Posted on 12/09/2010 4:47:00 PM PST by FromLori
There’s a lot of rumor, buzz, innuendo, chitchat and scuttlebutt about the precious metals markets these days. Most of the chitchat is about J.P. Morgan and silver. Rumor has it that J.P. Morgan has amassed a whopping short position in silver.
The scuttlebutt, according to SFGate.com, is that “J.P. Morgan holds a giant short position in silver. Furthermore, some observers are accusing the bank of acting as an agent for the Federal Reserve in the market...i.e., a lower silver price helps maintain the relative appeal of the US dollar..."
“By selling massive amounts of paper silver in the futures market,” SFGate continues, “J.P. Morgan has been able to suppress the price of the precious metal. It is believed that these short positions are naked (i.e. they are not backed by any physical silver).”
If the silver price were falling, Morgan’s (alleged) short position would be lauded as a stroke of genius. But since the silver price is soaring, Morgan’s (alleged) short position looks much less laudable.
“In recent days,” SFGate notes, “rumors have been swirling on the Internet that J.P. Morgan’s massive short position is about to blow up in its face in the form of an almighty short squeeze and potential COMEX default, as large traders demand physical delivery of silver that COMEX does not have in its vaults.”
Based on some of the latest conjecture, Morgan’s short position totals a whopping 3.3 billion ounces. If, therefore, the buzz about J.P. Morgan and silver is even half true, the prestigious investment bank could be cruisin’ for bruisin’.
(Excerpt) Read more at businessinsider.com ...
ping
Why would JPM do this? If they are an agent for the Fed..then the Fed will help them unwind the position. But I don’t think that JPM would have shorted silver any time in recent history.
Is this at all similar to what happened to the Hunt brothers many years ago?
You would think they would try to corner the market on COPPER, since they have a never-ending supply of pennies.
Fifteen years ago I was buying silver jewelry for resale when the price was about $4 an ounce. Lately it has been bouncing between $25 and $30. Early this year it was from $15 to $20. I remember when the Hunt brother ran it up to $50 an ounce and a lot of tableware was melted down. When I was buying I think it was low because new photographic processes were not using silver. Now it may partially be up because gold jewelry is so darned expensive.
So does this mean that if you have physical silver bars or coins in storage, you need to get them out now?
No it isn't, it's the value of your dollar that has fallen
IMHO, always keep some physical metal nearby, out of storage. If you have a large amount, well, you gotta store some of it somewhere.
Lead should always be nearby.
Years ago two brothers from Texas tried to corner the silver market and lost bigtime.
Where are those Hunt brothers when you really need them?
Sooooooo, for those of us unschooled in this stuff: Does this mean that if this all blows up
1. The price of silver will “crash”
a. by 10%
b. by 50%
c. by 90%
or 2. The price of silver will shoot up
(a,b,c)
or 3. The bank will go bust
a. out of business
b. into bankruptcy
c. into a little manageable trouble
and 4. It will drag the rest of the economy
a. into disaster
b. into depression
c. if you’re not a JPM depositoror creditor you won’t even notice
or some combination of the above?
Why would JPM do this? If they are an agent for the Fed>>>>>>
IIRC JPM and Goldman Sachs are the largest agents the Fed uses for open market operations run out of the NY Federal Reserve Bank. Wikipedia has more info on the NY Fed which is first among equals
The answer is, they wouldn’t. They are a primary broker-dealer, and make money on the spread, selling futures contracts to customers.
And there is no evidence they are short, either. You don’t think big traders would let their competitors know what their position is, do you?
Your kidding right because JP Morgan is a bunch of crooks and the article says they are already under investigation by the CFTC for manipulating the silver market.
Not to mention the suits they had for the Gold shorts and Jamie Dimon is obama’s favorite banker he supported him going way back to Chicago days. They also donated to Acorn, are instituting Sharia Finance and are being sued in the Madoff case oh and let’s not forget they took the position of no Christmas tree’s.
They did you must have missed that thread.
JP Morgan revealed as mystery trader that bought £1bn-worth of copper on LME
As copper price rises, rumours abound of market manipulators
http://www.freerepublic.com/focus/f-news/2637798/posts
No as explained to me by another freeper...
“The VERY CONSERVATIVE Hunt brothers were set up by Volker and his buds at the Fed and were nearly destroyed financially.
Of course, the MSM never reported THEIR side of the story. Sound familiar??”
Snippet..
In 1973, the Hunt family of Texas, possibly the richest family in America at the time, decided to buy precious metals as a hedge against inflation. Gold could not be held by private citizens at that time, so the Hunts began to buy silver in enormous quantity.
In 1979 the sons of patriarch H.L. Hunt, Nelson Bunker and William Herbert, together with some wealthy Arabs, formed a silver pool. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world’s deliverable supply.
When the Hunt’s had begun accumulating silver back in 1973 the price was in the $1.95 / ounce range. Early in ‘79, the price was about $5. Late ‘79 / early ‘80 the price was in the $50’s, peaking at $54.
Once the silver market was cornered, outsiders joined the chase but a combination of changed trading rules on the New York Metals Market (COMEX) and the intervention of the Federal Reserve put an end to the game. The price began to slide, culminating in a 50% one-day decline on March 27, 1980 as the price plummeted from $21.62 to $10.80.
More http://www.buyandhold.com/bh/en/education/history/2000/hunt_bros.html
I have mine out but I suppose it depends on who you talk to..
James Turk: You Should Also Take Your Silver Out Of The Banks
http://www.businessinsider.com/james-turk-silver-banks-2010-12#ixzz17ZeoyLth
lol thanks!
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