Water, Meet Blood - JP Morgan Admits To, Reduces Massive Silver Short Position, Proves Millions Of Conspiracy Theorists Correct

Tyler Durden's picture

In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of "tin foil hat" wearing, conspiratorially-oriented "gold bugs", has cut back on its US silver futures. "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that "the decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world's biggest financial company out of business. Lastly, this means that silver is about to really blast off as the push to really hurt JPM takes off in earnest.

From FT:

The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.

However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.

The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.

In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.

But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.

Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.

The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.

Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.

JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.

And while we revel in the knowledge that the short squeeze is causing massive pain for JPM, we are far more overjoyed that the days of Blythe Masters as head of JPM's commodities desk is coming to an end: any comparable massive admission of weakness by a trader is always and inevitably followed by some very high profile terminations.

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hero HNL's picture

JPM is right now getting out of silver and moving into copper.


See the rise in copper happened almost at the same time as silver in August.

Bring the Gold's picture

Welcome to the forum. I hope you have a thick flame resistant skin!

As to JPM and copper it's interesting. I read somewhere China was considering a tri-metallic currency regime. I wish I could remember where.

palmereldritch's picture

Here's a related article


From April 2009: 


A 'Copper Standard' for the world's currency system?



Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources," he said.

Beijing may yet buy gold as well, although it has not done so yet. The gold share of reserves has fallen to 1pc, far below the historic norm in Asia. But if a metal-based currency ever emerges to end the reign of fiat paper, it is just as likely to be a "Copper Standard" as a "Gold Standard".

The question is:

Is JPM fronting China, blocking China, gouging a monopoly or all of the above?

Addendum:  From a macro perspective this doesn't look like inflation in China so much as it is a large scale and long term conversion of USD holdings by stealth into the securing of primary resource base metals both in physical pools in China and in mine interests elsewhere to vertically integrate ownership and price control (hence profit control) of all the elements of manufactured goods produced by this country.

The world reserve currency is shaping up to be the finished manufactured product increasingly owned by China through its stake in its control of the raw and finished components before it is ever sold to the end user.

The iCrap as currency.


Bob Sponge's picture

I have been wondering:  Could a huge stock market crash help JPM cover their short silver position in that people could heavily sell PMs and buy stocks at very low prices?  and...Would TPTB engineer such a stock market crash to help JPM?  Just a thought.  The fiat situation may keep a lot of people from selling their PMs for any reason.

Hook Line and Sphincter's picture

Don't swallow your mexi-jumping beans yet. These slithering reptiles had plenty o' time to get ready and have their delegates prepared. Expect large numbers of proxy new shorts to move in soon. 

The Gong Girl's picture

So, Blythe?  Who's "scared sh*tless" now?  What goes around comes around.  Instant Karma, baby!

The Gong Girl's picture

The FT story by Jack Farchy is a verbatim recitation of GATA.  Blythe is now "scared sh*tless" herself, hah! Instant Karma, baby!

ctiger2's picture

“materially smaller” than in the past."

translates to:

"we've just un-un-doubled our short position."

A_MacLaren's picture

May the childhood rhyme prove true: Cheaters never prosper.

TheGreatPonzi's picture

JPM will have to use shell companies to do the work, now.

MsCreant's picture

Or they get Goldman's Sacks to do it for them...or another company, while JP Morgan helps them out with something they want to cheat at...

Mr Lennon Hendrix's picture

The Goldman Sach would never do this job, they are way above it.  Shell corps can not finance this; the silver short was one of if not the biggest farce ever perped on humanity.  Watch how fast the FIAT syatem fails now!

MsCreant's picture

What if you gave the shell corp. the money somehow? I want to be a believer, I do. If Ben is in this, he can just make it come into existence, anywhere he wants. Perhaps I am being childish, but I have no idea what would prevent him from doing it.

Mr Lennon Hendrix's picture

Give them.......dollars? 

This news is the sun on the vamps face.  Shorting silver was THE ONLY THING HOLDING THE DOLLAR UP.  The dollar is done.  Move to dxy 78 tomorrow, 77 by Wednesday, and by Friday the bottom falls out.  DXY 66 within weeks.  The game is over.

Hephasteus's picture

It's like a game changer from Rock Paper Scissors to Glock Paper Scissors? Kill your customers so you don't have to deliver. Let's get world war 3 started. I grow tired of the endless stupidity.

I Am The Unknown Comic's picture

Quick Wizard of Oz, pull the lever that says "Euro zone panic" so as to depress the EUR and boost DXY.  Get the Mainstream Media to the printing presses, quickly!

