Zeev's Turnips Patch-No Politics (ZEEV)

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Ted Butler's Latest...

These are extraordinary times in the silver market. No, not the price action so much (yet), but the remarkable events swirling behind the scene. I will attempt to highlight these recent events and put them into proper perspective. You already know my message to investors - buy real silver while there is time, at such incredibly low prices. Prices made incredibly cheap by the 15+ years of the downward price manipulation. A manipulation that increasingly looks like it is drawing on its last dying breath.

But my message today is not directed towards the real silver investor, as that investor has not been asleep at the switch. The real silver investor has paid attention. He has done his silver homework. He has used his God-given common sense. He has positioned himself in real silver. Additionally, he has demonstrated his anger with the continuing market crime of manipulation and has written to the market regulators. That those regulators have ignored the clear signs of manipulation is a reflection on them, not on the real silver investor.

Today, my message is to US industrial silver users, lease participants, mining company short sellers, call option sellers and the members of the COMEX, close to 1000 in total number. My message to them is that there are forces in effect that will radically change the nature of the silver market soon. If they ignore these changing forces and they conduct their silver business as usual, they will be destroyed by the coming silver price violence, the likes of which they can not imagine.

Before I highlight those changing forces, I would like to discuss the recent price action in silver and the new Commitments of Traders Report, issued Friday, August 1. The statistics are revealing and disturbing. There was an explosion in new buying and short selling. In a little less than two weeks, more than 200 million ounces (over 40 thousand contracts) of new silver futures and call options were created on the COMEX paper factory. In that same time frame, only 20 million ounces of new real silver were produced by all the mines in the world. A thirty cent rally caused new paper short selling of ten times the amount of real silver taken from the earth. Where would the price be, without such uneconomic and manipulative short selling?

As of today, August 3, there is a total of 884 million ounces held short in COMEX futures and call options. That is more than a year and a half total world mine annual production. That is six times all the known silver inventory in the world. I can assure you, with absolutely no fear of being wrong, that no commodity has ever had such an outrageously large short position, as silver. And that's just the short position on the COMEX. It does not include the OTC and leasing short position. By itself, this COMEX short position explains why we are so depressed in price and also guarantees why we will move much higher, in time, as it is unsustainable.

In a very real way, this 884 million ounce short position is an obvious, very simple proof of the manipulation in silver. Ask yourself this - at only $5 per ounce, who, in their right mind, would actually allow themselves to be short such an obscene amount of silver, if it weren't for manipulative purposes? I'd like to hear from anyone who could explain, on economical grounds, the justification for the largest short position in history, at the dead low, inflation adjusted price for 5000 years? For the market regulators to ignore this visible proof, is like a policeman stepping over a dead body on his beat and not reporting it.



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