Silver: Past – Present – Future

Posted by Ted Butler via

Share on Facebook

Tweet on Twitter

“…..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

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.

… more HERE