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The Who, How, and Why Behind Silver Price Manipulation

No one knows the machinations of the day-to-day silver price better than Ted Butler.

Ted publishes bi-weekly commentary at, with a special focus on the silver market, which he's been closely following for over 30 years. Ted is an expert's expert.

So naturally, that's whom I turned to for an in-depth perspective on what's really going on with the silver price. As usual, Ted tells it like it is.

I think you'll be fascinated by Ted's tremendous insights…

Ted Butler on Silver Price Manipulation

Ted, you're widely recognized as the foremost expert on manipulation in the silver futures market. How do you define manipulation, and how are the main players benefiting from that?

Manipulation is another way of saying someone controls and dominates the market by means of an excessively large position. So, just by holding such a large concentrated position, the manipulation is largely explained. In real terms, whenever a single entity or a few entities come to dominate a market, all sorts of alarms should be sounded. This is at the heart of U.S. antitrust law. It is no different under commodity law.

Price manipulation is the most serious market crime possible under commodity law. In fact, there is a simple and effective and time-proven antidote to manipulation that has existed for almost a century, and that solution is speculative position limits. Currently, the Commodities Futures Trading Commission
(CFTC) is attempting to institute position limits in silver, but the big banks are fighting it tooth and nail.

As far as any benefits the manipulators may reap, it varies with each entity. But if you dominate and control a market by means of a large concentrated position, you can put the price wherever you desire at times, and that's exactly what the silver manipulators do regularly. This explains why we have such wicked sell-offs in silver; because the big shorts pull all sorts of dirty market tricks to send the price lower.

Could you tell us when and how you got started researching this matter?

It started around 1985, when a brokerage client asked me to explain how silver could remain so low in price (in the single digits) when the world was consuming more metal than was being produced. I accepted the intellectual challenge, and it took me more than a year to figure out that the paper short positions on the COMEX were so large as to constitute an almost unlimited supply. It was this paper supply that was depressing the price.

Who are the main players in this manipulation scheme? On average, what percentage of COMEX silver contracts are "controlled" by these main players?

Under U.S. commodity law, the names of individual traders are kept confidential. However, it is no secret that the commercial traders are the big shorts. It is also no secret that these big commercial shorts are mostly money center banks and financial institutions. Based upon government data and correspondence, the largest such short almost certainly is JPMorgan Chase & Co. (NYSE: JPM), who inherited their big silver short position from Bear Stearns when JPM took over that firm in 2008.

Together, the eight largest commercial silver shorts on the COMEX generally account for 50% to 60% of the entire net COMEX silver market, with JPMorgan alone holding around 25% or more of the entire market. I would hold that those percentages of concentration and control constitute manipulation, in and of themselves. By the way, there is no comparable concentration on the long side; only the short side of silver.

What exactly are the dominant players doing to manipulate the price?

The current exact mechanism they use to suddenly rig the price lower is High Frequency Trading (HFT). This is the placing of sell orders in great quantities by computer programs that suddenly appear as legitimate orders, but are really mostly "spoofs," or orders entered and canceled immediately (in the fractions of a second). When the sell orders first appear, they spook others into selling as they give the appearance of great selling about to hit the market. Instead, it is all a bluff, intended only to scare others into selling, as the vast majority of these original sell orders are never executed, nor were they ever intended to be executed. They were designed for one purpose only – to scare others into selling.

Through HFT, the commercials are able to push prices suddenly lower on very little actual volume. But once prices are put lower, the outside selling (from those who are frightened by the drop in prices) hits the market. It is that outside selling from technical traders that the commercials then buy. In a nutshell that's the HFT scam in silver. It is important to grasp the fact that the actual selling (and commercial buying) takes place AFTER the price drops. Most people think great selling is what causes the price to decline, but that's not true. The great selling only comes in after the price has been put lower, which is the purpose behind HFT in silver.

What impact, if any, has the arrival of silver ETFs had on the silver price, manipulated or otherwise?

