Potential CFTC Failure To Prosecute For Silver Market Manipulation—The Good And The Bad

By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com

Over the weekend, London’s Financial Times came out with a story claiming that the Commodity Futures Trading Commission (CFTC) four-year investigation into manipulation of the silver market would soon to be dropped without and findings of prosecutable actions.

CFTC Commissioner Bart Chilton then issued a statement where he called the Financial Times´ report both premature and contrary to some of the facts.  So, there is at least some doubt that this will be the eventual outcome of the CFTC investigation.

However, let’s assume that the CFTC finishes and closes its investigation without any prosecutable findings of wrong-doing, as it did in two prior silver market investigations.  What would likely happen if this were to occur?

No one has a perfect crystal ball.  But here is my speculation.  I would expect the dropping of such an investigation to result in some major mainstream media coverage proclaiming that the silver market is not manipulated.

This, of course, would not be what the CFTC would mean by dropping the investigation.  The CFTC merely would say that they were unable to take legal actions against any parties.  That is not the same as saying that they found no market manipulation.  The CFTC could have documented all kinds of price manipulation that did not rise to the level of prosecutable offenses.  But, don’t expect the mainstream media to get the correct implications if the investigation goes away.

As a result of such news coverage, I would expect silver prices to temporarily drop, but by no more than 10% at the most extreme.  Some existing silver investors would fall for the mainstream media line as meaning that there is little prospect for higher prices.

However, the sudden drop in prices will, I think, spur even more aggressive purchases by central banks and major investors taking advantage of the bargain opportunity.  This is why I don’t expect prices to fall by more than 10%.

With this projected rise in overall investor demand for physical silver, I would expect already tight supply squeeze to lead to market disarray sooner than if silver prices stayed steady.

So, the quick reaction to the CFTC dropping of the silver investigation could temporarily knock down prices.  But the whole sequence of events could ultimately result in far higher silver prices occurring more quickly than would happen if the CFTC simply continued researching the issue.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

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  1. There are more clear proofs of the Commodity Futures Treacherous Collusion (CFTC) being a functionary for silver shorts than there are billiards in a pool hall. My view, Chilton is a stall job and a distraction, a ploy to placate investors! Way back on May 23, 2001, James Newsome, chairman of the Commode Futures Treasonous Collusion (CFTC) opened his remarks to an assembly of the Silver Users Association—“It is an honor and a pleasure to address this distinguished group” and closed with “I look forward to working with you as we move forward.” In between that perverse sandwich of fawning laudation he slathered simpering, idiotic verbal bouquets on this pillaging industrial users group, who ALWAYS thinks silver prices are too high, even when they were still demanding Federal price caps on silver at 71 cents the refined troy ounce “FOR ALL TIME” (New York Times, April 20, 1946, page 22). That same major source of managed news in “Hoarders Spin Half Dollar Web,” March 19, 1967, section 2, page 36, claimed that no one had an explanation as to why the public wouldn’t circulate the watered down 40% Kennedy halves. Why shouldn’t we be falling all over ourselves to self-immolate for the silver users, who wanted even the 40% coins for silver? The great newspaper holds it incomprehensible that people feel objects with innate worth have more value than mere paper! So, after Newsome’s tenure at CFTC the powers that be installed him as chief at the New York Mercantile Exchange, then owner of the Commodity Exchange. This self policing organization allowed the silver suppression to continue, evidently it was Newsome “working with silver users as he moved forward with them.” Before CFTC, Newsome was a cattle rancher in Mississippi. When it came to silver, only the shortside users were to be allowed to graze at the silver feedlot, so to speak. What would have been the reaction of shorts and users if Newsome had addressed the annual general meeting of Pan American Silver (for example) and ended his speech by saying “I look forward to working with you as we move forward.” That’s about right—the giant bag of pus would have been crushed and the filth would have spewed from their keyboards like the Krakatoa volcano. “Manipulation in silver is only possible on the long side” is the unwritten credo of CFTC/SUA! Of course, the largest SUA entities, Du Pont and Dow Chemical, are Pilgrims Society concerns, and THAT runs up WAY HIGHER than the CFTC/SUA! Friends, no commodity in world history has been the target of so much shorting, price suppression, financial witchcraft hits, collusive attacks by banks and national treasuries, mass hypnosis bad mouthing by media, raw hatred from economists and finally, painted out of the picture in university economics textbooks that feature not 1 mention of silver in their indexes! Got no silver? Better get some! Just some 1964 or earlier dimes if possible. While metals make the best money due to fungibility, even diamonds get hot in a panic! (Top grades were soaring along with metals in the 1979 to January 1980 runup, and also retreated South in the collapse). Just after Franklin Roosevelt declared a national bank “holiday,” diamond dealers withdrew their stones from availability, because public demand suddenly went off the charts (NY Times, March 8, 1933 page 4 “Flurry In Diamond Trading.”) This isn’t to advise you to get some diamonds—silver or gold is the better choice for way over 95% of investors. But the mania will hit diamonds too, as people flee the synthetic “money” we’re on trying to stampede into tangible objects of value—it also transpired in the John Law fiat experiment in early 18th century France, and legal tender laws will be ignored first by hundreds of thousands, then by tens of millions who realize how vacuous the Fed’s “money” is. John Law exited France in 1720 disguised as a woman when his life was in danger because his paper money setup collapsed. Mr. Bernanke, do you own shaving equipment? And is your name in that New York Pilgrims list they refuse to release?

  2. On the matter of Bart Chilton—has anyone else noticed he has not said which way silver prices have been influenced? The agency’s history shows they believe long side tampering is the only direction in which a commodity, especially silver, can be influenced. Almost a third of a century past, the Hunt/Arab debacle I believe still has many big and smaller rich fearing to touch physical silver buying. The investigation they say could be over as early as September. Early? It’s dragged on almost fifty (50) months. I also see they’ve said October. Is that October of 2022?


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