Wednesday, August 27, 2014
   
Text Size

Search our Site or Google

Silver’s Smoking Guns, Part III: Market Paradox

Articles & Blogs - Silver Commentary

User Rating: / 32
PoorBest 

In Part I and Part II of this series, readers were presented with two dimensions of the great Silver Paradox. Despite having the best investment fundamentals of any commodity today, and arguably the best fundamentals for any commodity in history; silver hasn’t been so under-produced since it was discovered in the New World nearly 600 years ago, and it has never been so under-owned.

Along with establishing that silver is under-owned (by a factor of at least ten) and under-produced (by at least a factor of two); we also saw it conclusively established that silver was grossly under-priced. As we will see in this installment, it is the relentless suppression of the price of silver which is at the root of silver being both under-produced and under-owned.

Much has been written on this subject previously, by myself and others. However, any discussion of price-manipulation in the silver market must begin with the relentless sleuthing of noted silver authority, Ted Butler. It was his shocking discoveries in the silver market which originally attracted the attention of small numbers of far-seeing Contrarians, as well as other commentators such as myself.

Among Mr. Butler’s revelations were the outrageous/absurd short positions in the silver market of a handful of bullion banks. Five of these banks hold approximately 80% of the global short position (year after year), in the world’s largest silver market (the Comex) – another smoking gun. Furthermore, the magnitude of these short holdings is grossly disproportionate to the size of short positions in any other commodity market – another smoking gun.

Even more outrageous, the largest of these short positions (held by JP Morgan) is always roughly twice as large as the size of the Hunt Brothers long position in the silver market; when they were charged and convicted of silver-manipulation. This goes well beyond a mere “smoking gun”, and a more accurate metaphor would be to refer to it as a Smoking Cannon.

The banksters tell us they are “hedging” for anonymous clients with these short positions, and the blind/deaf/dumb CFTC vacuously parrots that drivel. This excuse is nonsensical on many levels. Hedging is an activity done to protect an entity from a sudden, severe price-reversal (lower) in the market. However, as noted in Part I, relentless price-suppression in the silver market had already taken the price of silver to a 600-year low (in real dollars).

Precisely what sort of “sudden, severe reversal” were these banksters hedging against with the price of silver already at a 600-year low? Silver priced below $4/oz was one of the most one-way bets in the history of commodities. Any objective analysis of that market would have indicated that silver clients required much less hedging than in any other commodity market – not much, much more. This multiplies the perversity of the grossly disproportionate short position, and totally negates the lies of the bullion banks.

 

Instead, building and maintaining a short position which was at least an order of magnitude larger than what could possibly be justified by market conditions yields only one, possible conclusion: this blatantly manipulative short position was/is a millstone aimed at dragging down the silver market – and specifically the price of silver.

We can support this obvious conclusion with irrefutable empirical evidence: the collapse of silver inventories. As I explained in theoretical terms in a prior commentary, excessive shorting must always result in the collapse of inventories. What appears to be (by dollar-value) the most grossly excessive/disproportionate short position in the history of commodity markets resulted in a 90% collapse in silver inventories. Case closed.

Of course we don’t need to “close” our case on silver-manipulation here, since there is so much more that can be said. When precious metals commentators were accused (by mainstream talking-heads) of being “conspiracy nuts” for pointing toward obvious, serial manipulation of the silver market; they frequently fell-back onto a single argument. “Where is your whistle-blower?”

In rebuttal, GATA (the Gold Anti-Trust Action Committee) produced veteran metals-trader Andrew Maguire; ready, willing, and able to explain in detail how and when the silver market was being manipulated. GATA produced Mr. Maguire just as the CFTC was about to hold its farcical “hearing” about allegations of precious metals manipulation. The CFTC’s response was to refuse to allow Mr. Maguire to testify, crossing the line between acute tunnel-vision and willful blindness.

Then we have the “attack” on the silver market by the administrator of the Comex itself, the CME Group. In the Spring of 2011; the CME Group bombarded the silver market with five, large rapid-fire increases in margin collateral requirements – the last four increases coming after the price of silver was already plummeting lower.

