by Chris Powell, Silver Seek:
Dear Friend of GATA and Gold:
In the July 18 edition of Gold Newsletter, editor and publisher Brien Lundin wrote about the failure of silver prices to keep up with gold prices.
“I’m not the kind of conspiracy buff that many of my friends in the industry are,” Lundin wrote, “but it’s hard to look at silver and not see some hidden hands at work (especially considering who holds so much of the metal in both physical and paper forms while acting as custodian for the biggest silver exchange-traded fund).”
Of course, Lundin meant investment bank JPMorgan Chase and silver ETF SLV.
TRUTH LIVES on at https://sgtreport.tv/
Why anyone would invest in silver or the other precious and monetary metals with JPMorgan Chase can be explained only by ignorance.
In the last decade, the bank has pleaded guilty to five felonies and has paid more than a billion dollars in government fines and civil lawsuit settlements, including a fine of $920 million for manipulation of the monetary metals markets by some of its traders:
But silver market manipulation long has been bigger than even JPMorganChase.
Indeed, silver price suppression has been U.S. government policy since President Lyndon B. Johnson signed the Coinage Act of 1965, which removed silver from the country’s money.
Signing the act into law, Johnson proclaimed:
“If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content”:
https://www.presidency.ucsb.edu/documents/remarks-the-signing-the-coinage-act
https://www.gata.org/node/15838
It’s not known how long the U.S. government’s strategic silver inventory lasted after 1965 and how much was used for executing the price-suppression policy Johnson proclaimed, but eventually collectors and investors did exactly what the president warned would bring them no profit. They removed the silver coins from circulation and hoarded them as the steady inflation of the U.S. dollar made them worth far more than their face value.
JPMorganChase Bank long has been a primary dealer in U.S. government securities and has been particularly close to the U.S. Treasury Department, so when SLV was launched in 2006 and the bank became custodian of the fund’s silver, suspicion of government involvement with the bank and the ETF was fairly aroused. (The bank now is also the custodian of the metal of the major gold ETF, GLD, prompting more fair suspicion.)
After SLV was founded, complaints that JPMorgan Chase was manipulating the silver market grew loud enough that the bank felt obliged to answer them publicly.
First the bank’s CEO, Jamie Dimon, said the bank had no interest of its own in the monetary metals and traded them only for clients. Then in 2012 the head of the bank’s commodity desk, Blythe Masters, went on CNBC to emphasize this denial particularly in regard to silver.
“There’s been a tremendous amount of speculation, particularly in the blogosphere, on this topic,” Masters told the CNBC reporter. “I think the challenge is that it represents a misunderstanding of the nature of our business. … Our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk-management objectives. … We have offsetting positions. We have no stake in whether prices rise or decline.”
See: https://www.gata.org/node/11216
But since CNBC is a mainstream financial news organization, its reporter failed to put the critical follow-up question to Masters: Do JPMorgan Chase’s clients trading silver and other monetary or precious metals include governments, particularly the U.S. government, directly or indirectly?
The answer to that question was provided inadvertently 10 years later, and barely noticed by mainstream financial news organizations, during the trial of the JPMorgan Chase traders charged with and convicted of “spoofing” the monetary metals futures markets. In the very last paragraph of its July 31 report about the trial, Bloomberg News reported:
“Another set of important clients were central banks, which trade gold for their reserves and are among the biggest players in the bullion market. At least 10 central banks held their metal in vaults run by JPMorgan in 2010, according to documents disclosed in court”:
A mechanism for governments to use for surreptitious manipulation of the monetary metals futures markets was already in place at CME Group, operator of all the major futures exchanges in the United States. It is called the Central Bank Incentive Program, whereby CME Group exchanges provide volume trading discounts to governments, central banks, and international organizations for trading all futures contracts on CME Group’s exchanges.
