In Ted Butler's Archive


There are many who dismiss, out of hand, my allegation that JPMorgan has accumulated 700 million ounces or more of physical silver over the past seven years. That’s completely understandable, since I can’t document and point out all 700 million ounces. It doesn’t matter that I first picked up on JPMorgan’s quest to acquire physical silver four years ago, by which time it had already accumulated 300 million ounces and have been reporting on it ever since. If I can’t show every ounce belonging to JPM, some will remain skeptical. There are still some who doubt that the 135 million ounces of silver that JPMorgan has moved into its own COMEX warehouse since 2011 belongs to the bank. This despite the fact that most of that silver is a result of JPMorgan taking delivery of that metal in its own name in futures contract deliveries. And please remember, it is in JPMorgan’s best interest that its physical metal ownership remain largely unknown, so the bank can’t be expected to confirm its holdings.

The visible 135 million ounces of silver that JPMorgan holds in its own COMEX warehouse is more silver than ever owned by any private entity in history, eclipsing the amounts held by the Hunt brothers in 1980 or Warren Buffett’s Berkshire Hathaway in 1998. To those who wonder how JPMorgan could buy the most silver ever without driving prices higher (as was the case with the Hunt brothers and Buffett), look no further than the fact that JPMorgan was also the largest paper short seller in COMEX silver futures over the entire seven years of its physical accumulation. Not only does this answer the question of why prices didn’t rise despite JPMorgan buying so much actual silver over the past seven years, it also presents the clearest evidence of commodity market price manipulation.

The issue today is the motivation behind JPMorgan’s epic accumulation of silver. JPMorgan first began acquiring physical silver as the one surefire solution for covering its massive paper short position without driving prices higher. Then, after acquiring enough physical metal to neutralize its dominant paper short position (by 2012), JPMorgan continued to accumulate hundreds of millions of physical ounces of metal with the sole intent of someday selling that silver at a high price.

Just to be clear, I don’t think JPMorgan envisioned in 2011 that it would amass the largest stockpile of silver in history at artificially low prices. But JPM’s decision to buy physical metal as the solution for covering its otherwise impossible to cover massive paper short position was nothing less than a stroke of manipulative genius. JPMorgan was smart enough to realize that once it had effectively covered its paper short position, any additional physical ounces acquired could be sold at a great profit someday.

However, many feel that the main motivation for JPMorgan accumulating physical silver is not to profit by selling at a very high price, but instead to use the physical metal to prolong the manipulation. Some believe JPMorgan is acting on behalf of the U.S. government, but this makes no sense. The U.S. government spent 50 years, from 1950 to 2000, disposing of our national stockpile of silver. It’s unlikely they would begin stockpiling silver again.

JPMorgan’s prime reason for existence, just like any business is to make profits and that is the motivation behind its massive accumulation of physical silver over the past 7 years. JPMorgan’s physical position is far larger than its paper COMEX short position and that sets the stage for a dramatic liftoff in price. JPMorgan’s massive physical position is the single most bullish factor to ever exist in a commodity.

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