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An organization that hasn’t received a lot of press from the
silver community lately is about to get some.
The Silver Users Association is having a fall conference on November
6-7 at the Army-Navy Club in Washington,
D.C. The S.U.A. has been around
since 1947 and is the only commodity that has its own users association. Virtually
all commodities have producer associations, and most are of the harmless
variety. Only two are not, OPEC and DeBeers. Both are price fixing cartels
and are considered to be illegal. Their objectives are to keep the price of
their products as high as the market can bear by controlling supply.
So what does a “users association” do? What is its reason
for existence? Here is the SUA’s
“Objectives” from their own website, which is linked here. Note in
particular the second bullet point… “Cooperate with appropriate government agencies to reduce excesses in silver
speculation.”
Ted Butler and Charlie Savoie, two of the
most prolific writers about silver on the Internet, have their opinions about
the SUA…
Back in March 2001, Ted Butler wrote an essay about
the Silver Users Association entitled “Silver Users, Silver Abusers” and its
well worth the read. In it, he describes the SUA as follows: “Now
let me give you my description of the Silver Users Association. I’m not
about to beat around the bush. The SUA is a dubious, manipulative organization,
whose sole purpose is to artificially depress the price of silver.”
Further down in this essay, Ted has this to say… “On
any silver price rise, the SUA will be all over the Commodity Futures Trading
Commission (CFTC), to pressure the COMEX to curb the "excessive
speculation.” According to the Silver Users Association,
silver only rises due to "excessive speculation", and never because
of legitimate market fundamentals. Where will the SUA’s
attention be focused? At the only place it can be focused – on the
paper traders on the COMEX - or, more correctly, on the paper traders holding
long positions. They are always the culprits. Even though we are at the lowest inflation adjusted price for silver in
5,000 years, the SUA will look to assign blame for any price increase on
paper silver investors. Trust me - you can take this one to the bank.”
The other essay, written in September 2003, about
the Silver Users Association is entitled “The Silver Raiders.” The author is Charles Savoie. This is a very small part of what he had
to say… “I don’t know
what you could compare them to in any other commodity, because this is the only users group in any commodity. If
anyone can show why they are not an illegal short-side price fixing cartel in
violation of antitrust law, regular readers of this website would like to see
it. That would be like proving the great white shark isn’t a marine
predator.”
If you wish to read Savoie’s
essay, my advice is to buy a six-pack or a couple of bottles of wine and then
pack a lunch, as his essays are more like small novels. I would advise
spending some time there, as there is some really incredible information in
it. You won’t have to read very far before you get some idea of how
vast the conspiracy against silver really is.
Anyhow, I digress…
As I mentioned at the top of this essay, the SUA
meeting is in November, and here’s the line-up of speakers. It’s
a small pdf file and is linked here.
On day one, the main speaker is John Tobon from the Department of Homeland Security, and the
topic is “Government Scrutiny of Precious Metal Imports”. I’m
really curious to know what’s in that speech. We’ll see if the
SUA posts it on their website.
On the second day, Jeff Christian, another of
silver’s “friends”, speaks on the topic of “Using
Silver in an Era of High Prices”. Excuse me Jeff, but silver is only
$13 the ounce. That’s hardly what I would call expensive, so
what’s the problem?
Another speaker is Senator Chuck Schumer (D-NY), and
his topic is “Unfair Trade Practices with China, Including Silver”. Gee,
I wonder what the Chinese are up to in the silver market, as this is the
first I’ve heard of this issue. I’d love to be a fly on the wall
for that one.
The last speaker of importance is John Conheeney from the NYMEX…the SUA’s
partner in crime. If it wasn’t for their friends on the NYMEX/COMEX,
the SUA’s silver (and gold) concentrated
short positions would not exist.
Butler’s latest
essay shows you exactly how large these concentrated net short positions are
in both these precious metals. It’s contained in a graph, and
it’s a beauty. The essay is
only a couple of paragraphs, but it’s the chart that steals the show. The
essay, entitled “A Picture Worth a Thousand Words”, is
linked here.
It’s a pretty good bet that the SUA meeting is
not going to be in the best interests of the silver mining companies and
their stockholders. Although a lot of stockholders have been screaming foul
for many years, the silver miners won’t lift a finger in your support. That
too, as Ted Butler said previously, “you can take to the bank”.
The central point of this article is to use the
occasion of the SUA’s upcoming meeting to
showcase the fact that this organization still exists in this day and age. This
is an organization that appears to exist for the sole purpose of depressing
the price of silver. This is against the most basic tenets of free and fair
trade. No matter how many government officials, elected or appointed, or
industry analysts are brought in to give the SUA the aura
of respectability, the stench of possible illegal price influencing prevails.
Why is this organization allowed to exist?
Ed Steer
Director
Gold Anti-Trust
Action Committee
www.GATA.org
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S.
Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe
at www.GATA.org. GATA is
grateful for financial contributions, which are federally tax-deductible in
the United States.
 
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