Five Years That Have Changed The Silver Market Forever
Ask any infrequent spectator of a china marketplace what happened to a steel over a past 5 years and you’re expected to hear how a cost fell from scarcely $50 in Apr 2011 to underneath $14 during new lows – a overwhelming decrease of 70%. If we scrutinise further, you’ll expected hear a series of reasons for a decline, trimming from an oversupply of a metal, a strengthening dollar, descending acceleration rates, and a fall of a line markets.
What we will not hear is how a specific growth has transpired over a past 5 years that ensures a entrance blast in a destiny cost of china over a many bullish predictions and confident upside targets. You’re also not expected to hear that a overwhelming decrease in a cost of china over a past 5 years was a counsel underline of an scarcely bullish growth that promises to change perpetually a destiny cost landscape.
While we have closely researched a china marketplace for some-more than 30 years, uncovering some-more strange commentary (including silver’s cost manipulation) than anyone, we entirely acknowledge that we did not immediately see a staggering change that began to start 5 years ago. This startling growth that had begun in 2011 did not come transparent to me until late 2013.
I detected that a largest U.S. bank, JPMorgan Chase, began to amass vast amounts of earthy china starting in 2011 and has continued that accumulation to this day. All told, we trust JPMorgan has acquired somewhere between 400 and 500 million ounces, a largest secretly reason save of china in history.
What this means is that a destiny cost of china is now unfailing to pierce distant aloft in cost than anyone can imagine. we wasn’t looking for something to come along that would substitute my already ultra-bullish opinion on silver, though that is what occurred. That’s given a apparent ground JPMorgan has whenever it acquires a vast investment position is to distinction on that position to a biggest grade possible. And given JPMorgan is now in position to distinction enormously when china prices soar, that means anyone holding china will distinction as well.
How did JPMorgan come to acquire hundreds of millions of ounces of earthy silver? It was a nomadic route, commencement in a financial predicament of 2008 when JPMorgan took over a unwell Bear Stearns, afterwards a largest brief seller in COMEX bullion and china futures contracts. JPMorgan stepped uniformly into Bear Stearns’ purpose as a categorical china and bullion cost pimp and proceeded to expostulate a cost of china from $21 in Mar 2008 to underneath $9 by vast brief sales on a COMEX. In a years that followed, JPMorgan continued a new purpose as a largest brief seller in COMEX china and reaped billions of dollars in ongoing increase by shorting china on cost rallies and shopping behind those brief positions after it fraudulent a prices lower.
With manipulative vigilant and practice, JPMorgan continued to make unlawful increase on a brief side of COMEX china until late 2010. Then a building earthy necessity in a china marketplace gathering prices to roughly $50 by a finish of Apr 2011. JPMorgan was not prepared for a building earthy necessity and a cost run adult scarcely crippled a bank. That’s when it dawned on JPM that it was on a wrong side (the brief side) of china and a bank resolved to get on a right side – a prolonged side. But first, JPMorgan had to get off a brief side.
JPM did this by causing china futures prices to plunge with a full determine of a COMEX and supervision regulators during a CFTC, a routine that has continued to this day. JPM regained control of china prices on May 1, 2011 and by pushing prices neatly reduce killed off a building investment direct that was causing a earthy shortage. But while JPMorgan regained control of china prices on a COMEX, it could not buy as many futures contracts as it preferred though causing prices to soar – it indispensable another angle. That other angle was for a bank to start to buy earthy china while it continued to sell brief COMEX paper futures contracts. This way, JPMorgan could have a cake and eat it too – stability to distinction on paper brief sales while appropriation earthy china during a vexed prices it had created. we labeled JPMorgan’s actions as a ideal crime in a open essay in Dec 2014.
JPMorgan behaved illegally in utilizing prices reduce while accumulating all a earthy china it could. However, there is no reduction on what any entity can reason in a earthy commodity position. Limitations exist (loosely enforced) on what traders can reason in futures and other derivatives, though no such stipulations request to earthy positions. This privileged a approach for JPMorgan to reason as many earthy china as it could. Since a cost of COMEX china determines a cost for china via a world, this put JPMorgan in a catbird’s seat, by enabling it to subdue a COMEX cost and afterwards scooping adult earthy china in supernatural quantities and during ridiculously vexed prices.
As distant as a forms of earthy china that JPMorgan has acquired over a past 5 years, a elementary answer is in any form that could be acquired in size. Most of a china that JPMorgan acquired was in a form of 1,000 unit bars, a attention customary for china and a kind deliverable on COMEX futures and reason in a worlds china ETFs and other investment vehicles. JPMorgan has cumulative hundreds of millions of ounces from a large china ETF, SLV, and in deliveries opposite COMEX futures contracts, some of it reason in JPM’s possess COMEX warehouse, that non-stop for business in May 2011 and is now a largest COMEX china room (confirming my timeline). Their room now binds 70 million ounces and is their many manifest holding. Harder to see is a 100 million ounces they expected have in their London room where they changed out 100 million ounces of other people’s china to make room for their possess in 2012.
But JPMorgan has also bought china in a form of American Silver Eagles and Canadian Maple Leafs to a balance of 150 million ounces over a past 5 years, fast re-melting a coins into 1,000 ounces bars given it would be unfit to sell so many coins in china form. In fact, a extraordinary riddle of record sales of Silver Eagles and Maple Leafs over a past 5 years joined with bona fide reports of diseased sell sales of these coins was an critical idea that someone large was shopping many of a coins, roughly 50% of all such coins sold.
When we contend we wasn’t looking to expose a many bullish growth ever in china that is an understatement. But as an analyst, we demeanour to a information initial and foremost. Not usually has that information sloping me off to what JPMorgan has been adult to, a stability upsurge of open information endorse my finish daily. Everything from COMEX china room movement, deliveries opposite futures contracts, changes in a large china ETF, SLV, sales of china coins from a U.S. and Royal Canadian Mints indicate to a vast accumulation of china by JPMorgan. They are positioned to make $100 billion or some-more in a exile china market. They will make $1 billion on a $2 arise in silver.
The really final thing we would be meddlesome in during this theatre of my life, is to come adult with some dumb grounds that threatened to criticise many of my prior findings. we studiously equivocate anything that would repairs a repute we have spent decades constructing. On a other hand, if we have detected a many shockingly bullish china growth ever, how could we not broadcast it distant and wide?
I have detected that JPMorgan has amassed some-more earthy china than any private entity in story and we don’t caring if good numbers of observers come to determine with me or not. we will plainly plead this with anyone who has questions, though many importantly we would remind we that if we am scold in my avowal anyone who aligns themselves with what JPMorgan has finished and buys china will many expected reap financial rewards of truly extraordinary proportions.
Courtesy: Ted Butler
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