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JPMorgan’s Imaginary ‘Silver Hoard’ Is Explained - Jeff Nielson

JPMorgan’s Imaginary ‘Silver Hoard’ Is Explained - Jeff Nielson
By Jeff Nielson 3 years ago 23890 Views 20 comments

Over the past couple of months, several respected commentators and (of course) the mainstream media have been reporting that JPMorgan has supposedly amassed a gigantic hoard of “physical silver”, roughly twice as large as what was amassed by the Hunt Brothers (and their cartel) back in 1980, when the Hunt Brothers were formally charged and convicted of “cornering the silver market”.

This report was previously greeted with extreme skepticism in a previous commentary, for a multitude of reasons. When the Hunt Brothers were charged/convicted of cornering the market; their hoard accounted for less than 20% of total global inventories, yet this “squeeze” on the market resulted in the price of silver soaring by a factor of ten (i.e. 1,000%).

The JPMorgan “silver hoard” is supposed to be twice as large as that of the Hunt Brothers; yet it comes at a time where global silver inventories are at best one quarter as large as back in 1980. In other words, the JPMorgan silver hoard (if it existed) would represent a market concentration of at least eight times as extreme as that of the Hunt Brothers. Yet while JPMorgan has been accumulating this supposed hoard; the price of silver has been falling.

Let me repeat this point, to ensure that it is clearly grasped by readers. We have a supposed market concentration today in the silver market by JPMorgan which is eight times as extreme as that of the Hunt Brothers (when the price of silver increased by 1,000%); yet, today, the price of silver has been falling, not spiking higher.

How is this possible? It’s not. There is no rational/legitimate market (or universe) where a market concentration of this supposed magnitude could not result in a dramatic, upward spike in price. Period. Certainly if this much silver was ever dumped onto the market (rather than supposedly withdrawn from the market), we know what would happen to the price of silver: it would plummet lower.

Obviously “markets”, by definition, move in two directions. If dumping massive amounts of silver (and even paper-called-silver) onto the market causes the price to crash, always, then withdrawing massive quantities of physical silver from the market must cause the price to soar. Always.

This brings us to the explanation of JPMorgan’s latest gigantic silver-fraud, and the purpose behind that fraud. Further enlightenment comes via the interesting observations of Bill Holter (from June 26th):

First, we have an insane situation brewing in Comex silver. The open interest finally exceeded 200,000 contracts (1 billion ounces). I believe the only other time this much open interest existed was back in 1980 or ’81. This makes no sense whatsoever, the price is again plumbing 4 year lows yet open interest has moved to record highs…?

In other words; we have Mr. Holter reporting a market-insanity precisely parallel to what was just noted before this, where JPMorgan has purportedly accumulated an extreme, long position in the silver market (larger and more extreme than in 1980), yet the price has gone down rather than up. Holter continues:

The fact open interest has expanded while price has declined is proof positive the “initiation” of this expanded open interest has been by “shorts” but absorbed by “someone” on the other side of the trade. Total global production of silver is only 800 million ounces or thereabouts so Comex shorts have contracted to deliver 25% more silver than will even be produced globally over the next 12 months. Silver available for Comex delivery only totals 57 million ounces so they sit on a naked short time bomb of more than 950 million ounces! [emphasis mine]

Enter JPMorgan. Obviously one does not have to be Sherlock Holmes to deduce who is the “someone” on the “other side of the trade.” They are the facilitator for the construction of this gigantic, illegal short position. In an ironic example of role-reversal; we have JPMorgan playing the part of the patsy-long, absorbing all of the bets of “the other side” in this serial shorting – by other Big Bank tentacles of the One Bank (such as Scotia Maccotta and HSBC).

Simultaneously; we have JPMorgan claiming to have accumulated a massive hoard of “physical silver”, when the market tells us that this could not possibly have occurred. Hence we know that the JPMorgan silver hoard is imaginary silver. But this begs an obvious question: why would the most-notorious silver short in the history of the silver market pretend to accumulate a massive long position – while still holding a large short position, itself?

To say that this makes absolutely no sense is the greatest of understatement. Obviously there had to be an ulterior motive to this sham, as JPM would certainly never engage in any behavior to deliberately drive-up the price of silver, which is precisely what it seemed to be doing here. Now, via Bill Holter, we see this “ulterior motive”, plain as day:

they [i.e. the One Bank] sit on a naked short time bomb of more than 950 million ounces!

How do you defuse an absurdly gigantic, naked-short, time bomb in the silver market? With an absurdly gigantic “hoard” of physical silver, conveniently delivered to the market, as needed, to prevent implosion of this time bomb. And in our criminalized system, if you don’t have a hoard of real silver available for this defusing; imaginary silver will be a perfectly good substitute.

Let me refer back to the commentary which first scoffed at reports of JPM’s imaginary silver hoard:

…The purpose of JPMorgan pretending to hold “a massive long position”?

