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By: Jim_Richter
During the time I have been writing this newsletter, I have frequently mentioned the blatant manipulation of the gold and silver markets. For background on this issue, please see my article in the May, 2009, issue. The manipulation of gold has been accomplished primarily by central banks selling or leasing gold into the markets so as to artificially depress the prices. The bullion banks (e.g., JP Morgan, Goldman Sachs and others) have also helped suppress the prices of gold and silver by selling them short on the commodities exchanges.
Most of the time, I have focused on the gold manipulation schemes. That is because gold is the ultimate form of money, so it is the primary target of all those who benefit from the current fiat money system. However, silver is also a monetary metal. When the silver price rises, this can also be a sign that something is rotten in the fiat currency world. In addition, silver is a very important industrial metal. No doubt, there are parties who benefit from being able to buy silver at artificially depressed prices for their industrial needs.
Through the work of the Gold Antitrust Action Committee (GATA) and noted silver expert Ted Butler, we know that there has been a huge short position in silver on the COMEX for several years. According to Butler, as of March, 2009, the short position was equal to 154,190,000 ounces of silver, or 23% of total annual world mine production. In all likelihood, the primary perpetrators were JP Morgan Chase and HSBC. Their huge short positions have artificially depressed the price of silver, and they remain the primary silver market manipulators. The CFTC has done absolutely nothing about this, even though it is supposedly illegal for anyone to hold concentrated COMEX positions, either long or short, in an attempt to manipulate the market. Ted Butler once said that the CFTC's performance has been "...akin to tripping over and not seeing the dead body in a murder investigation."
The silver manipulation has actually worsened during the past year. Earlier this year, Mr. Butler reported that JP Morgan Chase had increased its COMEX short position on silver to a number of contracts equivalent to 40% of the COMEX silver market and 30% of annual world silver production! JPM's short position has been the primary reason why the silver price is not much higher. To his credit, Ted Butler has waged a crusade to get the CFTC to establish position limits, as well as rules limiting concentration. Bill Murphy and Chris Powell, of GATA, have also waged a continuing battle for honesty and transparency in the precious metals markets.
Metals Market Manipulation Update: Are The Metals markets Rigged? Do Fish Swim?!
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