Silver Prices To Surge - JP Morgan Has Acquired A "Massive Quantity of Physical Silver"

Silver Prices To Surge - JP Morgan Has Acquired A "Massive Quantity of Physical Silver"
 


- JP Morgan continues to accumulate the biggest stockpile of physical silver in history
- "JPM now holds more than 133m oz -more than was held by the Hunt Bros" - Butler
- Silver hoard owned by JPM has increased from Zero ozs in 2011 to 120m ozs today
- Money managers showing more optimism towards silver through record buying

- "Near impossible to rule out an upside price surprise at any moment"

Editor: Mark O'Byrne

Source: Sharelynx

Money managers are feeling increasingly optimistic about silver, against a backdrop of cautiousness regarding gold according to the latest Commitment of Traders (COT) report.

There has been some record buying in the last fortnight. The report shows some impressive moves given just under a month ago the silver market was net short. Last week speculative gross long positions in Comex silver futures rose by 11,920 contracts to 66,224. Whilst short positions fell by 10,379 contracts to 28,122. Silver’s net long positions now stand at 38,102 contracts.

For the current week's reporting, the four largest traders are short 130 days of world silver production-and the '5 through 8' large traders are short an additional 70 or so days of world silver production-for a total of 200 days. This is around seven months of global silver production.

JP Morgan are out Hunting the silver market

Much of this is attributed to JP Morgan, who according to respected silver analyst Ted Butler, is responsible for the 'third great investment accumulation of physical silver'.

The silver market has been closely monitoring JP Morgan's activities for some time. Since April 2011 the powerful bank has been accumulating silver at a quite a rate. It has taken its position from zero to nearly 120m ounces this month, less than six years later.

Butler explains:

'Just about every ounce moved into the JPMorgan COMEX warehouse over the past 7 years has come from futures deliveries stopped (taken) by JPM in its own name. JPMorgan took delivery of 14 million ounces in December and so far, 13 million ounces have remained in the warehouses from which the metal was delivered. So this means that JPMorgan now holds more than 133 million ounces of silver in COMEX warehouses, or more than was held by the Hunt Bros or by Berkshire Hathaway at their peaks. There was a lot more silver in the world in 1980 and 1998 than there is today, meaning that JPMorgan’s accumulation is much more of an accomplishment than previous silver acquisitions.'

Why would JP Morgan be stockpiling silver? As we pointed out a few years ago, it may be the case that they are anticipating geopolitical and financial turmoil?

This would not come as a surprise to JP Morgan shareholders who have previously received such warnings from CEO Jamie Dimon who has stated 'there will be another crisis'.

Dimon has even admitted that the trigger for the next crisis may not be the same trigger as the last one – but there will be another crisis:

“Triggering events could be geopolitical (the 1973 Middle East crisis), a recession where the Fed rapidly increases interest rates (the 1980-1982 recession), a commodities price collapse (oil in the late 1980s), the commercial real estate crisis (in the early 1990s), the Asian crisis (in 1997),so-called “bubbles” (the 2000 Internet bubble and the 2008 mortgage/housing bubble), etc. While the past crises had different roots (you could spend a lot of time arguing the degree to which geopolitical, economic or purely financial factors caused each crisis), they generally had a strong effect across the financial markets.”

JP Morgan's silver accumulation in the face of upcoming turmoil may lead some to ask why not go for gold? It's likely that the depressed price is the deciding factor here.

Silver USD, Jan 2007 - Jan 2017, Goldcore.com

The bank is often compared to the Hunt brothers when it comes to cornering of the silver market, but in truth the bank has been much savvier and is set to make far more. After all, the Hunt's accumulated primarily paper silver, JP Morgan are going after the hard stuff. Had the Hunt brothers, bought more physical silver bullion and less paper silver in the form of futures, they would likely have made even more money than they could imagine.

More silver bullion than we know?

Butler believes that 'JPMorgan holds at least 675 million ounces of actual silver. Simply put, JPMorgan has acquired six times as much metal as bought by the Hunts or Berkshire Hathaway. If this really is the case then it would account for 'nearly 45% of the 1.5 billion ounces of silver bullion in the form of industry standard 1,000 ounces bars in the world'.

