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Guest Post: A Brief History Of Silver Manipulation

Tyler Durden's picture

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Thu, 01/06/2011 - 21:18 | 854645 uno
uno's picture


On March 25th at the CFTC Public Hearing on Precious Metals GATA made a dramatic revelation of a whistleblower source, Andrew Maguire, who has first hand evidence of gold and silver market manipulation by JPMorganChase and who has even tipped off the CFTC in advance of manipulative attacks on gold and silver. Just as in the Madoff case the regulator has done nothing to stop such manipulation.

On March 26th while out shopping with his wife, Mr. Maguire’s car was hit by a car careening out of a side road. The driver of the vehicle then tried to escape. When a pedestrian eye-witness attempted to block the driver’s escape he accelerated at him and would have hit him had the pedestrian not jumped out of the way. The car then hit two other cars in escaping. The driver was apprehended by the police after police helicopters were called in and following a high speed chase. 




Thu, 01/06/2011 - 22:32 | 854855 flacon
flacon's picture

Check out this relaxing silver timelapse from August 2010 - January 2011. 



Fri, 01/07/2011 - 00:38 | 855065 Turd Ferguson
Turd Ferguson's picture

How about a recent history of silver manipulation? See below:



Fri, 01/07/2011 - 03:45 | 855333 bigelkhorn
bigelkhorn's picture

Alot of people think we are doomed, but there are still great ways to make money. Even while the economy is collapsing around us.

I subscribe to the guy from australia and his FFT economic newsletter at http://www.forecastfortomorrow.com  that guy has called many big events before they have happend, including the stock market crash in 2008 and the current financial collapse of the US. (currently happening) I found him from a friend last year, and he has some important work.

His oil calls are insane, and I have been making good money with them. He is well worth a look, if you want to keep two steps ahead of the sheeple out there.

I am worried about my financial future. Is anyone else nervous out there?

Fri, 01/07/2011 - 06:42 | 855427 theprofromdover
theprofromdover's picture

This is cited every bleeding week, yet never a follow-up.

Where is the outcome, what does Andrew Maquire say happened, and has the driver been charged?

We devalue the effectiveness of this site with replayed rumours.

Either the hit 'n run was premeditated, or it wasn't.

If it was, dig deeper; if it wasn't, stick to Maquire's explosive testimony. That is a big enough story on its own.


Fri, 01/07/2011 - 07:10 | 855456 uno
uno's picture

Now you have a task to do, look into it and report back to us, then you can add 'value' to the site. 

The MSM did not cover Andrew Maguire's testimony or what happened shortly after.  The worse thing for the manipulators is to have the story continue to be told.  CNBS, CNN, Fox, WSJ etc ignored it, bringing it up here is a reflection of their part in continuing the Madoff/Enron environment.

If we are going to have a post of silver manipulation, Andrew Maguire's recent story should be included.  I want it for anyone new to zerohedge to know, the easy thing to do is let it go away over time.  

Fri, 01/07/2011 - 12:48 | 856468 david3549tw
david3549tw's picture

very good stuff. fortunately i sold off my slv already. 

Fri, 01/07/2011 - 18:16 | 857679 Imminent Crucible
Imminent Crucible's picture

This story is not only badly written, it's grossly in error.  Are all of ZH's readers children?  Am I the only person that actually remembers the Hunt brothers' debacle?

This piece of rubbish implies that the Hunt brothers got killed because they ran a good scam for too long.  Nothing could be further from the truth.

Here's how it really happened (and there are plenty of historical accounts out there for you to fact-check, as Sudden Dump obviously did not):  The Hunts watched the accelerating inflation that followed Nixon's 1971 default on the Bretton Woods agreement.  They saw the price of gasoline go from 27 cents to over a dollar a gallon (in part due to the Arab oil embargo and other supply disruptions).  They saw home prices double and triple.

