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COT Positions: Silver market analyst and rigging critic Ted Butler today explains why, despite the extreme conditions it reflects, he believes that the gold and silver futures market trader positioning data reported by the U.S. Commodity Futures Trading Commission is still accurate and predictive.
The data, Butler asserts, is no more extreme than the prices of the monetary metals themselves. He continues to construe the data as the most bullish ever for the metals.
Butler writes: "It is not just the fact that it is fairly easy for the CFTC to uncover the false reporting of positions that persuades me that little actual misreporting is occurring currently. It is more the fact that the current reporting of positions proves that silver and gold are being manipulated in price and, further, that JPMorgan is the prime manipulator. "Why lie and falsely report when you can report truthfully and openly manipulate? Moreover, my allegations of manipulation by JPMorgan are derived directly from positioning data published by the CFTC.
"CFTC data show that JPMorgan has been the single largest buyer of Comex silver and gold contracts on the unprecedented downturn in price, making it the single biggest beneficiary of the downward price manipulation. I don't know it's possible to state the case in more precise terms. If the single biggest beneficiary of a manipulative downturn in price is not the prime manipulator, then who is?"
Yet JPMorganChase repeatedly has claimed that it has no position of its own in the monetary metals markets and trades them only for clients:
Further, official filings by CME Group, operator of the major U.S. futures exchanges, repeatedly has reported that its clients include governments and central banks and that its exchanges give them discounts for their secret trading:
The U.S. Treasury Department's Exchange Stabilization Fund is expressly authorized by U.S. law to trade secretly in all markets, domestic and foreign, in the name of maintaining stability in the currency markets:
Indeed, at a hearing in U.S. District Court in Boston in 2001 in GATA's lawsuit against the Treasury Department and Federal Reserve, which charged them with rigging the gold market, an assistant U.S. attorney claimed that the government was fully authorized to do exactly what the lawsuit complained of:
So if the biggest manipulator of the gold and silver futures markets is not really JPMorganChase & Co. at all but the U.S. government, which is fully authorized by law to rig any and all markets anywhere and is using the investment bank as its broker, as the government uses the investment bank as a primary dealer in government securities, might that not explain why the bank's market rigging is never opposed by the CFTC?
Might that also signify that the biggest beneficiary of gold and silver market rigging is actually the U.S. government, whose currency, the dollar, is valued inversely from the monetary metals? Surely the U.S. government has an interest in maintaining the dollar's value against other currencies and commodities that can be used as stores of value.
Might that also explain why trader positioning has gone to such extremes lately -- because the biggest participant in the market is a government authorized to create infinite money and deploy it secretly?
Butler has done heroic work over many years. Since today he has addressed concerns that the futures trader position data is no longer accurate or predictive and may even have been falsified, maybe next he could address the possibility that the force controlling the monetary metals futures markets is really much bigger than an investment bank that is functioning only as a broker.
Butler's analysis today is headlined "Is the COT Report Still Valid?" and it's posted at GoldSeek's companion site, SilverSeek, here - silverseek.com
