An Interview with Ted Butler
Written by Jeff Nielson Friday, 16 April 2010 23:17
Articles & Blogs - Silver Commentary
I am pleased to announce a special treat for readers today. Noted silver researcher, and tireless crusader against Comex-manipulation, Ted Butler of ButlerResearch.com, has found time in his busy schedule to provide Bullion Bulls Canada with a written interview.
He shares his valuable insights into the huge revelations which have shaken the precious metals market to help us put these subjects into perspective – including a caution against reading perhaps too much into this news. He also gives us some clues about where the silver market, and precious metals market (in general) is heading. I hope readers find this as illuminating as I did.
Q: Let's dive right in to the two, huge revelations which hit the precious metals market nearly simultaneously: a volunteer “whistle-blower” has gone public with accusations of rampant manipulation of the precious metals market (in the person of Andrew Maguire), and Jeffery Christian of the CPM Group stunned the world with his admission that the bullion-banks have leveraged their “physical” bullion by somewhere around 100:1. What was your initial reaction when this news hit the market?
Well, I know Andrew and have spoken with him about this for months, so it wasn’t much of a surprise for me. That said, what he described to the CFTC’s Enforcement Division did confirm the nature of the manipulation in COMEX silver and gold. Regular observers of these markets knew that the commercials play all sorts of manipulative games there. Andrew was frustrated that even his detailed explanations weren’t generating action on the part of the regulators, a frustration I know all too well.
As far as these claims that there are 100 ounces of paper gold for every ounce of real gold, I think that’s quite a stretch. Certainly no one has documented such a ratio. I’m kind of a stickler for hard facts and I know of no facts supporting such a paper to gold ratio. To be sure, I could be persuaded by verifiable evidence, but not by off-hand remarks. There are, however, more paper claims on silver than actual silver bullion that exists in the world, but not for gold. There is much wrong in the market, such as the documented short concentration in COMEX silver, and it is important to stick to allegations that can be substantiated.
Q: Which of the two items do you believe to be of greater significance?
I think the greatest significance was that the public hearing actually occurred. Here we had a hearing by the CFTC, publicly airing the very issues that matter in the silver market, namely, position limits, manipulation and the concentration on the short side. It was really quite remarkable.
Q: If I have interpreted Christian's testimony correctly, he seems to be saying that the “short” positions in the silver (and gold) derivatives market actually dwarf even the massive, Comex “short” positions. Do you agree with that interpretation, and (if so) did that news come as a surprise to you?
In listening to his testimony, I felt most of what he said to be erroneous. In fact, Chairman Gensler caught him in a number of misstatements, particularly his description of what transpired in 2008, that Christian was forced to restate. From what I’ve read, others found error in most of what Christian said. Therefore, I’m surprised that anyone would take anything he said to be true.
Let’s face it – the COMEX is where the price gets set. And this business that legitimate position limits would restrict liquidity and drive the big players away is a lie. Getting rid of the big short crooks would vastly improve liquidity and restore integrity to the COMEX. It is amazing anyone could say otherwise.
Q: What was your biggest surprise from the meeting?
That JPMorgan didn’t attend. To me that was shocking. Who skips a public regulatory meeting on markets where you are the very largest participant? After I got over my surprise at their absence, it occurred to me it had to be for good reason, like avoiding self-incrimination.
Q: You had previously expressed some guarded optimism that the CFTC might be ready to start behaving as a real “regulator”. More specifically, you hoped that the new Chairman of the CFTC, Gary Gensler, was prepared to seriously address some of the issues you (and others) have raised in the past. Being able to now view the recent CFTC hearings in hindsight, do you still believe that the CFTC will ultimately “do the right thing”, or has your opinion changed – in light of those hearings?
