BTW: Notice how you can never buy silver or gold at the spot price anymore? It’s always at least 15% above spot price IF you can find it?
Remember this: before March 2008 (when the events described below happened) silver was easy to get and you paid just 18 cents or so over spot. Now the US Mint is rationing gold and silver Eagles, they’ve halted production of fractional Gold Eagles, and silver & gold carry delivery lead-times measured in weeks or months. You can thank the government’s PPT (Plunge Protection Team) for this mess.
Q: How did we get to the point where a big U.S. bank, most likely JP Morgan Chase, has come to manipulate the silver (and gold) market?
Q: Why are U.S. banks allowed to speculate in commodity markets at all, when they have caused such havoc already with their failed trading in just about everything they touched?
Q: Didn’t they do enough damage with subprime mortgages and credit default swaps?
Q: Why should taxpayers subsidize bank commodity speculation and manipulation?
Q: When did the regulators stop enforcing the law and switch over to defending the criminal element?
As bad as the lack of justice for past misdeeds is to the public psyche, there is something even worse: regulators ignoring an obvious crime in progress, especially when the evidence of that crime is readily available and published by the regulator [CFTC] itself.
The CFTC is on their third silver investigation within five years, while at the same time reporting that the short concentration has grown to the highest level in that time. This is akin to tripping over and not seeing the dead body in a murder investigation.
The Crime: In Progress Now
As I write this article, the big short(s) is attempting to rig the silver and gold markets lower to trip off technical fund selling below the 50 day moving averages. Will that attempt succeed? I don’t know. What I do know is that this is market rigging of the highest order. I also know that the big short is becoming increasingly isolated and more learn of the manipulation daily. That’s good for us, bad for them.
In the case of silver, while the manipulation has been ongoing for many years, the criminality kicked into high gear when JP Morgan took over Bear Stearns, at the government’s request, last March .
Who Started the Crime?
Bear Stearns was the holder of the large concentrated short silver position and it was inherited by Morgan. In JP Morgan’s defense, it does not appear they initiated the concentrated silver short position. It was excess baggage from the forced takeover of Bear.
The Treasury Department and Federal Reserve backstopped Morgan and agreed to hold them harmless for financial losses and for criminal involvement in the silver manipulation. The financial system was weak enough at the time of Bear Stearns’ failure, that a blowup in silver had to be avoided. JP Morgan was given the go-ahead to “manage” and control Bear Stearns’ silver short position directly by the Treasury.
JP Morgan: Above the Law
While it is understandable that JP Morgan would accept the Treasury Department’s request, and that the avoidance of a potential financial panic is always a good thing, panics are short-term events. A year has now passed, and the manipulation is still in force, stronger than ever.
What started as a temporary remedy for a short-term emergency, has evolved into a continuance of the long-term silver manipulation. This is wrong on every level. The U.S. is a nation governed by the rule of law. No one is above the law. Not the Treasury Department, not JP Morgan, not the CFTC. If my findings are accurate, then the passage of time indicates that there is potential real criminality here.
Why Does the CFTC Look the Other Way?
As far as the CFTC, it is a weak agency, incapable of over-ruling a directive from the Treasury Department. They had no choice but to allow the silver market to continue to be manipulated by allowing the transfer of the concentrated short position from Bear Stearns to JP Morgan.
Besides, the CFTC already dropped the ball by allowing the concentrated short position to come into existence at Bear Stearns in the first place and denying for years that the silver manipulation existed. They had no choice but to go along. They couldn’t stand up to Treasury if they wanted to. [Editor’s note: the CFTC is actually a member of the Plunge Protection Team (created by Executive Order # 12631) whose stated purpose is to manipulate markets. [link] See also Bailout Charade: The Hidden Reason Why]
Will It Ever End?
So how does this end, or can JP Morgan, Treasury and the CFTC allow this crime to continue indefinitely? No one has a lock on the future, but there is no easy way out for them. This cannot be resolved quietly or orderly, but it must and will be resolved.
Even if the manipulators don’t blink first, the growing shortages in the wholesale physical market will bring this scam to a head. That’s why you must own silver. [more]