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Silver price manipulation: 'public deserves answers'

An official investigation into silver price manipulation has been going on for two years. The man who made sure the investigation went ahead has told Citywire that it's time the public heard the results.  

 

US regulators have been urged to reveal the results of a two-year-long investigation into silver and gold price manipulation allegations. The findings are keenly awaited by investors and organisations who have been making allegations about silver and gold price manipulation for decades. 

The investigation was based on a claim that large traders, like banks, had been selling huge amounts of silver on the futures market to keep prices down. A substantial short position - believed to be equivalent to 25% of the annual global mining supply of silver - was exposed during the financial crisis.      

Bart Chilton, a commissioner at the US Commodities Futures Trading Commission (CFTC), which is investigating the claims, said: 'I think the public deserves some answers in the very near future.'

He said: 'I expect the CFTC to say something on our silver investigation within weeks. I can't pre-judge what that will be. I can't even guarantee that the agency will speak. That said, if the agency remain silent for much longer, I intend to speak out on the matter in an appropriate fashion.'

Geoffrey Aronow, a former CFTC investigator, told Citywire that there was a chance the investigation could affect silver prices: 'I would say that, generally speaking, results of investigations have not had direct market impacts, but it may depend on whether the Commission concludes that there is any ongoing questionable conduct.'

Ben Davies, chief executive of Hinde Capital, a london-based gold hedge fund manager, said that the CFTC investigation and actions taken by gold and silver investors had helped recent increases in silver prices. He said that this had curtailed the activity which had raised the original concerns about silver price manipulation, adding that a further direct effect on the price of silver was unlikely.

Back in March 2010 Chilton suggested that CFTC investigators had made significant discoveries: 'We have looked at the silver market like we have never before and I think there is a window of success that has been opened for understanding about what has been going on and why.'

In the statement he said this was the first full investigation into the silver market since 1979 when the Hunt brothers cornered the market and the silver price spiked.

Until 2008 the CFTC believed that these allegations were groundless, a view still held by some gold experts.

However the product manager of ZKB's physical gold exchange traded fundsuggested that concerns about the global gold and silver markets had motivated significant investments. He said that clients liked the Switzerland-based ZKB ETF because ZKB was the product's sole market maker which minimised reliance on global gold markets. 

42 comments so far. Why not have your say?

Rajah Brookes

Oct 08, 2010 at 14:02

'We have looked at the silver market like we have never before and I think there is a window of success that has been opened for understanding about what has been going on and why.'

Does anyone understand what language that is in?

The CFCT is an ambarrassing joke! They've known about this for years but let's be perfectly honest...they are working on behalf of the Federal reserve and US government who don't want people to realise how worthless their paper money is getting.

Basically we all know that if you flood a market with something you lower the price. Normally your ability to flood the market with anything is limited by the amount you actually have. But naked short sellers don't have to actually have the commodities they sell. So when JP Morgan and HSBC decide they want to make money they are allowed to short sell as much silver as they want because they don't actually have to have it. It was recently admitted by someone at the CFCT hearings that the proportion of silver derivatives to actual silver was 100 to 1. Sooner or later people are not going to accept paper promises to buy and sell any more and will demand only physical. Comex derivatives market is going to be exposed for the giant fraud that it is and when it does we'll all find out what commodities are really worth. Good functioning markets depend on trust. That trust is about to fly out the window.

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Raymond Hurley

Oct 08, 2010 at 15:35

The post by Rajah Brookes was interesting,informative & well written.

It is a pity, that the so called journalists of City Wire, can not match his economy of style,good grammar and syntax.

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Gordon Duncan

Oct 08, 2010 at 16:15

Well said to both Rajah and Raymond. It's not all bad news though, while the precious metals prices are being artificially suppressed we have all been allowed to buy the real thing (physical gold/silver) at ridiculously low prices so perhaps a word of thanks is owed to the manipulators for giving us the opportunity. If you haven't loaded up on silver yet - it will outperform gold in percentage returns in the future by a long way, believe me - I respectfully suggest you get a move on. It is no longer a question of if, but rather, when, the largest wealth transfer in the history of mankind will begin. The CFTC and short-sellers can only delay the inevitable for so long. In fact, looking at the way the market has behaved in the last six weeks, we may be about to witness some substantial moves as even more "safe hands" join in the purchase of pms at giveaway prices.

