Limited Edition Silver Proof

Michael Victory's picture

by Ted Butler of

This is an excerpt from the Weekly Review for subscribers of January 7, 2012:

Commissioner Bart Chilton of the CFTC gave an interview this week with Jim Puplava that should interest you.

A number of subscribers asked me if I would comment on what Commissioner Chilton had to say. In commenting, I can’t help but try to be as objective as possible. For the record, I commend Chilton for the role he has taken on the important issues, like position limits, concentration and in addressing allegations of manipulation in silver. He is the only commissioner to have done so. I believe there would be no ongoing silver investigation were it not for him. I think he is one of the good guys and I started writing to him about these issues in 2007.

I agree with most of what Commissioner Chilton had to say, particularly about concentration and position limits and manipulation. I’m glad the interview was mostly about potential manipulation in the silver market. I’m going to skip over all the things I agree with Chilton on and confine my remarks to where I disagree with him. Agreement can be boring. Even though the disagreements are few, I believe they go to the heart of the matter.

Chilton pointed out that it is difficult to prove manipulation in a court of law. He indicated that there are three elements necessary to prove manipulation – the intent to manipulate, the ability to manipulate and the success in the manipulation. I accept his legal definition. Where I respectfully disagree with him is in the degree of difficulty in establishing all three elements in the silver manipulation.

Let’s go through the three elements

Let’s forget for a moment that silver has been under investigation by the CFTC’s Enforcement Division for almost three and a half years and that countless civil lawsuits have been filed against JPMorgan for allegations of silver manipulation in 2008. Let’s just focus on the last year, when silver experienced two separate 35% price declines in a matter of days. Such a decline in a world commodity for no observable  . Yet it happened twice in silver within months.

As I have written recently, as a result of the second silver price takedown in September, a tight-knit group of commercials traders bought the equivalent of 165 million ounces in net COMEX futures contracts on the price decline. This is equal to 22% of the world’s annual 740 million oz silver mine production. These same traders came close to buying the same amount in the big May silver price decline as well. This is an extraordinary amount of silver futures, much larger than any manipulative long position attributed to the Hunt Bros. in 1980. It is not possible to buy such a large amount of silver by accident. It had to be intentional. There is the element of intent that Commissioner Chilton speaks of.

The next element necessary to prove manipulation is the ability to manipulate by a concentrated position or otherwise (collusion among different traders). It would seem that the ability to manipulate is also self-evident, as it has been done on more than one occasion in silver. This also ties into Commissioner Chilton’s third element, namely, success being brought about by intent and the ability to manipulate. It couldn’t have been more successful for the COMEX commercial crooks than the results they achieved (at great cost to innocent investors and traders).

I think the problem that Commissioner Chilton and the agency are having is that they have convinced themselves they need proof by wire-taps and emails and other incriminating documentation (like actual confessions) before they can prove manipulation in silver. But the COMEX commercial crooks are not likely to accommodate them. The Commission has something better than that already in hand, namely, the very data that I rely on in analyzing the market. The Commission should stop wishing and waiting for evidence to drop out of the sky and just study the COT and Bank Participation statistics that they produce on a regular basis.

Because it appears so easy for the Commission to prove a silver manipulation on the basis of the three elements outlined by Commissioner Chilton, my guess is that there is something else holding the agency back from ending this scam. They just don’t want to end it. Perhaps there is a political motive or the knowledge that JPMorgan and the CME may be too big to sue. It’s hard to see how the three elements can’t be proved by the public data.

This is all very troubling. Every federal agency and department has a specific public mission. For example, the Federal Aviation Administration’s mission is to ensure aviation safety. Having come off the safest decade in aviation history, it would appear the FAA is achieving its primary mission. The Department of Defense would appear to be meeting its primary mission of defending the country from foreign military attack. I’m sure the Food & Drug Administration would quickly deal with an outbreak of tampered drugs harmful to public safety.

Try as I might, I don’t see the CFTC as coming close to meeting its primary mission of protecting the public and our markets from fraud, abuse and manipulation. Manipulation is the most serious market crime possible. There have been enough credible allegations of manipulation in silver, based upon data from the Commission itself, that the agency appears involved in a never ending silver investigation. But the investigation is never resolved. The critical point is that if there is a silver manipulation (as I and many believe), then it is an active crime in progress. It would be as if commercial passenger jets were dropping out of the sky every other day and the FAA refused to comment. Or if the US was invaded militarily and the Department of Defense went on vacation. Or if citizens were dying from tainted aspirin and the FDA couldn’t be bothered. That would be completely unacceptable and require immediate remedy of the strongest kind.

