In Ted Butler's Archive


JPMorgan took delivery of 3,000 contracts (15 million ounces) combined in December and January. After two days of delivery for the March silver contract, JPMorgan took 997 contracts, and will likely take 600 or so of the roughly 1,000 contracts still remaining open. This would tend to confirm that JPMorgan is still acquiring physical silver despite its recent increase in silver futures shorting on the COMEX. JPMorgan might be shorting silver futures contracts in order to depress the price and buy physical silver, even though that’s as illegal as it gets. JPMorgan has taken delivery of close to 4,000 silver contracts (20 million ounces) since December and is in position to take another 3 million ounces in March. This adds to the 100 to 200 million physical ounces (or more) of silver that JPMorgan has acquired over the past three years.

Despite increased shorting on COMEX silver of 5,500 contracts over the past two weeks, JPMorgan has largely accomplished a massive reduction of its overall silver and gold short positions. Then it has established a long market corner in COMEX gold, as well as amassing prodigious quantities of physical silver and gold. JPMorgan is fully positioned for a lift-off in prices. The only thing missing is how to avoid any accusations that a price rise was caused by them.

The proof of JPMorgan’s manipulation for all to see lies in the Commodity Futures Trading Commission’s Commitment of Traders Report as to market share. Some way must be arranged to make it look like this proof of manipulation matters not. The COT reports have always explained big price moves and provided proof of manipulation. However, for JPMorgan the final big move must not be linked to this fact. In other words, JPMorgan needs a way to make it appear as though it had nothing to do with an explosion in prices.

If prices exploded now, it just might relieve the suspicion of manipulation associated with JPMorgan. A sharp price rise now would discredit COT analysis and undermine allegations of manipulation. Sharply higher gold and silver prices would also remove the financial pain of investors and the interest in manipulation theories would dissipate. Who can be angry while making money? The criticism of JPMorgan would likely disappear.

I’ve labeled all this as “way out,” but given all the facts, it is going to take something like this to make this all go away for JPMorgan and the COMEX. Just this week, stories of gold manipulation appeared in the Financial Times and on Bloomberg. Suspicions of gold and silver price manipulation are growing. If we get another manipulative price smackdown suspicions will grow even further. There is little real economic incentive for JPMorgan to continue the manipulation. They have accumulated a vast hoard of gold and silver and higher prices will make them billions. It would be smart for everyone to mimic JPMorgan and hold a lot of physical silver.

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