Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Silver Wildcats - And The Day Futures Died - Part 1

Commodities / Gold and Silver 2016 Jun 17, 2016 - 05:37 PM GMT

By: Dr_Jeff_Lewis


From Legends to Bankers

Yes, there has always been price manipulation.

There will always be price manipulation.

From the time of Caesar, through the American Civil War and into the 20th and 21st centuries.

Equities, interest rates, bonds, currencies, and futures. 

From wheat to silver, the Maine potato default, and the onion debacle, futures trading has been subject to all manner of interference. 

The technology has changed over time. From carrier pigeons, the telegraph, the telephone, or today’s laser-assisted high frequency trading algorithms - the strategies and tactics remain.

No commodity has been spared. 

A long list of colorful characters litter the landscape.

Legends like Jesse Livermore, Jay Gould, King Jack Sturges, Ed Parker and The Chicago Bear Ring, or The Wheat Kings of Chicago to name a few.

From J. Pierpont’s  “Goldroom Manipulation” at the turn of the 20th century, to the modern day equivalent of the massive commercial bank silver short.

It wasn’t always easy…

"To commit murder is very simple. The trouble is to bury the corpse".

So said famed industrialist and manipulator P.D. Armour, in reply to a the question of why he did not corner the delivery when such massive speculative short interest appeared in December Pork.

The corpse is the sequestered supply that always makes it way back into to the market, therefore diminishing profits of the squeeze. 

(Something tells us that when JPM Chase decides to corner the LONG side of silver - they will have no problem covering the cost of ‘burying the corpse’.

Especially if much of the silver they control has yet to be melted made ready for delivery).

The Hunts Must Be Green With Envy

The Hunts experienced the impotence of the CFTC first hand in soy beans. Then they moved on to the silver market, foreseeing the great accident Bunker would come to characterize.

In their forced liquidation, all who remained to fill the vacuum were the market makers - a few deep pockets who eventually morphed into the big concentrated short sellers that exist in COMEX silver futures today.

This profit center hot-potato has been passed along the line from J. Aron to Drexel to AIG, onto Bear Sterns, and finally to JPM and the Bank of Nova Scotia.

In fact, the big eight commercial banks maintain a concentrated short, yet ultimately temporary (paper) promise to deliver of more than 200 days of world mine production. 

Unprecedented by any measure or comparison. An elephant so big and dangerous that few see it - many still refuse to consider it. 

The Eternally Absent Regulator

The history of futures market manipulation and enforcement is a testimony to the difficulty of imposing equilibrium from the outside.

To enable is to cause. To cause the dislocation of supply and demand from price is a harmful and in this case, a potentially devastating agenda. 

Much like today’s financialization-driven fiat-fiasco, regulatory impotence formed its roots in parallel many decades ago.  

Financial market enforcement has deep and rich history of failure.

In 1921, Commerce Secretary Herbert Hoover testified that large volumes of (futures) short-selling “deliberately intended to suppress the price had caused injury and worked a great injustice on the public…”

The Hatch Act was early attempt to rein in the wild cat speculators. And the Sherman Anti-Trust Act failed to incorporate futures regulation as well.

Regulation fails because it is reactionary and corrupted by power and special interests.

Of course, simple solutions could be adopted - by the exchanges themselves - to maintain order and stability.

Positions limits would be the easiest place to start. 

But sadly, that ship sailed long as the exchange (hint: Chicago Mercantile Exchange (CME)) morphed from facilitator into one of the largest of the  ‘systemically important’, ‘publicly owned’ institutions.

Today the ‘self-regulated’, for-profit behemoth enables the mechanisms and tactics of price manipulation across the market landcape: spoofing, layering, front-running, banging the close, to name but a few of the most visible.

Because the largest sellers of COMEX (owned by the CME) Silver are essentially, the only sellers of silver on the exchange, their departure will undoubtedly come with systemically felt disorder as price re-adjusts.  

(For now, world silver price discovery begins with COMEX). 

As Bunker Hunt stated (for reasons of physical supply and demand) more than 40 years ago - silver is an accident waiting to happen.

Today, instead of the colorful wild cat legends we have the multi-national JPM Chase as part of the big 4- a death star such grand import that it’s existence must perpetuate, and cannot possibly continue. 

In part 2….we’ll discuss…

The natural developing corner (and congestion) that may ultimately separate the paper tail from the physical dog…

…And more on the burying corpses.

Stay tuned…


*Note — Special thanks and credit. Many of the historical references above were sourced from excellent work of Professor Jerry Markham, former CFTC enforcement attorney.

Intimate knowledge of the inner workings of price formation and manipulation would not be possible with the work of Ted Butler.

If you are not already a member... For early access to Part 2 and private discussion of all things silver in a unique, private community, discover more at the 47 Forum.  

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of

    Copyright © 2015 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules