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The silver markets are rigged. Every day. Every trade. Every option. Every derivative. The silver markets have been rigged since the early 1970′s when Alan Greenspan introduced computer market trading systems to the world beginning the long term commodity market rigging operation.
Since that time there has not been a day when the silver markets have been “freely traded”. Nobody, and I mean NOBODY, knows the true “Fair Market Value” of silver!
But like all price suppression schemes, the silver manipulation must come to an end and we are on the brink of that moment. The only remaining question should be “What is the true value of silver in terms of money?”
First a little background to set the stage.
Computer Commodity Trading
Beginning in the early 1970′s, computers were introduced to control the order flow in financial markets. Order processing was drastically changed with the New York Stock Exchange’s “designated order turnaround” system (DOT, and later SuperDOT) which routed orders electronically to the proper trading post to be executed manually, and the “opening automated reporting system” (OARS) which aided the specialist in determining the market clearing opening price (SOR; Smart Order Routing).
Today we have algorithmic trading, auto trading, algo trading, black-box trading, robo trading…and the list goes on. Algorithmic Trading is widely used by pension funds, mutual funds, and other buy side institutional traders, to divide large trades into several smaller trades in order to manage market impact, and risk. Sell side traders, such as market makers and hedge funds, claim to provide “liquidity to the market”, generating and executing orders automatically. In “high frequency trading” (HFT) computers make the decision to initiate orders based on information that is received electronically, before human traders are even aware of the information.
Over the years computers have played an increasingly important role in everything related to our “free and open market system” such that today’s financial markets CANNOT function without computers. The Federal Reserve, US Treasury, Wall Street insiders and the Exchanges were all instrumental in the integration of computers but they also gained access to secret trading information before the order hit the open market. This information coupled with the fastest computers on earth made market manipulation easy.
This power, the power to control markets, was too much for anyone to resist. Over time those who were given the official key to the back office operations have used and abused their position to its manipulative fullest. Although some of the time they used this power in an official capacity (for the good of the country), more often than not it was used in an unofficial capacity… for the good of themselves.
Bernie Madoff, the ex-head of the NASAQ, was a great example of this public to private transition as his private trading firm was all computer algorithm based market rigging operations. There are many other ex-Exchange/Wall Street officers that went on to open computer trading operations. Many continue to thrive such as EWT, LLC which became a dominant trading/market making firm using “state-of-the-art technology and algorithmic models”. EWT was founded by Vincent Viola (ex NYMEX Chairman) and David Salomon (reported to Robert Ruben at Goldman Sachs) and are also an “Authorized Participant” in the iShares Silver ETF (SLV).
Are you beginning to see the problem? He who has the biggest, fastest and smartest computers (or programmers) can set the price and will ALWAYS WIN! No longer is there any kind of true supply/demand factors related to commodity exchanges or prices. Computer trading should be outlawed…the convenience and efficiency it provides does not offset the detrimental effects and potential for total and complete market manipulation.
CFTC Created to Cover Up the Manipulation
When the computer rigging programs were implemented there needed to be some kind of cover to ensure secrecy and maintain a false confidence in free markets. In 1974 Congress passed the Commodity Futures Trading Commission Act that overhauled the Commodity Exchange Act and created the CFTC as an independent agency with powers greater than those of its predecessor agency, the Commodity Exchange Authority.
From that moment the CFTC has been run by board appointees that showcased a revolving door of Wall Street insiders ensuring that the computer market rigging operations were not interfered with. The only notable exception is Brooksley Born who was fired by President Clinton when she found out the truth about our supposed “free markets” and tried to warn everyone. (see The Warning)
Listen to Brooksley Born explain the problems in her own words when she accepted her JFK Profiles in Courage Award in August 2009.
A while back I gave up my fight against the CFTC as I determined that they were NOT protecting the best interest of the investor but rather they were protecting the computer market rigging operations and the people involved. Here is one of my last articles on the subject:
Road to Roota III — Who’s the little man behind the curtain?
http://www.roadtoroota.com/public/133.cfm
Now that you have some background let’s get back to $6,000 Silver!
Historically, when any price rigging operation stops the violence of the ensuing price changes are determined by the length and scale of the manipulation as well as the underlying fundamentals of the item being rigged. Take for example the famous 1980′s case of the Hunt brothers trying to corner the silver market. From early 1974 the Hunt brothers started accumulating silver which ultimately drove the price from $6/oz to $50/oz until January 21, 1980 when the CFTC finally pulled the plug on their operation. Within 2 months the price of silver plummeted from $50/oz to $10/oz and the silver price was back under control of the US Government and Banking Cabal. An excellent account of what transpired can be found here.
