It has been rumored that the silver market has been manipulated by JPM for too long and too frequently for somebody not to investigate and report.
Yeah, the problem is that we have so many new laws and are not enforcing the old ones that would stop this sorta crap....
The letter contains no new facts and is nothing more than recycled rumors that have been going around for months, at least. This from no less than Zerohedge: http://www.zerohedge.com/news/jpm-metals-whistleblower-letter-complete-fraud-or-just-total-mockery
Let me explain in simple terms why this posting is a fake and shows no knowledge of how commodity futures trading works.
Let’s say you want to make a few bets, and open up an account at a retail commodity brokerage. In order to be allowed to sell contracts, which is a short position, you have to put up enough cash collateral to cover possible price movements. You deposit $10,000 cash, and sell a few contracts.
Now your brokerage doesn’t operate directly on the futures exchange, it ‘clears through’ JPMorganChase. So they put up collateral to JPM, and JPM sells the contracts on your behalf. On the exchange, these contracts are shown as an obligation of JPM, because they are doing the transaction, but the chain of collateral goes back to you. If silver goes up instead of down, you will have to put up more collateral or lose your deposit as your position is liquidated.
Both your broker and JPM make money on every transaction, win or lose. They get a steady stream of fee income, and that’s how they make their money. Why should they gamble themselves when they own the casino, and a monopoly casino at that?
Since JPM clears for a large number of smaller brokers, about 25% of the contracts on the exchange look like they’re ‘owned’ by JPM. They’re not.
I can’t say that JPM doesn’t trade on their own account, but most of their activities involve making a market for their customers. The keep a certain number of options contracts ‘in stock’ in order to be able to service orders, but usually they avoid trying to take a position where a market movement could hurt them. If they had been doing so, it would have showed up in their earnings reports by now, since these are typically 3-month contracts. But you don’t see any losses, do you? So their book must be well-hedged.
If that were the case, then why would the CFTC do anything under Obama?
And as far as trying to make money off of food stamp EBT cards or what not, well, JPMorgan is really shooting itself in the foot if it builds its empire on welfare.
The three D's.
Default and Debt Deflation on a nearly universal scale.