Because preventing manipulation is the CFTC’s number one mission, credible allegations of an active manipulation, particularly one in which the Commission has initiated a formal investigation, must be resolved immediately. The Commission must either terminate such a manipulation or explain why there is no manipulation forthwith. This business of explaining why it’s so difficult to prove manipulation is unacceptable, especially when all the elements of manipulation are present in the public record.

When the stock market experienced its infamous flash crash in May 2010, all the regulators, including the CFTC, rushed to make sure it would never happen again. That’s good. What’s not good is that silver has experienced a continuous and more severe series of flash crashes all along and the same CFTC hasn’t lifted a finger to intervene. The laws against manipulation apply to all markets, not just to those randomly selected and deemed by the agency to be important. The rule of law applies to all. That includes silver investors who have been savaged by the COMEX commercial crooks.

The CFTC has many important matters to deal with in Dodd-Frank and in helping to sort out the MF Global mess. But nothing comes closer in importance than resolving allegations of an active manipulation in silver, as this is truly a crime in progress. I call on the Commission to immediately end the silver manipulation or explain why there is no manipulation. So should you.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
XitSam's picture

Did anybody else see the title "Limited Edition Silver Proof" and think "A Zero Hedge silver proof coin? Cool, I'll buy one of those."

AE911Truth's picture

The only solution I see is to take out the trading robots that execute the manipulation. No need to physically destroy them, just mess with their logic.

Fred C Dobbs's picture

Bart Chilton is there to be a non regulator.  That is what he has done and will continue to do.  That is his job.  

Some day Ted Butler will accept it.  

Treason Season's picture

Just for the record and fwiw Bob Moriarty @321gold has always dismissed Ted Butler's arguments.

Bullionaire's picture

Akak wrote:

You'd have to be on the manipulators' side or just a plain retard to not see the obvious manipulation at work.

Or both in one.

CharlieSDT, please allow me to introduce you to Jon Nadler.



Ditto for Moriarty.






akak's picture

For whatever reason, Bob Moriarty has for a long time hated, Hated, HATED silver, and silver investors, with a passion that is rivaled only by the loathing that Jon Nadler has for gold (and its advocates).  He is utterly irrational and near-insane on the topic --- I have read any number of raging, illogical, blind-with-fury rants of his on the subject of silver on his 321Gold site just in the last year, and I feel that he has thereby done great damage to his credibility as an analyst of the precious metals.  I know that I have a significantly lower opinion of him than I used to as a result.

Interestingly, a friend of mine sat next to Bob on a plane ride last year, and I knew that he was going to be sharing a flight with Moriarty beforehand, so I made sure that he brought up the topic of silver with him during the flight.  My friend said that, after a congenial conversation, Moriarty got almost livid at the mere mention of silver investing, and the conversation was soon over.  This is not the response of a rational man.

Interestingly, Bob wears a heavy, solid-gold belt buckle that greatly impressed my friend.  He told me that Bob said that it is his "emergency gold stash".  (Bob, if you weren't such a dick about silver, I wouldn't have repeated this fact, but because you are, you can deal with it.)

overqualified's picture

I remember he insisted on the point that silver is a commodity, while gold is money in an article by him of some time ago. To stay safe I am invested in both 50-50. 

Troy Ounce's picture



Of course "they" do not want a higher price! It has everything to do with CONTROL and the famous "strong US$ policy". The higher the gold/silver price, the weaker is the perception of the US$. Perception is Reality in a currency war. For our financial and political leaders they will NEVER..surrender to a free market in gold and silver as that would threaten directly their very "raison d'etre", their existence on this planet which is CONTROL. The higher silver price we are experiencing now is just part of an orchestrated play which keeps you, the silver bug, and our financial leaders just about happy...a happy medium.

My feeling is that there is a close knit group in the higher echelons of the regulators who have been briefed about this. They will invite Ted & followers on a regular basis just to find out how much he knows, not to do "the right thing". Chilton is apparently not part of this group of people but a successful lightning rod.

But how do you fight this kind of long term manipulation by the system? With anything available even if it constitutes acting "illegally", eaves dropping, whistle blowers, hacking into computers, bribing people...using a Mata Hari (Ted Butler with a wig & lip stick?) long as people do not get physically hurt. Put it differently: we are obliged to go this route.

