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rockmstockmon Feb 10, 2014 10:10pm
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Gold/silver dollar backing
Gold/silver dollar backingTHE GOLD IS GONE, IS THE USA GOING TO BACK ITS DOLLAR WITH SILVER?
JP Morgan Holds Highest Amount Of Physical Silver In History
Gold Silver Worlds
While everyone is focused on the massive outflows in COMEX registered gold inventories and the gold ETF, GLD, it seems that an important evolution in silver is passing unnoticed. In what follows, Butler's calculations show that JPMorgan (JPM) has piled up the largest holding of physical silver in modern world. Since the silver price peak in May 2011, the bank has accumulated between 100 and 200 million ounces of physical silver (if not more). The equivalent in metric tonnes is between 3,110 and 6,220 tonnes.
To put that number in perspective, it surpasses the amounts held by the Hunt Brothers or Warren Buffett (in his investment company Berkshire Hathaway).
On a yearly basis, some 100 million ounces of silver reach the investment market, which translates into 250 million ounces between May 2011 and December 2013. That has a value of approximately $5 billion. Given the size of the too-big-to-fail bank, that amount of silver, how large it may seem, is easily affordable:
Butler explains that JPM was able to accumulate so much silver without being noticed through the big silver ETF, SLV. In his weekly commentaries to his premium subscribers, he has explained on numerous occasions that the physical silver holdings in SLV have been largely intact on a net basis, but there was a large ' 2539=' class=' 2540=' class=' 2541=' class=' cssbody=' style=' 2542=' class=' csstopic=' style=' 102,='153);' 2543=' class=' 2544=' class=' churn"='in' the='data' which='allows' for='a' large='buyer' to='go' unnoticed.='For' instance,='60' million='oz' were='right' in='May' two='months' after='the' price='smash' 2011;='they' away='absorbed' by='a' big='buyer.' are='available' on='this' site='https://about.ag/SLV/.
Furthermore, the conclusion that JPM has been the big buyer in physical silver is confirmed by the following facts:
“Causing the price of silver to be depressed via a concentrated short position on the COMEX along with the ability to crush prices in an HFT second, to then scooping up physical metal (and covering paper shorts) at the self-created depressed prices.
What this also highlights is the madness and illegality of having the paper price on the COMEX setting the price in the physical market. If JPM hadn't been capable of rigging silver prices lower in 2013, it would never have been able to buy back 100 million ounces of short paper contracts and buy many tens of millions of physical silver as well.”
Motive
The underlying motive for JPM to accumulate such a large amount of silver is most likely related to the fact that the bank was on the wrong side of the market when the silver price exploded.
When silver went through its historic rally in March and April 2011, the weekly COT data indicated that speculators did not rush into COMEX futures, which means that the peak in the silver price was not driven by speculation in silver futures. On the other hand, there was buying in the big silver ETFs, including record short selling in SLV.
- Meantime, JPM has built the longest position in physical silver in recorded history. It holds its grip on the silver price through its Ted Butler has written time and time again that the extent to which JPM adds new short contracts on the next silver rally will determine the strength of the rally. Simply put – if JPM doesn't add new short positions, the manipulation is over. Someday, JPM won't add to silver short positions and they, more than anyone else, will be best positioned to realize massive gains.
Further reading
JP Morgan's Perfect Silver Manipulation Cannot Last Forever
Highest Concentrated Position In Silver In History
The Great Disconnect Between Paper & Physical Silver
This article is based on a previous commentary of Ted Butler's premium service. Readers are highly recommended to subscribe to the service on www.butlerresearch.com as it contains the highest quality of gold and silver market analysis. Ted Butler is specialized in precious metals markets analysis for 4 decades.