08 April 2015

Butler: J'Accuse - Market Rigging in the Wheat Market, and in Silver


"What is truth? said jesting Pilate, and would not stay for an answer."

Francis Bacon

This is an excerpt from a much long article posted by Ted Butler at SilverSeek here.

I read Ted's columns each week at his subscription site.  I am glad that he was kind enough to make this one public.

There was little mention in the media of the case against Kraft, which was caught rigging the wheat market.   The parallels with other instances of market rigging are noted by Ted, and he asks the obvious question, 'Why the selective enforcement of the laws?'

Indeed.  It may have quite a bit to do with the credibility trap.  Once bureaucrats and politicians get involved in dirty dealings, their co-conspirators have often used the threat of disclosure to take them along for a much longer ride.  And it is easy to rationalize official silence in the face of injustice for the sake of careers.  And then leave office and take a high paying sinecure with the very industry that they had been paid to oversee.
When the precious metals markets dislocate, or 'blow up' in the vernacular, the economists and other very serious hypocrites will say that no one could have seen it coming.   Or blame it on some unrelated scapegoat.  Or crazy misguided goldbugs.   The same way they tried to blame the financial collapse following the housing bubble on the government and homeowners.  No one can see anything in this kleptocracy.
And they are right.  You can't see anything coming when you keep averting your gaze and closing your eyes to it.
An Unavoidable Comparison
Theodore Butler
April 7, 2015

"Importantly, the Commission’s case against Kraft most likely came as a result of a complaint from a disgruntled insider who was damaged by Kraft’s futures market activity and not as a result of widespread complaints or damage to the public. To my knowledge, this was not a case publicly discussed prior to the charges being filed. Compare that to silver, where many thousands of market participants and observers have petitioned the agency for years about the manipulation by JPMorgan and where investors and silver producers have been and are being damaged by artificially depressed silver prices.

The unmistakable conclusion is that this agency is bought and paid for or otherwise not acting in the public’s best interest. For a federal agency, I don’t think there is a more serious allegation.

So the real question is why the selective prosecution of the law? Why is the CFTC going after Kraft on a complicated case with an alleged payoff that looks like chump change (around $5 million total profit to Kraft), when public data indicate JPMorgan shorts the silver market whenever prices rise to cap and drive prices lower in order to profit on those short sales and accumulate silver at unfairly low prices; with JPM’s cumulative illicit take running into the hundreds of millions if not billions of dollars?

I can see the agency going after Kraft, but I can’t see any legitimate reason for it not to go after JPMorgan for the far more egregious silver activities the bank is involved in. Worse, why won’t the agency explain why the public data doesn’t point to JPMorgan doing what I allege the bank is doing? Can the Commission refute that JPMorgan has been the big concentrated short seller in COMEX silver futures since acquiring Bear Stearns in early 2008 and has been accumulating physical silver while remaining short COMEX futures for the past four years? That’s the key, no one - not the CFTC, not JPMorgan, not the CME – can offer a reasonable explanation for JPM’s control and manipulation of the silver market and what has transpired these past seven years...

The problem with selective enforcement of the law is that it undermines and makes a mockery of the whole system. It is a betrayal of the highest order. Yes, I’m fairly sure that the free pass to JPMorgan to allow it to continue the silver manipulation was given by Treasury and Federal Reserve officials to preserve market order and was considered to be to the public’s benefit. But look at what it has morphed into seven years later – a market more distorted than ever before and in which JPMorgan has amassed the largest hoard of silver in history."