Tomorrow's headlines read: "Panic on the Streets of London, Panic on the Streets of Birmingham, Panic on the Streets of Carlysle, Dublin, Dundee and Versaille"

StychoKiller's picture

Couldn't happen to a nicer bunch of Socialists! :>D

Rainman's picture

This is just like how we are forced to watch modern reruns of films from yesteryear.....Spiderman, Superman, etc. No creativity by today's commodity brainiacs....just dust off the same old " necessity " cons. Hunt Brothers worked the silver scam decades ago......behind the oil, coffee and sugar shortage scams. Enron had the electricity futures squeeze. This is like the chain letter that turns up every 10 or so years, only now more frequently. Lapsed memory falls for the play every time and gets Wankered at the top. Beware.

razorthin's picture

What looks to be a H&S top on the $USD daily chart may make short-term move even more interesting.

LiquidBrick's picture

silver to $25.00 by the end of the yr. they have to put.

JLee2027's picture

We will never see $25 an ounce for silver again in US Dollars in our lifetimes.

Fred Hayek's picture

Perhaps in 2013's new RentenDollar.

akak's picture

Ein volk.

Ein reich.

Ein Chairman.



Bernanke uber alles!

akak's picture

I guess I was junked by ... a lurking Nazi with a chip on his shoulder?

(For those literal-minded persons junking my post above, it WAS made in jest!)

Bring the Gold's picture

I'm sure you have. Been junked by the same when calling out their BS.

razorthin's picture

Me thinks maybe Leo called the site DBA to let him write multiple junks agains you.

akak's picture

LOL, that thought occurred to me as well!

I'm surprised he didn't make a post to remind me, and the rest of us, that the corporations and elites "own us", and that of course, "There's not a damn thing you can do about it".  That smug and venal coward really gets my goat.

DoChenRollingBearing's picture

@ akak,

I leave ZH for 3 hours to read and have dinner (while on vacation in PERU ferchrissakes), and look what happens!  I miss this big story breaking.  Do I ahve to stay here 24/7 ???

Still this is wonderful news for Peru, looks like a LOT more capital will be coming in.  And more bearings to be sold.


Yo, JPM, esp. YOU JonNadler!  Get that price of silver back down to $24.00 or thereabouts so I can pick up some more on the cheap when I get back!

akak's picture

DoChen, I hope you're having a great time down there!  Be sure to have a Pisco sour for me, and some of that great Lima ceviche!  And if you make it up to Cuzco on this trip, some aji de gallina and of course, CUY!  My favorite!

ATM's picture

OMG, is that fucking funny! I'm buying some of those.

CD's picture

Yup, very fitting. Picked one up a few weeks ago. Quadrillion is the new trillion, though...

trav7777's picture

stop defending yourself against some "raciss" charge that you are INFERRING someone is making.

Look, everyone just stop fearing the label, stop using the label, move on.

Hook Line and Sphincter's picture


Did I ever tell you I think you're a PM loving joo-nigga-spic?! : )

Best Regards,

Hook, Line, and Sphincter (I'm a wigger, descended from a chigger and a spigger)


laughing_swordfish's picture

You mean in 2013's new Judefetzen?

moofph's picture

...you might see it if it flashes and your blinking eye moves at the speed of light...you also might see it in the paper price on its way down to zero as the reality-physical price runs the victory lap around the globe with gold and platinum giving "high-fives" at the finish line.

DoChenRollingBearing's picture

+ $1385

or should I say + $55,000?

StychoKiller's picture

If the universe is indeed curved, then given a powerful-enough telescope, you should be able to see the back of your own head! :>D

Hook Line and Sphincter's picture

I do like that positive curved universe theme, it would nicely explain a universe that exists in the ever-present moment, where time and space are but constructs imagined for our convenience.

jimgcpa's picture

Every conspiracy theory is eventually proven correct?  LMAO!!!  Like the one where we never landed on the moon?  What a freakin joke.



tickhound's picture

Why prove a conspiracy as correct... when one can simply view it as self-evident..

oddjob's picture

Mankinds repeated trips to the moon since then obviously proves that conspiracy false.

TraderTimm's picture

Yeah, its pretty hard to fake the laser reflector that is on the moon's surface. It is used by observatories to measure the earth-moon distance as it increases slowly due to orbital mechanics.



Problem Is's picture

Hey Einstein...
You know the Soviets placed mirror reflectors for laser measurement and brought back lunar rock samples robotically without ever setting foot on the moon?

Rusty Shorts's picture

Jeesh, there are no reflectors on the moon, cause if there were, we couldn't hit them anyway ... the whole surface of the moon is a "reflector".

Reflectors on the moon, gawd, it takes a laser beam 1.4 seconds to reach the moon, which the moon btw, has traveled 34,000km during that 1.4 seconds. Yet, even if some 19 year old undergraduate did manage to hit a supposed "reflector", the return trip takes another 1.4 seconds, by which time the Earth has left the area altogether.


In other news, the GPS system confirms that the Earth is expanding at exactly the same rate as the Moon is receding.


Links available on request.