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Posted on 04/09/2010 12:59:22 AM PDT by Palter
Someone had to do it. So we applaud Jason Hommel of Silver Stock Report for submitting the first official complaint to the United States Department of Justice over the recent revalations of unprecedented manipulation and fraud in the silver (and gold) market.
Citizen Complaint Center
Antitrust Division
950 Pennsylvania Ave., NW
Room 3322
Washington, DC 20530
Re: Reporting Antitrust Concerns
http://www.justice.gov/atr/contact/newcase.htm#submit
Step 1: Fully Describe Your Concern
1. What are the names of companies, individuals, or organizations that are involved?
The CFTC, the Commodity Futures Trading Commission, is withholding the names, with the excuse given that they cannot reveal the names, because of statute. But, a statute, which may violate other laws, is no excuse for obstruction of justice, dereliction of duty, misprison of fraud, or conspiracy to defraud the United States.
The COMEX, owned by the CME Group, also has the data on who is primarily involved, as the antitrust violaters trade on their exchange. http://finance.yahoo.com/q?s=cme
JPMorgan Chase & Co. has been named by thousands of writers in the private sector, all over the internet, based on the reports of the BIS, the Bank of International Settlements and the OCC, the Office of the Comptroller of the Currency at the US Treasury, that they manipulate the precious metals markets by fraudulently selling metal that does not exist. This Bank report indicates that JPMorgan Chase & Co. is heavily involved, far more than any other, in derivatives, exceeding $72 trillion.
JPMorgan Chase & Co.
270 Park Avenue
New York, NY 10017
http://www.occ.treas.gov/ftp/release/2009-161a.pdf
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2.
How do you believe they have violated the federal antitrust laws? (For details on federal antitrust laws, see Antitrust Laws and You.) http://www.justice.gov/atr/laws.htm
RE: Sherman Antitrust Act
This Act expresses our national commitment to a free market economy in which competition free from private and governmental restraints leads to the best results for consumers. This Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies.
JPMorgan Chase & Co. holds a large, concentrated, short position in silver futures contracts at the COMEX that allows them to unreasonably fix prices for silver lower than they should be, which resulted in widespread shortages of retail bullion, and 1000 oz. silver bars, over several months in 2008, at which time, I became a bullion dealer to help relieve the shortages caused by this price manipulation. I had to wait up to 5 weeks for delivery of 1000 oz. bars from one of the world's largest wholesale suppliers at the time.
It has been estimated that JPMorgan Chase & Co. has held up to, and over, 90% of the commercial short interest in silver futures contracts, essentially dumping silver on the market, silver that does not exist, in an attempt to contain, thwart, suppress, and manipulate the price of silver lower than it should be, and otherwise would be.
RE: The Sherman Act also makes it a crime to monopolize any part of interstate commerce. An unlawful monopoly exists when only one firm controls the market for a product or service, and it has obtained that market power, not because its product or service is superior to others, but by suppressing competition with anticompetitive conduct.
World silver prices are monopolized by this price manipulation that takes place at the COMEX, and also in the London market, which is even more heavily leveraged due to excessive selling of silver on paper that does not exist in the real world. Their primary product, "silver on paper" is clearly inferior to real silver, in that the key difference is that real silver does not depend upon the financial solvency of JPMorgan Chase & Co. for its value; and paper silver will lose all value if JPMorgan Chase & Co. goes bankrupt. Competition for real silver as an asset is suppressed by their choice to sell paper silver at a discount to the costs of delivering real physical silver, which must include shipping, manufacturing, and mining costs. Other popular forms of silver for investment, such as 100 oz. bars, and 10 oz. bars, and 1 oz. rounds also include manufacturing costs, which are also not included in their "paper silver" investment products, such as the ETF, SLV, futures contracts at COMEX, options on futures contracts at COMEX, and the standard LBMA "unsecured bullion accounts".
RE: The Clayton Act
This Act is a civil statute (carrying no criminal penalties) that prohibits mergers or acquisitions that are likely to lessen competition. Under this Act, the government challenges those mergers that careful economic analysis shows are likely to increase prices to consumers. All persons considering a merger or acquisition above a certain size must notify both the Antitrust Division and the Federal Trade Commission. The Act also prohibits other business practices that may harm competition under certain circumstances.
