The intrepid silver analyst Theodore Butler was the first person to insist that the prices of silver and gold were set almost exclusively on the Commodities Exchange (COMEX). His years of experience as a futures broker and trader also led him to discover that JPMorgan was the ringleader of a group of eight banks who actively suppressed the price of precious metals through short sales. These banks held massive short positions they used to manipulate the price of silver and gold downward. Thus they generated large profits when they bought back their short positions.
According to Mr. Butler, this was contrary to commodity law. After many years of complaints from Mr. Butler to the regulators, the Justice Department recently moved against six or more traders in JPMorgan’s precious metals trading department. The big question is whether this will cause JPMorgan to pull in its horns and no longer short silver to the extent they have in the past. If so, we could be in for quite a ride.
Mr. Butler also built a rock-solid case that while JPMorgan suppressed the price of gold and silver over the past eight years in the paper futures, they built up an enormous hoard of physical gold and silver at the cheap prices that they engineered. They now have over 900 million ounces of physical silver. Mr. Butler calls it the crime of the century. He also theorizes that their huge silver hoard gives them additional incentive to let the price rip. He even predicts a possible double cross of the other big shorts that JPMorgan has been in league with.