“…..led me to the conclusion that the silver market was manipulated by excessive short selling on the COMEX. The actual Eureka Moment came one day as I was reading ……

Silver; Past, Present, Future – Phoenix Silver Summit Speech

by Ted Butler via SilverSeek.com

Good afternoon and thank you for being here. It’s an honor to get to speak with so many interested in silver, especially at such an interesting time in history. I’m going to ramble a bit, and try not to get too detailed and save some time for questions where you can get specific.

I’d like to acknowledge a few people who are not here that had an awful lot to do with me being here today. First, I’d like to thank Jim Cook, from Investment Rarities in Minneapolis, for his sponsorship of my work for more than eight years. It was this support that enabled me to devote all my time to studying and contemplating everything I could about silver. Thanks, Jim.

Second, I’d like to thank my friend of 25+ years, Israel Friedman. It was Izzy, who back in 1984, issued to me the challenge to prove him wrong in his analysis of silver. Although I had traded and invested in silver for years before his challenge, I admit to never having studied it in depth. Izzy’s claim that the world was and had been consuming more silver than was being produced seemed so at odds with the price at that time, that I took up his challenge. I also admit that I thought it would be easy to prove him wrong, although I was well aware of his buying of silver in the $4 range and then selling it in the $40 range a few years later. When I discovered that he was correct, it set off a thought process that I couldn’t satisfy. I couldn’t reconcile how there could be greater demand for an item than there was current production with prices not moving higher. I’m sure that many had also been deeply perplexed with that puzzle.

For some reason, rather than to simply dismiss and put out of mind something I couldn’t figure out, I thought long and hard about the silver supply/demand/pricing enigma. It was that thought process, plus my background as a commodity broker, that led me to the conclusion that the silver market was manipulated by excessive short selling on the COMEX. The actual Eureka Moment came one day as I reading the Wall Street Journal Commodity Tables. It wasn’t an accidental discovery. I was looking for something wrong. I was looking for anything that was different about silver that could account for it’s very different behavior compared to other commodities. After all, we were all taught that when consumption is greater than production, price must rise. Yet silver didn’t. The light bulb went off in my head when I realized that COMEX open interest, when converted into real world supplies was completely out of line with every other commodity. This meant that the derivatives market in silver was larger than the underlying host market from which it was derived. A complete absurdity. The paper market tail was wagging the physical market dog. This is something that has remained constant in the subsequent 25 years of manipulation.

Much later, I would come to understand the role of leasing in the silver manipulation, which answered a lot of open questions in my mind. It was Izzy who caused me to be bitten by the silver bug, just as I may have, in turn, infected others, who in turn infected still more. The good news about this silver virus is that instead of giving you the flu or killing you, it could make you rich. For introducing me to silver, thanks Izzy

Finally, I’d like to thank my wife, Mila, who has been subjected to my preoccupation of silver for the entire duration. While I have both suffered along the way and enjoyed the journey, it was always my choice to continue or not. I know it was much harder for Mila as a partner, and a I marvel at her ability to persevere where I know I could not, were our roles reversed. Thanks Mila.

The Past.

…..read more HERE

Atna Resources Ltd. — Atna Resources Reports Fourth Quarter and Year End 2009 Results.

….click read more for 9 more

Aura Silver Resources Inc. — Aura Silver Commences Phase III Drilling on Prolifically Mineralized Taviche Project In Mexico and will Increase Stake to a Potential 70% of the Project

Aurizon Mines Ltd. — Aurizon Reports Record Earnings, Revenues, and Cash Flow In 2009

BacTech Mining Corporation — Bactech Announces Agreement With Blackstone Development

Endeavour Silver Corp. — Endeavour Silver Reports Record Silver Production in Q1, 2010 compared to Q1 2009; Produces 766,210 oz Silver (Up 34%) and 3,775 oz Gold (Up 62%); Endeavour Silver Reports Record Financial and Operating Results in 2009. Endeavor Silver Presentation.

Energizer Resources Inc. — Energizer Resources Announces Closing of Private Placement Financing of US$6,500,000

International PBX Ventures Ltd. — International PBX Ventures Intercepts Copper Mineralization

Lucas Energy, Inc. — Lucas Energy Announces Letter of Intent for New Joint Venture

San Gold Corporation — San Gold Discovers High Grade Eastern Extension to Rice Lake Mine

Tantalus Rare Earths AG — Tantalus Rare Earths AG appoints new CEO.