The Clayton Act was likely violated when JPMorgan Chase & Co. acquired Bear Stearns, and inherited their short position in silver, giving JPMorgan Chase & Co. even more control over silver market prices, due to their even larger and more concentrated short position. "Higher prices for consumers" is a result if the consumers are silver investors, and if they lose the value of their silver, and thus, have to pay relatively higher prices for everything else in the economy as a result.
RE:
The Department of Justice also often uses other laws to fight illegal activities, including laws that
prohibit false statements to federal agencies, perjury, obstruction of justice, conspiracies to defraud the United States and mail and wire fraud.
The BIS, the Bank of International Settlements indicates that the notional value of "other precious metals" (silver) in the "over the counter" category increased to $203 billion by June of 2009.
http://www.bis.org/statistics/otcder/dt21c22a.pdf
Yet, the entire world's annual production of silver, at about 600 million oz., at $17/oz., is barely $10 billion, which is a mere 1/20th of the amount owed in these bullion accounts, which are dominated by JP Morgan. But the $203 billion of mostly silver, is 12 billion ounces of silver, which is 24 times world annual production, and perhaps 100 to 160 times the actual supply of physical silver held in London for delivery against such accounts, which may be as little as 75 million ounces or less.
JPMorgan Chase & Co. is also the custodian of the ETF, SLV, which is supposed to have up to 300 million ounces held by JP Morgan, which is also likely not there.
JPMorgan Chase & Co. is thus likely engaged in a Ponzi scheme of selling silver to clients, without actually purchasing the real physical silver in the marketplace, which is a totally fraudulent and illegal activity.
JPMorgan Chase & Co. is likely engaged in sending false brokerage statements to account holders of unsecured bullion accounts, and thus, is likely engaged in both mail fraud and wire fraud.
JPMorgan Chase & Co. is likely engaged in defrauding the United States Government
by manipulating silver prices low, by selling excessive amounts of "paper silver", which creates the false illusion of abundance of silver, which creates the illusion of a false sense of availability of silver, which is likely needed by the Department of Defense for the national security of the United States, as silver is vital and necessary element for the defense industry.
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3. Can you give examples of the conduct that you believe violates the antitrust laws? If so, please provide as much detail as possible.
Yes. Andrew Maguire, a silver trader, who knows the silver traders who work for JPMorgan Chase & Co., testified to GATA, and to the CFTC in the recent hearing on March 25th, 2010.
See
A London trader walks the CFTC through a silver manipulation in advance
By: Bill Murphy, Gold Anti-Trust Action Committee
http://news.silverseek.com/SilverSeek/1269625544.php
Andrew provides detailed, blow by blow acts of price manipulation, giving specifics, in real time, through emails to the CFTC about the manipulation in progress. His report is highly detailed.
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4.
What is the product or service affected by this conduct? Where is the product manufactured or sold, or where is the service provided?
Good question. The product is silver. Real silver is sold through approximately 4000 coin shops nationwide in the USA. A low, manipulated price, hurts and suppresses the business volumes of those businesses. Even more directly, a low silver price hurts the worldwide industry of silver mining. Most silver, about 75% is produced as a by-product of copper, lead, and zinc mining. And many primary silver mines produce gold, copper, lead, and zinc as by-products. Thus, a low silver price that suppresses silver mining also restricts the supplies of gold, copper, lead, and zinc, which leads to higher prices for all of those other commodities than would otherwise be the case. The world could have more abundant, and thus cheaper, gold, copper, lead, and zinc, which are desperately needed for the continued industrialization of the entire world, if it were not for the silver price suppression manipulation scheme in progress.
Silver is primarily produced in North and South America, so this is a direct assault on a large section of the world's economy, which is, of course, a much smaller industry as a result.
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5. Who are the major competitors that sell the product or provide the service?
The largest refiner of silver in the world is likely Penoles of Mexico, who may refine about 70 million ounces of silver per year, over 10% of the world's supply. The second largest source is likely the Cannington silver mine owned by BHP Billiton, which produces about 30-40 million ounces of silver per year. The largest silver refiner in the USA is Johnson-Matthey, who also might have been engaged in illegal allocation of 100 oz. silver bars back in 2008, as their primary retailer had a wait list of over 2 months for delivery in 2008 as a result of their complicit actions in the price fixing scheme. They refused to allocate silver to the highest bidder at the time. At that time, I helped pioneer the development of a silver auction website, with the owner of silverseek.com, who created seekbullion.com, which sold over 10,000 oz. of silver per day to the highest bidder for a few days during a time of a national and worldwide silver shortage that resulted from the illegal price fixing.
