Golden Oxen's First Amendment Forum

Kyle Bass Explains Why He Had The U of TX Take Physical Delivery Of $1 Billion in Gold


     

A couple of weeks ago, a long time subscriber correctly pointed out that I seemed to be speculating more than usual in my conclusion that JPMorgan was the big buyer of Silver Eagles and had accumulated as many as 300 million oz of silver, including Eagles and bullion. The subscriber noted that I usually relied on hard core facts that could be documented and not on speculation. As it turns out, I believe there are sufficient number of hard facts behind my speculation, but I had failed to point them out. So let me present the facts, as I see them, that point to JPMorgan having amassed the largest physical silver position in history.

First, let me set out what I am suggesting concerning JPMorgan and silver. I’m not suggesting I knew all the facts as they were developing, but I came to see them only afterward with the benefit of hindsight. The facts show that JPMorgan took over Bear Stearns and its concentrated short position in COMEX silver (and gold) in March 2008 when silver was close to $21, the highest level to that point in 28 years. The price of silver fell from that level in an irregular pattern until late 2010, while JPMorgan both decreased (bought back) much of its concentrated short position on sharp price declines and increased its short COMEX silver short position on rallies, as I publicly chronicled all along. At times, JPMorgan’s COMEX net short position exceeded 40,000 contracts or the equivalent of 200 million oz. Such a large concentrated position necessarily controlled the price of silver and was, in fact, manipulative on its face.

Because it controlled the price of silver, JPMorgan profited handsomely on its COMEX manipulation thru 2010 and not even an ongoing five year CFTC investigation interfered with JPM’s control on silver prices. However, in late 2010, investor demand for physical silver caused silver prices to break above the highs of early 2008 and JPMorgan could no longer control the price of silver through excessive paper short selling on the COMEX. Physical silver conditions tightened so much by the end of April 2011 that the price reached nearly $50 and, quite literally, JPMorgan (along with other collusive CME traders) were staring into a financial catastrophe, the same as undid Bear Stearns three years earlier.

But no bailout of JPMorgan was possible in April 2011 and instead, the bank along with interested parties at the CME Group arranged for a disorderly takedown of silver prices, almost assuredly with the approval of US regulatory officials. The disorderly takedown proved successful and the big shorts, particularly JPMorgan, escaped what would have been an epic financial catastrophe had they been forced to cover their massive silver short positions.

It is said that one learns more from failure, especially near disaster, than from success. It is my belief that at the time of JPMorgan’s near catastrophe in being short silver into April 2011 that the bank realized just how limited and critical the supply of silver in the world was and decided to use their near death experience to their advantage. It was at that time that the bank decided to buy as much physical silver as it could in order to profit even more to the upside than it did previously to the downside. Again, it was not possible for me to know this at that time and it has only come to me with the fullness of time and the developing factual evidence. What evidence?

For starters, there is the matter of extraordinary sales of Silver Eagles from the US Mint. Since April 2011, the US Mint has produced and sold 140 million Silver Eagles, more than in any similar period of time, in a price environment that can only be termed putrid and in which sales of Gold Eagles were notably lower. I would estimate that JPMorgan purchased close to half of the 140 million Silver Eagles sold since April 2011. According to very reliable sources on the retail front, general investment demand has been lower over this time, as retail buyers do not buy strongly into a declining price environment in any investment asset. Yet we know for a fact that there has been extraordinary buying of Silver Eagles, even while Gold Eagle sales cooled off notably, so someone had to be buying Silver Eagles.

If there is one thing that JPMorgan is expert at, given that it commands an army of lobbyists and has more government officials in its back pocket than any other entity on the face of the earth, it is the exploitation of US law and regulations. JPMorgan knew that US law dictated that the Mint must produce enough Silver (and Gold) Eagles to meet demand. That law was never intended to allow a single big buyer to demand the extraordinary amount of Silver Eagles that JPMorgan desired to buy, but that’s the purpose behind the exploitation of the law.

The Mint sells Silver Eagles at the prevailing price of silver on the day of the sale. In essence, the COMEX price of silver is the price of silver. By controlling the price of COMEX silver, JPMorgan sets the price at which it will buy Silver Eagles. It’s the perfect crime – JPMorgan sets the price of COMEX silver and then demands as many coins as the Mint and its suppliers can produce, even if that means producing the coins on a 24/7 basis. Hey, that’s the law. And remember when JPMorgan increased its COMEX short position in the summer, assuring that prices were about to drop and what occurred as a result? Sales of Silver Eagles nosedived temporarily and only resumed after prices were brought lower by this crooked bank. This is old stuff – what about some additional evidence that JPMorgan has amassed a massive quantity of physical silver?