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Rajah Brookes

Oct 08, 2010 at 16:53

Apologies for the typo. Embarrassing not 'ambarrasing'. (Thought I'd get in there before someone else does.)

Thanks Raymond and Gordon. What a select few we are that find this issue of interest. Britain's gaze is way off in the wrong direction. Anything to do with property, asylum seekers, benefits or any excuse to have a pop at Labour's deficit gets a minimum of 20 comments on Citiwire.

The issue above has the potential to take down JP Morgan and in all probability other banks with it because there is no more money for bailouts. Quite right too. It also may signal the final stage in in a return to a gold standard or more practically, currencies linked to an index of commodities. Silver is so underpriced that the CFTC are probably trying to work out how to stop the manipulation without sparking off a total collapse of the Comex. As Gordon says it will either mark a huge transfer of wealth to those holding precious metals or more probably a round of state theft in which private ownership of precious metals is banned for the 'good of the nation' and anthing reachable in vaults is raided. Far fetched? We'll see.

And yet only three people find it sufficiently interesting to comment in a whole afternoon. What if I told you benefit scroungers were manipulating the world silver market?

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Kevin S

Oct 08, 2010 at 17:12

situation interests me as I have some positions in PM both ETF's (the physical ones) & mining shares.

this manipulation "story" has been around a long time & more prevalent on US blogs but seems to get little attention from the MSM

So is it suggested the ETF's will have a problem with no metal to back up & where in the UK can you buy small quantities of gold / silver (without VAT)

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The Astrologer

Oct 08, 2010 at 18:03

Buy real commodities at goldmoney.com

I have moved a proportion of savings into 50% gold 50% silver. As suggested above, there is a risk if paper collapses and gold skyrockets that the government will ban the private ownership of gold (as the US did 1930's -70's.)

There is far more paper issued than gold and silver actually exist, so ETFs will have a problem in the longer run. Having said that BoJ QE policy is to buy up all sorts of things including ETFs!

It's all a currency race to the bottom as the western government backed bank currency ponzi schemes finally collapse.

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j t

Oct 08, 2010 at 19:11

PS...sorry for the errors, but there is such a time delay between my stokes on the keyboard and the appearance of the words that I am often three to four words ahead before I see them in print and missed some.

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Bill lawson

Oct 08, 2010 at 19:23

All metal markets are sky high, but we must remember you cannot EAT IT.

Hording copper for instance created a plastic revolution in the plumbing industry,

I suspect financiers are making rods for their own backs, time will tell.

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jma

Oct 08, 2010 at 19:41

A good article on a subject overlooked for too long by most as others have said and my research suggests that gold and silver are not the only commodities subject to price distortion by the present market regulations/practices. Look at the soft commodities and eg the cover for the actual contracts sold.

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j t

Oct 08, 2010 at 19:48

Bill...sorry, but I'm so sick of hearing that drivel. I take it you and your significant other eat souffle de paper money bills for supper smothered with a layer of sweet North Atlantic oil, followed by a swallow of 93-grade gasoline (heard '98 was a good year)?

I'ts MONEY, man...it's used for an exchange for other goods and services you need and has been thruout all recorded time!! If you want to trade radishes for your other various needs, be my guest!!

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Fiat Currency

Oct 08, 2010 at 20:03

If Banksters can sell 100 ounces of Silver for every 1 they own,

does that mean when the music stops and the puppets cease dancing,

Silver will be worth closer to 100 times it's current value?

As Andrew Maguire testified about the London office of JP Morgan Chase

laughing arrogantly as they rigged the Comex Silver markets.

If Bart or anyone at the CFTC would simply read this document, they

would have no choice but to do their jobs. We have all been waiting 6

years of "Investigation" that anyone who has passed 4th grade Math,

and/or owns a $2.00 calculator can figure out in 5 minutes.

Keep threatening to do your job, Bart. We all know you and the CFTC

have as much credibility as Madoff or Sanford.

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Country Boy

Oct 08, 2010 at 20:56

Refreshing to see such informed comment on this side of the pond.

