National Inflation Association: "Silver Short Squeeze Could Be Imminent"

Tyler Durden's picture

A press release from the NIA finally picks up where everyone else has been for about two weeks. It is too bad, that those who brought the story to the foreground are getting exactly zero acknowledgement, but such is the media world.

Full press release from the NIA (keep in mind that the NIA describes itself as "an organization that is dedicated to preparing Americans for hyperinflation."):

Silver Short Squeeze Could Be Imminent

LEE, N.J., April 3 /PRNewswire/ -- The National Inflation Association today issued a silver update to its http://inflation.us members:

On December 11th, 2009 NIA declared silver the best investment for the next decade. In our December 11th
article, we said that it wasn't a coincidence that the very day Bear
Stearns failed was the same day silver reached its multi-decade high of
over $21 per ounce. We went on to say,
"The reason why we believe the Federal Reserve was so eager to
orchestrate a bailout of Bear Stearns, is because Bear Stearns was on
the verge of being forced to cover their silver short position."

JP
Morgan took over the concentrated short position in silver from Bear
Stearns and gained complete control over the paper price of silver
.
Within weeks, JP Morgan was able to manipulate the price of silver down
to below $9 per ounce. NIA believes they
were able to drive the price of silver down through "naked short
selling," selling paper silver that is unbacked by physical silver.

On February 5th, we witnessed another sharp decline in silver prices, which NIA described on February 7th
as being "just a temporary wash out, before a huge surge in silver
prices later in 2010." Since then, silver prices have rebounded by 18%.
The temporary wash out that occurred on February 5th was predicted by independent metals trader Andrew Maguire, who came out this week exposing the fraud that is taking place in the paper silver market.

On February 3rd, Andrew Maguire wrote Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, giving him the "heads up" for a "manipulative event" signaled for February 5th.
He warned the CFTC that JP Morgan was about to manipulate down the
price of silver after the release of non-farm payroll data on February 5th.
Andrew said that the takedown would happen regardless of if employment
was better or worse than expected and the price of silver would be
flushed to below $15 per ounce. During the next couple of days, silver was crushed from $16.17 per ounce down to a low of $14.62 per ounce.

Despite all of the evidence given by Andrew Maguire
to the CFTC of gold and silver manipulation, Andrew wasn't allowed to
speak at last week's CFTC hearing on limiting gold and silver positions
held by banks like JP Morgan. Bill Murphy of the Gold Anti-Trust Action Committee (GATA) was allowed to speak (within a five-minute time constraint) and present some of Andrew Maguire's
evidence, but right when his presentation began there was a technical
failure of the live television broadcast, which was mysteriously fixed
as soon as he was done speaking. Bill Murphy
was scheduled for several mainstream media television interviews after
the CFTC hearings, but they were all abruptly cancelled at once.

A couple of days after the CFTC meeting, Andrew Maguire and his wife were involved in a bizarre hit-and-run car accident in London
where a second car coming out of a side street struck their vehicle,
which resulted in a police chase using helicopters and patrol cars
before the suspect was nabbed. Andrew and his wife were released from
the hospital with minor injuries. (NIA does not believe in conspiracy
theories but when you consider that this is a potential multi-trillion
dollar fraud that could bring down the world's financial system, it
really makes you think.)

The
silver market provides a window into what is happening in the gold
market. Because the silver market is very small and its short position
is so concentrated, its price is easier to manipulate than gold, but
the same manipulation is taking place in gold on a much larger but less
noticeable scale. In our opinion, the CFTC is under pressure not to do
anything about the manipulation because the lower gold and silver
prices are, the stronger the U.S. dollar appears to be. If we saw an
explosion to the upside in gold and silver prices, it would result in a
complete loss of confidence in the U.S. dollar.

NIA
believes the precious metals markets are currently being artificially
suppressed by paper gold and silver that doesn't physically exist.
At
last week's CFTC hearings, Jeffrey Christian
of the CPM Group admitted that banks have leveraged their physical
bullion by 100 to 1. This means for every 100 ounces of paper
gold/silver that trade, there could be as little as 1 ounce of physical
gold/silver in the vaults backing it. However, Mr. Christian sees no
problem with this because he says "it has been persistently that way
for decades" and there are "any number of mechanisms allowing for cash
settlements."

What
Mr. Christian fails to realize is, most investors around the world
holding paper gold/silver believe they own physical gold/silver. There
will come a time when these investors don't want cash settlements in
U.S. dollars, but they will want the physical precious metals
themselves. When investors around the globe eventually call for
physical delivery of their precious metals, NIA believes it will result
in the biggest short squeeze in the history of all commodities.

The
physical silver market is now more tight than ever before. In the first
quarter of 2010, the U.S. mint sold 9,023,500 American Silver Eagles,
the most since the coin debuted in 1986 and up from 8,299,000 sold in
the fourth quarter of 2009.
All U.S. silver mines combined are
currently producing only 40 million ounces of silver annually. This
means the U.S. needs to use almost all of its silver production just to
keep up with the demand for American Silver Eagle coins.

Silver closed this week at a 10-week high of $17.89
per ounce and a major short squeeze to the upside could be imminent.
With the spotlight now on JP Morgan, NIA believes they will be less
likely to naked short silver at these levels and manipulate the price
down like in February. With the mainstream media blackout, it is
important for NIA members to work harder than ever to spread the word
and help expose what could be the largest fraud in the history of the
world.