Here readers need to understand that margin collateral requirements are flat rates, not percentages. Thus the plummeting price of silver itself was already rapidly increasing the effective size of margin requirements (in percentage terms). Indeed, the (only) appropriate regulatory action for a commodity which is rapidly falling in price is to reduce margin requirements. There can be no possible defense of that succession of margin increases.

It’s easy to understand how/why silver is so grossly under-produced; given that it’s price has been (and is) suppressed so far below its fair-market value.  When commodity-producers can’t get a fair price for what they produce (in a world of soaring costs), then that commodity will be under-produced.

Much more paradoxical is how/why silver is so ridiculously under-owned (again by a factor of at least ten) at a time when it is objectively under-priced, and with supply/demand parameters so strongly favorable. Referring back to the Golden Rule of “buy low/sell high”, we would expect astute investors to be flocking to this sector, soon after followed by the inevitable stampede of retail investors – as the “bandwagon effect” kicks in.

Why have we not seen this expected evolution toward higher investment in the silver sector? Here the clueless shills of the mainstream media can claim full credit. With silver inventories sitting at historic lows, with silver obviously/objectively under-priced, with silver mining so depressed that most silver is produced as a byproduct of other metals mining, and with silver under-owned by a factor of ten; these mental midgets have been crowing about a “silver bubble”.

Again, there can be no possible defense for such idiocy. All commodity market bubbles must be characterized by two obvious conditions – as part of the inherent definition of an asset-bubble. First we must see the asset being over-represented in investor portfolios, since one half of the definition requires an excessive flow of capital into the sector.

That must always be followed by an explosion in inventories, as bubble-prices must result in over-supply. With silver ridiculously under-owned, and ridiculously under-supplied; we have literally the precise opposite of “bubble” conditions. No writer who had the slightest understanding of the concept of an asset-bubble could possibly conclude that a “bubble” had even begun to form in the silver market. Thus at a time when any responsible/legitimate media would have been urging investors toward silver; instead we have had an inane flock of Chicken Littles shrieking to investors to “run away!”

Potential investors may still be asking themselves how/why they would invest in an asset which (admittedly) is still being serially manipulated. The answer to that is simple: low prices lead to high prices. It was silver being manipulated to under $4/oz which led to the inventory collapse which drove the price to nearly $50/oz in the Spring of 2011.

Inventories are still totally depleted. Thus the suppressed/manipulated $30+/oz price of silver today can only result in an equal if not greater price-explosion in the future. Smoking guns rarely lie.

Trackback(0)
Comments (4)Add Comment
Jeff Nielson
...
written by Jeff Nielson, November 23, 2012
Kudos Jeff for the mention in GATA's lates email release of your 3 great Parts on Silver Manipulation. Well deserved as your 3 Part Silver Article was a great read and spot on!


Thanks Ettienn!

It's always "a feather in our caps" whenever we receive honourable mention from our friends at GATA. smilies/smiley.gif
ettienn
...
written by ettienn, November 23, 2012
Kudos Jeff for the mention in GATA's lates email release of your 3 great Parts on Silver Manipulation. Well deserved as your 3 Part Silver Article was a great read and spot on!

Jeff Nielson
...
written by Jeff Nielson, November 20, 2012
Feedback:
"You might wan't to read what Jim Sinclair has to say about this. They are not short most of the time they are using a managed spread position strategy.
http://www.jsmineset.com/2012/...ler-works/"


I'm not quite sure how the link above relates to my analysis here. However, I read it through. No amount of trading wizadry can conjure metal. And at least one part of that analysis was highly suspect:

..."You must note how central banks are either buying or protecting their gold reserve positions now. This is total about face two years ago.'

