On The Hot Seat

 Jim Cook Interviews Ted Butler

Q: A minor analyst recently remarked that he didn’t believe any of the claims you make about market manipulation and called it conspiratorial stuff. What do you say about that?

A: That’s the main reason my arguments have never caught on in a big way. Nobody wants to be associated with a conspiracy. However, I draw my conclusion from government data like the Commitment of Traders report and the Bank Participation report. There’s nothing conspiratorial about the data and my conclusions are factual.

Q: You have cast JPMorgan as the main villain in a market manipulation of silver. Hundreds, maybe thousands of people have queried the main regulator, the CFTC, about this manipulation and they have never responded to anyone. Are they writing us all off as conspiracy nuts?

A: They would probably like to. The Justice Department just indicted a JPMorgan trader for spoofing and indicated their investigation of this highly manipulative tactic was ongoing. Normally this comes under the jurisdiction of the CFTC. Why did they miss or ignore this practice when I told them about it a hundred times? We need an explanation.

Q: JPMorgan would certainly claim they are doing nothing wrong.

A: For ten years they have held the largest short position on the COMEX and in collusion with other banks, they have acted to suppress the price. Meanwhile they have accumulated a vast hoard of physical silver in their own COMEX warehouse and elsewhere. I call this an illegal market manipulation on steroids. Somebody please tell me where I’m wrong.

Q: I believe JPMorgan would say that they are short along with hundreds of other traders. Nothing wrong with being short and nothing wrong with buying physical silver.

A:  First of all, you have great concentration among 8 big banks on the short side. That’s collusion and a key ingredient in a price manipulation. These 8 banks are currently short more than 500 million ounces or two-thirds of all the silver produced in a year. No other commodity comes close to this.

Q: Why go short at such a low price?

A: It’s hugely profitable if you dominate the market. In ten years JPMorgan has never lost money on a short sale. I can document that, if anybody in the government cares. They’ve made billions doing this while never a losing trade, which anyone who knows anything about futures trading will tell you is absolutely impossible. You do that by cheating.

Q: I’m not going to ask you about the big counterparties who are the losers in these trades because we are running out of space. JPMorgan is showing nearly 150 million ounces of silver in their name in their COMEX warehouse. That’s more than the Hunt brothers owned in 1980. However, you claim they have 800 million ounces in total. You don’t have the same kind of solid documentation on this figure as you do on the 150 million in their warehouse. Don’t you think this hurts your credibility?

A: I’ve been focusing on the futures market and silver for more than 30 years. I’ve been scrutinizing JPMorgan’s activities closely for ten years. They acted to squash and suppress the price of silver while accumulating as much physical silver as they could. This is the ultimate market crime. Of course they have tried to hide this fact, but if you read my newsletter, you will see the kind of detective work I have used to track their acquisition of the greatest hoard of silver in the history of mankind.

Q: You are saying they grossly manipulated the market to set up a mind-boggling profit, right?

A: For every ten dollars that silver rises they make 8 billion dollars. They forced down the market and bought silver bars on the cheap to set themselves up for an astonishing profit.

Q: Any other evidence?

A: Take JPMorgan out of the short side and the price of silver would be much higher. That’s proof of manipulation in itself. Look at the government data. It’s conclusive. It’s illegal to conspire to suppress the price of a commodity in order to buy it at a lower price and reap a big profit after you close out your short sale.

Q: Might this never end?

A: Manipulations always end and I’m hopeful the Justice Department will be all over this. How can they not be? That would end the manipulation and set the price of silver free. That in itself will be something to behold.

Q: What do you say to people who are getting impatient waiting for this to happen?

A: Waiting does not diminish the incredible opportunity for gain that I believe exists in silver. People who own silver will be glad they waited. The coming price rise in silver will be talked about for decades.

Jim Cook is the President of Investment Rarities.