(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)

Recently I received an e-mail from someone that I’d like to share with you. (By the way, I read and appreciate all comments, even if I can’t reply to them all.)

"Mr. Butler,

I have read each of your writings (every available one I can find) with great interest for many years now. I view you as the Michael Jordan and Tiger Woods of silver.

Personally, I have been accumulating silver since 1993. Incredibly, I got my first 300 ounces back then at a low of $3.72. Once I got them, all I wanted to see was $50 silver the next day so I could cash-in on the big profits.

Then a year passed by and not much happened, so I had a chance to accumulate more, and did.

Now I thought I was ready for $50 silver! But again, another year passed by and not much happened. So I accumulated more.

Each year I have done this, accumulating more and more silver. Since 1993, there has not been a year I have not accumulated more silver. And when I began reading your writings, it only confirmed my beliefs and then I accumulated even more.

The point is, that had $50 silver came for me back in 1993 like I had desperately wanted, I would have missed out on all the important accumulation years I have now experienced, and they have been SIGNIFICANT ones.

Painfully, I have seen more dives in the price of silver than made by the great cliff divers of Acapulco. But, I am now SO THANKFUL that silver prices remained SO LOW for SO MANY YEARS, because it allowed me to accumulate so much more silver than I would have ever thought possible back in 1993.

For years my wife thought I was nuts, until this past year when she and I entered into early retirement in our mid 50s. I have to admit, these past couple of years have been sweet around our household, and I don’t have to explain why, they just have been. Even if silver never goes up another penny, we will be comfortable the remainder of our lives.

However, you and I both know that silver still has a long ways to go from here, so it will only get better around.

And… just like every year… I’m now ready for $50! So let her rip!

Signed,

Jerry (Retired in Great Smoky Mountains of East Tennessee)"

In follow up e-mails, Jerry explained how the manipulation had lasted so long that he was able to increase his initial 300 ounces in 1993, to almost 60,000 ounces today. He also wrote that he felt that the big short was trapped and that this explained the violent sell-offs, as the big short tried to wiggle out from under his position.

There was a lot of wisdom in Jerry’s e-mails. He had gone about it right – buy on the sell-offs, and only for cash. Then sit tight. If the price drops, buy more. Make the best of the situation.

Anyone can replicate what Jerry has accomplished. All you need is patience and discipline. You won’t get as good an average price as he got, but you shouldn’t have to wait nearly as long either. When you adjust the current price for inflation, or compare it to other investment possibilities, you’d be surprised just how cheap silver still is.

Jerry started buying his silver long before he started reading my articles. However, I know there are many people who started buying silver after reading my articles and are in a similar position to Jerry. I know these people have done well. More importantly, they are sure to do well in the future.

While I admit that my primary motivation is to end the silver manipulation sooner than it might end on its own, seeing people improve their families’ financial security is also important to me. That’s why I believe you should buy silver. These sudden and manipulative sell-offs only allow you to enter at more advantageous prices.

This recent two-dollar sell-off looks large now, because it came so suddenly. As with all previous sharp sell-offs, it was designed to force as many margin players from the market as possible. Undoubtedly it had that effect. But as time rolls on, this sell-off will recede in importance. If you are able to take advantage and buy here, it wouldn’t surprise me if I got a note from you in the future telling me how much better your life is because of your family’s improved financial circumstances.

(This essay was written by silver analyst Theodore butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)

In a holiday-shortened Labor Day week, the concentrated short sellers attacked gold and silver with a vengeance. Gold broke out earlier in the week, only to collapse in price on Thursday, Friday and the following Monday. Silver lost almost two dollars in three days. It’s crystal clear to me what transpired.

Before Labor Day, gold looked technically strong. The downside looked limited. I was encouraged by this structure in gold, as I saw little risk of the big dealer shorts rigging a sell-off in gold in order to engineer a similar sell-off in silver.

That changed on Tuesday, as gold exploded to the upside by some $15 on heavy technical fund buying of fifteen to twenty thousand contracts. Although this is a fraction of what the tech funds formerly bought, the key 20 and 50-day moving averages were decisively penetrated to the upside. With the funds now on the long side of gold, the dealer shorts were then in position to force gold and silver sharply lower. The key for the dealers is that they know the technical traders buy as prices are rising and sell as prices are falling. Armed with this knowledge, the eight or less dealers, who control the entire net dealer short position, find it easy to dictate the technical funds’ behavior.

Since there are so few dealers holding the concentrated short position, it’s no problem to collude and tacitly agree to withhold offers to sell more short positions as the tech funds are buying with abandon. This assures that the tech funds buy at a high price. Once the tech funds are positioned on the long side, the concentrated dealer short sellers pull the rug out from under them. The dealers collude and withhold bids until the tech funds begin to sell in a panic. The dealers often strike overnight when the markets are thin. This assures dramatic price movements, up or down.