Goldmoney.com was mentioned as a place to buy physical gold and silver VAT free. Bullionvault also do a very similar service with gold and silver, possibly at slightly better margins. I am a customer of both and no more.

The manipulation and/or it's story has been around for the few years I have been following investment markets. I'm not holding my breath any more as it's obviously in the interests of any western government with an overprinted currency (US, UK, Euro etc.) to keep the value of precious metals down and off the front page. Whether we have an earthquake or just a gradual reduction in dodgy practices I don 't know. I guess it could be like a bubble, it goes on for far longer than anyone can imagine.....

I buy the precious metals story but having seen them yo-yo like other markets I will be buying more gradually, hopefully on the bigger dips.

Good luck to you all.

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harry richardson

Oct 08, 2010 at 22:37

Perth mint certificates issued by Australia's biggest refiner give ownership of numbered bars in a safe juristiction. I have bought for a couple of years now from Ainslie bullion in brisbane and had good service and very trustworthy, can have free storage in "pool accounts" or will organise seperate storage for a price and no vat over here but do your own due dilligence and hurry before the top blows off this ponzi scheme. don't buy on margin and don't buy paper unless backed by the real thing, these are 2 ways to do that, good luck

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Everyday People

Oct 08, 2010 at 22:46

Dear Mr Chilton:

Please allow the illegal manipulation of silver prices on the CRIMEX to continue for at least another year or two. While you're sitting there twiddling your thumbs and turning a blind eye to this ongoing criminal activity, please tell your counterpart who gets paid to watch over the London Bullion Manipulation Association (LBMA) to do the same. Doing so would allow us small investors on both sides of the pond to continue accumulating silver at fire sale prices so that we can cash in big when the lid is finally blown off this ongoing scam. It would also give us badly needed time to pad our brokerage accounts in order to short JP Morgan stock in a big way in the not too distant future when the bottom falls out.

Last but not least, I owe you government bureaucrats an apology. There was a time when I honestly believed that the government didn't care about the little guy. What in the world was I thinking?

Thanks in advance

Yours truly,

Everyday People

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C. Caribou

Oct 09, 2010 at 01:18

On the right Citiwire has provided links to related articles and reports. The Silver Report :US regulators’ 2008 investigation* concludes that the price of silver futures has not been manipulated downwards for 25 years as claimed.

If the silver price had been undervalued you would expect other investors such as W. Buffett or Goldman Sachs to buy. Silver has many uses including jewellery, electronics, photography and medicine. There is also a large potential supply from all the silver in the form of jewellery, coins and household articles. I think it would be very difficult to predict supply and demand or what is the correct price.

Pension funds and other investors now own large quantities of silver in the form of exchange traded securities. You could argue that these investors or speculators have forced the price higher.

Silver is now at a 30 year high.

*Extract from Report

“In contrast to the silver commentators’ allegations, an examination of silver prices over the past three years shows that silver prices have been rising—not falling—suggesting that shorts have not been able to maintain depressed prices. From the mid 1980s through the early 2000s, silver prices remained quite low and stable relative to prices observed during the late 1970s and very early 1980s. During the 1990s, for example, silver prices, with few exceptions, traded within a band of $4 to $6 per ounce. Beginning in 2003, however, silver prices began to rise. During 2004, when staff conducted its earlier review, silver prices traded in a range between $6 and $8 per ounce. Since the beginning of 2005, silver prices have risen dramatically. In this regard, Exhibit 1 shows that the price of silver on the London Bullion Market (LBMA) was just over $6 per ounce at the beginning of 2005. By the end of 2007, the price of silver rose to greater than $14 an ounce and has recently traded above $20 per ounce”.

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Francis Wilkinson

Oct 09, 2010 at 09:31

Gold and silver in the ground is by far the most convenient form of investing as there is no storage charge and the continuing increase in price we are experiencing is a lever since production costs are fairly static. Obviously you need a spread and the mines should be producing rather than prospective.

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Gordon Duncan

Oct 09, 2010 at 10:00

I would like to repeat, as an investor rather than a trader, "buy the real thing (physical gold/silver)".

