Is Silver Manipulation Over?

courtesy National Inflation Association

(Editor’s Note: I urge readers to buy silver as a store of value, not for any investment potential. That means don’t buy collector coins of any type, since collector value of a coin will vanish when SHTF. This is why Glenn Beck’s favorite sponsor Goldline is so full of s***. They sell collector gold coins for premium prices. Bullion price is the only thing that should concern you. The best way to buy silver is in “junk silver,” which are old US coins back from pre-50s days. Buy dimes, nickels, quarters, halfs and silver dollars. But eventually junk silver will be all bought up. Buy one ounce bars, multi-ounce bars, and any sized coin you can. Just consider this to be an alternate form of savings…put it in your safe and forget it for now.)

The big news in the financial mainstream media during the past week has been JP Morgan’s announcement that they will be closing their proprietary trading desks. JP Morgan is in the process of winding down their proprietary trading operations and will be laying off their 20 proprietary commodities traders, who NIA believes could be responsible for the current concentrated short position in silver. NIA has been receiving countless emails from members asking us if this means the silver manipulation is coming to an end and what this means for the price of silver.

One thing is for sure, this news from JP Morgan can’t be a bad thing. NIA has long held the belief that JP Morgan’s manipulation of the silver market is the sole reason for the artificially high gold/silver ratio of recent years, which currently stands at 63. Silver possesses all of the same monetary qualities as gold. There is no rational reason for gold to be 63 times more expensive than silver when only 10 times more silver has been produced in world history than gold.

The main thing Americans will need to barter for during hyperinflation is food, but gold is too expensive to be good for bartering for food. Silver is the perfect bartering currency for food. Assuming the gold/silver ratio returns to 16 during hyperinflation and food prices increase at the same rate as gold, it will be possible to feed a family of four with only 2 to 3 ounces of silver per week. However, just 1 ounce of gold will buy 6 to 7 weeks worth of food for a family of four, and most perishable food items go bad in just a week or two.

The only advantage of owning gold over silver during hyperinflation will be having the ability to pick up and leave with your entire net worth in hand. The average American currently has their entire net worth tied up in their house. There is already a 12.5 month supply of Real Estate on the market. During U.S. hyperinflation, the U.S. mortgage market will come to a complete halt and it will become nearly impossible to sell your house unless you are willing to lower the price to a level where buyers can afford it without a mortgage. With the U.S. unemployment rate likely to rise above Great Depression levels, the last thing you will want during the upcoming currency crisis and societal collapse is to have your wealth stuck in Real Estate. Americans will desire the freedom and flexibility that comes with owning precious metals.

The U.S. median home price is currently $179,000. NIA expects Real Estate prices to fall by another 55-60% priced in gold and 90% priced in silver. For the average American who sells their $179,000 home now and uses the money to buy gold, they will have the ability to pick up their entire net worth in the form of gold bullion that weighs less than 10 pounds and move with their gold to wherever they desire. On the other hand, $179,000 worth of silver currently weighs 600 pounds and even with a gold/silver ratio of 16 would still weigh 156 pounds.

NIA considers silver’s bartering advantage to be a lot more valuable than gold’s value density advantage. Therefore, we don’t see any possible way to justify a gold/silver ratio that is higher than the historical average of 16. NIA believes we are guaranteed to see the gold/silver ratio decline dramatically and if JP Morgan is going to be covering their shorts as part of their winding down of their proprietary trading division, the biggest move downward in the gold/silver ratio could come in the months ahead.

Is it possible that JP Morgan’s plan to shut down their proprietary trading operations is just a smokescreen to make it appear as though they are complying with the new “Volcker Rule”? On July 1st, JP Morgan acquired the Metals, Oil and European Energy business lines of RBS Sempra Commodities. Also, on August 31st, JP Morgan filled their newly created role of global head of commodities strategy. These mixed signals from JP Morgan lead us to believe it is possible that JP Morgan will continue to engage in the same manipulative trading activities, but under the name of a new outside firm that they control. NIA is hopeful but skeptical that the manipulation is coming to an end. We remain cautiously optimistic at this time.

Bear Stearns previously held the silver short position that is now controlled by JP Morgan. The very day that Bear Stearns failed in March of 2008 was the day that silver reached its multi-decade high of $21 per ounce. Although nobody in the mainstream media has ever reported this, the real reason the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns is because Bear Stearns was losing control over the price of silver. If they were forced to cover their shorts, silver could have quickly risen to $50 per ounce. A breakout of this size in the price of silver would signal a loss of confidence in the U.S. dollar and trigger a currency crisis.