A giant impact. The introduction of the big silver ETF in 2006 is probably the single biggest reason behind the climb in silver prices from the $7 area the year before. Investors have purchased close to 600 million ounces of silver in all the silver ETFs over the past six years. Without that buying, I doubt we would have made it over the $10 mark. While silver is still manipulated due to the concentrated short position on the COMEX, the introduction and success of the various silver ETFs has impacted the price tremendously. That should continue.

Eric Sprott has indicated that 143 times the amount of silver is traded in the paper markets versus mine supply. What implications does this have for facilitating silver price manipulation?

There are two distinct forces exerting artificial control of the price of silver. One is the concentration on the short side of the COMEX. The other is the ascension of the mindless and destructive computer trading of HFT. This was behind the "flash crash" in the stock market on May 6, 2010.

The difference in HFT is how the regulators react to it. When it occurred in the stock market, the regulators, the SEC and CFTC, rushed to make sure such meltdowns didn't recur in the stock market. Instead, the HFT practitioners were given free rein to disrupt the silver market. All the big sell-offs in silver are related to HFT to aid those holding large short positions.
The simple and undeniable fact is that the commercials are always big buyers whenever gold and silver sell off sharply. These commercials trick others into selling after prices have been deliberately pushed lower. Because the commercials are always the big buyers on every big sell-off, that proves they are rigging the price, as it is not possible for them to always be the buyers on these pre-arranged sell-offs.

What, if any, reasons can you think of that would explain why so much more paper silver is traded than physical silver?

Investors who hold physical silver don't buy and sell often; they hold. Only paper silver holders, because they only put up a fraction of the full value as margin, can be regularly tricked into selling their paper contracts on price declines. The big commercial shorts know this and that's what the game is all about – taking paper long traders to the cleaners.

Also, there is more paper traded than real silver because there is a very limited amount of real silver and an infinite supply of paper silver. It's important to know the difference and that difference is what makes physical silver superior to any paper alternative.

If one day large numbers of silver futures contract holders choose to take physical delivery, would that overwhelm the physical market? Who would be the party/parties on the hook at that point, and could they default, or how could this be resolved if there's insufficient physical silver to fill those contracts? What do you think that would do to the silver price?

Absolutely, large demands for physical delivery could overwhelm any market, including silver. The key is who would be demanding delivery. If it was a large single entity, then I suppose the regulators could cry foul and claim an attempt to manipulate prices higher. It would be much better if things continued as they have to date, where great numbers of smaller investors grab a piece of the physical silver market.

The shorts would be on the hook in that event and there is a risk, but not a guarantee, of a default. Default or not, if there is insufficient silver to meet demand, then the price must explode to cool off demand and bring sellers into the market. That's the way the law of supply and demand works.

I've read more suspicious activity just recently took place, on February 29th, in the silver futures market. My understanding is that large commercial traders, using high-frequency trading, manage to influence the price to their advantage. Can you explain what's really going on?

You've described it perfectly. The key ingredient, which many people miss, is that the large commercial traders don't sell heavily on such big down days. They just pretend to sell, by rigging prices sharply lower in order to scare and induce others into selling, in order for the commercials to buy. Everyone thinks the commercials are selling on these big down days, but in reality they are buying every contract they can trick others into selling. That's at the heart of this scam.

The proof of this is in government data, specifically the Commitment of Traders Report (COT), published by the CFTC weekly. These reports show that on every big down move, the commercials are always the big net buyers. This provides the reason and rationale for the sell-offs, namely, they are pre-planned events intended to allow the commercials the opportunity of buying whatever they can trick others into selling. If there's another reason that fits the documented facts, I haven't heard it.

The CFTC is aware of the concentrated positions in the silver market, thanks in large part to your efforts to point out the problems and irregularities. Commissioner Bart Chilton has made a number of statements acknowledging undue influence on the silver price by a small number of players. There is a lawsuit pending against JPMorgan in this matter. All of this has been going on for years, with no resolution. What's your best guess as to why that is?

I've narrowed it down to either the government is allowing and encouraging JPMorgan to manipulate the market, which the majority who write to me claim, or the CFTC is not able to take JPMorgan to task for some reason other than complicity. I think the CFTC is afraid of JPMorgan on a legal and insufficient resource basis. I recently wrote an article asking if JPMorgan was stupid for being so heavily short silver, although I don't think so. I think JPMorgan is just as much trapped in this big short position and is desperate.

