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This is excerpted from
the Weekly Review of March 23 -
I’ll save the good for a
moment, but the bad and the ugly seem to permeate the silver and gold and
other markets. On Wednesday, I mentioned that one reason gold and silver
failed to move higher after the Cyprus news was such a rally would have
interfered with a planned takedown in copper, platinum and palladium, which
was evident on Monday and Tuesday. For the record, there was the expected
substantial commercial buying in copper and platinum, a bit less in
palladium. My point is that commercial positioning on the NYMEX/COMEX is the
strongest short term price influence, way ahead of anything else, including
actual news and developments in the real world of supply and demand. This is
so contrary to commodity law that I believe the regulators must be thought of
as corrupt.
Even worse is that silver
(and gold) investors seem to be confronted on a daily basis with the
proposition that the US Government is working against the interests of silver
investors. While every conceivable effort is undertaken by the USG to help
push bond, equity and real estate markets higher, there appears to be an
effort to depress silver prices that goes beyond ugly. It’s not that silver
investors are asking for or expecting any of the special favors and
incentives doled out to investors in other markets; it’s more a case of
silver investors being discriminated against by the US Government. This
discrimination gets old and I sense that is what many must feel. I know I do.
The prime discrimination
is the failure of the federal regulator to address credible allegations of
wrongdoing by JPMorgan in the COMEX silver market. No one has asked the CFTC
for any special favors or that is outside their direct jurisdiction. Market
concentration is not something I invented or suggested be included in COT and
Bank Participation Report data; it is the main safeguard of the CFTC against
manipulation. For anyone to raise legitimate questions about existing bedrock
regulatory matters shouldn’t result in silence behind a phony 4.5 year
investigation. By the CFTC not speaking up or ending a continued silver price
manipulation brought about by JPMorgan’s controlling market share, the agency
is discriminating against silver investors and undermining trust in the
institution. It further undermines everything good that America used to stand
for.
Every day, silver (and
gold) investors are subject to whatever daily pricing the big COMEX paper
hangers decide to dictate, irrespective of what the real supply/demand
fundamentals would suggest.HFT and computer-driven algorithms have come to
dominate COMEX silver pricing to an absurd and uneconomic level. The reason
we are witnessing unprecedented silver investment demand and unusual
movements in COMEX silver warehouses and the SLV is because corrupt COMEX
pricing has set the price of silver too low. If the price of silver was not
set too low by JPMorgan’s outsized short position and the daily computers
gone mad games, I doubt we would be seeing all the unprecedented developments
in silver that I write of constantly.
To experience these unnatural forces of JPM and the computer trading
madness on a daily basis over many months and years, all while other
investment markets are buoyed by government actions, is debilitating; it
wears you down, as it should if you are human and alert. So my first offering
is one of empathy and to tell you that I feel it as well. More importantly,
an objective analysis of the discrimination by the CFTC and their failure to
rein in and terminate an increasingly obvious price manipulation is good beyond
measure. In simple terms, the bad and the ugly add up to an overpowering
good. The bad and ugly are why silver prices will soar. If silver prices
weren’t set so low and if the CFTC had cracked down on JPMorgan, there would
likely be little reason or urgency to buy silver.
Certainly, I know I wouldn’t be pounding on the table to buy silver if the
manipulation didn’t exist or if the regulators hadn’t gone off the rails and
into a ditch. I don’t think I ever suggested buying silver for reasons
unrelated to the manipulation or actual supply and demand. I’m not saying
that all the other reasons, like currencies, economic conditions, other
markets and money printing, etc, don’t have a bearing on silver prices; but I
am saying those reasons are not specific enough to silver for me to write
about them. As debilitating and painful as the ongoing silver price
manipulation has been, if the manipulation didn’t exist, neither would the
prime reason for buying silver. No pain, no gain and all that jazz.
Therefore, I can’t rule out further silver price stabs to the downside
before a dramatic and final resolution to the upside because both stem from
the same cause – the manipulation. What I can say is that while those stabs
at new price lows may occur, it is mandatory that silver prices will explode
at some unknown point. Considering how far along we are in the silver
manipulation in terms of time and considering the emerging signs of physical
tightness and developing shortage, I think it’s best to concentrate on the certainty
of the coming price explosion and not the uncertainty of near term pricing.
Don’t let the crooks at JPMorgan or the negligent and discriminatory
regulators convince you otherwise.
Ted Butler
For subscription information please go to www.butlerresearch.com
This is excerpted from the Weekly Review of March 23 -
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