In just the same way that it wasn’t a coincidence that silver reached its high of $21 per ounce the same day Bear Stearns failed, it might not be a coincidence that silver is now at its highest level since March of 2008 with JP Morgan claiming to be exiting proprietary trading of commodities. JP Morgan has been slowly starting to cover its silver shorts in recent months, but still holds the majority of its silver short position. In recent weeks, silver’s rise has come with very low volume. JP Morgan isn’t rushing to cover their shorts, but at least they aren’t increasing their shorts like they normally would at this time. Now is the time that JP Morgan would normally act to slam the price of silver down. If we don’t see JP Morgan make a noticeable attempt to manipulate down the price of silver within the next couple of weeks, it could be a sign that their manipulation is over.

The largest banks like JP Morgan control what is said in the financial mainstream media. It is sickening to us that all of the so-called financial experts who were pushing the public to buy dot-com stocks in 2000 and Real Estate in 2005, are now calling for massive deflation. This is being done solely to trick the little guy so that Wall Street as a whole can switch from being on the short side of gold and silver, to the long side. Within a year, after Wall Street has switched their positions, you will see the mainstream media begin focusing on the risk of massive inflation in our future.

NIA is currently producing an over one-hour long documentary about the societal collapse that is coming America. This promises to be NIA’s best documentary of all time because it is based off of the thousands of warning signs that were submitted to us by NIA members. NIA intends to release this movie near the end of October. We will be providing you with further details about it in the weeks to come. If you would like your friends and family members to be the first to see NIA’s new upcoming documentary, please tell them to become a member of NIA for free at


6 Responses to Is Silver Manipulation Over?

  1. It is always a pleasure to read an NIA analysis and this one is of particular value to anyone interested in the strategical and tactical uses of gold and silver. It is also a salutary lesson in the importance of choosing our sources of information well since it is not possible to keep up with everything that happens. I know. I try. Thanks, Russ, for picking this article up, and I’m rolling around the possibilities inherent in the information that JPMC picked up the Metals, Oil and European Energy business lines of RBS Sempra Commodities. I wish I hadn’t missed that bit of info–and that none of my usual sources had failed to pick it up either. That company is tugging at my mind; I’ve seen the name recently, but can’t remember if it was on a “buy” list or a “troubled” one.

    Potential for skullduggery…we all know that throughout most of history the ratio was 10:1. Andrew Jackson popped it up to 16:1 for obvious reasons and one of the things hovering on the edge of my consciousness is that the peg of the dollar to gold, which Nixon cut loose, has never been changed from $35/ounce. I don’t know why I have a queasy feeling about that but I’ll ponder it later.

    I’m fine with a ratio of 64:1 simply because it IS a quarter of what we should be able to exchange silver for gold for. Well…I like buying things for .25 on the dollar! At what I’ve got in mine I’m looking at over 100:1. I like knowing that if the–let’s call it a “cartel”–slips or sets a foot wrong, even 32:1 will double your investment. Of course, I’m with Russ: my silver isn’t for sale at any price.

    For a very small nit-pick, if we get to the point of “Casablanca” and flight our chances of getting out of the country will be slim and complicated by bribes, forgery, cooperative yacht captains, or being fortunate enough to know a Colombian pilot who flies to Arkansas or Texas frequently. In large part those who are in a good position to do so (see recent three-parter, here) have already moved their money and their persons out of harm’s way.

    I’m intrigued by the NIA conjecture that if we don’t see a major slide in metal in the next couple of weeks that could indicate that JPMC has given up its playful ways. One major question is whether or not the rest of the cartel has picked up such subsidiaries, because several other, um, respected institutions are ALSO dangerously short if we postulate that they lack the ability to control movement and were just slip-streaming on JPMC. “Collusion” is such an ugly word, but it certainly comes to mind.

    Un-uh, I don’t buy that one. Not even for noticeably lax SEC investigations and an innocent chorus of “We just thought prices were too high/the market was overbought/green shoots were here.” No…at the very least, if there is a cartel then there is an exit strategy.

    However, what if we combine our ideas into a double-play? Laughter…I always figure that anything a sweet, little old lady rancher in Texas can come up with while having a night-night snack of hummus and Mr. Keebler’s delicious Nut Crisp crackers, has occurred somewhere along the line to Iranian madmen and people who have been controlling the price of silver by going short sufficiently to bleed off market enthusiasm. (I spent a happy hour [not that kind of happy hour] last night investigating the Royal Navy of Oman! Ah wuz uh-thankin’ [in mah capacity of uh I-ranian madman] that Yemen is certainly a lovely staging area for the soft underbelly of Saudi Arabia after making a mess of Bab el Mandel, the bottle neck of the Red Sea that some 10% of Middle Eastern oil passes through…but Oman is raht acrost th’ beautiful Strait of Hormuz.

