from SRSrocco Report:
According to global market data from the top Official Mints, sales of Silver Eagles originate overwhelmingly from public retail investment demand rather than by one large bank… such as JP Morgan. I say this in response to the allegation put forth by silver analyst, Ted Butler who believes JP Morgan purchased half of all Silver Eagles since April, 2011.
Ted Butler, who has made this claim over the past several months, does so again in his recent article, The Perfect Crime. Butler states the following:
For starters, there is the matter of extraordinary sales of Silver Eagles from the US Mint. Since April 2011, the US Mint has produced and sold 140 million Silver Eagles, more than in any similar period of time, in a price environment that can only be termed putrid and in which sales of Gold Eagles were notably lower. I would estimate that JPMorgan purchased close to half of the 140 million Silver Eagles sold since April 2011. According to very reliable sources on the retail front, general investment demand has been lower over this time, as retail buyers do not buy strongly into a declining price environment in any investment asset. Yet we know for a fact that there has been extraordinary buying of Silver Eagles, even while Gold Eagle sales cooled off notably, so someone had to be buying Silver Eagles.
Butler assumes JP Morgan purchased half of the 140 million Silver Eagles produced since April, 2011… and he believes this to be true because “According to very reliable sources, general investment demand has been lower over this time.”
This is where I disagree with Butler. Now, let me start off by saying it was Ted Butler’s writing back in the early 2000’s that motivated me to start buying silver. So, I have a lot of respect for Ted as he was one of the leading silver analysts writing about the shiny metal well before it became on the public’s radar.
While I believe there is significant manipulation in the precious metals markets (including most other markets) by member banks, I do not agree with Butler that JP Morgan purchased nearly half of all Silver Eagles since 2011… and I believe I have the market evidence to support my claim.
Top 3 Official Coin Sales Support Broad Based Public Demand
If we look at the top 3 Official Coin sales since 2008, we can see a similar overall trend. Let’s first take a look at the U.S. Mint sales in the chart below:
As the price of silver skyrocketed, U.S. Mint Silver Eagle sales increased from 19.5 million in 2008 to 39.8 million in 2011. However, as the price of silver declined and remained flat in 2012, demand for Silver Eagles fell 15% to 33.7 million. Then in 2013, U.S. Mint sales hit a new record of 42.6 million as investors took advantage of sub $20 silver.
Butler alleges that as JP Morgan drove down the price, it purchased half of all Silver Eagles at a steal. Well, if this was the case, then who was buying record sales of Silver Philharmonics and Silver Maples?? If we take a look at the next two charts, we can clearly see a similar trend in these two 0fficial silver coin sales:
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