The bottom line is that the motivation for why JPMorgan is so heavily short and why the CFTC is not moving against it is less important than the fact that the concentrated short position actually exists. Concentration is tantamount to manipulation. The CFTC has never brought a case of manipulation without a concentration existing. Why the CFTC doesn't apply the same measurement in silver is something they refuse to answer, even though they have been asked thousands of times.

What's your long-term outlook on the price of silver, and what events or milestones would help it along? What advice do you have for investors regarding silver?

The main advice I would offer is not to misinterpret the facts in front of us. First and foremost, there is a manipulation in effect in silver, but that manipulation must be viewed cold and hard. The manipulation has caused silver to be priced much cheaper than it would be otherwise. That makes it a better buy. The silver manipulation also will end one day, as all manipulations throughout history have ended. Given the nature of these things, the price of silver will be much higher when the manipulation ends. Therefore, the manipulation is giving silver investors a double-barrelled bonanza. One, a cheap price to buy at than would otherwise be the case and, two, a much higher price to sell at once the manipulation is ended. That circumstance does not exist in any other investment, to my knowledge.

Lastly, the best approach is to put cash on the table and pay in full for whatever silver you buy; no borrowing or margin. This enables you to stay with it for the long term and ride out the inevitable price volatility. And adjust your thinking to the long term as well. It's somewhat fascinating and intellectually irresistible to follow silver on a day-to-day basis once you learn the facts, but the big payday is down the road, so keep your perspective there. The long play is the best play.

Of course, I'd like to thank Ted for helping us to uncover what is going on in the silver market.

Even state politicians are catching on. South Carolina's state legislature requested a report from the treasurer on the advisability of investing in gold and silver.

In response, State Treasurer Curtis M. Loftis, Jr. prepared a six-page report indicating among other things that:

"Similar to other commodities, the value of gold and silver is determined by supply and demand, as well as speculation. The Federal Reserve, The London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practiced fractional-reserve banking and engaged in naked short selling causing artificial price suppression."

But what's most important to retain from this captivating discussion is what you need to do as an investor.

As Ted reminds us, the ongoing manipulation has caused the price of silver to be unsustainably low.

Like the forces of nature, eventually the market will rectify this imbalance, bringing the price of silver in line with its proper supply and demand fundamentals.

As Eric Sprott has said: "…this decade will be the decade of silver."

With that in mind, my advice is simple: Get silver now. Here's how.

And for more outside-the-box thinking on the entire precious metals sector be sure to visit Ted's website:
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Join the conversation. Click here to jump to comments…

About the Author

Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.

Read full bio

  1. Charles Nathan | April 6, 2012

    Isn't there a law against the kind of manipulation Ted is talking about?
    If so, why is it not enforced?

    • Steve | April 11, 2012

      There are laws against it,but the bottom line is making money.JP Morgan and wall street have a lot of money and power,losing millions is not an option.The government and big business share the same bed,so to speak and making money is the bottom line.

  2. Mike | April 6, 2012

    JP Morgan and friends know their only last desperation of hope to stay afloat is to try to destoy the silver market.They are unwittingly giving everyone an opportunity to get physical silver cheap while the paper players and themselves go off the cliff together.

  3. BVHILTEN@PT.LU | April 6, 2012

    I've been in the Treasury Markets for over 30 years, mainly specializing in Foreign Exchange and Money Markets….. but of course closely been involved in most other Markets, like Bullion as well. This story is very interesting and confirms my experience in these over 30 years. Some players, big ones, manipulate, not only in silver. They work specially on more illiquid Markets, where it is easier to 'control' the price, read 'value'!! I would have a lot of stories to tell about these manipulations, how they work and how these "people only" can make money on it. I would call some of these manipulation systems 'inside information advantage' and 'accounting engineering' tactics. Another manipulation system is the 'cartel trading'. Funily enough nearly nobody talks about them although a large majority of the traders and customers are loosing money on it!!!!
    I think this is an interesting chat and I'm ready to participate in further details, if interested.
    Bram van Hilten (ex Treasury Manager)

    • ich1baN | June 24, 2012

      Hi BVHILTEN,

      If you could contact me at your earliest convenience, I would highly appreciate it. I have much to discuss with you in regards to manipulation. Please message me at

      Thank you.