Wikileaks Yourself: (google translation)


new game's picture

always best to get in front of the herd.

poor man and womans currency of future.

be a strolling into the salon with lead a loaded for a sasparila(sp)to be paid in full with a silver oz; 1880 style!

mad max a tooling by, huntin down the last of the traitors(532 last count-plus one huge bonus buck).

back to the future, when comon people had a say...

Haddock's picture

Will someone remind me WHY the price is being manipulated down?

tmosley's picture

The same reason any other commodity price is suppressed, so the Fed and government officials don't look totally incompetent, and can claim that there is no inflation.  

Excellent question, by the way.

Trifecta Man's picture

The watchdog allegedly aids and abets the criminals.

Uchtdorf's picture

It's elemental. Ag and agriculture with enough Lb to protect both.

resurger's picture

The Naked Shorts on Gold and Silver by Hedge Funds has a big role in the manipulation!!!!

boeing747's picture

I just bought 1KG of Silver Dragon Coin (perth mint)  from Apmex for $1000 thanks CFTC for your kindness. 10 years later I will sell this coin back to you so I can get enough fiat to buy a house.

tradewithdave's picture

So this is where Bart Chilton was... I think the folks at Forbes were looking for him:


Dave Harrison

in4mayshun's picture

I hate to burst all the bubbles here but lets be the time gold and silver starts to really skyrocket, the world will be nose-diving into an incredible black hole of which the climb out will be brutal, viscious, and animalistic. If you think that some precious metals are going to save you from the global meltdown thats coming, you're deluding yourself. The best you can hope for is for silver to double, maybe triple then you SPEND IT. Do not keep holding it thinking its a magic metal that will protect you from life's atrocities. When food and supplies are scarce...not even gold/silver will buy them.

OldTrooper's picture

No bubble here.  Do you really think that gold and silver is all I've been stacking?  Rest assured in4mayshun, I'll always have something set aside, whether it's one last oz of silver, one last oz of 12 gauge lead, or seed for the spring.  But in one respect you are right - spend it - FRNs should be spent as soon as you get them, for things that you do, or might, need.  And if you can swap some gold or silver for something more valuable, without incuring a tax liability (get creative folks), then I have no problem with that.

akak's picture

I think you misunderstand the fundamental role of gold and silver in protecting one's savings.

Most do not buy, or should not be buying, gold and silver to "save them" from some Mad-Max ultimate collapse (which I personally think has close to a 0% chance of happening anyway), or even a temporary monetary or financial upheaval, as helpful as they could be in those scenarios.  No, their real value lies in allowing one to transfer one's savings THROUGH the monetary/financial upheaval, during which paper assets of all kinds are likely to be radically reduced in value or lose all value altogether, and carry that stored value/wealth to the other side of the crisis, when some sort of normalcy is re-established.

Yes, gold and silver could be traded for needed supplies and food during a crisis, but as often been said by many others already, if one is relying ONLY on gold and silver to protect oneself from such a crisis, then one has planned for that crisis very poorly.

Ace Ventura's picture

Agreed. Although I place the odds of us entering Thunderdome slightly higher than 0%. Perhaps not universally and nationwide, but regionally (i.e. inner cities, rougher suburbs of such, etc). Even in some of the rural hinterlands there will be Mad Max scenarios on smaller scales , although the odds will be less (think armed, tweaking ghetto rednecks with no money).

Prepare accordingly.

new game's picture

think 17 th century...

you fuck with me, i fuck with you

silver rule...

Cast Iron Skillet's picture

akak, that's my take, as well.

Peter Pan's picture

Tyler, even if I agree with you (which I do in principal), how do you propose to get corrupt government agencies and corrupt governments to stop the rot when they are so much part of the scam? This is the central problem and not whether you can prove it in court.

Your thoughts on this please.

rehypothecator's picture

Bright, shiny, new, and very sturdy, lamp posts.  

Sunshine n Lollipops's picture

Jail cells with silver-plated bars and gold-plated toilet seats would be sweet justice.

akak's picture

And rope!  Lots and lots of rope ....

Me crew would be happy unto death to supply ye with all ye need in hemp and sisal, matey, bein' a hangin' bunch weselves.

