CTFC's Silver Involvement Gets Serious

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". . .firms engaged in this activity can make a fortune in stocks"

For any long-term purchaser of silver, there is no agency more important than the Commodity Futures Trading Commission (CTFC). The CTFC is charged with ensuring that the futures markets are trading fairly at all times and investigating manipulative trades and fraud within the trading system. Now more than ever, the CTFC is critically important in investigating banks like JP Morgan and their roles in manipulating market orders.

Whistle Blowing on Futures Manipulation

At the center of the investigation into manipulation is Andrew Maguire, who in November 2009 contacted the CTFC to expose front-line JP Morgan traders for market manipulation. Maguire claims that he had personally spoken to several JP Morgan futures traders, who alleged the firm manipulates the silver market and makes billions of dollars annually by pushing the market in its favor.

This comes with little surprise to those watching the silver market, as for years on end, the number of shorts in the market has long outpaced the amount of silver believed to have ever been mined. This type of naked shorting allows firms like JP Morgan and others to flood the market with silver contracts and drive down the price, allowing profits to be pocketed on derivative-style bets made on other "off the book" markets where no physical metals are traded.

In addition, firms engaged in this activity can make a fortune in stocks, selling off shares of miners as the price of silver dips.

The CTFC has yet to report on its official findings of the investigation, but has released a few preliminary explanations including: a difference in reporting models that could show a change in market interest models without a change in the public interest models, as well as a rare case in which an acquisition of two similar but different entities could create off the market volume.

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