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Considering how patient and
understated he has been for so long, and so often the voice of
reasonableness, this latest piece from Ted Butler is a bit surprising in the
directness and strength of his language.
Illegalities
By Ted Butler
May 25, 2012
The Commodity Futures Trading Commission (CFTC) has been negligent in
failing to terminate the obvious manipulation ongoing in silver. Furthermore,
the agency may be complicit in this manipulation. Worse, it has lied to the
public and elected officials. This all goes back to the time when Bear
Stearns was taken over by JPMorgan in March of 2008.
It is well known that Bear Stearns went under as a result of a sudden loss of
liquidity amidst a run by creditors and customers. What is not well known
is that those problems were greatly exacerbated by a $2 billion margin call
on silver and gold short positions from the end of December 2007 to March
2008. I believe the silver and gold margin calls were at the heart of Bear
Stearns’ failure.
We know now (from CFTC correspondence to lawmakers in 2008) that JPMorgan
took over Bear Stearns’ giant silver and gold short positions on the
COMEX. Up until that time, we did not know that Bear Stearns was the
concentrated silver and gold short. Using Commitment of Traders Report (COT)
data, Bear Stearns had a COMEX silver short position of no less than
35,000 net contracts and a COMEX gold short position of no less than 60,000
net contracts from the end of December 2007 to their takeover by JPMorgan
two and a half months later. From December 31, 2007 to mid-March 2008, the
price of silver rose by $6 (from $15 to $21) and the price of gold rose from
$850 to over $1000. Based upon the number of contracts held short by Bear
Stearns and the price movement at that time, that resulted in margin calls of
$2 billion. I would contend that was the real reason for Bear Stearns’
demise.
So where do I get off claiming that the CFTC is complicit in the silver
manipulation and lied about it to the public and to lawmakers? This is easy
to prove...
Read the rest here.
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