Morpheus A. Wakes's picture

Yay! Can we keelhaul as well? I've always fancied seeing them having some real skin in the game.

the misanthrope's picture

FFS Chilton / CFTC don't just sit/stand there. DO SOMETHING !  I guess he subscribes to the notion that on a long enough timeline.......what ? we'll forget ? give up? the only thing happening is I keep running out of paper to convert to money.

Stuck on Zero's picture

The Silver shorts will always win.  A) They can short an infinite amount of Silver because all the shorts are naked, B) They can always protect shorts that are coming due with a bigger naked short, thereby kicking the can down the road, and C) if they ever reall have to pay the paper and cover with physical metal they will move all the holdings to MF Glogbal II and walk away from it.  You can't win against paper pricing.

OldTrooper's picture

Funny thing about kicking the can down the eventually run into an ocean.

At <$30 I'm definately a buyer.  I'm employed and TPTB can't stop me (yet) from using my paper as I see fit.  When they can I'll just stop using paper all together.  Let's see, the tax on 0.00  FRNs is...

New World Chaos's picture

They cannot short an infinite amout of silver because it is being pissed away in electonics, never to return.  We win when JPM/COMEX/CFTC tells the electronics industry to "Eat my naked shorts".  Industry will face stark choices:  1) Try soldering with paper;  2) Redesign everything to not require silver; 3) Not sell anything; 4) Dig up all the landfills to get their silver back; 5) Find some place they can dig it out of the ground for $5; 6) Wait for the lawyers to untangle the skein of corruption or wait until the Sun becomes a red giant (whichever comes first); or 7) Let the silver bugs name their price in terms of paper and/or twin Japanese schoolgirls with shaved pussies.

deeznutz's picture

You, Sir, are a scholar and a gentleman.

Bansters-in-my- feces's picture


Too funny.

Kinda like the U.S.Justice department thingy ,right...?

whaletail's picture

Stop typing in all caps. You're waking Eric Holder from his nap.

akak's picture

I think you are on to something there --- (Place)Holder does always strike me as being rather nappy.

whaletail's picture

From what I've seen, he's probably kinky, too. 

TheSilverJournal's picture

Good luck manipulating the silver that's needed in tech devices or the silver on my girlfriend's ear. Industry will get the silver it needs, no matter what the price. Reduce the price long enough..restrain the incentive to mine long enough..and there's comes a point where manipulation becomes impossible.

HoofHearted's picture

Cheap silver...and I've almost used up all the fiat for the purchase of said cheap silver...almost time to let 'er rip. I sure hope Turd is right about this one...

CapitalistRock's picture

Damn right it's being manipulated. And I'm smiling from ear to ear every time I stack. It's rare that a crime like this is so large, so predictable, and so easy to avoid being the victim. (Hint: the victims are the ones selling at these prices).

Just buy and stack. Then repeat. If you are concerned that buying at artificially low prices won't protect your wealth then... I can't help you.

BeerBrewer09's picture

Seems like a lot of people in my area are stacking also. My local shop was out of everything except a 1lb. eagle and junk Barber dimes. I bought the 1 lb. coin. =-)

ebworthen's picture

So does an individual buying physical silver make it harder for TPTB to manipulate sliver?

I hope so.

tmosley's picture

No more than a real estate boom or collapse affects a kids' game of Monopoly.  MF Global has severed the one and only tie between paper and physical silver, the ability to stand for delivery.  In much the same way, when Monopoly was created, $200 was a LOT of money, and one could probably get a fairly nice undeveloped property for that much when the game was created.  Of course, the amount is laughable today.  The paper silver price is thus like the price of a property on Monopoly, and will soon have about as much bearing on the real world.

akak's picture

Waiting for Trav to appear and start foaming at the mouth about "silver bagholders" in 5, 4, 3, 2, 1, .....

Al Gorerhythm's picture

Let me paraphrase for him;

You're fucking a mob of fucking morons and fucking idiots to fucking stack fucking silver. Fuck, can't you fucking get it for fuck's sake. If you don't fucking see what the fuck I see then fuck me, you're fucking idiotic fucking morons. Fuck. Am I the only fucking smart fuck on this fucking site. Fuck yeah. Of course I fucking am, by fuck.

whaletail's picture

aka The Menacing Avatar 


akak's picture

Arrrhhh, matey, ye be lucky that we privateers be not interested in hunting whales!

whaletail's picture

HA! I was referring to Trav666

akak's picture

Avast!  Yon scalliwag Trav be walkin' the plank before long, by thunder!