IMPORTANT!!!
The story behind the Silver manipulation. BK
By: Theodore Butler
Commissioner Bart Chilton, much to his credit, made a number of recent statements that gave me great encouragement. He has confirmed that a single entity controlled 35% to 40% of the short side of COMEX silver earlier this year. (He didn’t identify JPMorgan as the entity, because he is precluded by law from doing so.) Chilton also indicated that he thought a 1500 contract limit for silver to be reasonable.
But it was something that Chilton said in a speech two days before the meeting that rocked me. In essence, Chilton proposed that any time a trader hits the proposed position limit and is holding a hedge exemption from position limits the agency would closely review the details of the underlying swaps that allowed the exemption. Importantly, Chairman Gensler ratified Chilton’s approach at the hearing and directed the staff to initiate this approach immediately. The chairman’s exact words were, “Make it so.”
Why was I rocked? Because I thought the agency was already doing this. Then it dawned on me that verifying whether the OTC swaps position that allowed JPMorgan to hold the obscenely concentrated COMEX short position was handled by the CME as part of their role as a SRO (self-regulatory organization). The CFTC never got to examine the details of what swaps justified JPMorgan’s concentrated silver short position, just the CME. In an instant, I knew how the silver scam was allowed to continue this long. The exchange decided what OTC swaps were legitimate, not the CFTC. But with Chilton’s Position Points approach, it would now be the agency doing the verification. Talk about a game changer. LINK...
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Dear readers,
This breakthrough in exposing the Silver manipulation is a long time coming and Ted Butler, one of the most respected authorities on the Silver market explains why the price of Silver has been lagging so much compared to the other metals in its class. As we have shown in our post from Dec 16th, Silver should be the shining star in the metals market in 2011. We expect high volatility and much higher prices in both Gold and Silver in 2011. BK
Disclaimer: Trading and investing in precious metals is highly volatile and risky. Past performance is not indicative of future results. Please consult with a registered financial advisor or tax professional before investing in precious metals.