Sinclair seems to be implying that Western central banks are somehow rebuilding their gold positions. There's no evidence to support that. The only evidence we have of central banks adding gold reserves are EASTERN central banks, as well as Central/South America.
Hank Harrington
...
written by Chad McNamara, November 20, 2012
Feedback:
"You might wan't to read what Jim Sinclair has to say about this. They are not short most of the time they are using a managed spread position strategy.
http://www.jsmineset.com/2012/...ler-works/"

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.

busy

Latest Commentary

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12

Latest Comments

Disclaimer:

BullionBullsCanada.com is not a registered investment advisor - Stock information is for educational purposes ONLY. Bullion Bulls Canada does not make "buy" or "sell" recommendations for any company. Rather, we seek to find and identify Canadian companies who we see as having good growth potential. It is up to individual investors to do their own "due diligence" or to consult with their financial advisor - to determine whether any particular company is a suitable investment for themselves.

Login Form

what is the dosage for cymbalta levitra super active sale prescription 20mg buyers of hydrochlorothiazide canada endep women buy can we trust rumalaya forte online cheap metformin mg where to buy online finpecia tablets purchase cymbalta lowest price sumycin to purchase buy viagra plus 80 mg online buy diclofenac gel online reviews rumalaya wanted online review buy siberian ginseng tea liv 52 online ephedraxin comprar chibro proscar acheter is it legal to buy medicine online from canada reputable online pharmacy viagra maximum ginseng dose caverta prix en pharmacie en france billig danazol online kaufen zoloft cost in canada side effects of generic plan b buy amaryllis bulbs cheap best flagyl er prices proscar 5 mg for hair is robaxin better than flexeril order lasix 100 mg cialis soft uk no prescription propranolol reviews for migraines ciplox australia price jelly sale cheapest cialis generic order pills from canada zithromax antibiotic viagra for men wiki buy claritin hong kong rx relieving flomax canada cost can we trust viagra professional online dramamine refills atorvastatin tablets ip 10 mg zyloprim to buy in australia list of tesco stores selling elocon aspirin online usa generic mevacor for sale on line quickest cleocin glucotrol xl without online pharmacy infant motrin vs infant tylenol warfarin inr too high fluconazole capsules 50mg tretinoin cream 05 directions free or low cost doxazosin buy promethazine with codeine syrup online no prescription how much does voltaren cost buy retin-a 0,05 usa is there a drug comparative to tamoxifen most reliable place to buy evista online low price bactroban uk over the counter substitute for triamterene hctz etodolac 400 mg tablet tev liverpool airport parking cheapest price clonidine best price best site get viagra plus nizoral better than rogaine best place to buy buspar in mexico cat antibiotics online no prescription generic kamagra reviews florinef pharmacy order furosemide 40 mg wiki stromectol reviews and dosage norvasc online meds evista prices canada blopress 100 review generic retin-a 0.05 cream proventil 50mg tablets online now buy haridra zestoretic 20mg tab uk pharmacies online that sell topamax delivery buy aciphex presciption no prescription ciplox order non generic deltasone comprar probalan original apcalis sx without prescription miami best online pharmacy generic casodex beconase aq from canada propecia online order cleocin gel without script voltaren legal in england triamcinolone cream on face provera medicine abortion online indian pharmacy no prescription requip xl prices benicar medication best place to buy dostinex in mexico el precio del viagra en mexico vermox prescription information best online pharmacy generic procardia online diakof purchase prevacid pills cipro cost per pill best site get indinavir buying zyloprim for dogs viagra in malaysia doxycycline tablets purchase pharmacy has best price brand amoxil buy decadron online overnight morning after pill over the counter tesco generic cialis manufacturers india no rx revatio online donde puedo comprar furosemide cancel order acai berry detox promethazine 20mg tab fast zyprexa delivery zyvox tablets price permethrin cream online pharmacy hydrea limited india buy cheap rx7 buy diamox no prescription how to use flonase youtube alli and other medications buy permethrin insecticide uk exelon medication alzheimer;s acai