In Ted Butler's Archive


A year ago, I wrote James McDonald, the newly installed Director of the CFTC’s Enforcement Division. I made special note in my letter of the role JPMorgan played in the silver manipulation since acquiring Bear Stearns, including that JPMorgan had never taken a loss, only profits every time it added new short positions in COMEX silver futures over the past ten years. Such a perfect trading record would be impossible in any market that wasn’t manipulated. The bank also accumulated a massive amount of physical silver at prices it was responsible for depressing. (JPM has added 100 million physical ounces over the past year and now holds 700 million ounces.)

I never heard anything from the agency or McDonald and don’t expect to. Regardless, I thought it might be instructive to see what transpired in the year since I wrote that JPMorgan had never taken a loss, only profits, by shorting COMEX silver contracts. How did JPMorgan fare over the past year? JPMorgan not only maintained its perfect trading record, it did so in absolutely spectacular fashion, with the past year being perhaps its best year ever in trading silver. On ten separate occasions, starting with McDonald’s first day on the job, JPMorgan managed to either add a significant number of net new COMEX silver shorts as silver prices rose or buy back those added shorts at a profit, never taking a loss. Keep in mind that the past year in silver was one of the least volatile, with no more than a three and a half dollars difference between the high and low prices ($15 to $18.50), making JPMorgan’s perfect trading record all the more impressive.

My data source is the COT report and Bank Participation report. The following table shows JPMorgan’s net short position and the price of silver on certain dates. In constructing the table, JPMorgan’s maximum and minimum COMEX silver net short positions were the focal points, with price and date secondary inputs.

Date Price JPM’S Short Position Estimated Profit
4/11/2017 $18.50 34,000 contracts
5/9/2017 $16.00 18,000 contracts $110 million
6/6/2017 $17.50 28,000 contracts
7/18/2017 $15.00 10,500 contracts $150 million
9/12/2017 $18.20 38,000 contracts
10/3/2017 $16.50 33,000 contracts $25 million
11/21/2017 $17.00 40,000 contracts
12/19/2017 $15.70 24,000 contracts $75 million
01/09/2018 $17.20 33,000 contracts
02/13/2018 $16.20 25,000 contracts $30 million
04/03/2018 $16.20 19,000 contracts


Clearly, JPMorgan made profits whenever it bought back short positions at lower prices than it sold at and since it never bought back short positions at higher prices than it had sold at, it never took a loss. My estimates for what JPMorgan made in this trading is very conservative and it’s likely much more than I’ve indicated. As to any suggestion that JPMorgan was only hedging, that’s poppycock – bona fide hedging requires a loss on one side of the hedge and a gain on the other side of the hedge. JPMorgan never took a corresponding loss on anything as it made nothing but profits on its COMEX paper trading, all the while adding to its massive physical position at depressed prices. There is no legitimate hedging taking place in COMEX silver.

The prime motivation for JPMorgan was not to maintain its perfect trading record on the COMEX (even though it made some $400 million in such trading over the past year), it was always the desire to keep silver prices depressed so that it could accumulate the 700 million ounces I allege it has acquired. That said, it should be crystal clear that the amounts of short positions that JPMorgan added on rallies were instrumental in capping prices as I have alleged for a decade. The table shows that JPMorgan was always the largest COMEX silver short seller at market tops which, at the margin, was the deciding factor in every silver rally petering out and ultimately failing.

The CFTC and McDonald must know this, particularly after being alerted to it so many times. Therefore, one must conclude that both are fully under the control of someone and my guess is that the ultimate control rests with JPMorgan. I’ve been told that McDonald is a straight shooter, but after the past year that’s hard to accept. As I said in my letter a year ago, his tenure would be judged by how he handles this issue. To date, he has not handled it at all, unless his aim was to help JPMorgan, in which case he’s done a bang-up job.

Please keep in mind that I am openly accusing the nation’s largest bank of criminal market activity and the federal commodities regulator of willful malfeasance. It’s beyond remarkable that neither can address such public accusations. That’s one big reason why more have become convinced that silver is manipulated in price. In no way should any of this be taken to be at odds with my strong belief that the next move up in silver could and should be the big one. In fact, it enhances that setup in more ways than ever before.

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