by Ted Butler, Silver Seek:
It seems to me that the forces at play in silver, both working for and against sharply higher prices, show no signs of letting up. However, common sense and logic dictate that such diametrically-opposed forces point to an eventual end to the stalemate – with the only real question being when. Since these opposing forces have been in play for 40 years, they have taken on a life of their own and the purpose of this review is a brief overview and summary.
Let me start with the forces that have worked to suppress and manipulate the price of silver to be much lower than any objective analysis would suggest, both on an absolute basis and relative to just about any other commodity or asset, most specifically, gold. The direct cause of silver’s 40-year price suppression is collusive commercial (mostly bank) paper positioning on the COMEX, the world’s leading precious metals derivatives exchange.
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So pervasive is the influence of silver pricing on the COMEX, that it has become the sole price-setter for silver throughout the world. Now there are suggestions that the world silver price-setting mechanism may be shifting (say, to China), so I would agree the moment the control of the COMEX changes in any meaningful way, the decades-old price suppression will have ended – although I don’t personally suspect it will be due to China.
The key to the control and suppression of silver prices on the COMEX by the collusive commercials has been the willingness of their principal counterparties, the managed money traders, to be led into and out from futures contract positions by contrived and rigged-price signals. So, while there have been significant and quite sharp silver price rallies from time to time over the scope of 40 years, the collusive COMEX commercials have mostly prevailed with the end result being that that the price of silver is near-universally considered to be extremely under-valued.
But the collusive COMEX commercials have not succeeded in dominating and controlling silver prices for 40 years in a vacuum, as they have enjoyed critically-important assistance from none other than those whose main mission is to ensure markets, such as COMEX silver futures, are free from the practices and manipulation clearly evident to have occurred. Sad as it is to say, not only has the primary federal regulator, the Commodity Futures Trading Commission, looked away and sanctioned the decades-old COMEX silver price manipulation, but over time, assistance to the forces of price suppression has come to include the Department of Justice and the US Treasury Dept., among other government agencies – all of which require an oath of office to uphold the law by key officials. Plus, there is the designated industry self-regulator, the CME Group, which has also been highly negligent and complicit in not ending the blatant COMEX silver price manipulation, but, at least, no one there ever took an oath to uphold the law.
I still maintain that those supposed to enforce and uphold the law and have failed to do so for decades can’t do so now because that would bring great shame on all these organizations, government and otherwise, for failing to have done so previously. That plus the fact that the principal agents of the COMEX silver manipulation over time, like JPMorgan, just happen to be systemically-important financial institutions, generally treated with kid gloves by the regulators. All these supposed-regulators are just as responsible and guilty as a primary force in not letting up on the continued price suppression of silver – along with the collusive COMEX commercials.
Admittedly, the forces intent on keeping a firm cap on silver prices are not only powerful, but show no signs of letting up and if there were any other plausible explanation for why silver prices have remained so depressed for decades, I’m sure those explanations would be apparent by now. Instead, as I’ve indicated, there is now a near-universal agreement that silver prices are too low – with more than ever pointing to an artificial price control emanating from the COMEX. As powerful as this growing consensus should prove to be, there are other remarkably strong forces clashing against the forces of continued silver price suppression, which also feature every sign of not letting up.
