By Dominique de Kevelioc de Bailleul
Leave it to Max Keiser to pick up on the Silver Doctors article, titled, “Is JP Morgan Shorting Paper Metals While Acquiring Massive Physical Stockpiles?”
If Keiser, who himself appears to have once been a clever and scheming juvenile delinquent, believes the article’s supposition reeks of the devil’s sulfur, there may be more than a sliver of truth in it.
The Silver Doctors cite Jim Sinclair, ‘Mr. Gold’, who has said two things which would most likely prove to be foolhardy not to believe. One, that the Fed would embark on “QE to infinity.” And, two, the bullion banks would amass the lion’s share of the bull market profits in the rise in gold and silver prices.
The first looks like a done deal. The second will most likely pan out as well, which takes us back to the Silver Doctors article.
The ‘Doc’ goes on to quote, David R, a veteran bullion trader, who has traded at the desks at AIG, Barclays, and UBS.
They [JP Morgan] buy the physical silver at the same time they sell the future (on Comex) futures trade in contango (higher price than spot physical) they get zero interest rate cash from FED so borrow the money for free, they own the vaults to store the silver…. so as the future comes to maturity they can either settle against their physical long or roll the future to collect more free contango…. This is pure arbitrage paid for by the FED. This has been going on for over 30 years and why shouldn’t they be allowed to have 25% of the Open Interest? There is no manipulation because they are short the futures and long the physical and have “ZERO” price risk, but nice profits! It’s brilliant trading and completely 100% legal and that’s why they will never be charged with manipulation because there is none going on. Sometimes it’s just that easy!
Of course, it’s that easy. Banks make money on spreads on every damn thing they touch. But as Ted Butler and the fine folks at GATA have argued: when a single trader becomes dominate within a single market, it’s size, alone, affects price discovery. That is, indeed, illegal, going back to the late 19th century—a time when the U.S. faced some of the nasty side-effects of an industrial revolution gone unfettered.
The man who fought the monopolists of the early 20th century, armed with the Sherman Anti-Trust Act of 1890, Teddy Roosevelt, must be rolling in his grave at the suggestion that JP Morgan’s “brilliant trading” is “perfectly legal,” as trader David R. suggests. In fact, there’s nothing brilliant about JP Morgan’s criminal activity in the bullion markets. The scam is not new; it’s as old as the hills.
According to Wikipedia, the lead author of the Sherman Anti-trust Act, Ohio Republican Senator John Sherman said the purpose of the Act was “to protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer.”
In the case of the silver market, the cost to the consumer is inflation—in everything, especially in those things consumed each day for survival. If the bullion markets are suppressed to give the U.S. dollar an advantage over the competition—bullion, the Fed can create more dollars, thereby forcing holders of the commodity (the dollar) to take a purchasing-power loss.
And with the latest mortality statistic revealing that more deaths in America come from suicide than from the result of an automobile accident, one must have to wonder how many of these suicides were the result of extraordinary bad economic times.
Another author of the Act, Senator George Hoar of Massachusetts, said, an entity that “merely by superior skill and intelligence…got the whole business because nobody could do it as well as he could was not a monopolist …(but was if) it involved something like the use of means which made it impossible for other persons to engage in fair competition.”
By the way, after the 1890 U.S. Senate ratified the Sherman Anti-Trust Act by a vote of 51-1, the House unanimously passed the bill with a vote of 242-0 on Jun. 20, 1890.
Can anyone image today’s Congress taking such a stand against the largest cancerous tumor of them all, JP Morgan? Of course not. Maybe Gerald Celente’s latest suggestion to boycott the upcoming general election is as good as Max Keiser’s suggestion to buy as much silver as one can.
The bottom line to the JP Morgan bullion prices suppression scheme is, if bullion prices reflected the weakness of the U.S. dollar, the Fed would have to stop printing them. Congress would be forced to make the tough decisions regarding the public account, and the wrongs can be righted more quickly with less, much, much less pain—and most likely less suicides, too.
It’s been said, “Evil knows no boundaries.” That evil is the Fed’s no. 1 stockholder, JP Morgan. How Alan Greenspan, Jamie Dimon, Robert Rubin, Lloyd Blankfein and the other Den of Thieves can sleep at night is another puzzle for another time. There’s a lot of blood on their hands, and for one, Blankfein, appears to have no idea why his hands are stained red. What an anthropomorphic example of a living and thriving cancer.
God have mercy on these pathetic and perfect examples of humanity’s worst.