this is from ted butler's latest essay on the manipulation of the silver market:

The March BPR recorded the largest percent (33%) of the market held short by one or two U.S. banks in silver ever. To my knowledge, this also may be the largest percent held by U.S. banks in any major market, long or short, ever. Please remember, this percent of the markets held by one or two U.S. banks is before removing spreads, and thus understates the true net percentage, which is more than 45%. The reported short position is equal to 154,190,000 oz of silver, or 23% of total annual world mine production.

The most disturbing aspect of the data just released is that almost all the short selling in COMEX silver over the past two months has come from the big short(s). From January 6, when silver closed around $11.10, to March 3, when silver closed around $12.85, the net increase in the total commercial short position was 7784 contracts. Of those 7784 net new contracts sold short, the big 4 accounted for 7490 contracts, or 96.2%. Of the 7490 contracts sold short by the big 4, the one or two U.S. banks accounted for 6149 contracts, or 82%.

The message of these data should be clear. The vast majority of the additional short selling over the past two months was concentrated new short selling by those already holding a large concentrated short position. The most plausible explanation for this new selling was to cap the price and limit damage caused by rising prices to an already existing large short position. This is manipulation, pure and simple. If the price of silver were at a fair and free level, there would be many different participants competing to sell contracts, not just one to four. As it stands, there are very many traders buying and looking to buy, while the sell side is populated primarily by one big U.S. bank.

As I write this article, the big short(s) is attempting to rig the silver and gold markets lower to trip off technical fund selling below the 50 day moving averages. Will that attempt succeed? I don’t know. What I do know is that this is market rigging of the highest order. I also know that the big short is becoming increasingly isolated and more learn of the manipulation daily. That’s good for us, bad for them.

How did we get to the point where a big U.S. bank, most likely JP Morgan Chase, has come to manipulate the silver (and gold) market? Why are U.S. banks allowed to speculate in commodity markets at all, when they have caused such havoc already with their failed trading in just about everything they touched? Didn’t they do enough damage with subprime mortgages and credit default swaps? Why should taxpayers subsidize bank commodity speculation and manipulation? When did the regulators stop enforcing the law and switch over to defending the criminal element?

The answers to those questions are contained in observing the news flow, government data, and correspondence from the CFTC to various congressmen and senators in response to those readers who have written to their representatives. I thank all who have done so and urge those who have not yet contacted the regulators and your elected officials to do so, as it really makes a difference. A clear picture is emerging. Allow me to present the findings to date, as I understand them.

In the case of silver, while the manipulation has been ongoing for many years, the criminality kicked into high gear when JP Morgan took over Bear Stearns, at the government’s request, last March. Bear Stearns was the holder of the large concentrated short silver position and it was inherited by Morgan. In JP Morgan’s defense, it does not appear they initiated the concentrated silver short position. It was excess baggage from the forced takeover of Bear. The Treasury Department and Federal Reserve backstopped Morgan and agreed to hold them harmless for financial losses and for criminal involvement in the silver manipulation. The financial system was weak enough at the time of Bear Stearns’ failure, that a blowup in silver had to be avoided. JP Morgan was given the go-ahead to "manage" and control Bear Stearns’ silver short position directly by the Treasury.

While it is understandable that JP Morgan would accept the Treasury Department’s request, and that the avoidance of a potential financial panic is always a good thing, panics are short-term events. A year has now passed, and the manipulation is still in force, stronger than ever. What started as a temporary remedy for a short-term emergency, has evolved into a continuance of the long-term silver manipulation. This is wrong on every level. The U.S. is a nation governed by the rule of law. No one is above the law. Not the Treasury Department, not JP Morgan, not the CFTC. If my findings are accurate, then the passage of time indicates that there is potential real criminality here.

As far as the CFTC, it is a weak agency, incapable of over-ruling a directive from the Treasury Department. They had no choice but to allow the silver market to continue to be manipulated by allowing the transfer of the concentrated short position from Bear Stearns to JP Morgan. Besides, the CFTC already dropped the ball by allowing the concentrated short position to come into existence at Bear Stearns in the first place and denying for years that the silver manipulation existed. They had no choice but to go along. They couldn’t stand up to Treasury if they wanted to.

http://news.silverseek.com/TedButler...