Debunking the Post-CFTC Precious Metals Fear Mongering Campaign

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  • Tue, May 18, 2010 - 02:02am

    #51
    Peak Prosperity Admin

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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

[quote=MetalsFacts]

Hello. This is Jeff Christian.

I do not normally participate in these commentaries, but saw a couple of inappropriate references to my personal ethics, so I thought I would clear things up.[/quote]

Jeff,

Thanks for replying to this thread and for making your clarification. I certainly appreciate you using your valuable time to do so. 

The debate was so one-sided that I looked at a couple of things that are in the public domain and are readily available to me and so raised the questions I posted above. The reason I did this is that the overwhelming winners of debates, at least among politicians, sometimes use questionable tactics.

The CFTC incident that you clarified was garbled, OK since you are usually extremely careful with language you’re allowed a rare error.

The memo Barrick filed in their defence was, at the time, erroneously reported as a claim of sovereign immunity in several places. As we both say this was untrue but related to a claim of sovereign immunity that would have existed for one of the alleged parties to the alleged price manipulation. You said that GATA had lied. I’m not sure whether this was a deliberate lie or gross incompetence.

Please accept my apologies for questioning your integrity and ethics, but please note I never said anything that was not true. I agree with you that words are important

 

  • Wed, May 19, 2010 - 09:09am

    #52
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

[quote=MetalsFacts]

Gents,

Thanks for all of your warm welcomes. I feel like a LURP walking into a base camp.

Let’s continue this discussion.

[/quote]

Jeff,

Since you’ve so graciously offered to join our discussion here, I’d love to hear your views on the JPM allegations. Not so much whether or not the e-mail was bogus or not (although that’s interesting too), but more specifically Ted Butler’s rhetorical allegation “How could a concentrated short position nearly as big as the annual production of silver be anything other than a manipulation?”

This community includes some very smart people, but most are not finance professionals so we have to take the information available to us and try to sort the facts from the BS. I think that most of us here have come to realize that the “100:1 leverage” business falls in the BS category. GATA BS to be specific. But many of us are still questioning whether or not Ted Butler is raising a legitimate concern relative to JPM.

Specific questions:

   1.  Does my most recent previous post above correctly summarize your position on the matter, i.e. that you believe the reason JPM has this big short is that some combination of JPM and their customers are in posession of that much metal and are hedging it?

        1a. If so, what’s your guess on the ratio of prop to client holdings behind this massive hedge?

   2.  For the inherently skeptical among us, is there any way to verify that JPM really has holdings of physical metal so large as to justify that big of a hedge? (Most of us here have a cursory knowledge of basic public company reporting documents but I for one have no idea whether banks are required to disclose their physical metal holdings on any regular basis)

  3.  Do you think there is any legitimacy whatsoever to the recent propaganda about this massive short being on the verge of being squeezed, or do you think JPM will sit on the hedge indefinitely because it’s offset by corresponding physical inventory?

Thanks in advance for your time in replying!

Erik

  • Wed, May 19, 2010 - 12:15pm

    #53
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

Hmmmm….it’s an interesting story, but the question I have about the idea that JPM was accepting back large amounts of physical silver is, “where did they do this?”

They didn’t appear to do it within the COMEX system itself since the registered and eligible categories neither moved sufficiently enough to warrant the size of the ‘hedges’ nor is there even enough metal within the entire COMEX inventory to account for the ‘hedges.’

I’ll have to ass-u-me, for the moment, that the majority action was happening on the LBMA while the NYMEX/COMEX was being used as the paper hedging side of the trade.

Alternatively we’d have to speculate about vaults outside of either the COMEX or LBMA, but I am unaware of any such conduits large enough to satisfy the amount of apparent hedging.

But I simply don’t know anything about any of this besides what I read.  Jeff, perhaps you can clear this up?

What exactly did you mean by stating that the bullion banks “were buying silver and gold hand over fist in the dealer market” and that the “banks, as market makers, stood to buy back gold and silver as their clients sold.”  To me this sounds like physical inventory that exists somewhere and is transferred from one party to another.  If so, where are these inventories and how large are they?  Where can I access the necessary data to assess whether the amount of paper shorts held by JPM, et al., constitute a fair and legitimate hedge, or of they are outsized relative to physical and therefore a matter of speculative investing for which the charges of “concentration and manipulation” remain applicable?

I am wide open to whatever the data says, but for now all I have are various claims for which I have no solid basis for analysis and opinion, which leaves me uncomfortable.

As a commentary, I often wonder why solid data is so hard to come by for gold and silver (and other commodities) when there is infinitely more transparency into other financial markets.  This opacity int he commodities makes for fertile ground for imaginations and belief structures to run wild.

