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The Silver Users Association and Homeland Security

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Published : October 19th, 2007
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Category : Editorials

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


Gold Anti-Trust Action Committee

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 GATA is grateful for financial contributions, which are federally tax-deductible in the United States.


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Ed Steer is a director of GATA (Gold Anti-Trust Action Committee). He lives in Edmonton, Canada.
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