About fifteen years ago silver analyst Theodore Butler was trying to uncover who was the dominant short seller in COMEX silver. He theorized it was Hank Greenberg’s AGI, a company that got into financial trouble insuring collateralized debt obligations. Subsequently, Bear Stearns took over their major short position and quickly suffered huge losses when gold and silver started their big run in 2008. That’s when JPMorgan took over.
At that point, Mr. Butler suggested to our readers that they write their senators and congressmen in Washington and ask them to find out from the CFTC (Commodity Futures Trading Commission) who took over from Bear Stearns. The CFTC then disclosed in a letter that it was a large commercial bank that had taken over a failing investment bank. The only such occurrence was JPM absorbing Bear Stearns. When JPM came close to losing billions in the silver price run-up they learned just how tight the actual physical supply of silver was. With that insight they began to accumulate a massive hoard of COMEX-tradeable 1,000 ounce bars.
Skeptics and deniers of the JPM silver manipulation story were vociferous for years. Then in a stunning interview with Bart Chilton, a former commissioner of the CFTC, just months before he died of pancreatic cancer, he confirmed that JPMorgan had been under investigation for years for market manipulation. Recent convictions of JPM traders for spoofing could be just the tip of the iceberg as the Justice Department indicates that an investigation continues. It’s getting harder to make light of Mr. Butler’s allegations. He is now the central person in the evolving silver story.