The ability to accumulate so much physical silver whilst at the same time sell short huge quantities of paper derivatives or futures contracts could be the poster child for market manipulation. After all, the selling results in lower prices which then paves they way for more physical buying by the bank.

Butler again:

It couldn’t possibly be legitimate and that makes JPMorgan a market crook and manipulator. It also makes the federal regulator, the CFTC, and the self-regulating CME Group, incompetent, corrupt, or both. This takes a special kind of market manipulator, one most likely operating under some type of agreement with the regulators.

To what end are JP Morgan pursuing this path of silver hoarding?

That intent is to sell at as large a profit as possible. No one buys any investment asset with the intention of losing money, least of all JPMorgan. They didn’t spend the last seven years accumulating physical silver to sell that silver at anything but the highest price possible. I can’t tell you when JPM will let the price of silver fly, but I am certain that that day is coming.

Silver prices looks particularly undervalued right now. Last year it gained just 1.6%, compared to 11.5% for gold and 48% for palladium. Yet we (and big banks such as JP Morgan) remain bullish. We have previously written about our forecast that silver prices will surpass its nominal high of $50 per ounce and its inflation adjusted high of $150 per ounce in the coming years.

The fundamental reasons for our very bullish outlook on silver is very reasonable. There are increasing global macroeconomic, systemic, geopolitical and monetary risks.  Silver’s historic role as money and a store of value has already been identified time and time again in the past and history is repeating itself.  It is also worth considering the declining and very small supply of silver, not to mention increasing investment demand from one of the world's most powerful banks and other contrarian investors.

We should see JP Morgan's accumulation as not just a sign to buy physical silver but also that the next financial crisis is coming and its time to diversify into physical gold and silver bullion coins and bars.

 

Related Reading

JP Morgan To Corner Silver Market?

Silver Bullion Has Key New Player – China Replaces JP Morgan

Silver’s Positive Fundamentals Due To Strong Demand In Key Growth Industries

 

News and Commentary

Gold holds near 4-mth peak, buoyed by weaker dollar (Reuters.com)

Gold jumps to fresh 4-month high as dollar slide deepens (MarketWatch.com)

China Escalates Crackdown on Cryptocurrency Trading (Bloomberg.com)

Carillion's Collapse Could Affect Companies From Madrid to Texas (Bloomberg.com)

Six banks accused of rigging key Canada lending rate (Bloomberg.com)

Bundesbank will add China's yuan to currency reserves (Bloomberg.com)


Source: Bloomberg

Metals Power Higher as Sickly Dollar Spurs Copper-to-Gold Rally (Bloomberg.com)

What investors can learn from Carillion’s collapse (MoneyWeek.com)

Merkel could join Macron in Davos for epic clash with Trump (Reuters.com)

Chinese Physical Gold Investment Demand Surges While Americans Pile Into Stock and Crypto Bubbles (GoldSeek.com)

As Petro-Yuan Looms, Bundesbank Adds Renminbi To Currency Reserves (ZeroHedge.com)

2018 - Year of the Octopus - Mauldin (MauldinEconomics.com)

Gold Prices (LBMA AM)

16 Jan: USD 1,334.95, GBP 970.38 & EUR 1,091.32 per ounce
15 Jan: USD 1,343.00, GBP 971.93 & EUR 1,092.93 per ounce
12 Jan: USD 1,332.90, GBP 978.75 & EUR 1,099.78 per ounce
11 Jan: USD 1,319.85, GBP 978.14 & EUR 1,104.45 per ounce
10 Jan: USD 1,321.65, GBP 976.96 & EUR 1,103.31 per ounce
09 Jan: USD 1,314.95, GBP 972.01 & EUR 1,102.19 per ounce

Silver Prices (LBMA)

16 Jan: USD 17.10, GBP 12.43 & EUR 13.99 per ounce
15 Jan: USD 17.12, GBP 12.58 & EUR 14.14 per ounce
12 Jan: USD 17.12, GBP 12.56 & EUR 14.12 per ounce
11 Jan: USD 17.01, GBP 12.64 & EUR 14.24 per ounce
10 Jan: USD 17.13, GBP 12.64 & EUR 14.27 per ounce
09 Jan: USD 17.05, GBP 12.60 & EUR 14.30 per ounce


