After publishing unique precious metals commentary on the Internet since 1996, I have decided to offer a subscription service. The main reason for the change is that I felt somewhat restricted by my weekly format. It is my intention to publish some commentary at least twice a week.
The commentary will include detailed analysis of the Commitment of Traders Report, regulatory developments, supply/demand considerations, and topics of interest to investors in precious metals, with an emphasis on silver. Subscribers will also be able to ask questions.
The service is intended to be source of market information for serious observers of the silver and gold markets, delivered in a no-nonsense manner. No bells and whistles, just unique and valuable content. Always outside the box.
Please note - this is not intended as investment advice and I am not an investment advisor. The service is solely for informational purposes
Ted Butler
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Ted Butler Commentary:
August 4, 2009
History In The Making:
As I have been writing about for the past month or so, I think that big change is coming to the silver market. I believe that this change will be historic in nature. Since there are never any guarantees, I will present my reasons for expecting this great change in silver and leave it for you to decide on the merits of my argument.
The first thing I see is a change in the pattern of investment accumulation of physical silver over the past few months. While pure retail demand appears to have cooled off from an anecdotal viewpoint given the overall choppy price action, actual demand statistics remain remarkably strong. In other words, reports from retail dealers indicate sluggish new buying interest, yet the official numbers indicate otherwise.
For instance,.....
July 20, 2009
The Real Solution:
Last week, I made the case that the level of the speculative position limit in COMEX silver was completely out of line with the level of the limits in all other commodities, including gold. I pointed out that, based upon annual production, silver had a position limit from five to more than sixty times greater than a wide variety of commodities, including gold, copper, crude oil and grains. In terms of world bullion inventories, silver’s position limit was more than 100 times larger than gold’s limit.
I also made the case that ....
May 28, 2002
Letter to CFTC:
The Honorable James E. Newsome
Commodity Futures Trading Commission
Dear Chairman Newsome:
It was my understanding that the Commission's response of April 12, 2002, by Mr. William C. Kokontis, indicated that you intended to terminate the manipulation in the silver market by the 4 or less short traders on the COMEX. Unfortunately, while your response stated that my "allegation would potentially involve violations of Commission and Exchange rules prohibiting price manipulation", the uneconomic and concentrated short position has grown larger
In your Commitment of Traders report released May 24, 2002, for positions held, as of May 21, 2002, the 4 or less traders now hold a net short position of over 228 million ounces, the most concentrated net short position in history. Additionally, the 8 or less largest traders hold an unprecedented net short position of over 310 million ounces. Not only are these net short positions historically astounding in size, they are largely unbacked by real silver or bona fide hedges, making them speculative in nature. Open interest statistics since your report's cutoff date, indicate the short position has grown even larger, presaging yet another artificial downward price manipulation by these criminals.
Most disturbingly, the 4 or less traders' net short position now constitutes 53.4% of the entire futures open interest in the COMEX silver contract. The 8 or less traders' net short position constitutes 72.4% of the entire market. No other regulated commodity has concentration ratios this high. It is not possible for any market to be considered a free market, when such a small number of traders hold such a dominating position. Common sense should tell you that a 50% or 70% net position in anything would mean effective control. And when such an enormous concentration is an unbacked and unbackable short position, the very existence of the market is threatened. Be sure that these large financial institutions are laughing at your agency, and have no intention of ceasing their manipulative behavior, just like Enron laughed at the regulators....