That’s an easy one. If JPMorgan pretends to be holding a 350-million ounce hoard of silver and its criminal accomplices who operate and (supposedly) police these markets go along with this massive sham; that is 350 million “ounces of silver” which this fraud-factory could claim to dump onto the market – as part of some future operation to crash the price of silver.

This is exactly what we seem to be seeing now, except with one, different wrinkle. Instead of JPM’s imaginary silver hoard being used to drive-down the price of silver still further (from already extremely depressed levels); this imaginary silver hoard will be dumped onto the market to “cover the shorts” – to prevent an explosive rise in the price of silver when these naked shorts would (otherwise) implode.

All that remains is to put this latest “operation” in the silver market into the overall context of the looming economic catastrophe which approaches, the Next Crash, scheduled for 2016 (or perhaps the end of this year). What happens in sane, legitimate markets when some economic disaster and/or panic occurs? People seek shelter in humanity’s most time-tested “safe havens”, gold and silver.

What happens when populations collectively move into these safe havens? The price for these precious metals explodes higher. However, as we have seen for most of the last 40 years, and all of the last 25 years; this is the one thing which the One Bank seeks to prevent, with literally all of its criminal might.

When you are planning to crash global markets (in order to profit from your foreknowledge of that scheduled crash); you know that doing so will put tremendous upward pressure on both gold and silver prices, and gold and silver demand, in markets already (criminally) stretched to the breaking-point. How do you blunt such a price-spiral, and hopefully the explosion in demand which would/should accompany it? By scheduling a price-crashing operation in the silver market simultaneous with, or slightly after your other, larger “operation”.

If Niccolo Machiavelli were alive today, he would be carefully taking notes, as he observed the schemes and crimes of the One Bank.

Alex Parker 3 years ago at 8:16 AM
I thought the Sprott organisation was supposed to be one of the good guys, so I'm amazed to see this shameful piece of journalism having no regard for the painstaking work undertaken by Ted Butler. Shame on you for stating as fact the individual views of the author!
Erik Gates 1 years ago at 7:23 AM
Banks don't "load-up" on commodities for their own accounts (other than customer facilitation, etc.). Anyone with a triple-digit IQ in the 21st century is keenly aware of this. EVEN if this nonsense were true....a failed "cornering" of market would be imminent with that type of overhang...and the price would collapse.
me 2 years ago at 10:30 AM
The author must have been paid by JP Morgan for the article. JP is very good at manipulating the precious metals market on both ends of the podium by creating false downside then buying massive quantities on down dips. Also dumping shorts when most advantages. also being in bed with the SEC helps too.
Bobby Fresa 2 years ago at 2:56 PM
Are you sure it's ONLY JP Morgan who's responsible for this???
Timothy Bond 2 years ago at 1:20 PM
That you cannot build a sizable position in a particular asset with the price declining is simply not true.

Silver declined from 2011-2015 and someone could have easily taken the buy side to accumulate that much silver that the speculative funds were puking.
Erik Gates 1 years ago at 7:33 AM
Fascinating....it's NEVER a conspiracy by the boogie-man when prices are going up...but always a conspiracy when prices are going down. Silver is dying because of the speculative premium placed by those who think we'll return to the days of the Roman Empire and it will be $$$ again! The Silver Institute's nonsense re the huge "ramping up" of industrial uses/needs is highly-exaggerated. It's in a dying asset class owned by those who long for yesterday. Digging crap out of the ground and calling it "wealth" ...again....yesterday. OH...even worse news for those who struggle to think >> over $20/ounce ...one can find a cheaper alternative to silver for almost any commercial/industrial application. So...run to your William Devane safe deposit boxes boys...and run your fingers through your "wealth". I guarantee your standard of living will continue to erode.
Silver Surfer 9 months ago at 8:14 AM
Thats Jamie for putting things in historical context.
Enough of this worthless antiquated relic.Im off to buy lots of grossly overvalued equites whose valuations bear no relation to economic realities.Thats again Jamie.Oh say hello to Blanky for me.
truth 28 days ago at 3:20 PM
yeah explain to me how the tech industry is going to replace silver and gold.. take a look in the mirror and face the music, non backed currency is worthless. simple as that.... but you cant look in the mirror, you dont like silver.
2ndshowroom@gmail.com 8 days ago at 3:06 PM
Get a life, Silver DESTROYS the good old paper fiat money...! Always did, Always will. It has MORE uses than GOLD...Golds S.H.I.T.! Its silver that will save the planet, Just its antibacterial properties R off the charts...! Its used EVERYWHERE around the world for 1000's of things, What you use gold or paper and ink for?????????
L Klem
Mike 1 years ago at 3:03 PM
Wouldn't JP Morgan's influence in the paper markets (i.e. shorts) and manipulation of the price downwards be an explanation for the low price, despite their physical accumulation?
Henk van der Laan 1 years ago at 10:22 AM
It is a pitty the writer does not know the difference between fysical silver and the role of JPmorgan controlled paper silver. The whole silver trade is paper magic and has no supply-and-demand rationale at all.
Spartan 11 months ago at 4:39 PM
The price has fallen because J P M sells more futures contracts than it buys metal!
Watch what happens when they stop!
Dean F. 9 months ago at 8:10 AM
BINGO to last few replies. Paper leverage/derivatives allows buy-up of anything physical at prices suppressed by sale of paper. Neat trick. Manipulation and collusion today makes Hunt brothers look like pikers, while regulators with dirty hands look the other way.
Bernie 7 months ago at 3:21 PM
Short comment;
WELL SAID!
Bernie 7 months ago at 3:28 PM
I do have a question!
How many ounces of silver will JP Morgan have to trade in this lovely buy and sell scheme on a daily bases to make up the short position? We can clearly see manipulated prices of .30 to .50 cent moves! One can only assume they are selling millions when up and buying more on the flip side when on the low!
JPM 5 months ago at 5:31 PM
By trading its futures and betting against it they manipulate the price causing it to fall. Once they stop trading the futures watch silver spike to $1000/ oz. JPM silver cornering is real.. Either get in or lose out!
R 2 months ago at 7:53 AM
You missed a key point. They also now control AI and robotics...and no longer have a need for us, especially during any sort of disruption, upset, refusal to work, uprising etc... They will either control us with mass z produced offensive robots or destroy us... take your pick.
Dean 2 months ago at 2:02 PM
R. Yep. Have actually written a fair amount on that subject exactly. A BUNCH more folks need a red-pill moment! Very doubtful, but we can keep trying.