ETFs and mining share certificates are NOT precious metals or money. Silver reached a brief high of £21.65 in 1980. This means that we are nowhere near an all-time high as one comment suggests. Inflation adjusted, according to the thisismoney.co.uk Historic inflation calculator, £21.65 in 1980 is worth £80.75 in 2008 - the last year their table has figures for. Yesterday's close at £14.55 is 5.5 times less than the previous high.

As a UK resident, I personally do not hold any bullion abroad for the same reason I don't keep my wallet in the USA, my credit cards in Australia or my tea bags in Mexico!

Admittedly you pay VAT if you purchase silver in the UK, but, - so what?

If you realise that silver is actually rarer than gold, has more uses than gold, and is nowhere near its multi-millenia price average of between 12 and 16:1 compared to gold......

If you want an idea of where the pms will end up, please treat yourself to Mike Maloney's book Guide to Investing in Gold and Silver. I have read it several timesand cannot find a single fault with his analysis. When he published his book in 2008 he offered three (independent) sets of data that suggest the 1980 high of $850 gold equates to $6,118 gold, $6,484 gold or $6,611 gold. Since this was published the good old Fed. Res. pumped out $900 Billion in September 2008 and $1.2 TRILLION in March 2009 to add to the original $825 Billion that it had taken nearly 200 years to put into circulation. To return to the Gold Standard means gold at £9,400 per ounce. Divide that figure by a modest 16 or 12 to get the price of an ounce of silver and it makes the £2.55 per ounce VAT at Friday's close look a tad insignificant, don't you think?

Stephen Betts & Sons of Hockley, Birmingham - Tel 0121 233 2413 are a well established gold and silver refiner

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Gordon Duncan

Oct 09, 2010 at 11:11

Not sure what happened there, meant to add that Stephen Betts sell gold and silver and also can offer storage in their own vaults and will buy your bullion off you at 1% comission when the time comes to sell, which despite all the adverts from those nice people who offer to take your unwanted gold off you, is not yet!

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Donald Chan

Oct 09, 2010 at 12:54

Very interesting contributions

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Stephen Kovaka

Oct 10, 2010 at 14:38

Silver prices are essentially set on the CRIMEX market. With the huge permanent short positions held by various parties in the past, and today held by JPMC and HSBC banks, the market is controlled with the silent complicity of the CFTC. Will they now come out and admit what has been going on for so many years? It will be interesting to watch. The challenge is for the CFTC to extricate themselves and the big shorts without admitting what has been going on, and without the top dogs being punished.

Imagine playing no-limit poker with Warren Buffett and Bill Gates? It hardly matters what cards they hold, when they can increase the stakes as much as necessary to strip the other players. Their bluff is never called. This is how the CRIMEX has been operated. The biggest players can always continue to sell what they do not have and will never be required to deliver in order to drive the price down.

But that said, we appear to be entering a new chapter in the story. In the past two months, silver is definitely behaving differently from what we have seen in the past. If anything like a free (uncontrolled) market is established, silver will soon be repriced to a much higher level.

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Neodymium60

Oct 11, 2010 at 12:40

This is very interesting... From where I can see how much there's short contracts in silver held by different institutions?

Thanks in advance

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Gerry O'Kane

Oct 11, 2010 at 13:21

This is one of the best debates on a financial subject I have seen for some time. Top marks to all contributors. So away from investment products backed by futures contracts and the impracticality of owning the physical thing and keeping it home, any suggestions on an investment strategy or products e.g. ETFs based on physical product?

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Stephen Kovaka

Oct 11, 2010 at 14:04

Neodymium60: The basic data comes from the US CFTC (see http://www.cftc.gov/MarketReports/), specifically the Commitment of Traders (COT) Report and the Bank Participation Report. If you read the BPR Explanatory Notes, you find this:

"For purposes of protecting the confidentiality of participants’ market positions (as required under §8(a) of the Commodity Exchange Act), when the number of banks in either category (U.S. Banks or Non-U.S. Banks) is less than four, the number of banks in each of the two categories is omitted and only the total number of banks is shown for that market."

