In Jim Cook's Archive


I think it’s safe to say that this newsletter and the articles we condense have been right on the direction of the economy. Our constant forecast of worsening inflation and a slowing economy have been on the mark. We frequently argue that the Federal Reserve is between a rock and a hard place. That’s the basis of the case we’ve made for silver and gold. Things are going to get dicey, we suggested, and you should be hedged against inflation and a recession. However, the price rise we thought was coming in silver has not followed the script.

Why precious metals are lagging has been thoroughly explained by silver analyst Ted Butler. Big banks selling short in unison have thwarted a price rise in silver. Mr. Butler has proven that JPMorgan has used this manipulative futures market trick to accumulate almost 2 billion ounces of physical and paper silver derivatives in the form of 1,000 ounce bars. Ted Butler’s accusations of wrongdoing have never been challenged because he is the only silver expert who knows what he is talking about when it comes to the futures market. A few analysts have got the silver story partially right, but most opinions are incorrect or misguided. Mr. Butler is the one to listen to.

Thankfully, he is suggesting that a price revolution in silver is still to come. He bases this argument on factors emerging in the futures market. Not the least of these is JPMorgan’s plan to generate hundreds of billions in profits for themselves. Interestingly enough, Mr. Butler does not see inflation and other economic factors currently influencing the price of silver. That’s because the price is set on the COMEX by big banks and hedge funds battling one another. So far, the big short-sellers have been winning.

If this explanation didn’t hold water, the price of silver would already be much higher. It would be reacting positively to inflation and economic worries. The fact that it hasn’t suggests it is underpriced and still a viable hedge. If Mr. Butler is right, silver remains an enormous financial opportunity. He believes it can go up ten times or more. JPMorgan must see the same thing and could conceivably try to arrange it.

We think silver could protect you in the dark days ahead by gaining enough to offset your losses in other assets. Inflation can’t be stopped without a recession and ultimately it could become a hyperinflation, a depression or both. Our advice to have 10% of your net worth in silver has never seemed more appropriate. Silver has been treasured for thousands of years and weathered countless economic storms with its value intact. In the past 100 years it has become a crucial industrial metal. Meanwhile, investors the world over are hoarding it. We hope you will give silver thoughtful consideration at what appears to be today’s bargain price.

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