In Ted Butler's Archive


Cook: Keith Neumeyer of Majestic Silver just came out with a prediction that silver will rise to $300.00 per ounce.  What do you think?
Butler:  It’s easy to understand extremely bullish price projections for silver once you grasp the whole story.

Cook:  What is the whole story?
Butler: The same story we’ve been spreading for 20 years, namely, that silver has been artificially suppressed in price by COMEX paper short-selling in the face of actual fundamentals that demanded much higher prices.

Cook:  So that is no longer happening?
Butler: Exactly, and that’s why gold and particularly silver prices have jumped

Cook: Are big shorts reducing their short positions now?
Butler: Yes, I just said that.

Cook:  How much have they lost on their short positions?
Butler:  So far, close to $18 billion divided by 8 traders, mostly banks

Cook:  Silver got slammed today (August 11). What happened?
Butler: Best I can tell, a number of things. For one, any market that runs up like silver has is subject to sharp setbacks. Plus I never said the big shorts had given up completely because if they had silver would have run much further to the upside. But it’s still my sense that the genie is out of the bottle as far as the old manipulation not being resurrected.

Cook: People want to know if you still think silver offers the potential for great price appreciation?
Butler: More than ever. The only big difference is that it now appears to be in play, meaning it’s not likely to lay there like it did for so many years.

Cook: When you say it’s in play, what exactly does that mean?
Butler: That the game has changed and no longer is silver in the lockdown mode it has been in since the price top of April 2011. I guess JPMorgan has accumulated as much physical metal as it is capable of.

Cook: So JPMorgan is still a big factor in determining the silver price?
Butler: Absolutely. More than ever.

Cook: How can that be if they are no longer shorting like they were?
Butler: Because they have been a major factor for so long that just by backing away, they have a giant effect.

Cook: Could they come back on the short side once again?
Butler: They could, but I don’t expect it. If they did it would be on higher prices and we’ll see it in the data.

Cook: We have a lot of short-term volatility. Does that worry you?
Butler: Not at all. We’ve had a big run-up. Corrections are inevitable.

Cook: What’s your prognosis for the longer term?
Butler: When we are done with this current decline we should burst to the upside stronger than ever.

Cook: Does that mean no more shorting by the big banks?
Butler: I think so. They have not done so since mid-March. We’re not going back to that old shorting game.

Cook: How are these big shorts going to extricate themselves?
Butler: By buying on declines when others are selling. They have had trouble doing it and they got a nasty lesson. That’s why I don’t see them going short again.

Cook: That has to be the most bullish news ever.
Butler: Yes, I suspect we’re going up a long way from here.

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