Sorry for slow reply. I only just received notice someone had responded
Ali 1 month ago at 10:51 AM
I have gotten things wrong so often that I can easily forgive the author for getting this one wrong. The more recent comments have it right, (JPM is shorting massive paper silver to manipulate prices lower while buying and storing physical bullion).

We have to remember that we cannot just inspect a chart and say, "Oh, I thought JPM was short here on this point of the chart. Their paper short did not pay off that year, and so JPM must not have really truly been short." (And visa versa for longs) Even though fund managers do aim to yield a 30%+ ROI at year over year, this does not mean that any one trade must realize profits before end of year. JPM is not you or me. They do not move hundreds of dollars or even thousands. We tend to think too small and too short term to understand what the big manipulators are doing. Look at silver's monthly chart. Silver and gold are almost always longer term trades for their best profit potential.
JPM silver is a long term trade. Even if it takes a total of 10 years from the time JPM began to accumulate physical bullion to the time they exited the market and took full profits, they can still show a very nice ROI for their customers. Example: acquiring the bullion at around $16.66 (assuming cost of storage and everything) and selling the paper for delivery at over $50 still mounts to over 300% ROI over the ten years, which divided out equals an average 30% return PER YEAR of this trade.

And none of this is assuming that this is a long term play -which it is. We are neglecting the fact that the dollar will crumble and silver will peak well over $100, giving the ten year trade 600% ROI at an annualized ROI of 60% Not bad JPM... not bad...
Paul Sellon 15 days ago at 1:54 PM
After following the JP Morgan silver manipulation story for a while I decided to do my own research into the matter. You see I have a vested interest in the outcome. I've been sitting on silver and gold since 2012. Not the best position to be in.
As I see it JP Morgan made the bonehead move of acquiring a shitload of silver just before the peak in 2011. The price fell dramatically later that year and JPM had a major problem on their hands. This kind of problem goes right to the bottom line and in 2012 banks could not afford to have problems of this magnitude. How to mitigate the situation?
I was a silver jewelry supplier for many years to major U.S. retailers. Sometimes I would make bonehead moves and buy silver at the high (Just like I did in 2012). In order to offset the purchase I would have to buy silver at lower prices to average my inventories and keep adding silver until I solved my problem or got back in line with the prevailing silver price. Basic dollar cost averaging of inventory.
This is what JPM is doing. It takes time. JPM needed assurances they can guarantee lower purchase prices going forward until the problem is solved and they alone have this capability. How do they do it? Massively short the market while continuing to acquiring physical silver.
Based on my calculations they need to buy about 50 million more oz's to have their average ownership around $17 - $18 per oz. They are now at about $21.50. When that happens they stop shorting the market and allow the price to go up. Let’s say it goes up to $36 per oz. The bonehead move is swept under the rug and JPM turns a 105% profit on their total holdings or roughly 15% per year over 7 years. A reasonable ROI for their efforts. Not a bad return. If silver goes a lot higher, and I believe it will. They stand to take their disaster purchase in 2011 and turn it into a major moneymaker by 2018 or a little over 7 years. With that said, I'm holding on to my silver and gold positions till year end or JPM reaches their goal.
BTW how are they getting away with this blatant manipulation? Don’t believe a word about not supporting too big to fail banks. The U.S. government and the Feds are in full support. After JPM made the deal with the govt. to acquire Bear Sterns, It’s the least they can do to help JPM out of their problem.

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