In Ted Butler's Archive


Hard as it is for me to believe, it’s been nearly 50 years since the introduction of the tongue-in-cheek advertising campaign for Miller Lite beer, which featured skits in which characters argued what was better about the beer – the fact that it tasted great or was less filling calorie-wise. It was a clever ad campaign, but it got repetitive. I’m reminded of that old ad campaign when I examine reasons why investors choose to buy and hold silver. Some choose silver because they feel it’s a good hedge against inflation, while others choose silver as insurance against a systemic financial collapse.

My reason for buying silver is that it is a vital industrial metal destined to soar in price due to an inevitable physical shortage, compounded by waves of investment buying. The fact that its price has been artificially suppressed on the COMEX for decades guarantees a dramatically higher price. What has been a collusive effort on the part of a few large paper traders on the COMEX to keep prices from soaring may appear successful to this point; however, a closer examination reveals their price control is weakening. The recognition that silver prices have been manipulated is more widespread than ever before.

The most persuasive evidence that we may be quite close to soaring silver prices are the actions of what was the former ringleader of the COMEX silver shorts, JPMorgan. Since stepping in and taking over the massive Bear Stearns short positions in silver and gold in 2008, JPMorgan had an epiphany in the run-up to silver prices to $50 in 2011 and decided then and there to buy as much physical silver (and gold) as it could. For the next 10 years JPM did just that, acquiring more than a billion ounces of physical silver. Now that JPMorgan is fully positioned with physical silver and has put its legal house in order with the Justice Department and the CFTC, it is in perfect position to reap the rewards from its physical silver accumulation.

JPMorgan is the absolute master of the financial world and has bought all the physical silver it is capable of buying – simply because there is so little left to buy. This should be evident in the persistently high premiums on just about all forms of silver – a sure sign of impending shortage. I’m convinced JPMorgan would buy even greater quantities of physical silver if it were available for purchase. JPMorgan has made a huge bet on silver going much higher. Does anybody think they are going to lose money on silver? They expect to make many billions. Every $10 rise in silver is a ten billion dollar profit for them. It only makes sense to do what they did and buy more silver.

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