A Tiger By The Tail

[webmaster]

Subject:A Tiger By The Tail
By: Theodore Butler

Overview: My message today concerns what I believe is the most important price factor in silver. That factor is the concentrated short position, that is incredibly large and is held in so few hands. Now there is reason to believe that the manipulation by the concentrated shorts has infected the SLV, both in the naked shorting of its shares and the use of its metal holdings to plug gaps in wherever physical silver may be needed, much like the boy plugging holes in a dike.

Link: http://news.silverseek.com/TedButler/1214325521.php

[the_moonbeam]

I'm a newby...always held small amounts of silver, but have only been a disciple for a couple of months. I've studied the web site that has the stock market definitions, and read every article and posts on SilverSeek in that time. Although you were very clear in your past articles concerning "shorts" and "short positions," it still never "clicked" with me. This article brought it all into focus - simple words that blew away the fog. I thank you for your knowledge, and clear, precise ability to convey it.

[pkrebaum]

I think a partial re-post of one of my earlier posts is justified here:

I'd like to go a step farther and say: those of you who do not have actual physical possession of your Silver, BEWARE ! In case of a default by the silver shorts, Silver held by the SLVs, IRAs, and other large depositories not under your control will be the first to be seized and sold to industrial users, quite possibly at fire-sale prices. So what will happen if (or when, as many believe...) the silver shorts go down in flames ? I suggest that we look to history for an example, namely the LME Nickel default of 2006. See:

http://news.silverseek.com/TedButler/1156198042.php

Please note that despite Nickel's many essential uses in modern society we did not have an economic meltdown or vast social upheaval. Along with the default came a most unfair ruling which was exclusively to the benefit of the shorts (reminds me of what they did to the Hunt brothers.... the shorts get the favorable ruling EVERY time !). That ruling resulted, basically, in the theft of Nickel from those who had some in the warehouse, giving it to those who had none. See:

http://silverstockreport.com/2007/LME_nickel_theft.html

So much for those who were holding on to their nickel in hopes for a higher price... they got scammed to the tune of $10 per pound (the difference between $15/lb., when the default was declared, and the peak price of $25/lb. almost a year later). Without the Robin Hood-esque theft peak prices might have been $50/lb. The shorts DID have to pay the longs a fine of $300 per ton for every day they were late on delivery, however that was only about 1% of the value of the underlying commodity.

Now, back to Silver:
Ted asserts, and I believe rightly so, that Barclays is one of the major short players in the Silver futures market. It is my firm belief that in case of a Silver shortage the following rule change will immediately be made: That whatever Silver in Barclays' physical possession, whether or not actually owned by them, will be sold at the current (low) price to relieve the shortage, as necessary. Ditto for the other bullion depositories who might be one of the shorts and holding on to YOUR Silver. I wouldn't trust these guys to hold my allocated silver in my name any farther than I could throw a 1000 Oz. COMEX bar.


One prediction for Silver:
This is based on the price rise v.s. time and warehouse stocks data for nickel during the nickel crisis.......

If we see Silver go to $30 (or more) in less than a 6 month time frame than we can be sure the Great Silver Shortage has begun. And hold on tight to your Silver Saddles guys and gals, this bronco's gonna be one rough ride.

[duneyman]

Maybe whatever Ted is telling us is indeed true , and yes, we may be proclaiming him a genius and a hero one of these days. However, I have been reading his weekly columns for seven years now and we haven't had the price explosion yet - and maybe never will ! In his January 22, 2008 column, Ted conceded that the industrial consumption supply deficit was no more.
Maybe we we will get a Weimar style hyperinflation, financial mega crisis, or war in the Middle East to make us rich, but the reason I got into silver was the more boring supply-demand situation. Ted was constantly predicting soon to be defaults on the Comex several years ago, but of course, nothing ever happened then either.

[mls56]

Ted has shown why the 8 shorts do what the do,but he has not named them! But it was spilled out by the monkey,acting as the CFTC spokesman on C-Span, a commitity of Dem's & Rep's was taking turns asking questions about speculators in commoditys,oil mostly, until this old smart ass ,a old time trader that knew his stuff, started hitting him with questions that had the lawers jumping to wisper how to answer or not, but the question that he knocked out of the park was,(is it a fact that Goldmans,Barleys,JP Morgan,HSBC & other Wall Street I-Banks Speculate all types of investment funds in all comodities?) The monkey said yes, but when ask can you get more detailed, I thought the monkey was going to crap right there, then ask? what about sugar? monkey said no,Old man, yea! no money there!! So the CFTC gave up the Names! What does that mean? I dont know,but I am sure some of you do! I know you can find replays on the net or c-spans web site..
Goldmans, along with Paulson & the Fed have a game plan, but can they keep all the holes pluged? AS I read more data, I always find some good stuff here. Headlines,CFTC outs Goldmans and Wall Street, & other I Banks to ?????

[balou2]

Another article commenting on the affect the iShares short could have on the price of silver. The actual article is a bit simplistic (and wrong in a couple places) but the point of it is correct.

http://money.ninemsn.com.au/article.aspx?id=585996

[pkrebaum]

Electrons travel faster than physical material. Even if the trade is completely honest there will exist, for a time, an imputed surplus or deficit of the commodity.