This account shows what can happen to the price of a manipulated commodity when the price manipulation is ended. In the case of the Hunt Brothers the manipulation lasted 6 years and involved approximately 130M oz of physical silver and 90M oz of COMEX silver contracts. This was an attempt at a Long Silver price manipulation but it was going on while the Short Silver Official manipulation was going on trying to keep the price down. The only way the Hunt’s accumulated so much silver without the price heading into the many thousands of dollars was the official computer price suppression operation.
The manipulation was ended when the CFTC stopped all COMEX Silver purchases and allowed only silver liquidation sales instantly driving the price down. In 1980 the US Government held 3B oz of silver and in order to maintain the lower silver price levels they sold the entire stock of silver into the market over the next 25 years. That excess supply combined with other governments divesting their silver was enough to continue the price suppression scheme for almost 40 years. That supply is now gone.
One Bank has the Hot Potato
So here we are 40 years after the official manipulation of silver began and the world is finally awakening to the situation. The CFTC, having investigated silver manipulation allegations twice previously, has had an open investigation into silver market manipulation for almost 2 years. They have even stated that the investigation was moved to the “Enforcement Division” within the CFTC which pretty much tells you what the conclusion of the investigation revealed. The FBI has separately stated that they are investigating JP Morgan for silver market manipulation. These two facts and the absolute SILENCE from JP Morgan are strong indicators that the long term manipulation of silver is about to end.
Ted Butler of Butler Research has been exposing the official manipulation of Silver for the past 25 years. His research was instrumental in exposing the gold/silver leasing operations and the massive concentrated short positions in both gold and silver. On September 3, 2008 Butler published a report entitled Fact Versus Speculation where he showed how one bank, JP Morgan Chase, took over the Bear Stearns Silver COMEX Short position of 30,000 contracts or 150M oz.
Since this report was published JP Morgan has continued its silver market rigging antics in an effort to get out of this precarious short position. After Butler exposed JPM as the culprit there have been wild orchestrated swings in the price of silver as JPM attempts to cover their massive COMEX short position. The price of silver has risen from $13 to currently over $20 in this time frame and the size of the short position held by JP Morgan has gyrated wildly between 30k and 40k contracts as they desperately try to shake the longs to cover their shorts. But even with this rise in price the short position is STILL above 30k contracts according to the CFTC’s latest Bank Participation Report.
Add to this various silver market manipulation tools such as naked shorting silver ETF’s, falsifying COMEX warehouse data, unallocated silver, leasing and swapping metal and you have a situation that dwarfs the Hunt brothers case.
Of course, JP Morgan is no ordinary bank because they are also the LARGEST derivative holder in the WORLD at $75.3 TRILLION! Do remember Warren Buffett calling derivatives “Weapons of Mass Financial Destruction”? Well, JP Morgan holds the mother load when it comes to silver too with $8.4 BILLION of Silver derivative contracts!
(OCC Report table 9: Classified as “PREC METALS”… might be a little platinum but not much).
This report was for the quarter ending June 2010 when the price of silver was $18.50. That translates into over 450 MILLION OUNCES of notional silver derivative contracts that remain open!
COME ON PEOPLE!
I’m starting to think my $6,000/oz silver call is too conservative!
What’s going to happen when JP Morgan’s derivative monument comes crashing down…which it almost did in September 2008?
So here’s where I get to $6,000 per oz for silver.
1) I know silver has not been freely traded in 40 years so today’s price if irrelevant.
2) I, like many, estimate there is only about 1B ounces in above ground physical silver for investment purposes.
3) I, like many, estimate there is only 5B ounces of above ground physical gold for investment purposes.
4) If the price of gold is not manipulated, like the banks claim, then the price of silver should be 5x the price of gold due to its supply/demand fundamentals.
CONCLUSION: The price of gold is around $1,300/oz so the true Fair Market Value of Silver should be over $6,000/oz in a FREE market!
It’s simple, if you remove ONE BANK from the supply side of the equation the price of silver will SKYROCKET overnight.
ONE BANK controls the price of silver.
ONE BANK controls the fate of our monetary system.
ONE BANK is behind the curtain pulling the silver manipulation levers.
ONE BANK has control over a nation that was founded by “We the People”.
ONE BANK MUST GO AWAY TO SAVE OUR LIBERTY!
May the Road you choose be the Right Road.
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When you hold a poor image about you and money, it’s almost impossible to attract enough of it into your life. And even if you have used your talent and enormous energy to earn some big money, a poor image will do everything it can to sabotage your wealth (there are a number of well known athletes and celebrities who are proving this principle right now).
Here are some beliefs that are common to those with a poor money
image:
“I can’t ever seem to get ahead.”
“It takes money to make money.”
“Most people who have lots of money got lucky.”