Hence, we know that that no more than 4 US banks hold a net of 30,000 short contracts our of 156,000 total in silver. In fact, research has revealed JPMC and HSBC as the "Big Two", controlling around 20% of the short interest in silver, according the the COT report. Commercial traders now hold about 40% of the short silver contracts, and again, almost all of this is held by "4 or less" traders.

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Stephen Kovaka

Oct 11, 2010 at 14:12

Gerry - Don't simply assume that self-storage is impractical. It depends on your gold vs. silver mix, and the amounts involved. Consider taking responsibility for the storage of your own metals. How impractical would it be if your metal was held by someone else and you couldn't get it when you needed it? However, also consider GoldMoney and Bullion Vault as ways to hold allocated gold and silver which will NOT be hypothecated to other parties without your knowledge.

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Gordon Duncan

Oct 11, 2010 at 14:30

Gerry, - Stephen's just read my thoughts and published my reply to you before I could. Please understand just how important "allocated" is. ETFs are a great way of trading but are not suitable for us small investors. Stick to physical, even if it means burying some of it in your garden.

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Country Boy

Oct 11, 2010 at 15:31

Some ideas on the subject of ownership of Gold Coins:

Britannia and Sovereign bullion coins are still legal tender in UK and therefore no UK CGT to pay if any gains made. They are recognisable and easily traded without authenticity issues which can affect bars and jewellery.

They are available widely from coin dealers (bigger ones are Baird & Co, Chards and ATS Bullion). They can be stored easily at home, buried as mentioned above or kept in a cheap home fire safe which is not a bad idea for valuable documents as well. Adding coins to your household insurance is reasonably cheap at today's value although you are putting ownership on record with the insurance company (as well as the coin dealer) if that is a concern for you.

ETFs are great for trading and general investment but problematic if you are buying gold and silver as insurance for an economic meltdown. If the ETFs are above board (some like Lyxor GBS publish regular audits) you may not be able to get hold of it physically or sell it for cash if there is a glitch in the markets. The more urgent the need the more likely we have had a meltdown, make sure you can access at least some coins immediately if the banks are closed, the internet is down and the stockmarket has been suspended and all your local cash machines are down. All these circumstances could easily come together at once in this technological age. Prepare for the worst and hope for the best and pray you never need the insurance.

Oh, and while we are on the subject of gloom and doom have a think (in advance) about how you might deal with requests and needs from close friends and family (who may not have made similar provision) in such a scenario. You might want to put a little aside on their behalf as it's my experience that this subject is not taken seriously by anyone who has not done the research that is apparent in this discussion. They believe firmly that stability will prevail. I hope so but I'm not putting my faith in anyone else like governments or central banks, they have other priorities and my welfare is a long way down their list.

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Stephen Kovaka

Oct 11, 2010 at 16:06

Further to what I wrote above, here are the words of premier silver market analyst Ted Butler (2009 article):

"Please keep in mind that the Hunt Brothers and all their reported associates had a futures market position (COMEX and CBOT combined) that was under a 10% share of the total silver futures contracts outstanding at that time and were charged with manipulation. What aren’t short positions three times as large also manipulative?

As large as the current gold and silver percentages of the market held by one, two or three U.S. banks may be, those percentages are grossly understated because spread positions are included in open interest totals. Remove all spread positions (non-commercial and commercial) and the share of the market held by one or two U.S. banks in silver rises to 41.5%, and not 29%. In gold, the share of the market held by two or three US banks is really 45%, not 32.1%. How could one or two traders holding 41.5% of any market, or two or three traders holding 45% of any market not be manipulative?

When the market share of the one, or two, or three U.S. banks in silver and gold are compared to the total share of all commercial traders, the result is truly shocking. In silver, the one or two U.S. banks account for more than 81.6% of the total net short position of all commercial traders. In gold the three or fewer U.S. banks account for more than 62.3% of all commercial shorts. With such a lion’s share, these big banks completely dominate and control the gold and silver markets."

http://news.silverseek.com/TedButler/1234207643.php

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John H Baker

Oct 14, 2010 at 17:43

Hi All:

I would like to give credit to GATA.org for giving me the insight to the metals suppression schemes. They have a great archive that documents their efforts over the past 10 years to expose the crooks. They were the ones who introduced Andrew Maguire to the CFTC.