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6. What is your role in the situation in question?
Another very good question. I invested in silver, starting in 1998. I have been advocating silver as an investment since then, as can be seen at silverstockreport.com, which also has an email newsletter that reaches out to 80,000 readers. The price manipulation has negatively impacted the success of my own investment choice, and the investments of hundreds of thousands of other people around the world. I have been working to expose this manipulation since 2002, as I wrote, and spent over $500,000 to publicize, articles such as:
The Moral Failures of the Paper Longs Jan 22, 2003
CFTC Response to Silver Problem Jan 14, 2003
People Talking About $32,567/oz Jan 10, 2003
Letter To Authorities of Silver Markets Jan 6, 2003
Why no talk of $32,567/oz ? Jan 2, 2003
Refuting Myths about Gold Oct 28, 2002
Controlling Gold with Paper June 10, 2002
Impending Gold Futures Default May 29, 2002
7. Who is harmed by the alleged violations? How are they harmed?
As I have said, silver investors who need to sell their silver for their retirement are primarily the ones harmed. But also, silver mining is suppressed, which hurts companies working to develop technology to explore for silver. It hurts engineers and builder who develop mines. It hurts and restricts the production of silver byproducts, which raises the prices for gold, copper, zinc, and lead, which restricts industrial development worldwide.
But primarily, it will catastrophically hurt holders of American dollars in the future, as they are currently being lulled into a false sense of security about the false and fraudulent value of US Dollars, or more accurately, Federal Reserve Notes, which stand to lose value rapidly as the fraud of selling silver that does not exist gets exposed.
Thus, the silver fraud is a small part of the Ponzi Scheme on which rests the much larger Ponzi scheme of the US Dollar itself, a $14-16 Trillion fraud, and also, the much larger US Bond market, which may exceed $30-40 trillion. Further, the $70 Trillion "interest rate derivative" fraud is also supported by silver price manipulation.
Inflation-indexed bonds are also sold as a competing investment to silver, and so, by hurting the silver price, or by making the silver price seem dangerously volatile by way of direct price manipulation, JPMorgan Chase & Co. supports its entire mountain of paper investment products, which it clearly dominates in world trade.
The silver price suppression scheme, and the resulting failure of paper money, and the resulting collapse of commerce and world trade risks sending the entire world into a severe depression that risks famine on a world scale unlike what has ever been seen before in world history, and could therefore cause the direct deaths of anywhere up to a third of all humans on earth, or even more.
Please pause now, and reflect on that for a moment. You may wish to consider and ask yourself if you want that on your conscience, or if you want to be blamed for that, by God himself, in the eternal reckoning that must come due for all men, if you decide to do nothing to stop the fraud on progress, that could potentially cause so much devastation.
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For more information, please see the following articles, or excerpts:
The Silver Boom Is Coming!
by Richard Daughty
April 6, 2010
http://www.lewrockwell.com/daughty/mogambo38.1.html
Key Excerpt:
Jeff Nielson, writing in the James Cook Market Update newsletter, who says that because silver kills the bacteria that causes body odor, “the use of silver in sportswear has exploded into one of the largest single applications of silver. This one usage already consumes more than 1,200 TONS of silver per year.”
1200 tonnes x 32,151 oz./tonne = 38,581,200 oz.
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Silver Short Squeeze Could Be Imminent
April 3, 2010
http://inflation.us/silvershortsqueeze.html
Key Excerpt:
NIA believes the precious metals markets are currently being artificially suppressed by paper gold and silver that doesn't physically exist. At last week's CFTC hearings, Jeffrey Christian of the CPM Group admitted that banks have leveraged their physical bullion by 100 to 1. This means for every 100 ounces of paper gold/silver that trade, there could be as little as 1 ounce of physical gold/silver in the vaults backing it. However, Mr. Christian sees no problem with this because he says "it has been persistently that way for decades" and there are "any number of mechanisms allowing for cash settlements".
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Kingdom Economics Blog: Biggest Fraud in History Exposed
FED and JP Morgan Chase appear to be manipulating Gold/Silver Market
4-5-2010
http://blog.kingdomeconomics.info/2010/04/05/biggest-fraud-in-history-exposed.aspx
Key Excerpt:
What does this mean for the future price of gold and silver? Now that this fraud on the market has been exposed for what it is -- traders will eventually call the bluff of the manipulators and expose their naked short position. This could mean that the manipulators will need to find physical gold and/or silver to cover their position. And with these metals now being in short supply (relative to demand) we could see the PRICE of silver and gold increase dramatically in the next few months. Silver is currently at $17.97/ounce and gold is $1128.80.