Recent Market Updates

- London Property Crash Looms As Prices Drop To 2 1/2 Year Low
- Gold Bullion Up 1% In Week, Heads For 5th Weekly Gain As Bonds Sell Off
- Gold Prices Rise To $1,326/oz as China U.S. Treasury Buying Report Creates Volatility
- Gold Hits All-Time Highs Priced In Emerging Market Currencies
- World is $233 Trillion In Debt: UK Personal Debt At New Record
- 10 Reasons Why You Should Add To Your Gold Holdings
- Spectre, Meltdown Highlight Online Banking and Digital Gold Risks
- Palladium Prices Surge To New Record High Over $1,100 On Supply Crunch Concerns
- Gold Has Best Year Since 2010 With Near 14% Gain In 2017
- Happy 2nd Birthday Bail-in Tool! We Suggest Gold As The Perfect Gift
- 98,750,067,000,000 Reasons to Buy Gold in 2018
- Gold, Bitcoin and the Blockchain Replaces the Banks – Realists Guide To The Future
- It’s A Wonderful Life Is A Wonderful Lesson To Hold Gold Outside of The Banking System

Comments

NoBillsOfCredit ejmoosa Tue, 01/16/2018 - 11:02 Permalink

They have done that many time...its called paper money.  Every time they lie about how much silver there is or steal the silver and leave the people with the unenforceable claim.  Crypto backed silver is not a good idea. Litecoin is counterfeit proof, limited to 84,000,000 and can be divided into as little as .0000001 amounts and is fast.  Who needs silver for money anymore? We have better with our technology.  Please no stupid comments about "Well what happens if the Internet goes down?" because the same thing that happens to the Bankster script. It won't work either and there won't be anything to buy anyway as 95% of commerce will stop since everything is done on the Internet now no matter what the money is.  However; when it comes back up you still have your Litecoin but the Banks will probably not be working then.  Silver is valuable of course and will be for as long as I can imagine but no one knows how much there is and it is not evenly distributed around the world nor accessible to everyone.

In reply to by ejmoosa

brianshell NoBillsOfCredit Tue, 01/16/2018 - 11:50 Permalink

Money is an IOU. It is intentionally temporary. Only the perceived longevity of its creator stands behind its worth. That is why a sovereign entity is entrusted to create money. It is also because a sovereign can regulate the value of the money by controlling its quantity. One might read the United States constitution about the sovereign responsibility for this.

Picture a deal where I ask you to pick nuts off my trees for me. I give you an IOU when you finish. You, or another person comes to me with the IOU and buys a bushel of nuts. I receive the IOU back and burn it.That is the purpose of money, as a temporary placeholder. When I burn that IOU, it prevents inflation by disallowing the recirculation of a fraudulent IOU. Think of an old goldsmith that issued more gold notes than the gold in his vault.

Lets say a sovereign wants to build a bridge. It issues a contract to  the builders. When the builders complete the job, they get the money. When the money is spent, it returns to the sovereign bank. The bank destroys the money just as if burning an IOU. That is how inflation is prevented.

Think of it as a mortgage. When the mortgage is paid off, it is destroyed. Its purpose is intentionally temporary.

In reply to by NoBillsOfCredit

Davidduke2000 Tue, 01/16/2018 - 10:14 Permalink

it is the barter currency in times of crisis as gold will be too high to be day to day bartering currency, it will be exchanged for silver and its low denominations. Silver would be the equivalent of $1000 per oz, meaning you need 25 silver oz to purchase a car valued today at $25000, however the same car in a crisis would be $10,000 which mean only 10 oz of silver.

anarchitect Davidduke2000 Tue, 01/16/2018 - 10:34 Permalink

Silver at $1000?  I grew up in Canada, which had silver coinage through 1967.  If you convert between imperial and metric, a silver dime back then bought you a liter of gas.  It still does, so it has held its value.  So it's unfair to say that gas prices have risen; it's that the currency has depreciated.  Now, to say that something that was used as money, and that has held its value even though it is no longer used as money, will go up 60-fold when it starts to be used as money again is something of a stretch, to put it politely.