Far more nefarious is when you have a fund (SLV - thanks Ted Butler !) which is shorting on the buy and is held by one of the suspected shorts (Barclays) which is shorting on the sell. SO.... they're taking your money and buying naked (non-existent) Silver from someone who is selling naked (non-existent) Silver. >>Your money disappears and non-existent Silver takes its place.<<
RESULT: more Silver for less money, or Silver Inflation..... which means the price of Silver has to go down since there's more Silver chasing fewer dollars. Note the exact parrallel here with how the FED and fractional reserve banking "create" dollars out of thin air, inflating the money supply. A naked buyer and naked seller working together in cahoots can now "create" Silver out of thin air, depressing the price.

I view any electronically traded fund as a source of volatility, especially if a good portion of the fund is held by managers who are out to maximize short-term profits and not by those who are in it for the long haul. These funds are a convenient way to buy and hold commodities, and while they have been great for PMs by increasing investment demand, all the big boys who manipulate these markets have come to realize that holding just a few percent of one of these funds allows them to influence the price at their whim.

[mls56]

Originally Posted by duneyman

Maybe whatever Ted is telling us is indeed true , and yes, we may be proclaiming him a genius and a hero one of these days. However, I have been reading his weekly columns for seven years now and we haven't had the price explosion yet - and maybe never will ! In his January 22, 2008 column, Ted conceded that the industrial consumption supply deficit was no more.
Maybe we we will get a Weimar style hyperinflation, financial mega crisis, or war in the Middle East to make us rich, but the reason I got into silver was the more boring supply-demand situation. Ted was constantly predicting soon to be defaults on the Comex several years ago, but of course, nothing ever happened then either.

There is a interview on www.jsmineset.com , I hope all the readers will go there & listen to it, a quite long , but great insight into how the shorts in SLV work the system in Canada & in the US, it even has details, lay out by a ex trader who got out, also how miners, sharre holders and all in the game are being used by these scum, to keep the scam going,and why the CFTC is so useless, keeping the price of Gold & Silver down, its illagle and they explain in detail how it works by the hedge funds & brokage houses, to bad the it was not played on CNBC or any MSM outlet!!

[peri1224]

If my average acquisition cost of silver was say $5 or 10/oz. and I had come to know in advance about all price runups and takedowns, I could have profited from the movements both ways, always near their peaks. Over the last several years, these rides up and down would have accumulated to obscene profits, much more than my original cost, so that my adjusted average cost would be far below zero, perhaps by a multiple.

If my original position had been short, it would be the same story, as it would have been recouped several times over. I could easily liquidate today all my old shorts and still walk away with a huge overall profit.

I believe that is the position of the concentrated commercial silver shorts in the Comex. They would have no problem liquidating all their positions and still come out ahead, inspite of their nominal loss through buying high and selling low. Why don't they liquidate their shorts then?

1. That would immediately drive the silver price higher, a thing that must be avoided. Whether or not that would result in an actual loss for them is not even their main worry, because

2. It would put a sudden stop to their little up and down seesaw game that has been so profitable to them over the years. Why throw that away as long as they can keep it going? The many small up and down increments in profit accumulate to something much larger than a one time big deal. And as long as they control the pricing - through their rigged paper markets - this seesaw game is a wonderful thing for them.
They are not afraid of liquidating their shorts and the one time nominal loss - which has been recouped long ago - their main fear is losing the little seesaw game and steady income stream from their dopey victims.

3. The masters of the universe who control our fractional reserve money, which they have been issuing as if there was no tomorrow, want to keep appearances about the strength of their fiat paper money. A big and growing price discrepancy between real money, i.e. gold and silver, vs. their printed paper coupons or Federal Reserve Notes, would alert the public, foreign and domestic, about the increasing worthlessness of America's main export.

These masters of the universe are in the process of bailing out of the dollar into tangibles. That takes time and they want to diversify as long as the dollar still buys something. Therefore, the US dollar must be kept artificially high and the price of gold and silver low for as long as possible. Let the public and non-insiders get saturated with paper dollars/obligations/promises by the time the planned and inevitable paper crash comes. The money controllers' motto is: After us the deluge.

Which of the reasons is the most important? Surely No. 3! It is the real strategic reason, while the fraudulent profits that traders squeeze out of the seesaw game are ony incidental - although with the blessings of the money parasites.

For these reasons Ted should stop citing fear of liquidation losses as main reason of the shorts' continued existence. Losses could only materialize at sudden and much higher silver prices. And I'm sure our crooked but not stupid shorts have an exit plan when that finally happens, like "Weimar style hyperinflation, financial mega crisis, (as per duneyman's post), etc. as excuse why physical silver can't be delivered.

[hiyosilver]

Originally Posted by mls56

There is a interview on www.jsmineset.com

I listened to this interview in it's entirety and it nicely explains in understandable spoken language how exactly the manipulators pull it off through various different methods and comments about what might be done about it.

Here again is the direct link to the interview file:

http://netcastdaily.com/broadcast/fsn2008-0621-3b.mp3

Keep in mind though, it's near 18mb, so it takes several minutes to download. You can also save it to your drive to listen to at a more opportune time by right clicking on the link, then clicking on "Save target as". I'm guessing the audio is about an hour long, but I didn't actually time it.