Manipulation of Silver has Run Rampant

  • Posted October 10, 2012

Silver Manipulation | October 2012 | In Plain Sight


Silver Manipulation is nothing new. For thousands of years, the elites have devised systems and techniques in which to cleverly steal from others. However, in sheer magnitude, the story of modern day silver may be unparalleled in all of human history.

Though the motives are uncertain, the manipulation taking place is not. Is the cabal’s interest in silver suppression only to prop up the US dollar for a little longer? Or are they quietly acquiring physical silver while shorting its paper price? Whatever their motives may be, let’s take this time to review events from the past week to put you in a better position to succeed.

First, we begin with a recent Ted Butler column published on 24hgold.comTed Butler has been a constant voice calling for investigations into silver manipulation and has been publishing content concerning precious metals online since 1996. He recently published ‘The Arguments Against Silver Manipulation‘ to take a devil’s advocate approach and run through the points of those who disagree with manipulation. JPMorgan has been the ‘alleged’ biggest culprit in the silver manipulation. Those who disagree that silver manipulation is even taking place often point to these reasons for JPMorgan’s short positions:

  • JPMorgan is selling short paper contracts aggressively in order to buy physical cheaply.
  • JPMorgan is only hedging for clients.
  • JPMorgan is only selling more silver short to serve as a counter party to speculative buying.
  • JPMorgan’s COMEX short position is offset by (presumably long) OTC positions, netting out and neutralizing the COMEX short.

To which Ted remarks..

‘Interestingly, none of the arguments defending JPMorgan’s concentrated COMEX short position denies that the position exists; the arguments attempt to excuse or legitimize the position.’

Here are a few other points form Ted’s column, and then we will get into a current example..

  • …’The CFTC has certainly denied that a Silver manipulation existed on multiple occasions in the past, including public explanations in May of both 2004 and 2008; but since the evidence of a short side concentration by JPMorgan was revealed in August 2008, the Commission has been investigating silver again’…
  • …’The bottom line is that after 4 years, no real response has been offered by those who should have responded’…’because to respond, risks expanding the discussion further. If they say anything, it risks truly opening up a legitimate debate. That’s because they (JPM, CFTC, and CME) know there is no legitimate explanation possible. So blatant is the short concentration by JPMorgan that any attempt to legitimately explain it away would invite additional scrutiny…’
  • …There is no excuse possible that would permit JPMorgan to hold 31% of the entire net COMEX silver market (minus spreads) or for the four largest shorts to hold 49% of COMEX silver (as of the most recent COT). Just to give you a sense of the lopsided nature of big shorts compared to big longs, on the same methodology (no spreads) the 4 biggest longs hold only 13.4% of the COMEX silver market. JPMorgan, alone, holds a position more than 2.3 times larger than the 4 biggest longs combined. That’s obscenely manipulative…
  • …JPMorgan has sold roughly 80 million ounces of paper contracts short on the COMEX over the past 2 months, increasing their total silver short position to nearly 150 million oz. Does this mean they bought 80 million physical ounces in the past two months or that they had the 150 million physical oz all along?…
  • …150 million ounces is more silver than the Hunts or Warren Buffet ever held and we are to believe JPMorgan amassed that position secretly? Did JPM get it from Bear Stearns? You have to use some common sense here – if JPMorgan ever did hold 150 million oz of silver, I would bet they would drive the price to $500, not short it aggressively…
  • …Regulators would never permit Exxon or Saudi Arabia to hold a concentrated position that comprised 31% of the entire oil futures market, no matter what cockeyed excuse was offered. If any US bank held 31% of the corn or wheat futures market, heads would roll the day it became known. It is the outsized concentration that is the issue, not the invented excuses…
  • …Without JPMorgan’s additional short sales, the reasoning goes, silver prices would shoot up dramatically. Hello? This is what I’m saying, namely, that without JPMorgan in the picture, the price of silver would be dramatically higher…

We know that there is silver manipulation. But now let’s see it in action following Silver Doctors timeline of events.