doctors online what is benicar hct for liquid nolvadex for pct low price lopid uk get protonix las vegas dilaudid hydromorphone 8mg elimite for sale uk retino-a cream 0,05 italiano nizagara without a prescription from mexico purchase generic lady era inderal echeck generic robaxin image suprax tablets for purchase order erythromycin generic purchase effexor xr on line in canada where to buy lipitor drugs online maxaman medicine children where can i get hydrea ventolin hfa inhaler coupons cost of prescription without insurance serevent from usa tegaserod uk what are amoxicillin 500mg capsules used for diflucan 100 mg costo buy colchicine overseas can i bring viagra from mexico phenergan cheap mexico pharmacy como comprar revatio l-tryptophan non perscription countries diclofenac dose bnf buy famvir visa buy valtrex for cold sores propecia 100 flagyl and alcohol how long generic viagra any good online side effects of zithromax in children procardia brands india decreasing synthroid dosage buy kamagra with amex modafinil online pharmacy propecia costs australia amoxil dosage too high abilify without food prescription kamagra soft express canada misoprostol side effects in dogs cialis trial pack levitra cheap viagra where to buy aleve in ontario mercaptopurine crohn;s disease overnight nolvadex online click here buy periactin online from australia voveran drugstore.com combivent by mail order buy advair diskus 11 pharmacy buy femcare capsules ordering biaxin cuando usar bactroban best price for real atacand how long does it take for zyvox to work 20mg canadian amlodipine benazepril voltaren by mail vantin generic reviews maxalt patient reviews imiquimod cream buy diflucan discount code methylprednisolone acetate manufacturers femcare not generic actoplus met on line no script how long does seroquel take to work for sleep where to buy trimix phenergan discount buy asacol from mexico online cefadroxil monohydrate msds rumalaya forte 100mg tablet where can you buy albendazole generic buy fincar boots pharmacy pharmacy has best price malegra fxt pioglitazone tablets usp monograph ginette-35 pills indocin to buy in australia does alli work discount pharmacy legal buy ashwagandha online canada buy asacol online uk buying cialis online scams lithium 100ah can buy furosemide online folic acid methotrexate dose order motrin 500 mg cialis testimonials trazodone 100 mg effects purchase probalan online purchase lotrisone lowest price best site to buy accutane online safe place order serophene cheapest price for flonase fincar dose purchase tenormin mg lithium spot price chart mexican pharmacy no prescription zyrtec xeloda reviews breast cancer cipla abortion pill in india hyaluronic acid dose cheapest antibiotics no prescription diltiazem hydrochloride suppliers india hang my pham tenamyd levitra plus online usa morning after pill bleeding between periods cheap ashwagandha buy online bactrim on line in the mexico levitra professional no prescription pharmacy 20mg tadalafil usa pharmacy generic from female viagra order nexium no prescription prilosec generic at walmart shuddha guggulu billig kaufen buy ammocillin online paypal kamagra buy online mexico buy nootropil online from usa cephalexin cost canadian cost of medrol pak tadalista super active doxycycline buy no prescription buy abilify 5 mg pharmacy chlamydia in mouth symptoms generic uk paypal ayurslim can you buy kamagra chewable over the counter in germany how to use lasix to lose weight can u get high on meloxicam 15 mg depakote without prescription what is the cost of accutane with insurance triamterene supplier in uk us online pharmacy no prescription mentat ds syrup flomax generic available how long does.viagra work after taking.it glucophage no prescription pharmacy lipitor store drugs is hydrochlorothiazide available on line in canada ordering ginseng seeds promethazine medicine lotensin drugs online purchases safe place order finpecia where can i buy tadacip in canada ayurslim tablets himalaya can you buy cialis soft in ireland canadian generico buy arimidex overseas prednisone dose for children with croup what is sinequan for order norvasc rx viagra 25 mg dose ketoconazole 2 shampoo walgreens motrin 100mg cheep what does valtrex do for you hs explorer trimix dive computer cheap synthroid buy online ditropan.com donepezil 5 mg bula walgreens pharmacy online phone number pyridium cost comparison mg prescription how to take zofran wafer ventolin side effects anxiety discount code for furosemide levaquin rx assistance prevacid for men sale in uk estrace from canada can i buy viagra online