Beyond question, this activity is illegal. Commodity law holds that futures trading and pricing should be subservient to developments in the real world of supply and demand. This principle is called price discovery. That’s not what happened to gold and silver prices. Supply and demand changes had nothing to do with recent price moves. What we just witnessed was as far away from price discovery as it gets. What we just witnessed in gold and silver futures trading was price fixing. The concentrated dealer short sellers set the prices to their advantage. That’s against the law. Once again, it is absolutely amazing that the silver producers and resource companies sit mute while the concentrated shorts toy with the price of the product of their hard labors. If it were they who made this case, it would bring a quicker end to the manipulation.

What makes this manipulative activity by the dealers so distressing is that it’s so obvious and blatant. It’s impossible to believe that senior management of the NYMEX/COMEX can be unaware of it. I have personally written to the Chairman, the CEO, the chief legal counsel and the chief regulatory official of the NYMEX about the dealers’ concentrated short position, and other manipulative activities, as have many of you. To date, no response has been received.

It hard for me to imagine writing to the head of a legitimate financial institution, for instance, John Thain of the New York Stock Exchange, about a such a serious issue as manipulation and getting no response. Especially if that financial institution were about to go public. Yet that is exactly what has occurred with the leadership of the NYMEX/COMEX. Sadly and unfortunately, I can reach no other conclusion but that they must be aware of, and maybe involved, up to their eyeballs, in the silver manipulation. I can’t help but think that they may be trying to dump the problem on an unsuspecting investing public, via their proposed initial public offering. I hope I am wrong, but I don’t think so.

While I have been very careful to only publicly recommend that people buy real silver on a fully paid for basis, I know that many also buy silver on a margin or leveraged basis. This is, in fact, my background, and I can understand why people do it, even though it can, and does, lead to forced liquidation on these manipulative sell-offs. I would like to introduce a thought I’ve held for decades, yet have never publicly disclosed. If and when events in silver turn out the way I have predicted, and the silver manipulation becomes common knowledge and accepted fact, I think that any losses can, and will be, recovered through legal recourse, in addition to possible punitive damage awards. If you have suffered such losses and are not complaining about the manipulation, you may be doing yourself a disservice.

(Editors note: Mr. Butler has pointed out that the concentrated short position in COMEX silver by a few large traders amounts to 241 million ounces. According to Mr. Butler, that’s larger than all the available silver existing in the world. It’s the greatest short position the world has seen and, by definition, depresses the price.)

It appears that the CFTC has finally responded to the allegations, by myself and others, of manipulation in the silver market, due to the documented concentrated short position. I say appears, because as of this article, I have not received a response, nor has Carl Loeb. I find this more than curious, as the CFTC mentioned my name in their response to others, which some readers were kind enough to forward to me.

While I intend to fully discuss the response from the CFTC in detail in the very near future, I would like to make a few initial comments. Against my hopes, but fully within my expectations, the CFTC denied there was a manipulation. As anticipated, they did not refute one fact presented by Loeb, or myself, but tried to diffuse the allegations with extraneous data, which was clearly designed to confuse.

In reading their response, I was left with the feeling that, while I was trying to simplify and clarify the issue, their intent was to confuse. Unfortunately, this has gotten to be a Washington, DC art form. You ask them a straightforward question and they answer a completely different question. I find it maddening.

One thing I can tell you about the CFTC response is that there were two different responses. Somebody sent me one dated Aug. 26, that was materially different from the ones dated Sept. 6. The earlier response had a couple of paragraphs saying how it was perfectly normal for there to be a short position bigger than deliverable supplies. Then the LME nickel default took place and the CFTC revised the response by deleting any reference to delivery. The default made their response look foolish, and by changing the letter it makes them look even more foolish. I’ll try to get both responses up on the Internet, so you can judge for yourself. I’ll lay out the whole case and let you be the judge. That’s hard to do when the CFTC takes months to answer and the COMEX doesn’t answer at all.

I spend so much time and effort on the manipulation and the mechanics of the illegal trading because these are serious matters. But not for a moment should anyone interpret them as a reason not to buy silver. Rather, I try to demonstrate why this manipulation is the very reason you should buy silver. The unintended consequence of the silver manipulation is that it is allowing you to buy silver at way below what the price should be.

We all have the choice to view the glass as half-empty or half-full. The manipulators do win some short-term battles against the technical funds and other leveraged traders. But they are clearly losing the war and you, the long-term real silver investor, is clearly winning. Here we are, after yet another vicious and engineered sell-off, still over $11 and the gold/silver ratio at close to 53 to 1. In days not so long ago, sell-offs ended at $4 or $5, with the ratio at 70 or 80 to 1.

When you make a financial commitment it is, in reality, an act of faith. You have faith in your own judgment, or if you rely on the advice of others, you have faith in that person’s opinion. If you buy a stock based on the comments you hear on financial TV, you have faith in the person giving that advice.

Much of what we do in life is based on faith. Our daily activities require faith that the outcomes we hope for will be there. Faith is a necessary ingredient to progress. Without it, no one would attempt anything new. Trailblazers and pioneers wouldn’t exist. Faith is the key ingredient to success. Faith is the antidote for lack of courage and fear. Faith is a mandatory ingredient to life itself and most especially a fruitful life. Faith is of the first importance in achieving financial security and peace of mind.