They had a family fortune to protect, and determined that, with the U.S. silver reserve gone, that the most reliable way to hedge inflation was to convert as many dollars as possible into silver and other real assets. Eventually they had millions of ounces salted away, and the silver bull market took on a momentum of its own.  It was being called "the poor man's gold".

This grossly misleading account leaves out the two most important events that busted Herbert and Nelson Bunker Hunt.  First, the SEC moved to ban delivery on silver futures contracts.  This was an egregious case of changing the rules in the middle of the game, and it was rumored (and no doubt true) that several clearing members of Comex and members of the SEC were heavily short silver and getting burned alive.

By banning deliveries, the SEC killed Comex as a source for procuring physical silver, and so demand for paper contracts dried up.

At the same time, the accelerating panic over dollar inflation led Carter to put Paul Volcker in charge of the Fed. Carter directed him to do what it took to restore confidence to the currency.  Volcker promptly raised the prime rate from 6% to 16% in five short months. Inflation hit a concrete wall, as did the economy.  With banks offering 16% on certificates of deposit, the return on money finally exceeded the inflation rate for the first time in years.  The rebirth of yield ended the panic demand for gold, and both gold and silver went into freefall.

There's a lesson for us in this. Demand for gold and silver will continue, and the price will keep rising, as long as real yields on "safe" debt instruments like Treasury notes remain near zero or negative.  Bernanke can easily kill the bull markets for precious metals; all he has to do is replicate Volcker's trick by raising the long bond yield to 17%--and watch the economy of the world's largest debtor nation implode as interest rates skyrocket, all borrowing comes to a halt and the cost of federal debt service goes off the charts.

It's not gonna happen.


Thu, 01/06/2011 - 21:18 | 854650 Instant Karma
Instant Karma's picture

Interesting story full of typos or errors of grammer. Would like to know exactly how price suppression works. Isn't the usual game to accumulate a position, pump up the price, and then unload (the stock market right about now). 

I prefer price suppression, because it naturally leads to an undervalued asset, allowing the patient to prosper. The usual game of pumping up prices (Netflix) lures in the suckers and then takes their knees out when the price collapses.

Thu, 01/06/2011 - 21:37 | 854708 nmewn
nmewn's picture

"Interesting story full of typos or errors of grammer."

In English...Sudden Debt is Belgian I believe.

Thu, 01/06/2011 - 23:19 | 854954 Cognitive Dissonance
Cognitive Dissonance's picture

Sudden Debt is a Belgian waffle who wildly waves his arms all day long while mangling the English language.

I like Belgian waffles.........with butter and Maple syrup. Sudden Debt is alright as well.

Thu, 01/06/2011 - 23:34 | 854985 woolly mammoth
woolly mammoth's picture

Waffle. Now I get it. I thought all this time he was a screaming chunk of meat loaf.

Fri, 01/07/2011 - 00:08 | 855032 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Sudden Debt is alright!

Fri, 01/07/2011 - 02:58 | 855287 Problem Is
Problem Is's picture

Try honey from a beekeeper, CD... Never store bought...

You will never go back to Leo Canadian Maple on a waffle again ;<}...

Fri, 01/07/2011 - 00:10 | 855035 TheProphet
TheProphet's picture

And the word is spelled "grammar"

Fri, 01/07/2011 - 02:07 | 855210 Al Gorerhythm
Al Gorerhythm's picture

Interesting karmmar.

Fri, 01/07/2011 - 03:17 | 855298 QQQBall
QQQBall's picture

Haha... never fales (fails)





Thu, 01/06/2011 - 22:28 | 854842 schoolsout
schoolsout's picture

well, I wasn't going to, but, uh...



Fri, 01/07/2011 - 02:47 | 855274 strannick
strannick's picture


Thu, 01/06/2011 - 22:36 | 854860 hack3434
hack3434's picture

Speaking of typos...it's grammar not grammer.  