yahoo answers how to order pletal online tadalis sx uk buy non generic buy aciphex online discount zanaflex otc female viagra spain over counter generic keflex dosage buy birth control pill online canada generic arimidex usa pharmacy generic amitriptyline tablets side effects of ciplox eye drops zyvox 600 mg pharmacy moduretic pas cher italie buy cheapest viagra online uk purchase flovent online advair without a prescription buy viagra professional greece no prescription aceon monthly cost of coumadin plavix coupon program where can i purchase aygestin inderal 40 mg pregnancy generic cialis super active no prescription endep on line thalidomide story youtube tadalafil online us pharmacy order altace what does trazodone do to u do i need a prescription for doxycycline cheap mazda rx8 for sale in ohio buy orlistat usa zithromax prescription medicine propecia reviews for young men buy viagra plus tablets online mexican stromectol chloramphenicol mg tablet altace drug class buy cephalexin 500mg dogs can you only get micardis on prescription best price midamor long term side effects of xeloda noroxin results forum buy anacin 50 buy lasix 40 can you order atarax drugs levaquin for sinus infection problem canadian online pharmacy for buspar nymphomax maximum dosage pcos metformin forum what is terramycin ophthalmic ointment used for generic aldara imiquimod overnight pharmacy zyprexa free world shipping what is himalaya evecare topical testosterone cream side effects safe place order caverta order compazine no prescription nombres de pastillas para ereccion masculina buy differin online without a prescription eulexin 10 mg cost what are cleocin capsules used for zithromax z-pak and alcohol ndc for depo medrol 40 mg phenergan rx order erythromycin from comprare viagra originale online comprar cardura pela internet mifepristone and misoprostol dosage in india where to buy cheap generic acai cheap cialis 100mg over the counter tricor best online no prescription pharmacy review order buy diovan online overnight zovirax 400 mg tablets clomid no ovulation symptoms korean red ginseng extract 100g can you get zyban acheter cardizem pas cher discover ireland dublin price avapro 150 mg order paroxetine no rx canadian pharmacy protonix online no prescription facebook search generic lasix no prescription unisom sleep tabs uk generic viagra india distributors zithromax usa no prescription bupropion company suhagra generico online blopress medication online original ponstel online lisinopril 20 mg not working when will generic viagra be available in us buy malegra dxt singapore where can i get glyset amitriptyline next day delivery can benadryl get you high evecare to buy in england can you take tegretol daily lasix reviews for men non generic cheap aceon order nolvadex from mexico without prescription ephedraxin overnight shipping cheap buy topamax pills what is evecare tablets what are the side effects of taking cytotec bactroban generic nitroglycerin spray cost diflucan buy on line ventolin tablet 2 mg salbutamol lawsuit against mirapex parlodel side effects uk buy advair diskus doses buy generic gyne-lotrimin online ditropan com is it illegal to order generic cholestoplex lotrisone overnight view next topic order alligator jerky antelope ditropan in the uk now generic glycomet buy canada pills buy cheap carafate generic female cialis spain calan side effects uk anxiety treatments medications comprar serophene en argentina eve online antibiotics 100 mg bactroban zyban online pay paypal can you buy malegra fxt german remedies india address fincar side effects uk where viagra in singapore imuran tablete 50 mg toprol xl australia buy brand zyprexa without prescription yasmin pills effects side effects buy pariet without a subscription buy toprol xl online at canada pharmacy srs online jobs pak & ind ponstel overnight pharmacy dramamine coupons mobic 15 mg tablet xenical australia buy renagel singapore what is amitriptyline hcl 10mg used for celebrex discount voucher citalopram 20mg tab missing benicar dose clozaril no rx where to purchase rumalaya gel cialis jelly tablets us online nizagara online price ordering software viagra online buy actos prescription cheap generic pramipexole mirapex dosage order compazine tablets what does doxycycline look like how to take prednisolone 5mg tablets schell pharmacy amsterdam ny are lexapro tablets scored what is metformin pills for free printable coupon for alli diet pills cheapest alli online salep lamisil buy zithromax online usa buy lipitor online from india where can i get bactrim for guinea pigs zestril uk buy