Silver Price Manipulation – Where are the Regulators and How Will It End?

Sunday, October 11, 2015
By Paul Martin

Dr. Jeffrey Lewis
SilverSeek.com
October 11, 2015

The following is an edited excerpt from our recent Q&A interview with Ted Butler.

It’s the even worse than the fox guarding the henhouse. It’s more like rabid raccoons.

In this section continue the discussion of HFT, while answering the question of how the regulators could miss all of this. We end on how it will end.

Dr. Lewis: The “foxes” will say that these traders actually provide crucial market making capacity. Because they are an outgrowth of market-makers in the traditional sense – by providing some liquidity. But it also enables them to set the price.

Ted Butler: Absolutely and they want to stray away from the purpose why we allow commodity futures trading which has been around for a hundred years. It’s supposed to exist for legitimate hedging purposes, where an industrial user or producer of a commodity will look to lay off price risk associated with production or consumption to a willing speculator. That’s why commodity trading is allowed. It’s not just like another Las Vegas that we intentionally created just to let people gamble. There’s an economic justification for commodity trading, and it happens to reside in offering legitimate hedging opportunities. The problem is what I just described that took place this week (and over and over again) has nothing to do with legitimate hedging.

Miners and producers must be aware that they’re being. Some have actually complained, taken my advice and complained to the CFTC. But the CFTC is not in a position (now) to admit that there’s something wrong because they denied it for the last thirty years. So it’s hard to go back. Just like it was hard for Volkswagen to admit that it jiggered with their emission software. Because the CFTC, the CME, the COMEX, have denied it for so long, the odds that they’ll ever admit it are remote.

Jeff: This is a question that comes up all the time: Why don’t they step in? The CFTC has investigated the silver market on several occasions – each having the same ending. Clearly, no official entity, be it DOJ or SEC, or anyone else is going to step in now. So how does this end?

Ted: Well, I think that you’re right, I don’t see it at this point. Too much water has gone under the bridge that I don’t think any of these agencies will act. I’ve approached them all. In fact, one I approached at your urging was the GAO, the General Accountability Office. Again, it’s the same with all of them. Department of Justice, CFTC, SEC. They have denied it on so many occasions and for so long that I don’t think it’s reasonable to suspect that they would take the lead.

It does not mean that this crazy system of manipulation and artificial pricing, won’t end. But it won’t end because of them. Where it will end in the case of silver and we might be seeing it now starting to develop is a physical shortage because this artificial price structure is basically a derivative structure, it’s not occurring because of too much supply or not enough demand, it’s an actual commodity, actual silver.

The Rest…HERE

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