    • Gerald dunbar | July 15, 2012

      We are gathering information to pass on for a article to be wrote in the daily telegrapth London any info would be much appreciated

      G dunbar

  4. Clive Burghard | April 6, 2012

    Thanks for this, I have been trying to figure out exactly how this manipulation was being carried out but could not see all the moves. This artical makes the whole thing crystal clear, many thanks,

    Clive Burghard.

  5. Paul Moscoe | April 6, 2012

    I bought and paid for silver five years ago from the Canadian Imperial bank of commerce. Three years ago i started to deal with a company in Vancouver on margin. In July of 2011 i was in Las vegas and silver was just about to hit fifty dollars per ounce. At about 2a.m. i saw a drop of six dollars per ounce that night. in three days the price of silver dropped to 28 dollars per oz. iT IS BEYOND BELIEF THAT THESE PEOPLE WERE ABLE TO GET AWAY WITH DOING SUCH A THING TO A WORLD MARKET. iN SEPT. OF 2011 THE SAME THING HAPPENED. THIS TIME WITHOUT NOTICE THE COMPANY SOLD ME OUT AND I LOST EVERYTHING. I WOULD LIKE SOMEONE TO CONTACT ME SO I CAN DISCUSS THIS FRAUD. I AM A WITNESS TO THE MANIPULATION. THEY SHOULD NOT BE ALLOWED TO DEFRAUD THE AVERAGE PERSON. THANKS IN ADVANCE.

    • AL | April 11, 2012

      THE BEST WAY to get back at these wretched people is 1) to publicize what happened to you in as many newpapers and websites as you can. DO SO.
      2)Talk to them about the negative publicity you can give them = see if you can reach at least a 50-50 split on the costs you incurred.

      Good luck,

    • AL | April 11, 2012

      PAUL, get back in as best you can to SILVER. But… pay for it, as in buying silver bars (10, 20, 50, 100 oz) and hold it till it runs up.

    • Mike Weber | September 17, 2012

      Paul! Are you still living in Denver? (Boy, I hope this is the same Paul Moscoe with whom I went to the University of Denver.)

      I am very bullish on the Fidelity Contrafund.

    • Keith K | September 18, 2012


      Do you still wear boxers for ease of access?

  6. Glenn Freeman | April 6, 2012

    The Ted Butler article above was very enlightening. I was aware of the JP Morgan Chase manipulation but much of that was based on just watciing from my easy chair. I have a bit of silver and I have removed the stop loss and plan to hang on as recommended. Thanks.

  7. Vern Plumlee | April 6, 2012

    Is there anything that can be done to focus regulator attention on this covert manipulation to stop it?

  8. Wayne | April 6, 2012

    This report has good information about what is going on in the silver market but lacks the most important piece of information in that what is the time fram for the short correction to happen!

    • AL | April 11, 2012

      THINK JUNE AND JULY due to the CHINESE and other ASIANS finally being allowed to purchase the silver and gold bullion rather than paper!

  9. Imants Krauze | April 6, 2012

    Thanks for the info, I;ll hold on to my silver and wait for the end of speculation.

  10. Richard Shepard | April 6, 2012

    Peter, I attempted to share your article. The "share" mode is only allowed thru FaceBook and Linkedin, as opposed to a general email link provided. I do not belong to any of these, so I cannot share your column with people that may be interested in following you.

    • luis | April 11, 2012

      you can hi-lite copy and paste to word then attach to an email and send

  11. GILBODY | April 6, 2012

    It must be influence and money on the parts of the big shorts in the silver market. However, why is there no call in Congress to push the CFTC into action. Where is our protection from our elected officials?

