Fundamentals Indicate The Price Of Silver Must Increase Dramatically
I’ve embraced one executive thesis for a past 30 years – that a cost of china has been manipulated reduce on a COMEX. For a good partial of those 3 decades I’ve exerted an heated bid in examining a tangible supply/demand fundamentals of silver, including production/consumption trends and a following annual change between a two, inventories, investment demand, etc. Those fundamentals infer that a cost of china contingency boost dramatically in a future, creation a strategy both a means and reason for a continued low price.
While we still follow a tangible fundamentals of a steel closely; increasingly, we write reduction about their change on a cost of silver. Why shouldn’t I? After all, we can’t remember an arise over a past few years where a tangible fundamentals had any outcome on price; china (and gold) prices are set on a COMEX when speculators adjust futures positions. Yes, a fundamentals will foreordain a destiny cost of silver, though they have 0 change on brief to middle tenure pricing. That’s since we thoroughness so closely on COMEX positioning.
When we step back, it is truly strange how a acceptance that china and bullion prices are manipulated by COMEX trade has grown from a levels of 5 or 10 years ago. Go behind twenty or thirty years and we could count a series of observers who believed that china or bullion was manipulated in cost on one hand. Despite a flourishing acceptance, not everybody believes china is manipulated in cost yet, though it occurs to me that we are relocating towards sum acceptance as new contribution are uncovered.
The many constrained contribution explanation that china is manipulated in cost embody a information display a COMEX has turn an disdainful suppositional venue where managed income speculators strive conflicting mostly bank speculators called commercials and a fact that COMEX china has a largest strong brief position of any commodity. Together, these dual contribution infer over doubt that china is manipulated in price. Now a new fact has emerged that ties those dual contribution together and illustrates and proves a strategy like never before.
I recently celebrated that JPMorgan and other members of a 4 largest brief sellers on a COMEX had never taken a detriment on any newly combined brief position in COMEX china futures over a past 7 years. Let me explain that statement; JPMorgan and other blurb traders in a large 4 have never bought behind a china brief sale during a aloft cost than a cost they initial sole brief during (for a loss) and customarily and always have bought behind china brief sales during reduce prices than creatively sole (for profits). In other words, a 4 large shorts in COMEX china have a ideal trade record – all profits, no losses. (Of course, if a managed income merchant enters into a ranks of a large 4, that merchant will expected catch waste – we am customarily vocalization of a biggest blurb traders).
In ball terms, this is a homogeneous of a Major League pitcher throwing zero though ideal games for a full deteriorate or a beat attack 1.000 for a whole year. Or in other words, a statistical impossibility. Think I’m overstating a case? Well, customarily suppose anyone entering into inherently dangerous trades (shorting a many undervalued item of all) several times a year, year after year, and always engagement increase and never a singular loss. Do we consider we or anyone else could do that? Yet JPMorgan and a other 3 largest blurb traders have finished zero though that in COMEX silver.
The explanation of this resides in a information from a CFTC in a thoroughness territory of a COT report. Every time a large 4 have increasing their strong brief position in COMEX silver, that customarily occurs on rising prices, they have never bought behind those brief sales on aloft prices than creatively sold, customarily during reduce prices.
The many extraordinary aspect to this is that we have been study this information all along and didn’t unequivocally see it. we have commented in a past on many occasions how a large 4 never buy behind china brief positions to a upside, customarily to a downside. In fact, that’s a pivotal core grounds of my COT research in that whenever a strong brief position has increasing in size, that’s disastrous for impending prices and when a position has contracted, that’s customarily a good vigilance for aloft china prices to come. we theory that means even in bargain how a china marketplace functions, we ignored putting a vivid underline into correct viewpoint – JPMorgan and a large 4 as a whole achieved a statistically impossible; never holding a loss.
My avowal is easy adequate to determine by comparing changes in a strong brief position and cost transformation and it is officious ashamed that we have to be a one indicating this out to a CFTC and for a group to not scrupulously investigate a possess data. But, what’s new about that? The critical indicate is that JPMorgan and a other large 4 never holding a detriment is a ultimate explanation of a COMEX china manipulation. That’s since no one could grasp a ideal brief tenure trade record in a giveaway market; that would customarily be probable if a marketplace was rigged.