Let me make two points. First, I think the meeting confirmed everything positive I have written about Gary Gensler. Apart from the hundreds who have written to the Commission over the past year or so about the silver manipulation, if it weren’t for him, there would have been no meeting. After last year’s meetings on energy, there was no meeting on cocoa, sugar, grains or any other commodities. Just metals. And the metals meeting involved mostly silver. No other previous Chairman, in my opinion, would have allowed such a meeting to occur. Gensler understands the issues and has a deep concern for the public’s interest. You don’t get a better public servant than that.
Second, I still don’t know if he will do the right thing. Not because he doesn’t want to, but because he may not be able to. Silver may be too big of a problem to solve. I don’t think there is any real solution to the silver manipulation that doesn’t include sharply higher and disorderly prices and unwanted publicity. Gensler may not have the political capital to pull it off.
Q: If you were in Gary Gensler's shoes today, what changes would you propose for metals-trading – given the information that has recently surfaced?
I would have privately told JPMorgan to dissolve their concentrated short position. (Which he may have done already). And then I would institute a 1500 contract position limit in COMEX silver and throw out the phony hedge exemptions that allow big traders to evade position limits. This would end the manipulation. That’s why it’s important that everyone write to the CFTC during the open public comment period. They are asking for your input on these issues and not to respond would be a waste.
Q: Given how the media and regulators “stonewalled” both you and others who sought to expose precious metals manipulation for so many years, did you ever get to a point of frustration where you wondered if you would ever see the precious metals market truly “exposed” in your own lifetime?
Sure, all the time. But it was much worse when silver prices stayed below $5 for many years. The last few years, the frustrations have been easier to handle as the price has climbed and more have come to learn about the manipulation. I feel blessed to have been given the opportunity to have my thoughts recorded via the Internet and the mailings by Investment Rarities over the past ten years or so. It was a heck of a lot more frustrating in the “old days” when all I could do was mail letters to the exchanges and the CFTC. That was agony.
Q: With Andrew Maguire's comments, and Jeffrey Christian's formal testimony essentially confirming what you demonstrated year-after-year in the silver market with your own circumstantial evidence, you must feel a considerable amount of personal vindication from these recent revelations. Do you now feel that (at least with respect to the issue of manipulation) “your work is done”, or am I being premature here?
It’s good that the manipulation is being exposed more, but it has not been terminated yet. It will be, but until it is, it is still very much a crime in progress. No high-fives yet.
Q: If the issue of manipulation should end up being resolved soon, have you decided upon a new focus for your own work as a silver commentator/researcher?
That’s a good question that I think about often. Kind of like what are you going to do when you grow up? But this is still way too premature, as the silver manipulation is still in force. My next major goal will be in trying to determine when to sell. My sense is that is going to be a lot more difficult than the buy part.
Q: When it comes to the future, what do you see as the immediate consequences of these revelations for the silver market, as well as the longer-term repercussions?
I can’t see how it won’t be big news when it unravels, but I’m not sure about widespread economic repercussions. Silver is a vital industrial commodity, but it is also a very small market that doesn’t impact many people directly. I’ve never been a believer, for instance, that when silver does explode in price, it will create widespread financial panic. It will create great profit for those who own it and great loss for those who are short, but the average world citizen won’t be largely affected.
Q: Turning to more general subjects, I make no attempt to hide my excitement about silver's rapidly growing and evolving uses in “industrial” applications. What aspects of this growing industrial demand do you consider to be of greatest significance?
All of them, from keeping socks from smelling to underarm deodorants to battery and catalytic developments. The great thing about these new uses is that there doesn’t appear to be much recycling capability, as silver is used in small amounts per application and recovery doesn’t seem plausible.
Q: Do you believe that the “correction” of silver prices to a real, fair market equilibrium will only occur as the result of some major, formal bullion-default, or do you think it's still possible to reconcile the enormous leverage, and massive “short” positions in the silver market without some sort of 'implosion' in this market?
