In Ted Butler's Archive


Government reports indicate that eight large banks have a short position of 400 million ounces in COMEX silver. For years JPMorgan has been one of these big shorts, but recently has used a couple of engineered price drops to close out its short position. As readers know I have written that JPMorgan is a powerful force in both gold and silver. After making billions over the years shorting these metals they extricated themselves from potential losses by stealthily acquiring 25 million ounces of gold and one billion ounces of physical silver to offset their short sales. In fact, they suppressed the price of these metals in the paper futures market and bought the physical metal at prices they manipulated lower. This was clearly against the law. Investigations by the Justice Department and the Commodity Futures Trading Commission are ongoing.

Recent purchase of silver bullion by various funds amounts to 100 million ounces of physical silver. That should have made the price of silver jump dramatically because there isn’t that much silver around. The fact that it didn’t is no doubt because of JPMorgan. I believe they dusted off an old tactic called silver leasing and used that to supply the ETF funds with all the silver they needed and thereby throttle the price. Why would they do that? It may be that they want to hold the price down to confuse the regulators, but it’s more likely they want to add more cheap silver. They are the shrewdest operators in the precious metals arena. Their ultimate goal is to make a fortune. If silver goes up $10 they make $10 billion and they could be aiming at a trillion.

Silver should be priced much higher. The free market price may be around $75 an ounce. It could go much higher because of a shortage that’s developing. At some point industrial demand will clash with growing investment demand. The price will have to burn itself out at a much higher level. JPMorgan has been the bad guy in silver, but their intensely focused involvement makes it certain they plan to profit in a big way. Future price developments in silver should be exciting. Today’s cheap prices makes silver an extremely worthwhile holding.

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