Silver market manipulation will reward investors who get in now. Price controls are nothing new in the history of markets and they’re usually done by large institutions, or by the government. And they’re always initiated to achieve some kind of economic or political objective.
There is an obvious downside to this. It obscures the markets, creating a disadvantage for most investors. You wouldn’t be able to know what the “true” price of an asset might be; whether an asset’s price is being artificially depressed or inflated.
Market Manipulation and Price Controls Have Their Limits
Price manipulation can go on for an extended period of time, but eventually, the economic reality of supply and demand will kick in, setting straight an asset’s “real” price. And this moment of reckoning is what many silver investors are positioning themselves for: the moment when JPMorgan, the largest silver market manipulator, will release its controls over silver’s depressed price.
According to Ed Steer, a prominent precious metals analyst and founder of the Gold and Silver Digest, JPMorgan is one of eight large institutions manipulating all six major commodity markets. And although each of the eight may be involved to various degrees in the price manipulation of all markets, Steer, like many other analysts, name JPMorgan as silver’s lead driver.
JPMorgan Has the Largest Short and the Largest Stockpile of Silver
It’s no secret that JPMorgan not only exerts tremendous control over physical silver and silver futures, they’ve also accumulated one of the largest stockpiles of silver, far beyond almost any other banking institution.
As Steer mentioned during the most recent International Mining Investment Conference, the short position on silver is extreme: “six months’ worth of silver production.” This is an exorbitant size as compared with crude oil, whose short is worth around seven days.
What is significant about this short position, is that if these eight institutions were to apply the same selling pressure to crude oil, the price of crude would be, as Steer estimates, between $1 to $3. This would immediately flag the CFTC who then would intervene to force crude to rise to its “correct” price levels; one based on the natural supply and demand conditions of the market.
And this is what Steer and other investors who are closely following silver are anticipating; that JPMorgan will eventually have to allow silver’s price to appreciate; a move that may also lift the prices of virtually all of the major commodities.
But why would JPMorgan hold down the price of silver and other COMEX metals?
Steer’s answer is simple and straight to the point: if you hold down the price of metals and crude oil, you control the price of most commodities. Holding commodity prices down keeps inflation “invisible” to the investing public. And this perception keeps the public well-invested in Wall St., a factor that significantly benefits JPMorgan and all of the other institutions involved.
In Steer’s own words:
As long as you control the price of gold, silver, platinum, palladium, copper and crude oil, you can control, with some exceptions obviously, the entire commodities complex. And that prevents people from seeing the fact that inflation is going on and they stay invested in Wall Street and things like that.
They’ve been doing this now for a couple of generations since we went off the gold standard in 1971, and that’s their job. But I can tell you right now to put a little optimism into this, I think this price management scheme is really getting a little long in the tooth, and the signs are out there that this thing at some point, whether it be this week, next week, next month, is going to come to an end.
So what should a silver investor do?
As Steer had mentioned several times during his Q&A session, there’s no telling as to how long JPMorgan and company can maintain pressure on silver: “I’d be foolish to put a date on it, but I can tell you right now that I’m pretty sure it’ll be this year…but don’t hold me to it.”
When asked how an investor might prepare for this event, the answer (to buy silver) was obvious if not underwhelmingly predictable. After all, Steer had been 100% invested since 2002.
But as a parting piece of advice, Steer emphasized that it’s better to be “five years early than five days late.” Because when the anticipated event happens, the rise in silver prices and other correlated commodities might happen so quickly that “you’re never going to get in.”
Steer’s advice: “So if you’re going to make the investment, do it now.”
As a company that believes in the intrinsic value and potential of silver, we are in agreement with Steer…market manipulation or not.