Thu, 01/06/2011 - 23:14 | 854939 Richard Head
Richard Head's picture

You should always pause for a moment when you write something like this, much like you would before hitting "Reply All" in Outlook.

Fri, 01/07/2011 - 03:17 | 855300 Hephasteus
Hephasteus's picture

I love to read things with typos and grammar errors. Because they are more like streams of conciousness than these breast implanted face lifted fancy worded communications we are inundated with.

Fri, 01/07/2011 - 09:07 | 855561 velobabe
velobabe's picture

i love too reed grammer mistakes to. i wasn't going to say anything, surprise, i make a lot of  errors. but i only gave him a good vote. i know he is 7000 miles away from me. in waffle country.

Thu, 01/06/2011 - 21:23 | 854654 Don Birnam
Don Birnam's picture

Arizona Slim...one legal wife, one bigamist marriage, and one mistress. Fourteen chillen' in all. The Head of the Hunt Family was nearly as busy as Rameses. All that procreative effort, and where did it lead ? Nelson and Bill try to corner the silver market with the inherited millions born of dear old dad's blood, sweat and tears...and lose it all.

Thu, 01/06/2011 - 21:40 | 854721 israhole
israhole's picture

Still a far better story than Bernie Madoff's.

Thu, 01/06/2011 - 21:31 | 854681 Real Estate Geek
Real Estate Geek's picture

Anyone else having trouble accessing Turd's site all day? I've been having internet trouble, so maybe it's a localized problem. (I'm in SF.)

Thu, 01/06/2011 - 21:33 | 854701 goldsaver
goldsaver's picture

Nope, just you.

Thu, 01/06/2011 - 21:38 | 854718 Real Estate Geek
Real Estate Geek's picture

Story of my life . . .

Fri, 01/07/2011 - 03:09 | 855294 Problem Is
Problem Is's picture

"Nope, just you."

Don't listen to your wife, ex-wives, girlfriend and ex-girlfriends...

They will tell you it's you until the end of time...

Thu, 01/06/2011 - 23:25 | 854970 lineskis
Thu, 01/06/2011 - 21:37 | 854714 Shameful
Shameful's picture

Interesting back story.

Seemed to me that the real mistake the Hunts made was not ot take delivery. IIRC they kept rolling contracts and left themselves exposed. I'm also leery of using leverage in the metals (particularly silver) just because can see some volatility in what is really a small market overall. But then I'm just a small time wage slave investing my savings.

Nice to see you get something up here Sudden Debt. Can we get something about what you are seeing on the ground in Belgium? As a dumb American I'd like to know what is happening in EU central.

Fri, 01/07/2011 - 00:08 | 855034 woolly mammoth
woolly mammoth's picture

One reoccurring thyme as I read these types of stories seems the bankers knowing what others positions are and profiting by betting against these positions, sometimes even against their own clients. "Maybe" Buffet didn't so much as invest in banks, but was buying protection.  

Fri, 01/07/2011 - 00:14 | 855046 Shameful
Shameful's picture

I simply assume the system is broken and corrupt. The regulators are 'captured' to put it mildly. Casinos are less rigged. At least with physical possession they cannot reach out and smack the underlying asset out of my hands, without their thrall Uncle Sugar anyway.

Having said that I do have some exposure to the miners, but accept that the prices can be played with. It's money I can afford to lose and I'm only in miners who are in production.

As far as fiduciary duty, it's a joke. Who would enforce that? Oh that's right the regulators who are captured. Captured regulators are worse then no regulators. They give the uninformed the illusion of a watch dog, and they serve to attack dog those who could challenge the rulers in the casino.

Thu, 01/06/2011 - 21:37 | 854716 goldsaver
goldsaver's picture

Ok, not to demean the guest poster but Tyler, if this is the quality of writing that is acceptable in ZH, how do I get posting privileges?

Wikipedia could have done a better job. And for crying out loud, proof read your stuff before posting man! Don't just count on spell check and call it done. You can not make an intelligent point with dumb writing! Only Yogi Berra could get away with that shit.