can you buy revatio need provera 20 mg finpecia 1mg (kumrek) betnovate cost in canada using lasix pass drug test non narcotic pain meds for back pain lipothin safe doxycycline para que se usa baclofen medicine online clonidine hydrochloride for hot flushes discount viagra super active otc vendita viagra originale line antibiotics alcohol liver acivir pills online shipping lopressor suppositories buy where clonidine order lasix furosemide canada most reliable place to buy compazine online online pharmacy no prescription needed altace diabetes insulin pen largest us generic drug manufacturers generic vytorin switzerland is mail order glucotrol xl safe is aspirin over the counter drug buy levitra no prescription canada flovent best price where cane i buy alli starter pack relafen mg tablet what does glucotrol xl look like purchase nizagara pills cordarone without prescription medication how much is meclizine tablets prednisolone buy online uk generic antivert prices cost of caverta claravis coupon with insurance pharmacy mexico singulair 1 mg finasteride tablets clozaril canadian source where can i buy famvir purchase chloramphenicol cheap india pharmacy no prescription eurax refills fucidin reviews for men order nolvadex online no presctiption western drug zestril zofran 4 mg tablets trandate for sale buy precose online pharmacy ukonly based online pharmacys order amityrptiline without presccription ordering brand generic levitra online buy dipyridamole side effects of cozaar medication online viagra canada pharmacy ordering deltasone where to buy propecia tablets where to buy prevacid otc what countries can you buy viagra over the counter pharmacies over the counter pain medication sales 400mg norfloxcin safe take 40mg cialis purchase motilium on line in usa c20 pill viagra 100 mg precio mexico cipro new company registration citalopram dosage elderly comprar dapoxetine portugal top rated ephedra diet pills sildenafil generico online sarafem usa sale how long do side effects of medrol dose pack last generic drugs from india reviews order alphagan online with visa levofloxacin hydrochloride dosage retin a no prescription needed uk kamagra visa debit green mountain energy propecia low price luvox uk finasteride 5 mg for hair loss rhinocort price australia mobic 7.5 mg tablets summary product characteristics buy cymbalta 20 tetracycline medication for acne drug brand names list in india what is the drug trazodone used for viagra and cialis online ephedraxin online australia s club juniors calvin cafergot phone orders famvir 100mg cheap phexin non perscription countries deltasone tablets us online cvs pharmacy buy voltaren gel online coumadin toxicity diagnosis code cost of tretinoin cream 0.025 kamagra oral jelly tablets nike womens air max 1 leopard pack is there a generic form for lipitor buy cardura from mexico online what is the generic form of benadryl viramune daily use reviews actos pharmacy type diabetes fastest leukeran uk delivery rosuvastatin legal us free coupon for lanoxin diclofenac sodium costochondritis cheap proscar melbourne pilex online legally phone in order for himcocid rumalaya gel no prescription compare prices atacand 8 mg pret champix severe nausea cost of cialis in uk generic uk paypal lioresal how to get a canadian health card phenergan without prescription canada buy shatavari boots prednisolone order canada celexa pills valtrex by mail best place to buy zoloft online cheapest generic viagra uk buy online no rx abilify hcl can you drink alcohol on zithromax united healthcare prescription solutions prior authorization yasmin contraceptive pill australia price cialis super active not generic olanzapine 5mg bd oxybutynin generic for ditropan can you order crestor cheap toprol xl 100mg best site get luvox clonidine side effects in children with adhd cheap amaryllis flower arrangements canadian buy canada no prescription for cialis jelly eulexin overnight delivery rogaine 2 perth australia discount nizoral mg dandruff nizoral reviews order abilify 1 aripiprazole pharmacy viagra helps jet lag erexin usa pharmacy cialis for daily use dosage carafate pills dogs 10 mg paroxetine weight gain buy diclofenac from mexico online etodolac delivery uk cheap pharmacy uk buy cephalexin suprax medication used cheap genuine actonel online chloroquine reviews bystolic sales 2010 clozaril next day delivery is generic maxaman available in usa baclofen rxlist buy amitriptyline 10mg approved drugstore sertraline dosage buy vasodilan online without prescription ventolin drugstore com levothroid drug in usa pharmacy order rhinocort aqua