The explosion in price will come from a short-covering panic and/or default or from an industrial user physical buying panic, or some combination of that. It’s hard to see how that can be avoided. What’s amazing is that no big entity has emerged yet on the buy side of silver, like has occurred already in gold. When, not if, such a big silver buyer emerges, it will really impact prices.
Q: What would be your own best guess on where such a default is most likely to occur?
Either on the COMEX or in some pool or unallocated silver programs.
Q: Do you have any general advice today for precious metals investors, or silver investors – in particular?
I don’t think there is much I can add for existing silver investors, except buy more. So I’d like to address this to non-silver investors. Rarely has the average person been presented with the investment opportunity available in silver today. The factors arguing for substantially higher silver prices are so clear and verifiable that only those who refuse to study the facts would bypass a silver investment at this time.
On behalf of ourselves and our Bullion Bulls Canada audience, thank you very much for finding the time to do this interview, and we certainly hope you will return for a “visit” again in the future!
TrackBack URI for this entry
Subscribe to this comment's feed
written by mikem54321, April 18, 2010
-
- +0
-
-
written by mikem54321, April 18, 2010
The US Mint makes enough gold/silver coins to draw the attention of Geithner and Bernanke.
The language of the press release is a bit strange too. I don't know, with complete accuracy, what it even says.
I punched out a few numbers from other fiat currency government mints, and the amount of coins they produce should be enough to draw attention from their central banksters too...but I did not have enough time to see if they have a shortage too.
You can still buy uncirculated silver eagles easily from dealers who apprently have them in inventory. So I don't get it...Maybe we are missing something? Or can it be that the dealers don't know they will have trouble getting them in the future? I doubt it.
Well, here is what they say about silver eagles and it appears to be a current press release. --Mike
American Eagle Silver Uncirculated Coin
Production of United States Mint American Eagle Silver Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Currently, all available silver bullion blanks are being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”
The United States Mint will resume the American Eagle Silver Proof and Uncirculated Coin Programs once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.
Update: Due to the continued, sustained demand for American Eagle Silver Bullion Coins, 2009-dated American Eagle Silver Uncirculated Coins will not be produced.
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?langId=-1&storeId=10001&catalogId=10001&identifier=1250
-
- +0
-
-
written by Jeff Nielson, April 18, 2010
I don't think we need to look at the US Mint (or other national "mints") as being part of the bullion-manipulation machinery - in that they have no political aspect to them, and no VALUE to the banking cabal (directly).
Yes, I'm sure the bankers would rather NOT see news releases about "unprecedented demand" and "bullion shortages", but they (correctly) believe that their own propaganda can drown-out such information - especially with the corporate media more-than-happy to censor anything "gold bullish" (whenever possible).
-
- +0
-
-
written by mikem54321, April 18, 2010
Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .”
The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.
Update: Due to the continued, sustained demand for American Eagle Gold Bullion Coins, 2009-dated American Eagle Gold Uncirculated Coins will not be produced.
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10001&storeId=10001&categoryId=13238&langId=-1&parent_category_rn=10191&top_category=10191
-
- +0
-
-
written by Jeff Nielson, April 18, 2010
"A Retrospective Look at U.S. 'Gold Reserves'"
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=8287:a-retrospective-look-at-us-gold-reserves&catid=48:gold-commentary&Itemid=131
-
- +0
-
-
written by breezer1, April 18, 2010
http://jessescrossroadscafe.blogspot.com/
I believe that this time the goldman saks crack in the dam will widen and 2010 will be a most memorable year.
-
- +0
-
-
written by mikem54321, April 18, 2010
I think exposing the suppression of precious metals scam by the CFTC has just as much chance as the BLS admiting their bogus inflation scam.
The money printing scam is too important for any branch of the Fed to risk damaging it. It will take China, Russia, India and investors to expose the scam simply by buying the physical....Isn't that bascially what happened in 1933 and 1971?