“I’m not worthy enough to be wealthy.”
“I don’t have what it takes to make a lot of money.”
“I’ve never been good at managing money.”
“To earn more money, you have to sacrifice everything.”
And there are many more.
I had most of those beliefs myself thirteen or fourteen years ago when I didn’t have any money. So I know they’re very real beliefs for a lot of people.
When it comes to money, most people believe it will take a struggle to ever have any. The truth is, as Bob Proctor teaches, “you were born rich.” You literally possess, right this moment, everything you need to be wealthy beyond your imagination.
You’re just not conscious (aware) of it right now.
I’ve had the great honor to speak on the same stage with Bob a number of times. It’s always very exciting to watch the looks on the faces of the audience as they listen to Bob. People have told me they’ve never heard anyone explain money and wealth the way Bob does.
On one occasion I remember an audience member that Bob interrupted as he was describing himself as “hard working.” Bob asked him why he wanted to be “hard working,” because creating wealth has nothing at all to do with working hard. The audience member grew speechless as it dawned on him what Bob was talking about.
His response was just as memorable as the gentleman who participated in the first-ever You Were Born Rich Tele-Seminar we did with Bob. He said, ‘For all my life, and I’m pushing 70, I’ve had a poor image as far as money is concerned. I grew up in a very tight home and your seminar has led me to think I can earn five thousand a week. And already things are coming to me just like you said. They’re coming to my mind, how I can begin doing that…”
And he wasn’t alone.
Financial education is important for various reasons. For example, financial education helps me to identify risks so that I can avoid financial traps such as the use of future money from credit cards on luxury items. By using my future money, essentially I will be depriving myself of the chance to invest in assets that will generate passive income. Passive income is the key to creating wealth, as I have understood from the book Rich Dad Poor by Robert Kiyosaki. Also, I will need to pay large amount of compounding interest for my outstanding credit cards bills.
I have heard a lot about financial education but I rarely heard anything on time education. Yes, I have heard about time management but there is a difference between time management and time education. Time management is invented for busy people to manage their time. It is not meant for people who have a lot of spare time. For people who have a lot of spare time, time management does not make sense at all!
What do I mean by time education? Time education educates one on how to make full use of one’s time. It should include investment, risk management and time management just like financial education. The purpose of time education is so that one makes the best use of one’s time to realize one’s potential.
Time is a limited resource that is always draining away whether I make full use of it or not. In that sense, it is even more precious than money. Time and money is the only two available things that I can invest to create wealth based on what I had learned from the Rich Dad’s series by Robert Kiyosaki. Yet, there is no full syllabus on time education. Sometime, I wish that there were such a thing as a compulsory time education where I am taught on all aspects about time.
What are the aspects about time that I will like to learn from time education?
Firstly, I like to learn that I can earn passive time similar to the way that I can earn passive income. Using an asset that can speed up or automate a manual process, I am able to gain passive time. For example, I can leave my washing machine running while I do other things. I can reduce my washing time using the washing machine as compared to manual washing of my clothes.
Secondly, I like to learn that there is a compounding interest for time too! For example, if I am interested to learn violin. I will invest my time to learn and practice violin consistently. After the first year, my skills maybe below average. After the second year, my skills will progress because of my consistent time investment to learn and practice. After a number of years of consistent time investment, there will reach a point where I will have a break through. My skills will reach a superb level. This is like having a compounding return based on the time invested.
It will be great if there is a time projection chart that can give me a guideline on how much time I need to invest to reach a particular goal. For examples, if I want to be a superb violinist, I will need to invest 10 years of time to learn and practice. If I want to be a millionaire, I will need to invest 15 years of time to learn and practice. If I want to be a top golfer, I will need to invest 12 years of time to learn and practice.
This is like doing a projected return for my financial investments. Before I do any investment, I will like to know the projected return of the investment. For example, if fund A gives me a greater amount of projected return compared to fund B, I will probably choose to invest in fund A if the risk involved is the same. Similarly, if there is a time projection chart, I will want to choose the investment with best return.
Thirdly, I will like to know about the dangers of time wastage. If I waste my time, what are the dangers that I need to face? For example, if I do not plan for my retirement early, then I will loss the advantage of earning compounding interest for my financial investment. The danger will be that I may not have enough money for retirement.
Another example is that if I do not exercise regularly, then I will loss the advantage of building a healthy body. In the long terms, I face the danger of falling sick easily. This will cause me to loss time because I need time to recover. Also, I will loss money because I need to pay for my medical bills.
These are just some of the aspects of time education that I can think of at the moment. It is definitely more than just time management. Though I agree that financial education is important as gathered from Rich Dad’s series by Robert Kiyosaki, I also feel that time education is just as important.
