In Jim Cook's Archive


I pay Theodore Butler a lot of money each month to consult with us on silver.  This arrangement started in the fall of 2000.  Silver was a shade over $4.00 and Ted said it was at a bargain price.  He predicted it would rise tenfold.  Over the years I’ve come to trust his judgment.  We talk almost every day and I’ve concluded Ted is one of the most careful guys on Earth.  His analysis of silver and gold is grounded in facts and government statistics.  He never goes out on a limb or gets his ego mixed into his work.  He never guesses or makes unproven assumptions.  If you check his writing over the past dozen years you will be amazed at its accuracy.

What he has unearthed and proved in the silver market remains widely doubted, misunderstood and mostly unknown.  According to him this lack of awareness means silver is still the greatest money making opportunity on earth.  He says the price of silver today is nowhere near where it should be.  His advice is to load up on silver, have patience and wait for the inevitable price adjustment.  This advice is no typical investment letter tout. Rather, this comes from a man who will be remembered in investment lore as a silver genius. Ted Butler has immersed himself in the study of the silver market almost exclusively for 25 years.  The world should be beating a path to his door, but the curious, unprecedented nature of his research makes the spread of this information surprisingly slow.

When you claim that one of the world’s largest financial institutions manipulates the price of silver and gold you automatically incur skepticism.  It smacks of conspiracy and in many minds it relegates you to the fringe.  Nevertheless, Mr. Butler has nailed this incontrovertible fact down by using the government’s Bank Participation Report and the Commodity Futures Trading Commissions weekly Commitment of Traders Report.  Frankly, this is complicated stuff, but out of this dark forest of futures trading revelations, Mr. Butler has constructed an impenetrable fortress of facts.  Therein lies the opportunity.  The price of silver is artificially suppressed by a giant entity.  The price should be much higher and for a number of reasons Mr. Butler insists that it will be.

Once you accept the fact that the big bank is the culprit you can more easily see the logical ramifications.  When the price is lower than it should be there will be more demand for it than if the price were higher.  It also reduces the supply because lower prices mean that mining silver becomes unprofitable. Inevitably, this must lead to a shortage.  If you’ve been reading Mr. Butler’s articles you will recall how often he has pointed out evidence that we are on the verge of a silver shortage.
A few years ago, Mr. Butler predicted there would be a boom in investment demand for silver.  Sales of silver coins from government mints around the world have exploded. Hundreds of millions of ounces have poured into silver funds.  He suggests that this growing physical demand will aggravate a shortage that will ultimately break the back of the manipulators.

It’s an accepted fact silver is a vital and important industrial metal.  Ted Butler embellishes this fact with his proprietary analysis.  In the beginning, silver became money because of its beauty, divisibility, and resistance to rot and rust.  It also had use for jewelry and adornment.  Today not enough silver exists to be money again in even a small country. Silver use as money lasted 2,000 or more years until modern industry began to embrace silver for its electrical connectivity, reflectiveness, malleability and efficiency as a catalyst.  Industrial demand grew until it depleted billions of ounces that existed in the above ground supply. Now industry utilizes virtually all newly mined sliver.  Not much silver exists in the world compared to fifty years ago.

Ted Butler has predicted that at some point the industrial users will be faced with a silver shortage and lack of availability that will threaten their own production lines.  Rather than endure a shutdown they will attempt to hoard silver for future use. This will lead to a price explosion.  All this he bases on the price suppression that has radically altered the supply and demand equation.  More silver gets used and less is produced. That’s the essence of the enormous profit potential in silver.

Here’s another important fact that Ted has not written about for some time.  An enormous amount of silver has been sold in pool accounts and worldwide banks and brokerage storage accounts that doesn’t exist.  For example, Morgan Stanley confessed in a lawsuit that the silver they supposedly held in storage doesn’t exist even though they charged storage fees.  Their defense was that “everybody does it.” Imagine what can happen to the price if all these entities must scramble to get silver to cover their deficiency.  That’s the reason Ted Butler wrote that silver is an atomic bomb on top of a hydrogen bomb on top of a neutron bomb.

Mr. Butler insists that investors should get the silver into their physical possession.  If silver is stored investors must absolutely get the serial numbers of the bars.  Given the potential for an inordinate price blow-off in silver he stresses that the way to avoid tears and ensure prosperity is to follow his advice to the letter.

Privately, Ted talks to me about $100 and $200 silver.  His track record instills confidence that many of his arguments and predictions will come to pass.  He honestly believes that silver will provide you with greater gains than anything else.  He believes he has proven with factual evidence that silver is grossly undervalued and the inevitable reaction to its price suppression will be a volcanic price reaction to the upside. He claims this coming price rise in silver will be written about forever.

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