It has been discussed that the $35 spot price was critical for silver and if it held that level for several days, another outbreak to the upside would ensue. On Thursday, October 4, Silver Doctors reported that silver spiked through $35 at the opening of trading..

Silver clears $35 on the COMEX open after consolidating above $34.90 overnight:

$35 | silver manipulation | October 2012 |

And is then immediately raided by the cartel:
cartel raid | silver manipulation | October 2012 |

Then on Friday, October 5th, SD called out widely known Kitco for erasing evidence of the cartel silver raid.

Kitco has just decided to erase the evidence, as they have just removed the entire manipulative takedown from their charts. There’s no manipulation in silver! See? Show me on the chart any manipulative price action!‘This morning’s raid just after it occurred:

big raid | silver manipulation | October 2012 |

And on NetDania:

raid | silver manipulation | October 2012 |

And poof: like that, all evidence of the NFP raid is simply digitally erased!

raid gone | silver manipulation | October 2012 |

See? What silver manipulation?

Also on Friday, Silver Doctors spoke more about the ‘flash-smash’ on the price of silver. The goal was to keep silver below the $35 level….by flooding the market with about 50 million ounces of paper silver!! The headline read Cartel DUMPS 1.5X US ANNUAL SILVER PRODUCTION on futures market in 5 MINUTES on NFP release. [1 silver contract = 5,000 ounces of silver]

Net Dania’s spot silver chart, which is not a precise futures volume measure but approximates the volume, indicates nearly 10,500 contracts were dumped in a span of merely 5 minutes, and half of those were dumped in a span of 2 minutes between 8:30 and 8:32am EST.

dump | silver manipulation | October 2012 |

Surprisingly, the takedowns are having less and less of an impact. In spite of the massive amounts of short sells, silver still held it’s own to finish the week, though missing the $35 mark.

Next, on Monday, October 8, Silver Doctors once more pointed out the sharp drop in silver during Asian trading.

This week’s silver COT report revealed that the cartel piled on another 31 million ounces to their net shorts, bringing the commercial net short position in silver to a mind-blowing 289 million ounces.

Thus, it should be no surprise to SD readers that the cartel has just initiated another water-fall decline smash in silver.

Silver had been trading in a tight range near $34.50 over the first 2 hours of Globex trading, prior to being sent down another mine shaft to $34.20.  The cartel made 3 or 4 attempts to initiate a 2nd wave of selling, and finally triggered the raid as silver again dropped vertically another .30 to $33.90, and a 3rd wave took silver under $33.70:

october 8 drop | silver manipulation | October 2012 |

Clearly the cartel understands just how significant a break through $1800 gold and $35 ($35.50) would be for the gold and silver markets.
Rather than retreating to higher ground, they appear ready to throw everything but the kitchen sink at the precious metals market.

Either that, or a hedge fund just dumped about 20 million ounces of silver on the market in 5 minutes at 9pm on a Sunday evening to ensure they received the worst possible price for their position.

With these events all taking place within 3 trading days, an SD contributor put out a column contending that the cartel is at risk of flipping over the precious metals poker table.

Frequently, silver worrywarts claim the cartel can ultimately control the price of silver, and that no advance will come beyond levels the cartel deems appropriate.  This logic fails in the face of the 12 year old bull market.  More to the point, the argument fails to factor the importance the powers that be assign to keeping the rigged game going.  Sure, the cartel cheats.  It’s like they play poker with 15 extra decks of cards under the table, able to pull needed cards at will just as easily as manufacturing naked short sales.  But they sure as heck don’t want to flip the entire poker table over and end the game forever.  It’s critical that you understand this analogy.  On an incremental basis, as the cartel’s manufacture of naked shorting becomes increasingly brazen and ever more separated from the realities of the true physical market, they run the risk of flipping over the poker table.  They lose all power to control paper prices when the game is seen by all as over — when the poker table is flipped over.

…More and more people are coming to understand what the cartel is doing and these people are buying the dips.  You don’t see it on the COMEX as easily as expressed in the comparison above.  But the buying is here, and it’s not going away.

