Think about this: bullion banks and large buyers of gold/silver deal in bars and tonnes. Think about how many silver eagles it would take to piece together enough to re-melt and fabricate into a meaningful quantity of marketable bars. Nothwithstanding the expense of doing this, it is an absurd notion that they would even bother with it. Especially when the Comex and SLV have plenty of bars that are available for hypothecation.
The enormous quantity of silver eagle sales are going to the growing legion of individuals in this country and Canada who understand that the dollar is going to collapse sooner or later. It is poor man’s gold. It is more fungible as currency than 1 oz gold coins. Ultimately, it is a possible signal that eventually the people will rise up and overthrow a completely corrupt system of Government and banking.
A reader of my blog – a high profile money manager and market strategist – sent me an email with kind words about my statement criticizing Ted Butler’s theory that JP Morgan is the entity that is the buying 1 oz. silver eagle coins in record quantities this year.
His comment stimulated a response about my view on the work being done by Ted Butler:
I believe Butler turned his ability to analyze the silver market – and the fact that he was one of the few people doing it for a long time – into a newsletter selling juggernaut. Now the only evidence he looks at and evaluates is the evidence that supports and promotes subscriptions to his newsletter. Although readers of my blog send me copies of Butler’s newsletter twice a week to ask my opinion, I stopped “absorbing” his analysis about 5 years ago.
1) His COT and open interest analysis relies on the all of the data being honestly and accurately reported. But from where is the data sourced? It’s provided by the big banks who run the Comex. If the COT, open interest data and warehouse stock data are accurate and honest, it would be the ONLY financial reports that come from banks that are honest. What are the odds of that? Butler refuses to question that premise and I’ve exchanged emails with him over the years pointing this out and he refuses to accept even the slightest possibility that the data is corrupt. In fact, he’s outright contemptuous of any thought that the data may be corrupt.
2) He refuses to consider the possibility that GLD and SLV lease and hypothecate their metal. He’s the only person I know who has read every word of either prospectus who is willing to believe that the GLD/SLV metal inventory reports are accurate and honest. In fact, I find it hard to believe that Butler has bothered to even read the entire prospectus of either Trust. Again, ultimately, the reports which are used by the Trust accountants and which are published on a daily basis are generated and sourced from the banks (HSBC and JPM) who safekeep the metal. It states right in the Prospectuses that the custodians are the keeper of the financial reports connected to the custody of any metal. There are strict legal restrictions on ANYONE’s ability to visit the bank premises and inspect the files.
I will say that his method of analyzing the COT data was at one time original and informative. But that time has past by. I will also say that he did a lot to open the market’s eyes to the manipulation of the silver market. But ultimately, as the exercise of the market looking at, analyzing and absorbing the COT information becomes widespread, the information becomes quickly priced in, right? If a few people use and trade it, it works. If the entire market sees it and tries to use it, it prices in immediately.
I truly believe that, ultimately, the banks distort the COT and Comex data into a shape and form that they want us to see and believe – just like everything else they do. Butler refuses to acknowledge and accept this possibility because it would mean that his work has no value. It also means that there is a distinct possibility that the Comex banks are actually using Butler (unwittingly) as a tool to promote the credibility of the reports.
At the end of the day, our system is growing more fraudulent and corrupt by the day. And the Government that is supposed to be in place to enforce the laws has actually become a partner with Wall Street and Corporate America in doing whatever it takes to steal as much wealth from the public as they can before the country collapses. But don’t take my word on it, read a few history books and then read or re-read Orwell and Rand and decide for yourself…