When JPMorgan took over Bear Stearns in 2008, its Manhattan precious metals warehouse was not operating. But in May 2011, after the decision was made to accumulate physical silver, the warehouse was activated as a working COMEX-approved silver facility and guess what – after starting with zero silver inventory that warehouse has grown to nearly 50 million oz, the largest of all six COMEX warehouses. You can decide if this was just a coincidence but the most compelling reason to start a warehouse would be to store silver you owned in your own warehouse rather than to pay some other warehouse to store metal you own. The timeline, in any regard, is remarkable.

In 2012, as the custodian for the metal held in the big silver ETF, SLV, JPMorgan physically transferred 100 million oz of silver it was storing in one of its own London warehouses on behalf of the trust to Brinks as a sub custodian. In hindsight, the most plausible explanation was to make room for silver JPM would come to purchase by using the SLV as a means of acquiring physical silver on an undetected and unreported basis as I have been explaining continuously (avoiding the SEC’s 5% share ownership reporting requirement). I believe much more than 100 million oz of silver, perhaps double or triple that amount have been accumulated by JPMorgan using the SLV to transfer metal to its own London warehouses completely undetected and unreported. The details of the London Warehouse transfer can be found here. http://about.ag/slv/

Then there is the matter of the unprecedented physical turnover in the COMEX warehouses. As I have detailed on these pages, this unusual turnover began in April 2011 and not in 2008 when JPMorgan first became the COMEX kingpin and manipulator by virtue of the Bear Stearns takeover. This timeline further supports the decision of JPMorgan to begin acquiring physical silver after its near death experience in April 2011. With so much physical silver flowing into and out from the COMEX warehouses weekly, it would be easy for a big buyer to regularly skim off a continuous share of that physical flow. And this is in complete harmony with my conclusion that the unprecedented COMEX warehouse turnover is to due to tight conditions in that the tight conditions are mainly due to JPMorgan’s accumulation of physical silver.

Back in the late 1970’s the Hunt Brothers accumulated close to 100 million oz of physical silver (and more in futures contracts) and were found to have manipulated the price of silver higher as a result of that accumulation. What makes the much larger accumulation of physical silver by JPMorgan today different is that it is the perfect crime.

The Hunts were outsiders; JPMorgan is the ultimate insider. The Hunts ran afoul of the regulators; JPMorgan owns the regulators. The Hunts’ purchases were widely known; as far as I know, I’m the only one pointing to JPMorgan accumulating massive amounts of physical silver. The Hunts drove prices higher as they accumulated silver; JPMorgan, by virtue of its price control on the COMEX, has been able to accumulate silver on sharply declining prices. Talk about a stacked deck.

Given that JPMorgan has such control over the US regulators and is able to operate in near total secrecy in matters related to physical silver, it’s hard for me to imagine what could foil their perfect silver crime. All that’s missing is JPM selling out at extremely high silver prices. And considering that big banks, in essence, don’t have to report anything they don’t want to publicly report, I would be surprised if JPMorgan would even have to pay taxes if they made the many billions of dollars they seemed destined to make on silver to the upside.

Yes, it is true that I am speculating about JPMorgan and physical silver and that much of this is based upon analysis after the fact; but it was not possible for anyone to predict this in advance without practicing voodoo or communicating with the spirits. As for the evidence surrounding JPMorgan’s decision to accumulate physical silver, I guess you have to believe that all the circumstances revolving around April 2011 were completely coincidental to avoid making the connection.

As always, I can’t give you the exact timeline for the future. If there is much more additional physical silver for JPMorgan to accumulate at lower prices, I’m sure this crooked bank will arrange for those lower prices. But after no more additional silver is available on the cheap, it should be time for JPM to allow prices to climb. One more point – since JPMorgan has been accumulating silver for more than 3.5 years, its average price is considerably north of current prices. Back of the envelope calculations indicate an average price in the mid-$20’s and any profit to the bank would only accrue above those levels. Yes, it grates on me that JPMorgan has been able to illegally accumulate as much silver as I suspect and, most particularly, the manner in which that silver was accumulated; but at some point the accumulation should prove most beneficial to silver investors.   

 

This article is based on a commentary of Ted Butler’s premium service at www.butlerresearch.com which contains the highest quality of gold and silver market analysis. Ted Butler is specialized in precious metals market analysis for over four decades.

Dear readers of my Gold & Silver thread, this one is must reading. 

