thing we can do is accept the fact that WE ARE ON OUR OWN. 
    No one is going to look out for us. 
    The powers that be are completely involved in protecting this evil paradigm in a World that has all the appearances of being Without Rule of Law (WORL)  The worst of the elites are struggling to retain control of what they have.
      It’s like we’ve taken the red pill, seen the Matrix for what it is, and are fighting to get out.  That is a epic struggle that will be written about for centuries, even millenium

    • email bomb them to change, enough people do it maybe they will wake up. I agree, TPTB are dead set on a path to destruction. What they hope to gain is beyond me.

    • The way I am going to deal with it is to take a long, hot bath with bubbles, fix a latte, watch a show with my son, practice piano for awhile, go to bed and read a good book. ✌ peace

  10. PS If Bulter believes a single word that comes out of the mouth of Dimon or Chilton, I have some swamp land in Mongolia.
    These two know exactly what is going on.  Ignoring it and doing nothing to stop the crime can’t be excused by ignorance.

    • Agreed, AG.  Chilton & Co. would be absolutely unable to be this incompetent by accident.  No, this is a well orchestrated and concerted effort to avoid doing their stated mission so they can do their real mission of sucking up to the banksters for their share of the spoils. 

  11. Wait a minute.  I thought Bart Chilton e-mailed folks in the industry regularly.  He’s a well-liked guy…. a friend… a buddy… a pal.  Everybody likes Bart.  Not everyone can be a great regulator, but in the end isn’t it about making friends in the industry… going on RT and Bloomberg…coming up with metaphors like “Cheetah” to describe HFT and telling folks that Dodd-Frank enforcement on swaps is right around the corner and silver manipulation too.  You shouldn’t judge a book by the cover.  Give mullets a chance.
    http://tradewithdave.com/?s=chilton
     

  12. The government is not your friend. The CFTC does understand the Silver manipulation. When they tell you, they do not understand; they lie. Their lie is a crime. They do not exist to help you, but to help themselves to the fruit of your labour. This behaviour on the part of the CFTC, the US Government, and the banks that control the government is criminal. They justify their behaviour as an effort to prolong the value of the Federal Reserve Note, which itself is a means of theft of the value of the worlds labour for the benefit of the owners of this criminal system.
    Buy all the physical Silver you can, and do not sell ever. Barter with Silver, but do not intend ever to trade for any currency until the criminal currency system is defeated. These criminals know they will lose, just as we know we will win.

  13. Now we get to look forward to the copper market being manipulated.
    SEC Approves JP Morgan’s Physical Copper ETF
    Maybe they see the end coming to their silver manipulation scheme and they are moving on to copper. Sumkid may be right about it being the time to load up on the physical copper. I now feel better about having hundreds of pounds put back. I guess nickel will be next. I just started making plans for building a foundry so I can melt scrap copper into bars, turning #2 and #3 Cu into #1. Used motor oil is free and can be used as fuel with modified oil fired furnace parts. Started saving used motor oil years ago and have quite a few 5 gal buckets of it. It is legal in my state to burn used motor oil as fuel so check with yours before considering this option. A good site is myhomefoundry.com and I am not associated with them other than being a client.

  14. seems to me Butler is starting to side with CFTC, they simply don’t understand, we need some people who understand manipulation to run the CFTC dammmit …. lmao

    • “starting to side with CFTC….”  Not in our lifetime!  Ted Butler is a stand up guy who has helped enlighten most of those who read this website and others, regarding the fact that “we better start accumulating silver”.  Read his writings and you will see he is a true silver pioneer educator.

  15. i said a year ago that bart chiltern was only able to make noise … even with the best intent in the world he cannot change a game thats controlled by power far greater than he wields … whether he was on our side or not he never stood a chance … his greatest service would be to resign siting corruption so great that he was powerless to change it …

  16. The pending bond market implosion will eliminate the need for any of this discussion

    Lip service on fiscal cliff, etc etc. is just to buy time and for crooks to screw each other before the dam breaks

    • The fiscal cliff is just another dog and pony show put on for the masses. Their left hand is waving at you while their right hand is in your pocket.

  17. CFTC,SEC,FINRA  ect faux Government Protection agencies ,supreme court  ,cops ,military bought and paid for..sad we been sold off ,and left to die

  18. our phyzz silver value is the cartel’s piggy bank I read Dimon and a friend were jacked for 70 million in gold recently in the Caribbean..and it’s x-mas time ,gifts for all the traitors of the American public..Jamie you the man for now.  

  19. WHISKEY SIX’s comment are most pertinent here. Ted Butler needs to shed his goody twoshoes attitude toward Chilton and the CFTC.
    All of us can see the lies and corruption but he can’t because he is a fundamentally honest and decent person   
    who has evolved out of a kinder, gentler financial climate. But he is terribly naiive which is a sad commentary on a man of his age

    Wake up Ted and smell the rot. It stinks but at least it is real. 

  20. One things Americans the  99%  readily have available is very cheap alcohol ,guns anger and lots of large screen TV’s  giving us choices of products to buy and their opinion on who to hate and why..’I pity the fools’ once America gets focus as who the is the ‘Wizard’ and his vampires bloodsuckers ARE..
    You can’t mix these people ‘Vampires’ with non-vampires look at world history some people don’t mix..you see them they are beautiful ,rich,powerful  and intelligent.they are in high places  some envy them ,but we are just ,slaves and soldiers and food.

  21. WHEN YOU GO TO THE SAME CASHIER DAY AFTER DAY AND KEEP GETTING SHORT CHANGED, IT’S NO LONGER A MISTAKE. TED BUTLER HAS COGNITIVE DISSONANCE ON A COLOSSAL SCALE.

  22. Chrissy  I get what you are saying about the fiscal cliff.  There is not an honest broker in this whole scam.  The same people who are carrying on the negotiations are the ones who’s complete DIShonest and ineptitude got us here in the first place.
    I was reading about how BHO and Boehner were bargaining over the fiscal cliff. It brought up an image of someone playing 3 card monte.  The card sharp and the supposed mark are engaged in their bit of business while we watch. The whole scam is set up so the third con artist is slipping around behind us to pick our pockets.  I really hate it when politicians say they represent us,t he voters, when all they are doing to talking about ways to fleece us.

Speak Your Mind