In Ted Butler's Archive


There has been no reply from the CFTC for 13 weeks to a question I posed through my congressman’s office about double-counting of silver inventories. However, two days ago my congressman’s office told me that the agency intends to respond although the office couldn’t say when. As a result, I still expect a response, although I must admit to being more than curious as to why it’s taking so long.

That’s because it should be simple for the agency to discover or clarify any double-counting of silver inventories, and it’s a particularly important time to get the question answered. We happen to be in a pronounced and documented physical silver shortage for the first time in history and nowhere is this shortage more obvious than in the 400-million-ounce reduction in recorded silver inventories over the past three years in the COMEX warehouses and in SLV. Any question concerning whether these recorded inventories are overstated by 100 million ounces necessarily becomes more critical in current circumstances. Yet it’s taking the agency months to respond.

At the heart of the inventory issue sits JPMorgan, unquestionably the biggest player and crook in the silver market – as evidenced in the recently-expired deferred criminal prosecution agreement for manipulating prices by sending false price signals. If the COMEX warehouses inventories and the holdings in SLV, both directly controlled by JPMorgan, were double-counted, that would amount to sending false price signals, the same as occurred with JPM’s manipulation by spoofing.

The vast majority of market observers believe the inventories reported in the COMEX warehouses and in SLV are separate and distinct. Every Saturday, for most of the last year, I reported them as separate and distinct holdings. I only wrote to the CFTC about my concerns because of long-held suspicions there may be double-counting. The long delay in the agency’s response has only heightened my suspicions.

Therefore, should the CFTC come out and admit that yes, there was double-counting, the question becomes what, if anything, the market reaction might be. Here, I don’t believe I may be qualified to answer, for the reason that I expect silver prices to explode for a wide variety of reasons. However, an admission of double-counting of silver inventories should alert people to the COMEX silver manipulation and to the price pressure on silver. This is just another incredibly bullish factor about silver.

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