    Now, if’n Ah sunk uh coupla-three super tankers smack in th’ middle of that little darlin’ [throwing th’ whole world into panic because I’d bottled up 90% of the oil traffic betwixt me ‘n’ th’ Saudis and th’ Iraquis, closing off access tuh any pesky aircraft carriers th’ Great Satan had in pretty useless positions in th’ Med or even th’ Indian ocean] then Ah could run mah troops over t’ visit Oman and THEN carve mah se’f out at least a nice hunk of Saud’s kingdom. Yup, I think we can take the race-winning 14-sail Brigantine and three small ships of the line.

    If th’ Shi’ites cooperated as expected against the hated Sunnis, Ah maht jest get th’ whole peninsula, or set some dandy li’l oil field fires while pullin’ back to th’ most defensible new borders…Unlike th’ Jews Ah wouldn’t give back a square inch of anything Ah grabbed…wonder if that Amadinejad fellow would be interested in cooperatin’ in a joint attack, 70-30 division of the spoils? We can fight any time, but together we could pull this off…

    Geography is history, and I will repeat: if I can come up with such ideas, so can ME males.)

    Back to silver. MY thought is that we’re going to see a big sell-off in metal (helped along by the cartel) the week of the election in response to ill-founded euphoria. Three days is ample to drop the price dramatically, increasing our short position–just swapping back and forth with my partners at first, actually–to gen up the volumn. Drive the price down low enough to cover all the shorts and pick up whatever else we’ve rattled small investors into turning loose of, and open the market on Monday with a rip-roaring upturn. You know, sort of like Consols on ‘Change the week of Waterloo.

    However, why NOT use that splendid plan twice?! Do it next week–market analysts can always come up with a “reason”–and the cartel can see where silver wants to go (once they’re comfortably long again), and repeat for the election.

    Anybody see anything wrong with that scenario? I still think I like my original one better because it is simple and profitable and I’m sure it can be executed once. I thought suddenly of an ad from my youth, “Which twin has the Toni?” If I see two blowout occasions in silver before the end of the year I’m going to think both girls had home permanent waves.

    Horrifying, isn’t it, the things that genuinely NICE little old ladies can envision?

    • dumpdc says:

      Linda and friends- Here is another Persian Gulf scenario that should chill your shorts. There is ALWAYS at least one entire carrier task force in the small and crowded Persian Gulf. Iran’s shoreline on the north shore of the Gulf is mountainous down to the water. It’s perfect territory to hide missile launchers. Iran already owns bunches of the Russian “Sunburn” anti-ship missile. The Sunburn flies at Mach 2.1, fifty feet above the waves. At the first American (or Israeli) aggressive act against Iran, Iran can and likely will launch Sunburn missiles against the carrier task force. The American Navy’s radar would never see them coming, and could not formulate a response in time to thwart the missile attack. The Sunburns will send the task force to the bottom of the Gulf. The Pentagon already knows that they have absolutely no defense against the Sunburn. Do you think that perhaps this knowledge is what is keeping America from attacking Iran? I hope so, but I could be wrong.

  2. Russ, dear, what a delightful mind you have! I asked my resident strategist and tactical advisor what he thought about your conjecture that concern for the troops/the cost of bottoms/fear of the consequences was responsible for the hands off policy against Iran. He replied laconically, “I think it is the resident communist in the White House, but what do I know?” (He taught those subjects and made 26 patrols on submarines, so just a little.)

    The North Shore sounds delightful as combat terrain, and I imagine that it, like the shore of China nearest Taiwan, is bristling with things that go “whoosh-boom!” However, between aircraft aloft, simple Doppler radar, and CWIS, it seems probable we don’t have to worry about that. I’m even of the opinion that some wily old tar below decks has managed to rig auxiliary radar if the Task Group Commander hasn’t considered protecting the vessel carrying his flag from low-flying threats. Still, Mach 2.1 is on the order of 1500 mph, but the boys tend to be pretty alert.

    I was wondering, back when Amadinejad was making noises about a “surprise” to celebrate the overthrow of the Shah (such a nice man, the Shah, that is) if he might have in mind using some rather elderly, very quiet submarines he acquired from his friends in North Korea to target the three carriers in the Med and/or the Indian Ocean. They’re old, slow, and have relatively short submersion times, but those very characteristics made them perfect for the job. I think he could have pulled it off.

    I like pondering what is coming out of Diego Garcia and speculating on satellites and what the CAP can see. Years of reading military and science fiction (and more serious works, although many of those are superb) can do that to a girl. I asked a couple of more relatively bright questions and now have myself oriented. If the terrain is suitable, a perfectly splendid place to put some of those missiles is at the OTHER end, where they could assist in blocking the Strait of Hormuz by flashing about three Sunburns into each of those super tankers when the time was right. Dear Charles points out reasonably that any sub from the opfors would take exception to this, but my point is that it might well be possible to bottle up at least one carrier and prevent others from steaming up to assist directly. Missiles located there would be useful for coastal defense in two directions…you didn’t give me the range, but I wonder if those on the North coast could be swung 180 and shot into Iraq, just for kicks and grins…

    What a fun subject for discussion! Thanks, and please carry on whether you think I’m right or wrong. That’s why we analyze scenarios, to seek advantages and identify weaknesses. Gee! Maybe we could even have our own mental war games. My brother knows just a bit about commanding squadrons in the Indian Ocean (above it, ideally!)and I can come up with a former combat engineer, several oil experts, and an AF top with a decidedly nasty mind.

