|
I
don’t think that any intelligent investor can now argue that the metals
market, especially silver, isn’t manipulated as Mr. Butler claims. While
I tried to be quiet about it, I always questioned the manipulation and tended
to side with the authorities who
said no manipulation existed. I changed my mind totally with Mr.
Butler’s discovery that two U.S. banks sold 140 million
ounces of silver and 8 million ounces of gold in one month, followed by the
collapse in prices.
I am
surprised that the miners who live and die to get a price above their real
production costs of $16.50 for silver and $850 for gold, are not the ones
complaining. Why are they letting Mr. Butler do their dirty work for them?
I
asked Mr. Butler why he is the front runner, carrying the manipulation flag? His
answer was simple - it was the right thing to do and there was no one else
doing it. He sees the big danger that the silver market manipulation can
bring catastrophic consequences to the U.S. When the shortage of silver
comes, it may force the COMEX to close, a scandal that would bring great
shame to our country.
Plus,
silver is a vital and strategic metal. The U.S. has a reliance on silver
imports more extreme than it does on oil. I would not be surprised in the time
of a silver shortage, that a big producing country might restrict exports of
silver to get even higher prices. What will the U.S. do without silver, let
factories close down and send their workers home? When you look far ahead,
you see the danger the silver short manipulators are putting our country in.
In my
opinion only a shortage will bring truly higher prices for silver. The
current retail shortage is a good sign. The premium on my favorite
form of silver, U.S. Silver Eagles, is the highest in history and demand has
never been greater. I think you know that I am not too surprised at that. I
think this is just the start. Wait until you see the premium when the U.S.
Mint stops producing them one day.
There
are now 440 million ounces of silver in the world’s inventory. I mean
COMEX stocks, the ETFs and other silver investment
vehicles. There are also large holdings of silver held personally by many
individuals. But we know those personal holdings are not available up to at
least $20 or higher, otherwise there wouldn’t be this tightness in the
retail market.
Against
this 440 million ounce world stockpile owned by investors, we have almost one
billion ounces held short. Isn’t that crazy? It is this short position
that represents a danger to everyone. The 440 million ounces is worth only
$5.3 billion. One oil Sheik could pay that. We are lucky they buy gold, not
silver. I hope silver stays at home and you who believe in silver will
benefit. I think 20 to 30 years from now someone holding 100 ounces of silver will
be considered wealthy and a genius investor. If I am not here to witness your
good fortune, maybe you will offer a kind word about me.
One
day in the future this 440 million ounce visible inventory will stop growing
and begin to decline. This will be the ultimate signal for shortage and that
the industrial users are now drawing down these inventories. The biggest
question is will we be able to act on this signal and buy silver. I have
discussed this with Mr. Butler endlessly over the years. He says the short
sellers will understand what is happening before any of us and will have bid
up the price in their hunt to get as much silver as possible. He says you
must buy before that day, when it looks like there will never be a shortage.
When
the silver inventory starts to go down and the price explodes, the shorts and
the users and the CME directors will scream to the CFTC to stop the upward
manipulation. It will be the reverse of now. But who will help them? Who can
help them? Not the U.S. Government as they gave up their billions of silver
ounces decades ago. Maybe you and I will help them a little at some crazy
high prices. Others around the world will be learning how rare silver really
is and may be anxious to buy. These manipulators who kept prices artificially
low for so long will pay the price.
It is
hard to look ahead to sunny days when a hurricane is upon you. But this down
draft will not last forever. Soon there will be an even stronger force
pushing silver prices much higher and for longer than any of us can imagine.
Israel
Friedman
www.investmentrarities.com
Israel Friedman is a friend and mentor to Theodore Butler. He has followed
silver for many decades.
(No one can
safely predict the future and it’s possible that Israel Friedman’s Butler’s analysis will prove
incorrect. Silver can go up, but silver can go down. It is up to you to read,
analyze, and arrive at your own conclusions. Prudence requires we emphasize
that precious metals may or may not prove to be suitable for your
consideration.)
| 