  12. Ron Springel | April 6, 2012

    I've been reading Ted Butler for a number of years and as the saying goes, "There are no flies on this guy." (Read: He's not full of sh*t.") I think the Lone Ranger said it best: To Tonto: "Hi-ho Silver….AWAY!"). -RDS

  13. Svend Moeller Nielsen | April 6, 2012

    I own the AGQ and SSIR silver stocks. Should I sell them or keep them for the manipulation to stop and prices going up

  14. mohan v. mahboobani | April 6, 2012

    It makes me feel that we are living in a uncivilized world,by allowing few crooks to prey on simple

  15. mohan v. mahboobani | April 6, 2012

    It makes me feel that we are living in a uncivilized world by lettiing few crooks to rob innocent
    and honest investors and are unable to do anything.
    This serious crime goes unpunished.People involved should be put behind bars for rest of their
    lives or better still be hanged to get rid of them forever.

  16. Pete | April 6, 2012

    I have been buying physical

    silver for the last year now . I'm
    Wondering if the price will stay down til the election
    in November ? I've been spending some time now
    Studying silver – and as in the past the ratio being
    14:1 (ish) gold – silver ratio – and looking at the
    Price difference the powers to be have it at approx
    45:1 hmmm – people should look into selling paper
    Silver And get into real physical stuff – same as "cash is
    Trash" get physical …. Thank you …. Pete

  17. Benton H Marder | April 6, 2012

    I have wondered for some time now about the reasons behind the manipulation. Is it possible that the big money boys involved in this are being paid by the industrial users to keep the price of silver down? If the price were to rise, certain applications and uses would cost more, pricing certain goods higher than the public will pay. Perhaps it is cheaper to pay to have the price hammered down than to pay the real going price? How much would all the electronic gadgetry cost if the price of silver was more realistic—this being one example to contemplate. A point to consider: with the unrealistically low price, the available supply will diminish more quickly, thus eventually forcing an enormous price increase that would damage the whole electronics industry in the longer term.

    • Vic Odd | June 8, 2012

      Actually, Benton, while that logic seems to make sense, the amount (quantity) of silver used for each individual electronic item is so small, even a price jump of 3X would only increase the overall cost of one electronic item by a few dollars. If there really was a lot of silver used in electronic items, there would be a widespread awareness that it is worthwhile to salvage silver from those electronic items instead of just throwing them away in landfills.

  18. pat hampton | April 6, 2012

    thank you so much for the advise Pat

  19. Alister McDonald | April 6, 2012

    Fantastic article, thanks Peter and Ted.

    It's great to hear from someone of such knowledge and experience, particular when there is real conspiracy in play.

    Please keep up the great work!

  20. GUNTHER03616 | April 6, 2012

    can you also send a text when the newsletter is sent? if so send alert to 5056034999.

    Thank you

  21. Les Pfenning | April 6, 2012

    That paragraph toward the end of your article; beginning with : "Lastly, the best approach is to put cash on the table…"- that is probably the most important thing, for someone who wants to sleep at night. The joy of following the very fascinating gyrations of the silver market, and the insights provided
    into our greater macroeconomic markets, theres the gist of the whole thing, I think. Keep blowing them out of the water, Mr. Peter Krauth. Happy Easter.
    Regards, Les

  22. Chris Andersson | April 7, 2012

    Excellent article and intreview.

    This has got to stop someday, thay cant be allowed to run their "blackops" trades and whatnot forever, hold on to the physical stuff, it will be rewarding.


  23. ted plottner | April 7, 2012

    I want some advice from ted butler———- I bought silver for 8 years and was scammed out of all our money and savings—–the FBI claims it is not a big enough value to handle the case and the State of South Carolina will not prosecute this man who stole our money———————TED,….Is there anything I can do to get justice or even find if there ever was any silver??????????????????????????????

    • CHRIS | April 10, 2012

      contact the cftc directly, have all your paperwork on hand and they may bring a case against the company you did business with, if they can get enough customers of this company to complain about their losses.

  24. Snakeman | April 7, 2012

    Excellent summary of the mechanisms of the ongoing silver (and Au) paper price manipulations. But in my mind it begs the question, whom is it that continues to play into the hands of the big commercials, in sucking-up to those bastards? Are they getting "kick backs" from the short sellers, say with stolen MF Global client money, or what? Who are the High Rollers who get "scared" into playing this losing game? It's high time to start pointing fingers, to wholly expose the full nature of this ongoing manipulation.