-
- +1
-
-
written by Jeff Nielson, April 17, 2010
-
- +0
-
-
written by Marcocruces, April 17, 2010
Regardless, it'll be a kick watching what happens over the next several months. We may however hear quite different points of view from the voices in the metal markets if Gensler doesn't deliver this summer. A Ted Butler might not be so mellow and passive following a Gensler tail tuck and a continued total fraud on the American investor.
I'd like to think that the CFTC meeting is the start to a COMEX clean up, that the meeting itself will produce the start of corrective actions. But I honestly think it'll take good old supply and demand, a major breakdown thereof, to provide the real change I'm looking for. Like everything else bad or wrong with financial America these days, it only finally changes when the SHTF.
-
- +1
-
-
written by Jeff Nielson, April 17, 2010
You'll note that even in mentioning the most-obvious, best-known events that there is no credit given to anyone like else (like, for example GATA). His work is so totally self-promoting that we decided to stop running it. If readers didn't know better, we would be led to believe that Deepcaster is "breaking" all this news himself.
-
- +0
-
-
written by Jeff Nielson, April 17, 2010
You can't put the genie back in the bottle.
-
- +1
-
-
written by breezer1, April 17, 2010
-
- +0
-
-
written by mikem54321, April 17, 2010
-
- +1
-
-
written by mikem54321, April 17, 2010
I think the odds would be 1000:1 for them to destroy the system that keeps a lid on precious metals. If you believe they will, then you must believe America will stop printing money.
America is absolutely addicted to fake money so that will never happen.
So the Fed has no choice but to support the gold cartel's suppression of the real money-gold/silver. The Fed wants America to believe gold/silver is a joke. They have been doing a fantastic job pushing this idea since 1971. Anyone who argues against their propaganda is a "gold nut."
We all know that.
The power of the Fed, Obama and The Plunge Protection Team, the CNBC Propaganda Machine, and the gold cartel, is awesome and over-whelming. I don't have any hope it can be beat by any organization.
My only hope is the free market may force the hand of the cartel simply by demanding the physical with more stories from the likes of Andrew Maguire.
My other hope is Obama will go so absolutely crazy printing $trillions and $trillions more, that even the average person-on-the-street knows he is nuts! I don't think we are far from that now. The problem is the average person on the street does not have a clue about how to buy precious metals.
I'm pretty sure foreign creditor nations already realize the insanity of it all, are already taking action in secrecy.
Soon everyone will know the green copy machine paper with a number on is a scam. That is my real hope.
-
- +1
-
-
written by Jeff Nielson, April 17, 2010
The only thing I wonder is whether it would be a purely "symbolic" gesture? In other words, even if we 'cleaned-up' Canada's bullion market, would it do any good - if the U.S. was still 'dirty'?
Conversely, if/when the Comex cesspool is finally 'drained', I'm wondering if that will trigger an AUTOMATIC cleansing process in all the worlds' bullion markets? My suspicion is that there is so MUCH leverage/corruption/fraud involved that NO ONE will have confidence in this market until EVERYONE is audited.
-
- +0
-
-
written by sailortony, April 17, 2010
One of the important things Ted mentioned is the need to submit our comments to the CFTC on the position limits issue before 26 April.
As you may know, he has asked the public to support the cause as follows:
"Dear Sir,
Thank for the opportunity to comment on the issue of position limits for precious metals. Please establish a speculative position limit in COMEX silver of no more than 1500 contracts. Please restrict any hedging exemptions from those limits to legitimate hedgers. Please stop the levels of concentration in COMEX silver futures that have been experienced over the past few years on the short side of the market.
Sincerely,
Email – metalshearing@cftc.gov"
I did write the commissioners back in January to ask for the meeting which finally took place in March. I was surprised by a personal answers from Bart Chilton saying he would insist.
Their emails are :
ggensler@cftc.gov, mdunn@cftc.gov, jsommers@cftc.gov, bchilton@cftc.gov, somalia@cftc.gov, dberkovitz@cftc.gov
Have any of you prepared a Canadian draft?