The CRIMEX and JPM Chase are obviously in cahoots, but don't forget about the US Treasury and the US FEDERAL RESERVE. Talk about a den of thieves!

If we are all correct, the suppressed prices of these metals are the best investment opportunities of our lifetime. Short term, we preserve our wealth. Long term, we get paid a premium for being intelligent.

Once the market actually gives us true price discovery, the value in dollars and pounds of the metals must appreciate significantly.

Enjoy the ride !

John B

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Bryant B

Oct 18, 2010 at 05:31

Yeah these criminals have been hard at word for a long time to try and hide their conniving thievery. Yes GATA is a good organization for info as well as the Silver Institute and others as well as all of the gold/silver bugs out there who are pretty accurate and on point especially David Morgan.

This is what I am doing to prepare my Ark. I do deal with the CRIMEX exchange and have been for the past 12 yrs trading all commodities. I do see similiar activity in the ag's as well. I see a lot of problems with all govm't around the world especially in the US and that includes the Dept of VA, Social Security, DoD, etc All a bunch of crooks and ripping the people off, hence the reason for a global re-shifting like a 12/21/12 event.

as mentioned above yes I do hope that these master criminals keep on manipulating "their" system so that the common man can have more TIME to accumulate wealth, like the next 2 yrs preferably. Like Mike Maloney was saying in his book that this will be the biggest wealth transfer in our human history since we were trading wood sticks as a form of money. So I suggest that you get to it with a minimum of 500oz of Silver at your house not in a damn VAT or vault somewhere.

Break down your silver into different sizes and measures such as 1 oz bars and coins, 5 oz, 10oz for easy trading with others. Remember the way the world do business now, there will be no banks around only people dealing with each other transferring good amongst one another with gun onside and dogs ready. Also get you some loose 90% silver coins as well , they are used as money still as well.

My plan is currently trading the futures contracts a good year out, they go all the way out to 2016 so the big refiners and users of silver such as Intel, Dell,Sony,etc, already have their prices locked in at today's prices. I am using the futures market to make digital profits, no such thing as paper money there, when you make profits it is all digital, and turn it into physical silver. I have very little gold because it's uses are very limited except for jewelry which makes it valuable where as silver has man y many uses and it's below ground inventory is not up to the supply needed. Above ground has been met since 2007 and has so for the past 3 years but as soon as the big players get it, it is immediately used up.

When the time come ,and I'm doing my own prediction of around end of 2012 because this is the time the devils have already advertised for those who are paying attention when they will rear that nasty head and make the division of poor and rich very apparent, also refer to your Bibles , book of Rev Chpt 21, At this time you will see crazy astronomical prices of PM's in the stratosphere of silver around $2500 and gold at $9000, hence hyperinflation because the fools mentioned in the article above were greedy and sent the world in a every spiraling downward path of chaos. Remember this is world wide epic event.

This same catalyst will also cause all of the agriculture commodities along with the softs to skyrocket as well so my suggestion to all of you if you aren't doing this now, learn how to trade commodities, it will be well worth it. Like one commenter said above, you will be paid handsomely for your intelligence.

Take heed to the times at hand, this article along with the things that have lead up to this crisis and the ones to come are the signs of the time. Keep stacking.

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Bryant B

Oct 18, 2010 at 05:38

Oh yeah I left out one very important piece of information out, if you are looking at charts of which I live by then to adjust for the 1980 inflationary price of 41.50 in silver then silver would need to break the first psycho barrier of 106.25 of today's money and inflation levels of around 4%. So when prices breaks above that level expect for it to keep going higher but with pullbacks of course and buy on the dips, drawing your trendlines and channels to time your entries.

Ok, hold on for the ride people. Remember that this is the largest transfer of wealth in HUMAN HISTORY and it has already begun, we are in the pre stage setup. If you are rich today, doesn't mean you will be rich tomorrow and if you are poor today doesn't meant you will be poor tomorrow. The difference is knowledge and taking action regardless of what those clowns in the article above do, just stay ahead of them an do the complete opposite.

Peace

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Robert Soros

Oct 25, 2010 at 10:51

Can anyone direct me to a detailed explanation of how this silver manipulation concept works as I've yet to find one?

