In Ted Butler's Archive


JPMorgan has profited $300 million to the upside so far on the gold price rally (after booking $2 billion in profit to the downside this year). Those profits are directly attributed to the bank’s market corners of up to 25% of the gold futures market. JPMorgan had a short gold market corner and the price dropped $500, a record amount. JPMorgan established a long gold corner and the price rallied $250.

In the Comex gold and silver JPMorgan is the biggest long, the biggest short, the biggest acceptor of delivery and the biggest maker of delivery. Our regulated futures markets are supposed to guard against an entity becoming too big in any market. The big banks should not jeopardize the markets or the financial system. Nevertheless, JPMorgan has a death grip on the most important gold and silver market in the world. Public data, including exchange delivery reports and government publications make it clear that JPMorgan is the dominant player in COMEX gold and silver. This bank was always the dominant participant in the OTC derivates market for gold and silver. JPMorgan became the controlling force in COMEX dealings when it acquired Bear Stearns in 2008. Bear Stearns was the big dog in gold and silver prior to being taken over by JPMorgan.

Banks have more important things to do than trade commodities. Pressure is being exerted on JPMorgan to exit the commodities business, but so far there has been no pressure to exit gold and silver. JPMorgan makes tremendous profits from manipulating and controlling gold and silver markets; but those profits come with growing damage to their reputation.

housands have come to learn that JPMorgan is the big crook in gold and silver. Being called crooked openly is not good for a bank. JPMorgan can’t continue to manipulate gold and silver prices indefinitely. The bank’s circumstances have changed. They are taking heat on several fronts. If I thought JPMorgan could continue to manipulate prices forever, I wouldn’t hold silver. Even though the bank never stopped manipulating prices over these past five years, we did have a run from under $9 to almost $50. The physical market nearly did JPM in at the peak. From where I sit, that was a trial run.

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