In reply to by Davidduke2000

fbazzrea anarchitect Tue, 01/16/2018 - 11:30 Permalink

let's see... the four "noble" metals:

1st  Gold    $1350
2nd Silver  $17.15
3rd  Platinum $1003
4th Palladium $1096

even a casual observer might detect the glaring anomaly in prices, especially in a world on the precipice of exploding demand for silver in applications of conductivity, antibacterial, currency, etc.

maybe not 60-fold, but considering speculation of Trump returning the US to hard currency and his buddy Jamie Dimon's "little" silver stash, i could see the USG as a massive buyer in order to give us little folks something to spend while our overlords hoard their gold. couple that with Shanghai bullion markets, looming global silver shortage and the unavoidable monetary gold reset to a non-inflationary $10k handle and it's anyone's guess where Ag is going, but i'm fairly confident we're talking MASSIVE MOVE toward the sky. 

 

In reply to by anarchitect

DaNuts Anarchyteez Tue, 01/16/2018 - 11:15 Permalink

They gave the Spaniards emblems of gold, banners of quetzal plumes, and golden necklaces.

And when they gave them these, the Spaniards’ faces grinned: they were delighted, they were overjoyed.

They snatched up the gold like monkeys and were swollen with greed; they were ravenous;

they hungered for that gold like wild pigs.

They seized the golden standard, they swung them from side to side,

they examined them from top to bottom. They babbled in a barbarous language;

everything they said was in a savage tongue.

In reply to by Anarchyteez

Dg4884 Tue, 01/16/2018 - 10:24 Permalink

I don't give two turds.  I just keep stacking when I can and if the shtf we are in a good spot.  If not, maybe the kids will have a cool inheritance when we kick it.

ReturnOfDaMac Dg4884 Tue, 01/16/2018 - 11:06 Permalink

Great attitude and the right way to look at it.  Kids will appreciate you looking out for them.  But if you bought JPMorgue or Squid,Inc paper you may have more loot to pass down, plus fat, juicy, dividends.

A simple strategy is to buy shiny with the dividends of bank stawks.  It's such irony and so much fun.

In reply to by Dg4884

WFO Tue, 01/16/2018 - 11:03 Permalink

The Gold to Silver ratio is around 79 to 1 - if you are a value investor, it is hard to find a better value right now. RE, Stocks, and Bonds are bid way up, not the best time to buy, imo.

You make your money on the buy. Buy right and sit tight. Buy weakness, sell strength.

MrSteve Tue, 01/16/2018 - 11:11 Permalink

We all know how to make a small fortune in silver;

you start with a large one!       And if everyone in China buys two solar panels with an ounce of silver in each one... 

I hope some bright CongressCritter will propose a bank tax on commodity profits, before they remonetize silver. It is highly likely that the Morgue will issue silver certificates and exploit rehypothecation of its hoard. Why would they sell it for massively devalued FRNs? Their silver certs would allow for leverage against fiat and be obvious and public approved "backing" for notes, etc. Doubtless they are thinking of a West Point-sized depository.

Stick with US and Canadian located mines; when metals fly, the third world will confiscate foreign-controlled mines using various ruses of a humanitarian hue.

johnduncan78 Tue, 01/16/2018 - 11:14 Permalink

So when the price of silver reaches the high they deem right time to sell, they will sell all 675 millio ounces for a yuge profit. That will drive the price of silver to $1 an oz or less. Hope you sell yours before they do !

Conax Tue, 01/16/2018 - 11:19 Permalink

I'm sure they have accumulated a nice pile since they got caught bare handed in 2010-2011, but I do not trust their published figures at all.

Besides, they came out and stated they have no silver of their own, but were storing it for a 'customer'.  Considering the fact that they sold their vault in NY to the Chinese years ago, I'd say the Chinese have been using them to recover the yuge stack once borrowed by the US and never returned.

600 million oz is a lot, 18,750 TONS, folks. Extremely hard to believe.

No way that fits in some vault downtown.

The numbers are inflated, the true owners concealed, Bah, fuck this story.

 

DaNuts Tue, 01/16/2018 - 11:27 Permalink

They are taking it off the shelf so that we can't use it in the future for transactions after the system collapses. If there is no silver then we have no option other than to use the States crypto system. Take a look at what has happened in India