In fact, JPMorgan’s ideal brief tenure trade annals in COMEX china was achieved since it had no choice in never shopping behind brief china positions during a loss. Had it ever bought behind brief positions to a upside, a cost of china would have exploded and reliable to a universe that china was manipulated in price. The customarily reason china has nonetheless to truly raze in cost is since JPMorgan never lonesome brief positions to a upside. we confess to being repeated in dogmatic zero matters some-more to a cost of china than either JPMorgan adds to a brief position on any and any china cost rally.
Another distortion that has been unprotected with a explanation that JPMorgan or a other large 4 shorts have never taken a detriment in COMEX china exchange is that any of these large traders were ever legitimately hedging. Hedging involves an offsetting position conflicting of and equal to a COMEX brief position. In any sidestep there contingency be a prolonged and brief leg in place and what a hedger loses on one leg, he creates adult on a other, regardless of either prices arise or fall. Sometimes a prolonged leg shows increase and a brief leg shows losses, other times not. In other words, were a large 4’s COMEX brief position ever partial of a legitimate sidestep transaction, it would be impossible, during slightest on some series of occasions, for there not to be waste on a COMEX brief position and gains on a hedged apportionment of a trade.
Because any COMEX brief position resulted in gains, it’s transparent there were never any offsetting legitimate hedges as it would be doubly unfit for there to never be waste on a COMEX side of a hedge. So most for all a scribble that a commercials are customarily hedging; JPMorgan and a others live to assume and manipulate. Never holding a detriment automatically means a marketplace is manipulated and no legitimate hedging takes place; there are no other probable conclusions.
This business of JPMorgan and a other large 4 blurb traders wholly explains how and since china has been manipulated for all these years – a large shorts sell as many new shorts as probable to eventually means prices to stop rising and whenever a technical supports are finished shopping as many COMEX china contracts and afterwards start to sell, a large shorts, led by JPMorgan afterwards douse a skids for reduce prices and buy behind a brief contracts they sole brief to a upside. It’s a ideal marketplace scam.
What creates JPMorgan a biggest marketplace limb of all (and what enables me to get divided with saying that openly) is not customarily a raking in of a hundreds of millions of dollars and some-more that JPMorgan achieved by never holding a loss; though since this curved bank used a invariably vexed cost of china to acquire a world’s largest position of tangible silver, some-more than 350 million oz during final count.
But due to a flourishing approval that JPMorgan has roughly single-handedly manipulated a cost of china over a past 7 years and has picked adult a large volume of underpriced tangible china in a process, a equation going brazen has changed. While it’s loyal that JPMorgan has picked adult another $30 million in unlawful increase on a COMEX on a brief side over a past month, some-more will come to be wakeful of customarily what unwashed tricks a bank employed in achieving those profits. For JPMorgan to acquire increase with no debate or critique is one thing; to be plainly indicted of strategy is an wholly opposite matter.
More importantly, a financial equation has altered for JPMorgan. Making $30 million on a one dollar distinction on 6000 sealed out COMEX brief contracts within weeks is one thing; though creation $350 million for any and any dollar that china advances will eventually infer too appealing for JPMorgan to put off indefinitely. Let me empathise that – $350 million is what JPMorgan will make when china starts to allege on any dollar advance. A 10 dollar pierce will equal $3.5 billion for a bank; a one hundred dollar pierce comes to $35 billion. The math is flattering elementary and strongly revealing of neatly aloft china prices, given how most JPMorgan stands to make.
While many feel that JPMorgan will continue to manipulate and top a cost of china forever, a tangible volume of income that a bank stands to make on neatly aloft china prices dictates otherwise. Of course, a bank is expected to subdue a cost of china for as prolonged as it can amass some-more tangible china and do so but too most outward notice of what these curved marketplace operators are unequivocally adult to. The impulse one or both of those conditions change, there is no reason for china not to take off to a upside.
Courtesy: Ted Butler