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This video features David Morgan’s thoughts on how physical gold and silver are the only asset class that exist outside the matrix of our financial system.
Share & Leave your comments below!
Rich Dad’s Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future
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- Image by Getty Images via @daylife
One of the most dangerous lies in all of finance and economics is the implied myth that inflation somehow “destroys” wealth. It doesn’t. Inflation doesn’t hurt everyone equally — inflation helps some and hurts others.
Inflation is actually one of the biggest reasons large corporations are so powerful in society. The government and big banks use inflation to force people to spend their money and go into as much debt as they can afford.
But how does it all work? Before we answer that, let’s first look at a parable. Some things are best learned in a story format, and inflation is one of those.
The Saver and the Slave: An Inflation Story
There were once two men who were neighbors. Their names were “Jack” and “John”.
Jack was a saver. He spent his entire life saving every penny he could get his hands on. He saved money with coupons, saved money by buying stuff only in off-seasons, saved money by spending as little as he could, etc. He was a saver. By the time he was 45, he had saved exactly $100,000.
John was a spender. He spent every dime he ever earned. Back in his 20s, he even took out a $100,000 loan, and bought two houses with it. He never used coupons, never looked at prices before buying anything, and wore nicer clothes.
During this time, inflation started to hit in. Inflation was fairly high. By the time Jack and John were 45, inflation destroyed 90% of the value of the US dollar.
For Jack, this was disastrous. He spent his whole life saving $100,000, and suddenly it was worth only 10% of what it should have been worth. This means that rather than having 100k it was as though he only had 10k. Not enough to even buy a house.
For John, this was perfect. He spent his whole life spending his money, so he didn’t see his money lose value. He took out a 100k loan, but his loan was only like he had a 10k loan now — and he still has two houses. John ended up selling one house, paying off the loan, and walking away with a free house, and 90k.
Inflation Destroys Debt and Dollars
Inflation doesn’t destroy wealth — inflation destroys dollars. This means if you’re in debt, inflation makes your debt less and less. If inflation is 10%, it’s like your debt is getting 10% smaller every year. If you’re a saver, inflation makes your savings 10% smaller every year.
Every year people in debt see their net worth increase because of inflation.
Every year people who are savers see their net worth decrease because of inflation.
Inflation doesn’t hurt everyone equally — it just hurts people with cash, and forces them to spend their money and get into debt. Inflation essentially forces people to become slaves to banks and to not have money.
In an inflationary society, people who are willing to go into debt to buy houses, businesses and such are at a huge, huge advantage over people who just save their money. Savers are penalized. Spenders are rewarded.
What This Really Means
Because inflation makes debt more attractive, an economy with inflation will see a much higher level of debt than societies with less inflation. This leads to the economy becoming much less secure, and sets us up for financial catastrophe.
Inflation is one of the reasons so many people purchase houses and property even before they have the money — inflation makes cash less profitable or secure.
There’s a reason the government and large banks support creating inflation. It pushes individuals into debt. It makes consumers slaves to creditors. It transfers wealth from savers to people in debt. It stops frugal people from being able to make ends meet unless they have large incomes.
This all means several things:
a) Investing makes more sense. Savings accounts don’t pay interest that’s higher than inflation. This means that most people will use the stock market to build up wealth over time — they have to take part in the financial system. Plenty will get fleeced in the system. Big financial institutions make more money this way.
b) Debt makes more sense. This should be obvious. You’re using inflation to essentially get free money. Most debt comes from banks, meaning you’ll be a voluntary debt slave to a bank because it’s profitable to become one. You’re shackled to the system.
c) An independent retirement is difficult. Being able to save your own money for retirement is much, much more difficult with inflation. If it wasn’t for inflation, social security would be much less likely to exist. This means inflation makes the people more dependent on the government. The establishment loves this.
If you save $1,000,000 for retirement over the course of 50 years, and inflation is 4.07%… you actually only save $136,000 in today’s money, which probably won’t be enough to own a nice house.
Does this mean you shouldn’t save? Does this mean you should go into debt? Not quite. I’ll be writing what you should do in the future… hint: gold is a great inflation hedge.
Right now, inflation is skyrocketing. Gold is exploding. Silver is exploding. The dollar is dying. This is all happening in a way that is destroying savers, rewarding debt, and creating an economy that is based on debt and insecurity.
Shaun Connell is the the founder and editor of Stand Strong Research. He’s an entrepreneur and investor living in rural America. He’s also a firm believer in income investing, inflation hedging, and debt-free living.
Related articles
- Millions of savers have no choice but to lose money (independent.co.uk)
- Through the Looking Glass economics (theglobeandmail.com)
- Why bother saving? (telegraph.co.uk)
- QE2 and Its Effects (economicnoise.com)
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