In Ted Butler's Archive


One must be careful in pronouncing any specific time as to when a great price rise might occur in silver. After all, most of us have been waiting a long time for the price of silver to explode – no one longer than me. On the other hand, it would be a disservice not to say something if there are important new reasons to expect a dramatic liftoff.

There are three important new reasons suggesting that silver could explode in price at any moment. One, JPMorgan has shaken off any pretense in its epic accumulation of physical silver. This month in actual COMEX silver deliveries, they have taken far more than ever before and well over the long established limit for deliveries. This has drained 17 million ounces from the market. They are openly and aggressively hoarding silver. This data is published for anyone to see.

Two, the class of futures traders known as managed money traders have amassed and continue to hold nearly 400 million ounces of paper silver contracts, up fourfold from levels they held just three years ago. Unlike in the past, these traders are not selling and that has changed dramatically the market equation in silver.

Three, as a result of the unprecedented buildup of managed money long positions, there has been more pressure and danger of financial ruin than ever exerted on the 7 largest COMEX shorts. These 7 big banks hold a combined 350 million ounces short and don’t appear to have a prayer of getting that much physical silver to offset their shorts. When they move to buy back their shorts it will cause the price to explode. (JPMorgan is excluded from danger because it owns 600 million ounces of physical silver).

Silver has always had the potential to explode at any moment, but the new factors suggest the time may be at hand. The price of silver has been ground down for so long that all hopes for a sharp rally have faded. But the ongoing facts and developments point to just the opposite. Back in 2010, silver was at the same price it is now before it ran up to $49 in a matter of months. Remarkably, the facts today favor silver exploding in price much more than they did then. If you are considering buying silver at these giveaway prices, I would urge you to buy now. To me, this looks like it just could be the last call before the big move higher.

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