AND DON’T FORGET…
New York Hard Assets Investment Conference
May 10-11, 2010 — New York Marriott Marquis
The BEST Conference for Delivering Growth to YOUR Portfolio… Attend the New York Hard Assets Investment Conference to learn from top analysts, economists, and newsletter publishers on how to consistently grow your portfolio while maintaining gains. You will get first-hand access to the experts, as well as investors with common interests
Sign Up Now… www.hardassetsny.com.
** NOTE: You will receive a Complimentary Registration when you use Promo Code NY10BB

Also, be sure to visit the highly informative websites,

TheBullandBear.com, TheResourceInvestor.com, and GoldStockNews.com

April 21 (Bloomberg) — China’s “excessive” credit expansion and surging real estate prices are “danger signals” that growth is peaking, investor Marc Faber said.
“There are some symptoms of a bubble building in China, with the increase in foreign exchange reserves, rapidly rising property prices,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview today. “From here on, the China economy will slow down regardless. Whether it will crash this year or later, I don’t know.”

…read more HERE

Gold Investment overtakes jewelry demand

Global demand for Gold Investment has overtaken that of jewelry for the first time since the 1980s, according to the GFMS.

The respected metal consultancy’s latest Gold Survey revealed that Buying Gold is becoming an increasingly popular activity among investors looking to preserve their wealth from the financial crisis that has gripped the world in recent months.

It reported that a recovery in the jewelry market requires a drop in Gold Prices, something it does not expect to occur in the near future.

Demand for jewelry was found to have fallen 20 percent to 1,759 tonnes last year.

Speaking to Reuters, Philip Klapwijk, chairman of GFMS, said: “An important factor in the US market has been the development of new capacity of the mobilization of jewelry scrap,” such as the popularity of “cash-for-gold” businesses.

If Gold Prices do eventually fall, it is likely that new demand will become apparent, primarily from Chinese investors, according to respected analyst Marc Faber.

The author of the Doom, Gloom and Boom report expects a number of investors in the country are waiting for the price to fall below $1,050.

Richard Russell has made his subscribers fortunes. One of the best values anywhere in the financial world at only a $300 subscription to get his DAILY report for a year. HERE to subscribe. Amongst his achievements Richard was in cash before the 2008/2009 Crash and he has been Bullish Gold since below $300

Ed Note: Richard Russell is bullish Silver and holds one of the largest single positions he has held since the 1950’s in the precious metals.

Russell Comment — Now it can be told. It started with billionaire fund manager John Paulsen. He had an idea that the wild speculation in homes was putting the price of homes into the bubbly stratosphere, and that the whole home-structure was due to collapse. Paulsen went to a few firms including Goldman and asked them to structure mortgage packages that would include some of the poorest quality mortgages. Paulsen’s plan — bet against these vehicles and these items and hope that he would be correct — that the housing boom would go into free-fall. This is exactly what happened, and Paulsen and his investors pocketed billions in profits.

Bear Sterns turned down a deal with Paulsen. But Goldman and Deutsche Bank went along with Paulsen. Goldman, knowing the mortgage packages they had created were toxic, sold these deals to investors without telling them about Paulsen and his thesis that these mortgage packages were created to fail. What’s worse, Goldman even sold these toxic packages short. Goldman sold the product to their customers and at the same time shorted the products.

But what about the agencies that were supposed to grade these packages? They were as asleep as was the SEC on the Madoff case. The toxic packages got a AAA classification from the rating agencies. All in all, a disgusting case of collusion and incompetence by Wall Street and the rating agencies and stupidity on the part of the buyers of these toxic packages.

The fact is that Paulsen had been searching for bubbles in the economy, and he correctly zeroed in on real estate and specifically home mortgages. But Paulsen never sold his toxic packages to investors, Goldman did. Which is why the SEC has focused its fraud accusations on Goldman and left Paulsen alone.

Paulsen & Co. earned $15 billion betting against the housing market in 2007. Paulsen, 54 years old, personally made nearly $4 billion that year. Today Paulsen’s hedge fund has $32 billion in assets, making it one the world’s largest hedge funds. Of interest is that Paulsen’s most recent big investment is in gold and gold stocks and exchange traded funds tied to gold.

I ask myself, what is Paulsen thinking as he takes a large position in gold and gold shares? Paulsen must be thinking that the dollar is in a bubble. Furthermore the ultimate “safe bet” against the dollar is gold. Normally, the bet against the dollar would be to load up on the euro, but the Greek fiasco eliminates a big bet on the euro.