Talking Points From This Episode- Comex Silver Short- Concentration & Manipulation- Silvers Unique Characteristics- Breaking the Manipulation
Tom welcomes Ted Butler back to the show to discuss the recent activity in the silver markets. Ted discusses the massive short position held on the Comex by Commercial speculators. These speculators have 80,000 contracts short, equating to roughly 400 million ounces as of last Friday. No other commodity has such a concentrated short position. If this position did not exist, the price would almost certainly be between $50 and $75.
He discusses why short positions are challenging for people to understand. How can someone short sell something that they don't own, and why there is nothing inherently wrong with shorting. However, the position should not be so closely held in so few hands as to constitute price manipulation. Silver is cheap because of this manipulation.
These commercial interests are desperate to keep the price suppressed. Should the price head much higher, these commercial traders would be in an awful position. He believes they are already out many billions of dollars in the gold and silver markets and can't afford to let these metals move higher.
He describes some of the methods they use to suppress the price and why the suppression usually happens at night. They are often buyers on the way down once they get the price headed lower.
Lastly, Ted explains how the silver short will eventually be broken and why it will require shortages of large bars that impact industry. He asks an important question, "Where did the 100 million ounces of silver come from in the last week, and why did they get rid of it for such a low price?"
Theodore Butler is an independent silver analyst who has published unique precious metals commentaries on the internet since 1996. He is the head of Butler Research LLC, where he offers a subscription service of weekly commentaries, including detailed analysis of the Commitment of Traders Report, regulatory developments, supply and demand considerations, and topics of interest to investors in precious metals, with an emphasis on silver.