  • Mon, Jul 19, 2010 - 02:42am

    #54
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

I just listened to the debate and found Bill Murphy annoying. But that doesn’t make his position incorrect. Frankly, it just leaves me with unanswered questions and confused. I am a small-time gold and silver investor which I do mainly to protect what little I have. I find the price manipulation debate confusing becasue I do not have the market knowledge to understand the complexities of what Ted Butler speaks of and what large players like JPM do in the market. But what I do dream of (naively) is having an open and free market where a hard-working ‘mum and dad’ investor like me can be a participant without having foxes and wolves snarling at my hard earned wealth.

Right now I would like more facts of manipulation from GATA. Conspiracy theorists can get a little wrapped up in themselves and lose sight of the truth and their origianl motivation.

Bottom line, I’m holding onto my precious metals. May the Truth win.

  • Fri, Oct 08, 2010 - 06:39pm

    #55
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

 

 ‘I expect the CFTC to say something on our silver investigation within weeks. I can’t pre-judge what that will be. I can’t even guarantee that the agency will speak. That said, if the agency remain silent for much longer, I intend to speak out on the matter in an appropriate fashion.’ – Bart Chilton

 http://www.citywire.co.uk/money/silver-price-manipulation-public-deserves-answers/a437169?ref=citywire-money-featured-articles-list

 I see you shiver in anticip……………………………………… ation.

 

 

  • Wed, Oct 27, 2010 - 12:28am

    #56
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

Silver Subject to Price Manipulation, Chilton Says

 

 http://www.bloomberg.com/news/2010-10-26/silver-market-faced-fraudulent-efforts-to-control-price-chilton-says.html

 

 

  • Wed, Oct 27, 2010 - 01:55am

    #57
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

[quote=SteveW]

Silver Subject to Price Manipulation, Chilton Says

 

 http://www.bloomberg.com/news/2010-10-26/silver-market-faced-fraudulent-efforts-to-control-price-chilton-says.html

 

 

[/quote]

Interesting article.  For some reason or other, this fellow Chilton strikes me as a complete schlemiel.  If you read his CV, you’ll find that he is in no way qualified for this position.  I thought it was particularly interesting that the article stated that it took 5 years to investigate the Hunt brothers.  For Pete’s sake, the U.S. was over and done with World War 2 in less than 5 years.  Given the growth in governmental ineptitude, the investigation into the present fraud should be good for at least 10 years, especially with this (in memory of Davos) moron running things. 

  • Wed, Oct 27, 2010 - 03:54pm

    #58
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    Re: Debunking the Post-CFTC Precious Metals Fear Mongering …

The CFTC has until January to develop rules for position limits, a requirement that was recently imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act on financial reform,

http://cftc.gov/LawRegulation/DoddFrankAct/OTC_26_PosLimits.html

For a view from the street.

Posted: Oct 26 2010     By: Dan Norcini      Post Edited: October 26, 2010 at 2:05 pm

 

The silver market was abuzz with news today about CFTC Commissioner, Bart Chilton, concerns over price manipulation. The fact that he has come out so publicly took many, outside the camp of GATA and others, by surprise and lit a fire under that market which took it up into a resistance area near $24 on the charts. Strength in silver then worked to pull up gold which had been under pressure from the falling Euro and the subsequent bounce towards 78 in the Dollar.

You have to wonder about the many who have insulted GATA and its fine work over the years and ridiculed them in such a derogatory fashion whether they will now have the common decency to apologize for their shameless and contemptuous treatment of my friends Bill Murphy and Chris Powell and all the other dedicated members of the GATA board. The fact that Commissioner Chilton has come out so forcefully and chosen to use the words, “fraudulent” and “devious” in regards to the silver market is remarkable for its clarity and frankness. He was careful not to come to a conclusion about actual manipulation but as he pointed out, attempted manipulation is an entirely different matter. Based on his own words, it is evident that he strongly believes that attempted manipulation has been occurring regularly.

From here on, those who refer to GATA and its supporters as “the tin foil hat” crowd are only making fools out of themselves and revealing themselves to be mere hacks of the bullion bank crowd. GATA can no longer be dismissed as some sort of rogue band of disgruntled “gold bugs” but as the fine group of people that they are; people who share a genuine concern for the integrity of our financial markets and whose tireless research and efforts on the part of the precious metals markets deserves to be given the respect that is due to any organization which has produced work of the nature and quality that GATA has. I am not holding my breath however; very few are able to conquer their own pride and remain slaves to it all their lives. It takes a man of real character to admit he was wrong. Generally speaking, the most vocal opponents of GATA seem lacking in this department.

Hats off also to Commissioner Chilton for having the integrity to follow through on this even in the face of what no doubt must have been some very strong opposition. It is refreshing to see a man who actually takes what he does seriously and is working in the interests of the general public and not just a few favored special interests. If you have not done so, please take the time to send him an email encouraging him and thanking him for his efforts. So often men in his position only get emails or letters haranguing them.

 [/quote]

 

  • Wed, Oct 27, 2010 - 09:19pm

    #59
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    Silver manipulation

Interview with Jeffrey Christian and David Morgan.

http://www.bnn.ca/News/2010/10/27/Silver-market-manipulation.aspx

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