Will attempt to write one in the next few days.
Let me know if of any interest.
-
- +0
-
-
written by Jeff Nielson, April 17, 2010
I sense a couple of you are a little disappointed that Ted Butler didn't "embrace" the revelations of the last few weeks to the same degree that others of us have.
In that respect, I would suggest that we could all learn something from him. All these years that he was trying to draw attention to silver manipulation, he COULD have sensationalized things - to try to draw more attention to himself and his (our) cause.
Instead, he was very careful and scientific in his approach - asserting no more than what he could document with his own numbers. That professionalism produced a lot of "converts" from the investment world, who were persuaded by his meticulous approach.
When it comes to the "100:1" quote, it's entirely a "fair comment" for him to dispute the accuracy of that number. Personally, I also think it's very likely that this number will prove to be inaccurate.
Where Ted Butler and I differ, is that I'm approaching the Christian "confession" more as a "prosecutor". This is THEIR number, and unless/until they want to revise that number - by coming clean on the actual degree of manipulation in the market - I am VERY happy to keep throwing that number back into the face of the cabal.
Just remember that there are still LARGE numbers of people totally unwilling to accept the Christian "confession". For those people, we NEED sober voices like Ted Butler - who continue to present this issue to the world in a detailed, methodical manner.
-
- +3
-
-
written by breezer1, April 17, 2010
Perhaps it is the sense that the western capitalist world is an ongoing criminal conspiracy spanning not only every market and commodity but every regulatory body and the mainstream press.
I tend to see the hearing as a straw on the back of the camel that cannot carry many more straws. Who said ,"what is not sustainable will not be sustained".
Enjoy your weekend all.
-
- +0
-
-
written by brian boutilier, April 17, 2010
-
- +2
-
-
written by mikem54321, April 17, 2010
And Ted Bulter does not see the implications of a rapdily rising silver price as a verification of inflation? In other words, as a verification of the idea of silver being real money as opposed to green copy machine paper?... This has a major impact on the world economy much bigger than the size of the silver market itself.
It surprised me how he has seemed to have lost focus on the big picture and was concentrated on the price of silver instead of the bigger picture about the manipulation of the gold/silver markets by the Fed and the gold banksters.
Afterall, none of these manipulations would be occuring (robbery in plain sight) if the Fed did not need to print $13 trillion in fake copy paper money and convince users it is real money.
The only thing I can think is Ted Bulter is ahead of me one step and understands the Fed will never be caught red-handed allowing, and being complicit to, the manipulation of the precious metals market.
-
- +1
-
-
| < Prev | Next > |
|---|
Latest Commentary
-
The U.S. Energy-Independence Fantasty, Part II: Supply In Part I, readers were confronted with some of the mythology surrounding...
-
The U.S. Energy-Independence Fantasy, Part I: Demand In the 21st century Corporate Media, where “black is white” and...
-
The World Paper Council Once upon a time, an entity called the “World Gold Council” was...
-
U.S Retail Depression is ‘Good News’ Perverse reporting of economic data by the Corporate Media is nothing...
-
Insanity Cubed Definition of insanity: performing the same act again and again, but...
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
(c) Section 5116(a) of title 31, United States Code, is amended by adding at the end thereof the following:
“(3) The Secretary shall acquire gold for the coins issued under section 5112(i) of this title by purchase of gold mined from natural deposits in the United States, or in a territory or possession of the United States, within one year after the month in which the ore from which it is derived was mined. The Secretary shall pay not more than the average world price for the gold. In the absence of available supplies of such gold at the average world price, the Secretary may use gold from reserves held by the United States to mint the coins issued under section 5112(i) of this title. The Secretary shall issue such regulations as may be necessary to carry out this paragraph”.
Jeff doesn't this say that the US Mint should have access to the gold reserves that are in Fort Knox to make coins? If so, why would the mint openly admit they can't get gold (or silver) to make coins? --Mike