Dead Men Walking?

silverseek.com / Theodore Butler / March 23, 2017 – 10:48am

The narrative thus far – after decades of allowing themselves to be led in and out of COMEX silver futures contracts by their commercial counterparties, several managed money traders appear to have woken up to the fact they’ve been duped all along. A key component of the silver manipulation for the past 30 years has been the knee-jerk and mechanical reaction of the managed money traders to collectively sell whenever the commercials rigged prices lower beyond certain moving averages. Ditto for buying on rising prices.

The dependability of the managed money technical funds to obey commercially rigged price signals made the funds the true enablers of the manipulation. The commercials, mostly domestic and foreign banks, made their profits by getting the technical funds to buy high and sell low. Without the technical funds to maneuver at will, the commercials would have little reason to prolong the silver manipulation.

So obvious had become the continued whipsawing of the managed money traders by the commercials that a near-universal question emerged – “why are these technical funds engaging it such a bizarre and harmful (to their investors) game?” I’ve heard from more than one reader that there must be some kind of collusion between the technical funds and the commercials, featuring under the table payments to the technical funds by the commercials to continue deliberately losing. While I understand and empathize with the logic of such an explanation, given the nearly inexplicable behavior of the technical funds, I don’t see such collusion, as I’ve tried to explain over the years. I certainly see collusion, just not on the part of managed money traders to deliberately lose.

Nowhere is the price influence of the continuing contest between the managed money traders and the commercials more pronounced than it is in COMEX silver. That’s what led me to conclude the price of silver was manipulated more than 30 years ago. And while it is now true that this same price influence has come to infect just about all our markets, silver still maintains a unique role as being the most manipulated market of all. Not just because it was the first such market to be manipulated by futures positioning, but that has something to do with it. Being first means that silver has been manipulated in this manner for far longer than any other market and, as such, its price is necessarily more artificial. More to the point is that the objective relative measures involving actual production and consumption and real world supplies always feature silver at a much different level than any other commodity.

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