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harry richardson

Oct 25, 2010 at 12:34

look up theodore butlers archives, that is an excellent resource, especially metal leasing and short selling, also GATA website which is mainly for gold but the manipulation of silver is like gold but on steroids. enjoy your journey, don't buy on margin.

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harry richardson

Oct 25, 2010 at 12:43

this is a fairly good one;

http://www.gata.org/files/PIRATES-OF-THE-COMEX.pdf

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Stephen Kovaka

Oct 25, 2010 at 15:26

Robert Soros: Since the silver manipulation is illegal, it will be hard to find an exact detailed explanation until there is an arrest, trial and conviction. This may never happen. It's like if someone can flip a coin and come up with heads 75% of the time, but you never get to take the coin away and examine it to see just how the trick is done. But the fact of 75% of heads tells you that it is not an honest coin flip.

Harry Markopolos knew that the Madoff ponzi swindle could not possibly be an honest investment the first time he reviewed its results. But it took a detailed look at Madoffs records to know exactly how he did it.

Just so in silver, and the CFTC has steadfastly resisted exposing just how the trick is done:

"But the WAR is fought in the NY COMEX market from 8:20 am to 1:30 pm EST each day, as that is where essentially ALL of gold and silver’s losses occur. Amazingly, throughout this nearly nine-year bull market, gold has declined far more than it has risen in New York, and last I read it had fallen in something like 93% of this year’s trading sessions despite being down just 2% this year. And, by the way, that 2% decline has outperformed essentially every asset on earth, not just this year but for seven straight years, soon to be eight!"

http://www.rbormetals.com/tag/comex/

This means is that while silver may go up in the other markets around the world, the gains have been regularly taken away on the CRIMEX over the past ten years, and more.

Also see "A London trader walks the CFTC through a silver manipulation in advance" http://gata.org/node/8466

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Stephen Kovaka

Oct 25, 2010 at 18:29

We should also add all the occasions of large short positions introduced during the so-called access market, i.e. when the COMEX is not open and few traders can respond to the move. These occasions have the effect of driving down the price of silver, since sellers temporarily overpower buyers. A normal seller, naturally wishing to sell at the highest price available would never throw his stock onto the market at midnight, when few buyers were in view. Instead wise sellers will sell steadily into market STRENGTH, not pour on the coal as the market falls. This move is intended only to force down the price at a time when long players are not present to oppose the attempted price smash.

Then, when the big price drops do take place, we have the spectacle of the sellers continuing to sell in size at lower and lower prices, deliberately soaking up all buying power in the market, running the existing stops (do you think JPMC, largest player in the silver COMEX, has ways of knowing where the stops are located?) until finally the longs begin to panic and unload, at which point these same short sellers begin buying back at depressed prices.

But, since the identity of buyers and sellers is known only to market insiders and the CFTC, we cannot (yet) prove beyond all doubt that it was JPMC that initiated the price collapse and then bought back their shorts. We can only point out that the entity holding the by far largest short position had the motive and the means to sink the market.

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Stephen Kovaka

Oct 25, 2010 at 19:04

And a link to an interview with Andrew McGuire (the London silver trader in the above article) and Adrian Douglas (Author of the "Pirates of the COMEX" article.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/30_Andrew_Maguire_%26_Adrian_Douglass.html

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Robert Soros

Oct 26, 2010 at 12:04

Thanks for all the info. Ii seems pretty indisputable that the price of silver is being manipulated in both directions for short term gains by these large traders and that the CFTC, which must know the full picture, is supporting this with their apparent reluctance to take any action or publish any report. But how can this activity depress the price of silver in the long term as many commentators say is government policy in the interest of the USD?

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Stephen Kovaka

Oct 26, 2010 at 13:14

The price of silver cannot be permanently suppressed. But to people in government, always with their eye on the next election, 5 or 10 years IS long term. As their hero Keynes said, "In the long run, we're all dead."

