In Ted Butler's Archive


Cook: Is the public’s interest and knowledge about silver picking up?
Butler: I’d say yes, overall, but I am still of the opinion that most still don’t fully grasp how silver has been manipulated and suppressed in price for 40 years – and this is the absolute key to why someone should buy and hold silver.

Cook: You have suggested that the silver price will explode upward rather than make small gains. Why is that?
Butler: Silver price rallies have always been capped and contained by concentrated short-selling on the COMEX by the largest banks. This is at the core of the decades-old price manipulation.  When the big commercials (banks) refrain from adding new shorts on silver price rallies, a selling void will cause the price to explode. It will be all bid and no offer.

Cook: Why can’t the commercials keep adding shorts as they have done for decades? These big banks have unlimited money.
Butler: Top of the list is a developing physical silver shortage for the first time in history. Verifiable data indicates shrinking world inventories. It’s another reason for a price explosion.

Cook: Why haven’t prices already risen?
Butler: Because the COMEX paper-rigging manipulation has succeeded to this point in overwhelming the physical shortage. Another reason is the worldwide acceptance of the paper price on the COMEX as the real price. The most important point is that the COMEX price is almost exclusively a phony price set by two opposing groups of paper traders – the banks and the managed-money traders which involve zero physical dealings.

Cook: What makes it illegal?
Butler: The largest short-sellers act in unison to impact the price one way or another. US commodity law holds that speculative derivatives trading must not dictate prices.

Cook: What will end it?
Butler: A physical shortage of any commodity must eventually cause prices to climb high enough to increase supply through new production. Higher prices also limit demand causing the physical shortage to end. The physical shortage in silver has been building for 40 years.  The coming increase in price must be dramatic enough to offset the damage and compensate for the time the price was manipulated and suppressed.

Cook: The current price of silver is way below what the free-market price would be. Isn’t short-selling silver extremely dangerous?
Butler: The big commercial shorts are more aware of this than anyone and when they refrain from adding shorts on a future silver rally, the move to higher prices will be magnified by this selling vacuum.

Cook: It’s taking more time than you thought, right?
Butler: Yes. I thought it would end back in the mid-1980s when I first started petitioning the regulators and the exchanges.

Cook: You recently claimed that the fireworks would start soon. Are you sticking with that?
Butler: Absolutely. While I can’t predict the precise point of the silver price explosion, all the signs, from the physical shortage to the growing awareness that silver is suppressed in price, mean the fireworks start sooner rather than later.

Cook: So, what do you say to frustrated silver holders?
Butler: It can’t take much longer until this fraud ends due to the emergence of the first physical shortage in history. Nothing is more bullish than a shortage of a critically important commodity.

Cook: Since we established a relationship in 2001, silver has gone from $4 an ounce to $24. Would you say long-term holders are ahead?
Butler: Prices did get as high as $50, 12 years ago, but while most of my table-thumping to buy silver has proven to be profitable, there was silver also bought at prices above $30 or even $40 and those purchases are held at a loss – although I don’t think for long.

Cook: What should people know about investing in silver?
Butler: The real lesson is to buy silver when it’s cheap – like now.

Cook: How high might silver go in the months ahead?
Butler: One of the rules of intelligent forecasting is to either pick a price or a time period, but never both. However, in silver, I look at it differently. Since the price of silver has been and continues to be manipulated, the question is what will the price be when the manipulation ends and my answer is, many times the current price in a remarkably short period of time.

Cook: Can you agree with the analyst that said silver should be held for a lifetime?
Butler: In some ways, but the whole point of investing is the postponement of current consumption to meet future financial goals – so when silver prices move high enough to meet important financial goals, I see nothing wrong with selling enough silver to do so.

Cook: Do you see silver as an important inflation hedge?
Butler: Silver’s suppressed and manipulated price is so low that it qualifies as just about every type of future hedge because it’s not hard for me to imagine that when the manipulation ends, the price reaction higher will beat every other asset and benchmark.

Cook: What happens if an industrial user can’t get silver?
Butler: The jig’s up. Delays in shipments to users can’t be tolerated, despite delays being tolerated by investors. To investors, delays in silver purchased are tolerated (as long as the dealer is reputable), but to users, delays mean closing assembly lines and furloughing employees. Delays mean users will rush to build up physical silver stockpiles to avoid production shutdowns.

Cook: What kind of problem can the COMEX experience with silver?
Butler: I suppose threats of delivery defaults, but that’s not high on my list, as I’m more inclined to believe that the insiders at the COMEX are well-enough informed so as to side-step clear delivery defaults. In the end, they know that when the physical shortage arrives in earnest, it will be best to stand aside.

Cook: Do you still think silver could develop into an asset bubble?
Butler: Silver has the best chance of any commodity to develop into an asset bubble. Perhaps the greatest asset bubble in history. An asset bubble occurs when a large number of buyers bid the price much higher than underlying valuations would support. The bubble reaches its zenith when caution is thrown to the wind as prices shoot higher.

Cook: Are you predicting a blow-off in the silver price?
Butler: Quite possibly. The stage is set for something the world has never experienced before – an asset bubble accompanied by an industrial shortage. These are the two greatest upward price forces known to man. An asset bubble and a genuine commodity shortage appear set to combine in silver. Either one alone would have a profound impact on the price, but the combination makes it impossible to forecast how high the price of silver can go.

Cook: Will this overwhelm the manipulators?
Butler: Absolutely. The COMEX silver manipulation is the key ingredient in the greatest potential investment score ever. If silver wasn’t manipulated, I wouldn’t buy or hold silver because that would mean free- market forces were setting the price. In other words, if silver wasn’t manipulated, there would not be so many reasons to buy it.

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