In Ted Butler's Archive


I’d like to focus on what the inevitable rally will look like in silver. I have some new reasons why we may be looking at a genuinely explosive silver rally soon, but first let me explain why we absolutely must see a silver explosion. It has to do with the manipulation that has existed in silver for more than 30 years and continues to this day. It is a historically proven and logical fact that all manipulations must come to an end. The law of supply and demand dictates that any artificial distortion of price must be eventually overwhelmed. We also know that the end of every price manipulation must be dramatic to the point of being shocking – sending prices suddenly in the opposite direction of the manipulation.

I have pinpointed in advance what will constitute an end to the COMEX silver manipulation – no additional concentrated short selling by the largest commercial shorts, most definitely including JPMorgan. Since settling into the role of the prime silver price manipulator as a result of its takeover of Bear Stearns in 2008, JPMorgan has capped every subsequent silver rally by adding to its short positions. What I’m talking about now is not whether JPMorgan has capped every price rally in silver over the past seven years, as that’s evident in the historical record; but what this crooked bank will do next. And to be perfectly frank, no one can know in advance (except the crooks at JPM).

Everyone has their own picture of how the silver manipulation will end (aside from the likelihood of a physical shortage). My silver mentor, Izzy Freidman, always envisioned the shortage would hit like a hurricane at full tide and catch the big shorts with large positions (Full Pants Down). On the other hand, I have always been of the opinion that the big commercial shorts are crooked and powerful enough to see the silver shortage coming before anyone else and use that knowledge to rig prices lower while buying as much as they could.

It comes down to this – JPMorgan has once again bought back all the short silver contracts it added recently; thus preserving its infallible trading record of never taking a loss on any silver short position added on higher prices. (Never a loss is the same as always a crook.) So once again, we’re back to will JPMorgan add shorts on the next silver rally or not? I know it’s a simple question, but it encapsulates everything that needs to be focused on in silver. Silver prices can’t and won’t go down forever and sooner or later prices will turn higher. Timing aside, this is as inevitable as the tides. Right now, we have a lot of pent-up buying power in the form of new managed money buying and short covering – it’s already baked into the cake.

Most beneficial to JPMorgan is that if it does nothing, that is, not add any new silver shorts, the price will soar. All these crooks have to do is keep their hands in their pockets and not sell and silver prices will fly. Since the silver manipulation must end in this manner, it’s best to err on the side of greater potential consequence. The biggest factor may be the historic and massive accumulation of physical silver by JPMorgan over the past 4.5 years of 400 million ounces. That means there has never been a better time or reason for JPMorgan to keep its hands in its pockets and not sell any additional COMEX silver contracts short on the next silver rally.

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