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Theodore Butler
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Theodore Butler
May 25, 2012 - 4:22pm
The Commodity Futures Trading Commission (CFTC) has been negligent in failing to terminate the obvious manipulation ongoing in silver. Furthermore, the agency may be complicit in this manipulation. Worse, it has lied to the public and elected officials. This all goes back to the time when Bear Stearns was taken over by JPMorgan in March of 2008. It is well known that Bear Stearns went under as a result of a sudden loss of liquidity amidst a run by creditors and customers. What is not well known is that those problems were greatly exacerbated by a $2 billion margin call on silver and gold short positions from the end of December 2007 to March 2008. I believe the silver and gold margin calls were at the heart of Bear Stearns’ failure.
We know now (from CFTC correspondence to lawmakers in 2008) that JPMorgan took over Bear Stearns’ giant silver and gold short positions on the COMEX. Up until that time, we did not know that Bear Stearns was the concentrated silver and gold short. Using Commitment of Traders Report (COT) data, Bear Stearns had a COMEX silver short position of no less than 35,000 net contracts and a COMEX gold short position of no less than 60,000 net contracts from the end of December 2007 to their takeover by JPMorgan two and a half months later. From December 31, 2007 to mid-March 2008, the price of silver rose by $6 (from $15 to $21) and the price of gold rose from $850 to over $1000. Based upon the number of contracts held short by Bear Stearns and the price movement at that time, that resulted in margin calls of $2 billion. I would contend that was the real reason for Bear Stearns’ demise.
So where do I get off claiming that the CFTC is complicit in the silver manipulation and lied about it to the public and to lawmakers? This is easy to prove. On May 13, 2008, the CFTC published a 16 page public response to my allegations of an ongoing manipulation in silver by means of a concentrated short position. The response was based upon silver market activity through the end of 2007, thereby conveniently sidestepping the drama that occurred through March 2008 when the biggest silver short in the market, Bear Stearns, failed and needed to be rescued with taxpayer assistance (Federal guarantees given to JPMorgan). The May 13, 2008 report from the CFTC went into great lengths in explaining there was nothing amiss on the short side of silver, even though the Commission knew that two months before the report was issued, the biggest concentrated short had failed and needed to be rescued by taxpayers. A lie by omission is no less of a lie... Finish reading @Source