The price of silver is depressed because these market actions have created an artificial silver supply. When supply increases (other things equal) then price is reduced. They have created another fractional reserve scheme, whereby for each ounce of silver metal that exists, many promises to deliver that ounce have been sold. Promises to deliver are the essence of the futures market. Since many potential buyers of silver can be satisfied with a mere promise to deliver, this reduces the demand for metal. This in turn is because many buyers only want exposure to the silver price rather than the metal itself. The irony is that the more people who buy promises instead of metal, the more the price is suppressed.

Some say, "A pretty poor price suppression scheme, since silver has multiplied its price by a factor of 5 in the past ten years." Well, it's the best they could do. Remove the huge, concentrated, undeliverable permanent dealer short from the CRIMEX and you would immediately see how much the price has been suppressed.

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Silence Doogood

Oct 28, 2010 at 01:07

Dear Bill Lawson,

Thank you SOOOOOOO much for pointing out the obvious; " All metal markets are sky high, but we must remember you cannot EAT IT"... Tell me Bill, which school of philosophy did you graduate from? I need to know so I can keep my grandchildren away from there.....

Dear Mr. C. Caribou,

You asked: " If the silver price had been undervalued you would expect other investors such as W. Buffet or Goldman Sachs to buy" My suggestion to you is get in touch with Mr. Lawson and maybe the both of you could philosophically dissect this question of yours and until then you may want to do more reading. If you ever read you'd probably know that W. Buffet owned plenty silver and sold it way too early (which means he didn't understand the market) you'd also know that Goldman Sachs is probably just as involved with the naked short selling as JP.... If the both of you think so lowly of the silver market, please feel free to invest in air..... I understand the air market is quite bullish these days......

Silence

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Neodymium60

Oct 31, 2010 at 07:18

"Silver to 30 $ / oz in less than couple of weeks" -James Turk-

Enjoy the ride fellows

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khalil nassour

Dec 04, 2010 at 19:08

silver and gold will drop as a rock from the sky ,gold will go to 1200 before march 2011 silver will be under 25 dollars buying silver gold as selling your life ,iam an old gold minor and a jewellery hole seller today ,ive been all way investing in gold i sold all what i have and i went short in silver yesterday this is the best opportunity to make good money be aware of all what you are reading on the net ,be short make your money no doubt

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Silence Doogood

Dec 04, 2010 at 22:18

This is in response to Khalil Nassour and another writer who is worried about possible future confiscation (Ex. order 6102)....

(1) Mr. Nassour, if your writing ability is indicative of your forecast for future PM's then I'd say PM's are in pretty good shape.... If I could understand what you wrote I'm pretty sure I would continue to be bullish on PM's....

\

(2) I'm not going to search for the guy/woman's name who is worried about the gov. confiscating PM's for the good of the nation I will just say; Do you really think the gov. has a clue regarding the good of the nation? If you believe the gov. in fact does have the nation's best interest in mind then I would suggest you re-evaluate the whole bailout / Qe1,Qe2, Qe3, Qe4 etc....... After your re-evaluation, decide...... As far as Ex.order 6102 goes, not only are we in a new decade, we also have a new society with new views / morals.... Back in 33 people may have been easily guided to the slaughter house but today, 2010, along with time people (America) has matured and aren't easily convinced of "All for one and one for all" I'm not saying Americans don't pull together, what I'm saying is Americans are well aware of those who cry wolf. Americans may no longer feel the need to give their all after witnessing a bailout of the very greedy few that were responsible for the misery of the MANY...... Never have so few screwed so many for so much.... Once their greed backfired on them they now call for "Good old American strength of together we stand" The question that continues to burn in the minds of the MANY is: When did the FEW plan to cut the MANY in on the Billions MADE AT THE EXPENSE OF THOSE WHO WORKED THEIR ENTIRE LIVES ONLY TO RETIRE BROKE>>>>>> WHEN WILL THEY RECEIVE A PART OF THE PIE THAT jamie dimon and boyz enjoy so very much????? WHEN? Oh I see.... They were waiting for the right time. The right time being while senior citizens starve and have no medication. Waiting for the time that parents will say to their children; Sorry kids, we won't be eating tonight..... Thomas Jefferson said it best long ago when he wrote that banks and paper will end in the children of our nation roam homeless and hungry... Thank you jp morgan, rothschild's, rockefeller's and others who may have been involved that Christmas eve 1913

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