When we send out our newsletter advocating silver, we are attempting to secure your faith in our judgment. When you read one of Ted Butler’s essays and you buy silver, you are acting on faith. In this case, you have faith in Mr. Butler’s knowledge and understanding. Our current task is to infuse you with enough of Mr. Butler’s insights to encourage your faith in his judgment.

Some of our readers reach this threshold and buy silver. I personally have bought silver based on Mr. Butler’s advice. More significantly, however, I have staked the success of my company on his advice. If my faith were to be misplaced, it would be ruinous to my financial security. Unquestionably it’s true that faith can be misplaced. When I first connected with Mr. Butler, silver was trading at slightly over $4.00 an ounce. A fairly prominent newsletter came out recommending selling silver and also buying put options on silver. The author claimed that silver was "more common than cockroaches." He expected silver to go down dramatically and you could profit by selling it short. That advice backfired badly. People who had faith in that writer suffered painful losses.

Life serves up abundant setbacks, struggles and disappointments. The most important advice for handling these predicaments were penned years ago by the success writer, Napoleon Hill. "Every adversity, every failure and every heartache carries with it the seed of an equivalent or a greater benefit." To accept that powerful fact simply requires a greater level of faith.

These setbacks do, indeed, give us a better handle on who we might place our faith in when it comes to making financial commitments. Disappointments sharpen our judgment. On the other hand, following someone’s advice to a successful conclusion increases our level of faith in that person.

So far, so good with Ted Butler. My faith in his views has been magnified because the price of silver has tripled since I first interviewed him. His accomplishments are impressive. He made the dubious practice of gold and silver leasing understandable, and he roundly condemned it as an accident waiting to happen. Subsequently, major mining companies took a shellacking, and huge losses still haunt mining companies that employed this practice.

He pointed out a large insurance company that was a dominant short seller in silver and questioned their tactics publicly. Before long they appeared to vanish from the silver market. He explained that the price of silver was set almost exclusively through COMEX trading. He showed that tech funds trading through computerized programs in commodities were the dominant silver buyers on the COMEX. He showed how they were getting crushed by the big dealers who were short. He questioned how long they could sustain such losses and, sure enough, in the last few months many have left the silver market. He predicted that the price of silver would rise and it did. He preached about the possibility of delivery default on the commodity exchanges and it happened recently with nickel. His prognostications, explanations and clear insights have generated a large following and caused many people to buy silver for the first time.

I can tell you that my faith in his opinions has increased. He claims the big short sellers, perhaps China and a few others, have a lot to lose if silver goes up. When he says they are trying to keep a lid on the price, I believe him. When he points out that a shortage exists in available silver, and this physical demand will override the short sellers, I suspect that’s right. And when he says the price will have to explode upward, I believe it, not just because I want to believe it, but because Mr. Butler has proven he has no peer as a silver analyst. That’s also why I think you should have enough faith in his judgment to buy silver for yourself.

Most Americans don’t realize how truly important silver is to industry and how strong the demand is. Nor do they know that the U.S. government, which had over three billion ounces of silver in 1942, ran out of silver. The demand in the future will also be billions of ounces. However, the billions of ounces are no longer there.

New and innovative uses continue to expand the need for silver. It’s an absolute necessity in the high-tech industry. Every computer, server, monitor, television, cell phone and switch uses silver. Lasers, satellites, high-tech weaponry and robotics all require silver. Digital technology and telecommunications need silver.

Silver has been referred to as a miracle metal. For centuries it was the safest and most useful form of money. It was used in jewelry and exotic art forms. More recently, it has followed the price movements of gold as if to verify it is also a monetary metal. But, silver is much more than that. It’s the metal that’s most necessary to modern life and a low priced opportunity that may never be replicated in any other commodity.

One of the nicest ways to own silver is in the form of brilliant uncirculated coins. These pristine silver pieces have never been in circulation and are in bright and shiny condition. In addition, they have age and a reasonable degree of scarcity. All were minted in 1964 and earlier. At today’s seemingly low prices these sparkling dimes, quarters and half dollars represent a special opportunity.

You can get Roosevelt silver dimes in bags of 10,000 coins. There are 725 ounces of silver in each bag. They were struck from 1946 to 1964 . You can also get Washington quarters. They come 4,000 to a bag and they also have 725 ounces of silver. They are beautiful coins that were struck from 1932 to 1964 at U.S. mints in Philadelphia, Denver and San Francisco.

We also have bags of brilliant uncirculated 90% Kennedy half dollars available. The BU Kennedy’s have 725 ounces of silver and contain 2,000 half dollars. These are bold and beautiful coins. You can’t beat these U.S. silver pieces that are almost forty years old.

You get a lot of silver for the money. A bag of silver coins weighs 55 pounds. We ship it to you in two buckets marked "machine parts." They don’t take much space and they combine the highest profit potential with asset protection.

Call us today at 1-800-328-1860 and order bags of uncirculated U.S. silver coins.

Sincerely,

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