In Ted Butler's Archive


Over the past month, there have been at least three separate occasions in which silver rallied sharply in a single day, only to lose most of those gains the next day. On another occasion silver rallied over several days, only to lose its gains in one day. This is highly unusual price behavior, even for silver, the world’s most manipulated market. There are no legitimate supply/demand explanations for this kind of erratic price behavior. It always comes down to who’s tapping who on the COMEX – check that – it always comes down to how the commercials are tapping the technical funds.

Whereas I previously labeled the commercials (big banks) as colluding among themselves in their dealings with the technical hedge funds and not exhibiting any true competitive behavior in their trading activities I must now amend that. The commercials are still collusive in their approach to the markets, but a new level of competition has emerged within the overall commercial collusion. Just as occurs in every Wall Street scheme eventually, the sure pickings the commercials enjoyed in their dealings with the technical funds has evolved into slim pickings, due to competition among the commercials. So eager have the commercials become to skin the technical funds that they are selling to the funds at lower and lower prices and smaller profits. This explains the phenomenon of the progressively smaller rallies in gold and silver over the past few years and also explains the big up days in silver followed immediately by next day takedowns.

It strikes me that the increasing aggression on the sell side by the commercials indicates that we are in the late stages of the silver manipulation. All financial schemes on Wall Street go through various stages and all blow up in the later stages and I can’t see why silver would be different. The overall profits to JPMorgan and the collusive commercials are definitely shrinking. The likelihood of serious miscalculation looms large. Miscalculation goes hand in hand with shrinking profits and aggressive positioning. The aggressive commercial selling is contrary to the spirit of U.S. commodity law. None of this COMEX positioning has the slightest connection to legitimate hedging by real producers or consumers. It’s no more than a Wall Street financial scheme designed to benefit a few insiders at the expense of the many. That it may have reached its terminal phase is nothing but good news.

Once again, the regulators have dropped the ball. A good number of obvious facts make the silver manipulation the greatest financial scheme ever to exist. Yet, the CFTC pretends that nothing is wrong with silver prices being set by purely speculative positioning on the COMEX and can’t even bring itself to comment on the most important market issue of the day. I don’t know how these people can live with themselves. They are either so clueless that they can’t understand failing in their main regulatory mission, or they are so corrupt that they do understand and choose to neglect their mission. In either case, they are not fit for office.

Keep in mind that the increasingly blatant silver manipulation has resulted in such an incredibly low and uneconomic price for silver that the price is reason enough to consider silver as the premier investment opportunity. This is particularly true when comparing silver to just about every other investment opportunity. The reasons for how we got to such a low price of silver are all rotten and illegitimate, but in time the high price to come will make the reasons for how we got here a distant memory.

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