Submitted by Mac Slavo via SHTFPlan.com [10],

Last month it was revealed that former federal reserve Chairman Alan Greenspan, the architect of U.S. monetary policy under four Presidents, is anticipating a significant market event [11]as a result of the trillions of dollars that have been pumped into the system over the last several years. According to Greenspan, something big is coming.

His comments were shared by well known resource analyst Brien Lundin, who joined Greenspan for private discussions at last year’s New Orleans Investment Conference. In his latest interview [12] Lundin further clarifies Greenspan’s private thoughts on current economic and monetary policy and sheds light on the former Fed Chairman’s suggestion that ‘something big is coming.‘

    Greenspan made some good points to me… He was concerned about inflation… He was specifically concerned in relation to the outstanding, or excess, reserves which are close to three trillion dollars being held on the Fed balance sheet now… That money is just hanging over the U.S. economy like a big water balloon of liquidity and it’s just searching for a pin.

     

    In fact, Greenspan referred to it as a tinderbox of explosive inflation looking for a spark.

Watch the full insider interview:

                                                         

Greenspan believes that in five years gold will be “measurably higher” than current levels because of the excess liquidity that will eventually be released into the open market. Such an event will undoubtedly lead to riots across America [13] as the general public, woefully unprepared for rapidly rising prices when the pin finally pops the dollar bubble, loses access to affordable critical supplies like food, gas and other resources.

The collapse of the dollar, an inevitability suggested by Alan Greenspan, will be a game changer that results in the quadrupling of the cost of living [14] for the average American.

All the while, as the United States stands on the brink of the most important event of our lives [15] and in a world of extreme monetary and economic instability, stock markets are at all time highs. What’s more, the very resource sectors that matter – energy, agriculture, gold and the precious metals mining companies [16] that get it out of the ground – have been decimated recently:

    Most people [at the investment conference] seem to share my belief that we’re bouncing around the bottom… that we’ve not necessarily seen the absolute lowest prices in metals but that they can’t go much lower than this because we’re right around the all-in cost of production… Your downside risk is may be 20% but the upside risk for really good companies that have good projects is on the order of 300% to 400% once the market gets back into gear.

As noted by Brian Lundin, with the demand from central banks and the global public, coupled with the obvious fundamental problems inherent within the system, the price of gold should have been rising but has been crushed instead. This, of course, bodes well for investors and those who intend to protect themselves from the collapse to come. The reality of the situation is we’re in trouble and Alan Greenspan, arguably one of the most informed insiders on the planet, has implied that it’s more than likely unstoppable:

    He [Greenspan] seemed to believe it was somewhat inevitable that the release of those reserves would create much higher inflation… the Fed just hopes they can get out of this alive… a normalized interest rate environment, which is what they say they seek over the longer term, is fiscally impossible for the U.S. at this point in time.

This is a well known fact within Fed circles and those on the inside are positioning themselves with hard assets for what will ultimately end in a collapse of the U.S. dollar and the American way of life.

                                                                     

http://www.zerohedge.com/news/2015-03-09/alan-greenspan-warns-explosive-inflation-tinderbox-looking-spark :icon_study: :icon_study: :icon_study:

   
  Richard Duncan, author of The Dollar Crisis [12] and The New Depression: The Breakdown Of The Paper Money Economy [11], isn't mincing words about the risks he sees ahead for the world economy.

Essentially, he sees the past 50 years of economic prosperity fueled by globalization and easy credit in serious danger of being unwound, as the doomed monetary policies currently being pursued by the word's central banks result in a massive multi-decade depression that spans the globe.

  I think it’s horribly regrettable that we find ourselves in a position where we are on government life support. We should’ve stayed on the gold standard in 1968. The global economy would be much smaller today than it is, but we wouldn’t now be in this position where we have to rely on money creation on a trillion-dollar scale to keep our global economy from collapsing. But now that we are here, I’m not sure that there are other alternatives other than 1) keeping the thing inflated or 2) allowing a new Great Depression to wipe away globalization. And not just the savings of the American public, but a huge part of the global economy altogether.

This is not going to be a 1921-style two-year recession that we bounce back from after a little bit of pain and unpleasantness. After a 50-year global economic boon involving what is now a $59 trillion expansion of credit in 50 years, this isn’t going to be a one or two-year hard recession. This is going to be a multi-decade global depression and I’m not sure that anyone alive today would live long enough to see the recovery. I mean, it’s like Rome: when Rome fell, there was a recovery, but it was 1,000 years later. This is the kind of depression we're looking at if we allow this $59 trillion credit bubble of ours to implode.

                                                         

http://www.peakprosperity.com/podcast/92283/richard-duncan-real-risk-coming-multi-decade-global-depression