Thu, 01/06/2011 - 21:37 | 854719 bob_dabolina
bob_dabolina's picture

Blythe Masters was a woman born of two female sea horses. With no assets and the company of only 1 friendly crab she cornered the copper market.

Thu, 01/06/2011 - 23:19 | 854959 oddjob
oddjob's picture

I heard she was hippocampussy too,also during social moments or in unusual surroundings,she turns bright colors.

Fri, 01/07/2011 - 00:55 | 855088 bob_dabolina
bob_dabolina's picture

I understand you.

My trousers moved.

Fri, 01/07/2011 - 01:56 | 855196 merehuman
merehuman's picture

like her or not, she is warrior pussy. How many women have that much balls? Got to give credit where its due. Obama is good at reading teleprompters

Fri, 01/07/2011 - 02:26 | 855241 JLee2027
JLee2027's picture

You mean the daughter of the devil? She is a destroyer not a warrior to respect.

Fri, 01/07/2011 - 04:01 | 855342 akak
akak's picture

How many women have that much balls?

Aside from Hillary, you mean?

Thu, 01/06/2011 - 21:43 | 854731 gwar5
gwar5's picture

That was interesting. I thought the Hunt episode and the current manipulation was unrelated

Thu, 01/06/2011 - 21:42 | 854736 Careless Whisper
Careless Whisper's picture

just crash the mofo. buy silver.


Thu, 01/06/2011 - 21:44 | 854737 Misean
Misean's picture

It sucks being ahead of your time.  Just think if they waited 15 years, they'd have been bailed out.

Thu, 01/06/2011 - 21:55 | 854762 israhole
israhole's picture

You got that right, except that the Hunts are Goyim.  Central banks are not there to bail Goyim out.

Thu, 01/06/2011 - 23:58 | 855022 mikhail kalashnikov
mikhail kalashnikov's picture

+202 trillion

Thu, 01/06/2011 - 21:51 | 854750 Bastiat
Bastiat's picture

There was some silver around in those days--not so much now.  Leverage is suicide in the metals unless you are in the club.  Physical demand is the only thing that will ever stop the Morgue and that day is coming.  All the paper bullshit games in the world can't create supply--only prices and mining can.

Fri, 01/07/2011 - 01:52 | 855194 Tapeworm
Tapeworm's picture

I might be full of it but I recall something about the gombit still holding about twelve billion onzas of plata at that time. US centgoo has nothing now. I caution all on just how high silver is now in purchasing power parity. Silverbugs are tagging along with those that might dump at any time.

Thu, 01/06/2011 - 22:08 | 854757 SwingForce
SwingForce's picture

"The end was near", why did you leave out the part about the CFTC raising margins? And the disallowance of opening new long positions? "The price of silver stopped rising and started to go down". Duh, how could it go UP if the CFTC didn't allow anybody to go long?  I think you left out the best part of the story. Somebody didn't like The Hunts or Bache-Halsey. But that was then, how about now when JPM supposedly has massive positions in both the silver & copper markets? How is this so different that now it is allowed? 

I am very glad to see you contribute, congrats! Does anyone remember Warren Buffet's big silver position of a decade ago? He took a huge position, but made sure it was completely outside of the US markets. What was he worried about? Or trying to circumvent? He lost his ass if I remember correctly.

Thu, 01/06/2011 - 23:39 | 854998 UncleFester
UncleFester's picture

Not to mention double digit interest rates on the $.  Let me see..who was the FR chairman at the time, seems like he resigned from the big O's admin recently, what was his name?

I Fester

Fri, 01/07/2011 - 04:44 | 855362 hpro123
hpro123's picture


THIS (the CFTC stance and changing the rules of the game to shorts-only) is actually the salient part of the story and the REAL manipulation. AFAIK, there has never been a good account of this ordeal that conclusively shows that the Hunts were more than the original "silver bugs".


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