In Ted Butler's Archive


Cook: Could the recent price fluctuations in gold and silver be the start of the “big one” as you put it?
Butler: Absolutely, yes. It’s long overdue, but also inevitable.

Cook: Why inevitable?
Butler: Eventually supply and demand issues will dictate price.

Cook: You mean the forty years of price manipulation on the COMEX is coming to an end?
Butler: I think so, but I won’t swear to it.

Cook: Why not?
Butler: I’m not sure that the big commercial shorts who have been primarily responsible for the price suppression are done.

Cook: Doesn’t the recent price rise indicate that may be the case?
Butler: Yes, it does.

Cook: What would motivate them to end this lucrative manipulation?
Butler: Public awareness and knowledge of this chicanery on the COMEX has become widespread and regulators have seen a lot of complaints lately.

Cook: So, you’re saying there could be some regulatory pressure behind the scenes?
Butler: That’s one thing. Then there’s the futures market itself, which reflects positive trading activity.

Cook: Any other reason for a bullish breakout?
Butler: Silver in the COMEX warehouses has been shrinking. Over the last four months, forty million ounces have departed.

Cook: What about the big short position in the exchange traded fund SLV?
Butler: Yes, it’s been running 50 to 60 million ounces short lately which is contrary to their prospectus and a sure sign of tightness in silver.

Cook: What about the buying from India of 300 million ounces?
Butler: That’s an enormous amount of silver and it’s got to put pressure on prices.

Cook: Where would the price be if we were in a free market?
Butler: Probably around $100.

Cook: Could it eventually go higher than that?
Butler: It is likely that it will.

Cook: Why would it go a lot higher?
Butler: By suppressing the price, you reduce the supply reaching the market from producers and you accelerate demand from users. Eventually you have a shortage.

Cook: What would a shortage do to the price?
Butler: Depends on how it effects the industrial users. If they can’t get what they need they will hoard and stockpile the silver at any price.

Cook: So, we could see the price overshoot $100?
Butler: No question. There’s no telling how far silver could overshoot when the investing public wakes up to silver’s extreme undervaluation.

Cook: It seems like the price may finally be starting to reflect all of the bullish factors?
Butler: Yes, there is going to be fireworks. For one thing, the derivatives held by Bank of America amount to being short 1 billion ounces of silver. That could explode the price and be ruinous at the bank.

Cook: In other words, don’t be short silver?
Butler: Absolutely not. Hold as much physical silver as you can.

Cook: Thanks for your advice.

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