It is well known in precious metal circles that there exists a large silver short position at JP Morgan…By large I mean it is likely larger than the amount of physical silver traded in a year’s time and large enough to bring the mega-bank to its knees if physical silver prices ever got out of hand. This has been rumor-fodder on the internet since at least 2008 when Bear Stearns collapsed and was subsequently acquired by JP Morgan (Here), however, little acknowledgement of this weighty charge has ever been offered by JP Morgan itself…until now.
On Thursday of last week Blythe Masters, head of global commodities for JP Morgan, told CNBC that the mega bank is not in the speculation business.
“It’s not part of our business model. It would be wrong and we don’t do it,” she said.
The misperception, rampant in the blogosphere, comes from what JPMorgan [JPM 43.09 -0.80 (-1.82%) ] does for clients, Masters said.
“We store significant amounts of commodities, for instance silver, on behalf of customers. We operate vaults in New York City, in Singapore and in London. Often when customers have that metal stored in our facilities they hedge it on a forward basis through JPMorgan, which in turn hedges in the commodities market,” she said.
Absent Master’s acknowledgement of what JP Morgan does is any admission that JP Morgan might do unethical things with the bullion it stores. She correctly identifies the service JP Morgan offers, but outright denies any manipulative behavior based on the receipts for said commodities. We must ask ourselves – why would CNBC bring Blythe Masters out on TV to acknowledge something that hasn’t been a news item on virtually any other MSM platform? If JP Morgan really wasn’t manipulating commodity prices, why defend something they aren’t being accused of? It would almost be better if they had continued pretending like the charge was never made. Does this mean something big could happen soon in the metals market? I don’t know, but it definitely piques my interest.
The denial of manipulation also flies in the face of what an alleged JP Morgan whistle-blower had to say on the CFTC comments section (Full story HERE). The comments were quickly taken down from the CFTC website, leading some to believe that it was a REAL whistle-blower, not just some internet troller:
I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.
As I have covered here, here and here, the price of silver is obviously manipulated to suppress the sentiment that paper money is declining in value. I think it’s highly likely CNBC and JP Morgan are working tandem to precondition mainstream news-goers and unsophisticated investors to go back to sleep and be happy with their paper money. Silver, like gold, is a rigged market and can not be so for very much longer.