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Mar 21, 2018

GATA | THE GATA DISTATCH | Craig Hemke at Sprott Money: Morgan's domination of silver futures

Craig Hemke at Sprott Money: Morgan's domination of silver futures

Submitted by cpowell on 03:27PM ET Wednesday, March 21, 2018. Section: Daily Dispatches 10:30p ICT Wednesday, March 21, 2018
Dear Friend of GATA and Gold:
Writing for Sprott Money, Craig Hemke of the TF Metals Report today examines JPMorganChase's huge position in physical silver and Comex silver futures, a position so large that it appears to violate ordinary commodity position limits imposed by the U.S. Commodity Futures Trading Commission. Hemke's analysis is headlined "JPMorgan's Domination of Silver Futures" and it's posted at Sprott Money here:
Your secretary/treasurer would elaborate on Hemke's analysis. For six years ago, just after JPMorganChase began accumulating silver -- perhaps doing so, as silver market rigging foe Ted Butler has written, to offset the short position the bank had assumed with its acquisition of Bear Stearns -- JPMorganChase proclaimed that it had no positions of its own in the monetary metals, just client positions.
... Dispatch continues below ...

Of course back then nobody asked the bank to identify its "clients" in monetary metals trading. Given the strategic sensitivity of the monetary metals, it is a fair assumption that the bank's clients in the metals are governments, and to rig a market a government or its broker probably would maintain both long and short positions. Further, it seems unlikely that any U.S. investment bank enjoying a privileged position as a primary dealer in U.S. government securities, as JPMorganChase does, would do anything in strategic markets without the government's approval.
Of course it's also possible that JPMorganChase is running monetary metals positions for other governments, like China's, with the approval of the U.S. government.
This would answer the question posed the other day by Keith Weiner of Monetary Metals in his commentary "Standing Ready to Lease Gold":
Weiner wrote: "If the mechanism of alleged gold price suppression is central bank leasing, then that leaves silver lacking an explanation. Central banks have no silver. The price of silver has fallen to 1/80th of the price of gold, which needs to be explained. If gold is suppressed, and silver is not, then how do we explain why silver is cheap relative to gold?"
But as the British economist Peter Warburton noted in 2001 --
-- with enough money in derivatives the price of anything traded in a futures market can be suppressed. If Weiner really wants to pursue an explanation for silver's awful chart, he might start by looking in JPMorganChase's silver vault and derivatives book.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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