    • dumpdc says:

      Linda- The Sunburn has a range of 100 miles…twice that of the French Exocet missile, and has the capability of making sudden erratic moves just before striking the target. And if flies less than 50 feet above the waves. Even the Phalanx system cannot calculate a firing solution in time to respond and knock out the Sunburn. The Phalanx response would be like hitting an approaching bullet with a shotgun blast. I guess the task force could hug the western coast, which might place them in Saudi waters, and might put them outside the Sunburn’s advertised range. But remember Sun Tzu’s words, “all war is deception.” My guess is that later versions of the Sunburn fly farther and faster. Using a sub makes no sense with the Sunburn in their arsenal. Blocking the Strait of Hormuz makes no sense when you sell oil and would like to continue selling oil to the world. Swinging the missiles toward Iraq makes no sense, since they only carry a 750 pound high-explosive payload, not a tactical nuke. The Sunburn was designed to sink ships.

      Can you imagine the media’s coverage if the task force was sunk by Iranian missiles? They would want to deliver 24/7 fly-over video showing the carnage. But they’d also feel like they should protect the military and the Washington establishment. The American sheeple would go crazy to see the American Navy destroyed in the Gulf.

  3. Fun! Thanks for the range, and I suppose that you are referring to “pop up,” a jink upwards so that the missile will come in at a steeper angle and penetrate better? Are we supposing now that Iran has gotten newer Sunburns? I can certainly see how even the older ones would be very unpleasant at short quarters. I was thinking of, uh, popping a few into Iraq primarily as a diversion if I needed one.

    The sub we had in mind would be USN, not Iranian. I checked and I did specify OpFors in terms of response to blocking the Strait. I’m planning from the standpoint of an Iranian madman, and another question is how to tell deception from what only a maniac would do. Chuckle…I guess I need to play “Battleship” as we did as kids–on paper!

    If Iran decides to kick off an invasion anywhere the least of their worries will be selling oil; the object of blocking the Strait would be to deny oil to the other side, and spreading oil on the troubled waters would be a method of stirring up the Green Machine. Sure, the Greens would be having hysterical spasms, but it seems probable that they would mobilize against any action that they felt would increase chances of even more oil being dumped into the sacred ocean.

    As for the MSM…sure, they’d have great fun showing the carnage, but their response and Obama’s to acts of terrorism–excuse me, “manmade disasters”–has been making a bridge with what passes for their backbones. Nidal Hassan is still sitting in a non-military jail getting paid $6,000/mo nearly a year later, when in any sensible world he would have been taken before a Court Martial promptly. He DID murder 12 soldiers and a civilian on a military base during duty hours, after all, and it isn’t as though there is any shortage of witnesses. His “motivation” may be clear to most of us, but since when is motivation a factor in punishment for the brutal murder of that many people? Rocks & Shoals frown on that.

    What WOULD the average American think if Iran attacked Saudi Arabia? Some would object if Iran attacked Israel, but would there be a division between “We told you so!” and “Not our war?” We’re already engaged ineffectively in Iraq and Afghanistan, we have severe monetary problems, and short of Iran sinking our carriers, do we have the will to war yet another place?

    What Obama needs desperately is either a short victorious war or a major act of terrorism on US soil, and he needs it fast. I THINK Iran will be more inclined to keep relatively quiet and continue striving for nukes, perhaps figuring in that Obama will be even weaker (and more determined to have his own way) after the elections.

    Iran’s putative actions don’t have to make sense even to them; they have proven they’re willing to cut off their noses to spite their faces. The hatred between Shia and Sunnis goes back over thirteen centuries, and we can’t begin to fathom the minds of those who stone young women to death for the “crime” of refusing to marry the man of their fathers’ choice.

    Think, too, of Obama, who is decidedly pro-Arab and freezes in times of stress. He did everything possible to prevent the Navy from rescuing a man held by pirates. I suppose his allegiance would be more to Saud, but would he do more than send materiel? Which Muslim sect was he reared in? Indonesia has a large Shia population. Obviously I need better Intel.

    Interesting to mull over, but too many unknowns. I suppose sometime before 2020 we’ll know the answers. Regards, Linda

  4. silveristhenew says:

    NIA always has great stuff. This is an exciting time to be investing in the metals but what I like about NIA and some other analysts too, they use the metals value as indicators. When the currency worth is equated to value, it doesn’t bode well for the analysis.

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