I would not be surprised to see silver exceed $25 by the end of 2010 and gold exceed $1500. And this may be just the start of the increases in price for these metals. What we have today is psychological money and it moves globally with the emotions of traders. Prices are artificial (imaginary) and the market is very volatile and emotional today. Except some ‘fireworks’ in the silver/gold markets in the near future. See this web site for more details on this issue:
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Will fraud lift gold prices to $10,000/ounce?
April 03, 2010
http://www.commodityonline.com/news/Will-fraud-lift-gold-prices-to-$10000ounce-27107-3-1.html
Key Excerpt:
In fact, there is no gold left in this world if all the Gold ETFs ask for physical delivery. And, if that happens only god knows what will be the gold prices in the coming months — $10000 per ounce? Maybe, even more. Because, price of a commodity which is not available at all can go up to any level due to the sheer fact that it is not there in the market.
Now read about the Commodity Futures Trading Commission (CFTC) hearing last week about a London whistle-blower who had explained to the CFTC how JP Morgan Chase has been manipulating/capping precious metal prices. In a shocking parallel to the inaction by the US Securities and Exchange Commission (SEC) after receiving warnings from Harry Markopolos about the Madoff ponzi, the CFTC has apparently been sitting on the information on gold cartels.
Did you visit the websites of GATA and CFTC this week? If you do, you can see a lot of articles and responses from investors who have been keenly watching the developments in bullion market.
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Gold, Silver, the CFTC & Conspiracy Theories
April 2, 2010
http://news.goldseek.com/GoldSeek/1270188480.php
Key Excerpt:
Well, if you read the Wall Street Journal, you’ll never know what happened at the hearing and whether the CFTC paid any attention to them, but, if you look elsewhere, you’ll read about all kinds of interesting developments during and after the meeting.
Here’s a partial list:
GATA’s evidence of silver and gold manipulation at CFTC hearing – Mineweb
CFTC Gets Facts of Bullion Manipulation – Numismaster
JP Morgan Chase Caught Manipulating Gold & Silver Market – Firedog Lake
Whistleblower Speaks Out On JP Morgan Market Manipulation – Jesse’s Cafe
Former Goldman Analyst Confirms LMBA Gold Market Is “Paper Gold” Ponzi – Zero Hedge
Whistleblower in Silver Manipulation Struck by Hit and Run Car In London – Jesse’s Cafe
King World Interview with Andrew Maguire the Silver Market ‘Whistleblower’ – Jesse’s Cafe
King Interview With GATA On The Biggest Gold Manipulation Story Disclosed – Zero Hedge
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Perhaps we all ought to submit this story to americangreed@cnbc.com ?
http://www.cnbc.com/id/22680920/
Then again, they are about as likely to expose this story as the Russian media was about to expose communism in government. What's ironic is that pravda is more likely to cover this story than the mainstream US media.
cc:
metalshearing@cftc.gov
americangreed@cnbc.com
Lol.
How is it that GATA isn’t accused of manipulating the price of precious metals since they only seem to want to raise the prices?
Flash back 1980. Whoa....
I love the fact that talk show hosts are shilling for this metals market. Here is a tip. If it gets so bad that Gold is the only thing of value then it will have no value. In fact there is not one gram of protein in Gold.
I like Glenn Beck except for the part where he shills for these companies. Hey my yearly salary has more than tripled in the last 10 years. Why won’t someone invest in me right now?
Shrug, I have no idea that they are selling metal they don’t own or does not exist.
As for manipulating prices, there is nothing wrong with lessening your supply of a material. It happens with oil production all the time.
Nothing wrong with someone shilling for a product. If you have faith in the market invest your money with it. Food, clean water, ammunition would probably will be of higher value in a end of world scenario.
I would agree but the end times people make folks think there is going to be someone there on home stretch cashing out gold reserves.
I like Beck, but you have to agree that to be Mormon you have to suspend some logic and reason. This end times belief is LDS and extreme Christian views. Do I have gold? Yes. Do I have Silver? Yes. Do I think it will help when nothing has value? NO and not ever!! When it gets to the Gold stage of your 72 hour kit you are dead, unless you have managed to defend yourself.
I am chasing my tail trying to figure the author out. Please help!