In early September when silver first challenged $35 there was quite a bit of discussion in the precious metals community about the cartel having the ability to crash the price back down to the $32 and change area — if not a full retest of $30.  I noted at the time it was unlikely given the qualitative shift that had happened with physical market demand.  Indeed, that case proved out — and will continue.  For all the monumental capping efforts the cartel has executed, they’ve only been able to get silver to just a bit below $34 on a spot basis for mere hours…. The past two months have proven to be a cartel failure and the smart money knows it.

So Now What?

Silver For Beginners has always advocated acquiring silver in its physical form. But while doing so, you need to have a white knuckle frame of mind. It is a volatile market in which to be involved. You see that it’s paper price fluctuates greatly and you need to take the roller coaster mindset. Or you could always cling to your fiat paper dollars while rocking it on the Teacups…

Acquiring the physical, we want to try to buy on the dips. However, in 5 years, you won’t be that upset if you bought your silver at $27 an ounce vs $35 an ounce. All that will matter is if you actually have silver or not. Keep in mind the current pricing paradigm is only temporary.

That’s the long-term. But now, in the short-term, there is some heed to pay to all of this market and silver manipulation. You need to have a firm standing and not get restless IF the cartel does suceed in taking silver down into the $20′s. Instead of getting discouraged, thank them, and BUY MORE PHYSICAL.

Possible Scenarios?

We need to understand that the global money masters didn’t gain the power they have by being stupid. There is a reason they are ramping up short positions right now. Is it because they fear what will happen if the US dollar’s weakness is exploited through further rising precious metals? Or do they know more tumultuous times are ahead for the Eurozone and that will stun silver in the near-term? A further Euro crises may result in a relative US dollar strength. Though the supply-demand fundamentals can only see silver down for so long, be prepared for another take down.

Just remember, eventually, silver is in for a dramatic rise. In the face of the paper market, investment demand, industrial demand, and global population will only continue to grow (unless Bill Gates has his way). And with those growths, a disconnect between the paper and physical markets will become more pronounced. The long-term value of silver will rise, not unless the companies that make phones and computers can figure out how to do so with paper certificates of silver instead of the real thing.

We DON’T know for sure, but here are 2 ppossible scenarios resulting from the short sells:

  1. JPMorgan knows precious metals and global commodities will tank with the final stage of the Eurozone crisis and they will hold their positions with that KNOWLEDGE…and totally crush all speculative holders of paper silver…
  2. Just like Bear Stearns and Lehman Brothers, JPM IS prepping for the worst and plan on biting the dust. That, or be reconfigured and taken over through government bailouts and/or stimulus… in this case Goldman Sachs will be there to reap the rewards of assets.


We DO know for sure that global reserves of silver are dwindling. At current consumption, there are no longer decades of silver available, but only several years or months worth. We can do the math of what will happen if consumption increases in any sector. Yearly, Global Mining production is already consumed as it is pulled out of the ground. When demand increases, where will the silver come from?

For that reason, Silver For Beginners and Procinctu will advocate staying in buy mode for the foreseeable future. Whether today’s silver is $27, $35, $50, $65…..Our tomorrow’s target is much, much higher.

That said, we still believe the big-time, ultimate silver price won’t be realized until AFTER the Eurozone crises is figured out. All fiat currencies are weighted against each other, so a Euro fall would likely result in a strong US dollar. We only just now started Spanish Revolution 2012, so there are still many moves to play out. Also, large scale war would stun the silver market initially, but give it an even bigger boost shortly thereafter.

In closing, as you acquire your PHYSICAL precious metals, understand why it is in the central banks best interest to suppress precious metals prices. Silver and gold are your way out of the system. By delegitimizing precious metals, the average person is kept ignorant of the power they really possess. The only way the money masters can control the mass of people is if all the people are enslaved to their system.

Harriet Tubman once said, “I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves.” If only the average person knew about the rigged game, we would have revolution tomorrow. Even in the bastion of indifference, the United States of America (and by extension, the world).