  25. larry olson | April 7, 2012

    Ted, do you thnink the traders (JPM etc.) are doing the US gov't's work (putting in orders fo the gov't)band if so, what makes you think this will ever end?

    and if you think it is just JPM doing this, same question, waht makes you think it will ever end? they seem to have total control over the market, and are making a lot of money with what they are doing.

  26. neal silverman | April 8, 2012

    I have been purchasing morgan silver dollars since 2004. In your opinion is this a better way to own physical silver than bullion?
    Thank You.

  27. norman cartmell | April 8, 2012

    When is the court case coming up for j p morgan.

  28. JOHN | April 9, 2012


  29. RUSS, CALIFORNIA | April 9, 2012

    Dear Patrons Of Money Morning Et Al:

    Here are some pointers as added incentives to buying silver whenever you're ready: One troy oz. of 999.99 refined by electolysis Industrial Silver can be used by Eastman Kodak for example applying it as silver haloid to produce up to 5,000 colored films for your Family Alblum. That same troy oz of Industrial Silver can be applied as a very fine electrical conduction wire throughout all forms of electronics worldwide that is 50 miles long. Scientists conducted electrical conductivity tests for various metals and then rated copper 100%. Later another scientiest discovered that the earlier electrical conductivity tests didn't include silver. He redid the tests and then rated silver 120% above copper. Please keep these aspects regards the Industrial usefulness of silver in mind, whenever you think about the advantages of owning your own store of this Industrial precious metal. Thank you for reading.

  30. Ricardo | April 9, 2012

    Great interview. It would be great if you could interview the CFTC and get an update on the 3.5 year silver investigation (close to a full term of a US President) and the attorneys on the class action lawsuit agains JPMorgat to get an update from them as well.

  31. rolf | April 10, 2012

    bring back the OTTOMAN EMPIRE. expell all whites from the Americas. chew more gum.
    honor your grandmother. sleep standing up. howl at the moon.

  32. robert walters | April 10, 2012

    I knew about the big guys, buying and selling, but just did't know how it was working. while we sell and buy small amounts, they in turn, buy and sell in the millions. If your jhonny on the spot you may be able to buy a small amount, of the metal, and not paper. If silver is going to hit 6 or 7 hundred per ounce, it will come quick, and if you are lucky maybe get a peice of the pie. For now I'm holding, and I belive in the next 10 years silver will make its move.

    Thank YOU qoutes by Bob Walters

  33. | April 19, 2012

    JP Morgan should be labeled as the scum sucking pigs they are. After their derivatives crash, you know they'll come to good old Uncle Sam for more handouts. This fascist state that used to be called America has submitted to the will of the fat cats and sold the citizenry down the river.

  34. ikke | April 22, 2012

    your still buying paper, buy physical silver, the only escape of this fraud.

  35. John Wallace | May 21, 2012

    I have no more patience for sitting idly by and watching my net worth go no where. Is there a more aggressive approach (like waterboarding) to take. It is not ok with me that we know it goes on yet we all hope it will end. Can we do ANYTHING to make it end NOW!

  36. James | July 10, 2012

    Where would silver price be at right now if there was no manipulation?

  37. lazy | September 8, 2012

    the mines are obviously still making a profit even at the low prices, so why is that manipulation?

  38. Azwehbe | November 14, 2012

    Here is an article that got me worried about the idea of the scarcity of silver, what do you think, it suggests that there will be little or no supply issues for at least 20 years.

    Also, if there is a big enough economic issue (inflation) to the point that silver will be even more desired as a security/investment, will there be not an equally if not greater decrease in demand for silver in industry which is propping the price as well, ~50% of demand.

    And James, I would suspect that the price prior to the speculation and investment demand, which is fairly recent, would be ~$10/oz, based on industry and other applications demand for the material.

    What do you guys think? Buy Silver @ $32/oz?

  39. Azwehbe | November 14, 2012

    And do you guys think that we will for sure see a day in the near future when the dollar dies?

  40. GREG | December 30, 2012


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