He is a silver holder/dealer and is complaining that the price of silver is being artificially suppressed by JP MOrgan Chase and that hurts the value of his holdings. He also says that by suppressing the value of his holdings that makes everything else more expensive for him. ( “Higher prices for consumers” is a result if the consumers are silver investors, and if they lose the value of their silver, and thus, have to pay relatively higher prices for everything else in the economy as a result.) So, prices are lower for everyone else but are higher for silver investors and that is unfair.
He then compares JP Morgan Chase with the Federal Reserve for issuing obligations for silver they do not possess. He says that if this ponzi scheme is exposed it will cause a global meltdown. Therefore, he is doing all he can to expose it, thereby destroying his holdings and that of everyone else along with it if he is successful.
The implication is that the price of silver is artificially low and as soon as this is exposed the price will go up dramatically. That will greatly benefit him and other silver investors except for one thing - the global meltdown he predicted.
Is that about right?
I remember years ago when two of the Hunt brothers tried to corner the silver market. They lost a ton of money when they were brought up short.
There are position limits for longs and shorts, 1500 contracts, except for “legitimate hedging activities.” JPM is short something like 20,000 contracts, but they are not a producer so it can’t be a position that is legitimately hedged. Why are they allowed to be short nearly a year’s worth of production (not including derivatives other than futures contracts) but position limits are enforced against other agents? The conspiracy argument is that it is in the interest of the central bank to destroy the value of ‘real’ money, gold and silver, so as to support the value of its fiat currency, and this is why the regulations are not being enforced - and this has been the case for decades. Even without that argument, why is JPM given a pass? It is doubly concerning that JPM is the custodian for SLV, a fund that purports to hold silver and that people buy to obtain exposure to the price of silver. But recently the prospectus for SLV changed in some curious ways, like going from “the fund contains silver” to “the fund is expected to contain silver”.
Although the end of the manipulation might be catastrophic, the sooner it ends the less bad it will be. By accelerating the end Jason is trying to minimize the damage.
JP Morgan manipulating the price of silver? 72 trillion in derivatives?
I don’t know of this is a real problem, but I would hate to own a bunch of silver certificates and find out they were were not worth the paper they were printed on.
The conspiracy argument is that it is in the interest of the central bank to destroy the value of ‘real’ money, gold and silver, ...
I understood the article to say that by suppressing the price of silver, and thereby discouraging the mining thereof, it increased the price of gold because gold, silver, copper, zinc, etc., were all part of the same mining operations. By not mining silver it made the others more scarce and therefore more expensive. So, if gold is "real money" wouldn't that about square the deal - silver lower but gold higher?
Gold and silver both are the subject of huge short positions by the central banks, however, the situation is a lot more dramatic for silver than for gold, by the reason of industrial consumption of silver. Most of the gold mined still exists as bars, but most of the silver mined has been consumed in products from which it would not be economical to recover. Silver is mined partly as a by-product of lead and zinc mining, but a lot of silver mines have gone bankrupt as a result of the long price suppression. Especially given environmental regs, it will take decades to get the production back on line, during which time some severe shortages may occur as a result. So the price suppression isn’t only harmful to investors.
I forget what the technical term is, but they have a continuous propaganda program to pump up precious metals prices.
Thanks again for an explanation I can understand which also makes sense.
The Hunt brothers didn’t “try” to corner the silver market, they did!
Gold was illegal to own, so they couldn’t buy that, so they focused on silver. Not saying it was a good idea but that’s why. Then the government changed the rules midstream and said nobody could buy any more silver, but only sell. The price cratered, etc. Prolly a good thing as it allowed the can to be kicked down the road for another 20 years or so, but.
In Beck’s defense he also shills for food supplies and carbon backup for your computer...
I have a tiny, tiny amt of gold....I have some silver bullion bought yrs ago....I figure is we ever get back to normal times, they’l make nice Christmas gifts to the grandchildren or as an inheritance....
Thanks for the details. I lived in Dallas at the time but didn’t remember the details, only the results. That should have been part of the TV show “Dallas.”
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Impressive. You know what’s going on! Minus this Morgan crap and others doing the same....Do you think silver would be double in price?
I think silver should be a lot higher than it is, if that answers your question. But there could be another meltdown before a short squeeze happens, so today’s price might not seem like a bargain in the near term. But I’m sure in 5 or 10 years, buying silver under $20 will seem like a great bargain. Double? Eventually much more than that. No time frame, though.
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