COMEX Silver Manipulation


". . .4 traders hold two-thirds of all the true short positions on the COMEX."

The latest Commitment of Traders Reports (COT) continues to provide clear evidence of manipulation in COMEX silver. At the close of business Jan 20, a new multi-year record was set in the percentage of the market held by the 4 largest short traders, at 48%. And when all spreads are removed from both the non-commercial and commercial categories, as is proper, the true net short position of the 4 largest traders runs over 66% of the entire COMEX futures market—the largest silver market in the world.

In other words, 4 traders hold two-thirds of all the true short positions on the COMEX. That such a concentration equals a control on price should be beyond question. If these 4 shorts were forced to cover their positions and had to be replaced by many sellers motivated by free market prices, the price would need to double, triple or quadruple. That's the key question in any manipulation: what would the price of an item be—higher or lower—if the manipulators were removed from the market?

The past few weeks have revealed another strong proof of manipulation through overt concentration. The short position of the next 4 largest traders (the 5 through 8 largest traders) has shrunk to its lowest level in more than a decade—both on a percentage and actual contract basis.

Since the raptors (the 9+ commercial traders) have held a long position for many months, now that the 5 through 8 largest traders are abandoning the short side, the big 4 must dig in to keep the price from exploding. When just 4 commercial traders collude to manipulate prices, one would think the CFTC might see it. Apparently not. I will provide this evidence to the Enforcement Division, as I have with all the evidence I have uncovered; but I get the distinct impression they are not interested in seeing any evidence of manipulation.

I have reason to believe that the CFTC might try to conclude its investigation of a silver manipulation by attacking my personal credibility. They have attempted this in the past. I hope that's not the case, as this issue is too important to get sidetracked. How can such an extreme short concentration, in terms of real world production and inventories—and as a percent of the futures market—be allowed to exist?

Why not have the CFTC air the matter in the full view of the public, and not behind closed doors? This can be done at no cost to the taxpayers and should resolve the issue completely. Last spring, the Commission assembled all interested parties in their Washington, DC headquarters for a full-day public hearing on the volatility in the commodity markets. The hearings were carried live via Internet webcast. More people have written in on the silver manipulation matter than ever wrote in on the issue that prompted last spring's hearings and webcast. It seems reasonable that such a silver webcast could be arranged. Let the Commission explain why there is no silver manipulation and answer some simple questions. Let the public decide who is telling the truth.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe