Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Big Silver Long - What Gives?

Commodities / Gold and Silver 2016 Jul 10, 2016 - 05:27 PM GMT

By: Dr_Jeff_Lewis


As Chris Powell of GATA made famous: "Price action makes market commentary".

Control the price of anything and you get control of the story. The U.S. Commodities Future Exchange (COMEX), a subsidiary of the Chicago Mercantile Exchange (CME), is central to price discovery – and nothing else can compete.

Price action on the big silver ETF, SLV does not (yet!) factor into a price that begins and ends with a trading structure that is rigged to the tune of a few traders who dominate one side of the trade.

Nor does the mining sector have direct influence, though it’s very easy (and therefore tempting) to envision scenarios where signals from mining equities seem to anticipate impending moves.

Sales from the U.S. Mint or industrial production or usage data have no bearing yet. There is no news of significant supply surplus.

Perhaps overnight trading or the Asian markets will matter one day. But for now, the overall (paper) trade volume outside of the COMEX is but a fraction of what occurs during New York hours. And yes, that is paper trading – the tail wagging the dog.

But that is not anything new. The entire fiat system is awash with derivatives and similar patterns, though none so egregious and visible than silver. The metals and commodities, fit with the story of what we see across the board. The dollar, deflation, the return of the liquidity crunch.

It’s as if the story is somewhere along the lines of, “Let’s make some political wiggle room for more easing – or printing – to justify the only thing that we, (the central banks) know how to do.”

So, we remain in limbo – lock down mode.

This chart is an graphic illustration of the dance between the commercial net shorts and the managed money technical funds.

Recently, a friend and fellow subscriber, wrote to me the following comment and question about what I thought of the bullishness or bearishness of JPM’s alleged physical long.

The premise came from Ted Butler’s many observations (read the premise here) and insight into the structural framework at this, the primary level, of silver price discovery.

My response was:

Sadly, in the end, it’s all bearish to me. The whole fiat Ponzi wake up call cannot, and most likely will not, end well.

(The reflection of the madness can be seen in the growing social unrest).

I think we’ll be ‘happy’ that we had something left over relatively unencumbered.

As for the JPM physical long speculation…

Someone has been buying while prices were falling in the aftermath of April-May 2011. Who, other than very deep pockets, can actually afford to accumulate against the grain like that? (Outside of our small village of silver investors.)

This was much different than the buying that went on from the 2009 to the 2011; for then it was buying on rising prices that ultimately put pressure on physical inventory.

It certainly seems in line with the way these guys operate – anything for a profit and above the law.

One could be right about JPM ultimately using their physical hoard to further quell prices – when or as ‘needed’.

Though I can’t help but wonder how they will use physical silver to suppress paper (COMEX) prices.

In fact, as I've speculated recently, buying Eagles and Maple Leafs is a perfect of way of burying the corpse if they intend to squeeze their fellow short counterparts...(it's not a new strategy in the history of futures manipulation).

In other words, what’s the vehicle for delivering on all that metal? Price is a COMEX-derived affair, yes?

It’s not like real physical supply and demand conditions have had any meaningful impact on paper price over these last 40+ years.

Longs must stand for delivery while the shorts must come up with the metal to fulfill the promise.

How do they go about feeding all the metal required to close out those positions without disruption?

Let’s say they do start delivering metal on all those shorts…

How do they do that quietly? And what then?

Are they going to come right back in and short the move up all over again? Wouldn’t everyone see it once market started moving? How would the rest of the big 8 deal with the margin calls on their underwater positions -- more than $2 Billion of open losses at the time of this writing according to Butler. 

The footprints would be all over the COT report.

Again, ultimately, how does one unload all that metal onto a futures market without being disruptive or drawing attention?

That’s a lot of questions, I know. But ones we should be asking.

Politically and systemically, JPM and the other big four (net shorts) are enmeshed with the fourth, fifth, and sixth branches of government. (The Fed, Treasury, and Exchange Stabilization Fund). These giant banks are, for all intents and purposes ‘The Fed’.

So yes, sure; ultimately, they are more or less one degree separated from THE central power.

Maybe, (along with the Fed), they are simply one more nodal point in the greater world currency matrix – which is an elite and fantastic farce, led by the BIS, World Bank, or IMF?

Maybe the real question is how do they keep THAT going? How do they keep the dollar reserve paper Ponzi going?

That seems like a bigger, much more complicated, high stakes, and delicate ‘mission’.

Black Swans (or a murder of crows) have essentially blotted out the sky. It is perhaps somewhat revealing in the way these guys come out of the kitchen singing a different song.

Take Alan Greenspan for example. He’s a gold bug all over again. To me that says it all right there. It’s a big game at that level – so far detached from reality that it eventually blows up like it always has, and probably always will – as soon as enough people forget about the last time.

Silver prices are determined by giant promises that based on a fiction which will never come true until it’s too late to do anything about it.

To receive early notification for new articles, click here. 

Or to view our products and services, click here. 

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of

    Copyright © 2015 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules