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April 9, 2024 | Selective Law Enforcement

No one has followed the silver market trading mechanics for as long or as closely as Ted Butler.

JPMorgan took over Bear Stearns in 2008, inheriting Bear’s massive short position in COMEX silver (and gold). There was a formal investigation by the CFTC’s Enforcement Division that began as a result of my request to readers to write to the CFTC about the massive short position held by JPMorgan. 5 years later, the investigation concluded with no definitive findings. But thanks to the deathbed revelations of late commissioner Bart Chilton, we learned that the Justice Department was heavily involved in many meetings convened over what to do about JPMorgan’s recalcitrance in reducing its manipulative COMEX silver short position of some 40,000 contracts (200 million ounces). In essence, both the CFTC and the DOJ looked the other way and let JPM skate on its clearly manipulative silver short position. Strike one against the DOJ (the CFTC has so many strikes against it for its handling of JPMorgan over the decades, that it’s pointless to count).


The next known instance of Justice Department malfeasance in regard to silver and JPMorgan occurred starting in 2018, when I complained to the FBI (part of the DOJ) about JPMorgan and silver. Later that year, it was revealed that the DOJ had “flipped” a former JPM trader and was involved in investigating JPMorgan for precious metals manipulation. I quickly learned that the DOJ wasn’t pursuing JPMorgan’s suppressing of silver prices and its illegal accumulation of a billion ounces of physical silver at the artificially low prices it created, but the relatively minor charge of spoofing, on which it was able to extract a $920 million fine and a deferred criminal prosecution agreement (DPA). It was a wrist slap to JPM.


This brings us to the present. On Nov 13, I wrote to the CFTC and SEC about the possible double-counting of the recorded silver inventories in the COMEX silver warehouse controlled by JPMorgan and in the big silver ETF, SLV, also under the direct control of JPMorgan. The SEC responded within two weeks, but avoided the question of double-counting completely. But the CFTC took more than three months before also essentially ducking the answer and effectively confirming, in my mind, that the two inventories were double-counted. The result was that JPM was sending false price signals to the market, which happened to be the precise violation cited in the 2020 deferred criminal prosecution agreement for spoofing.


The double-counting of silver inventories under the control of JPMorgan meets the definition of false price signals. A short while later, I discovered the pattern of large one-day deposits into SLV, a form of dumping. It dawned on me that only JPMorgan was in position of making such large deposits for two reasons; one, it was the official metal custodian of the trust, and two, it was the only entity capable of making such large deposits, courtesy of its decade-long illegal accumulation of a billion ounces of physical silver. So, I added this in my complaint to the Justice Department.



Because the silver manipulation has been so successful and efficient over the last few years, the artificially suppressed price has finally resulted in what is mandated by the law of supply and demand, namely, a physical shortage. And once such a physical shortage has been created, brought about by insufficient current supply and too much current demand, the only way for supply to increase sufficiently and for demand to be reduced is by higher prices. In other words, the law of supply and demand mandates silver prices must be substantially higher than the prices that have prevailed over the last few years in order for the physical shortage to be eliminated, as it must be. How long until we get those higher prices is the only unknown.

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April 9th, 2024

Posted In: Butler Research

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