Do like JP Morgan’s doing, Buy Silver Bullion

Go on and roll in your supposed silver cornering Hunt Brother graves.

Eat your former silver buying hearts Warren Buffett, Charlie Munger, & Berkshire Hathaway.

This current silver trade has taken more than 50 years to fully formulate.

From the end of 90% US silver coin circulation (1965) through the beginning of the global full fiat currency era (1971). Through one bullion bull market and into another.

JP Morgan's COMEX silver warehouse now holds the largest physical silver bullion position of all time (see charts below).

Here we discuss the historic perspectives and how large each of these respective 3 silver bullion buying entities were, and are currently now.

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[ Article Update Prologue ]

Coincidentally too, the US Department of Justice recently implicated perhaps systemic JP Morgan silver market manipulation upon securing a guilty plea from a 13 year, ex-JP Morgan silver and precious metal trader. Prosecutors alleged this trader's supervisors taught him silver and other precious metal spoofing strategies, and these JP Morgan superiors had knowledge and consent of such silver price manipulating practices ongoing for many years.

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For a prespective note, the current annual new physical silver ore supplies to market amount to about 800 million ounces per year (all of it consistently used up in industrial, jewelry, silverware, and investments).

Some silver industry analysts allege the JP Morgan Chase silver hoard has already reached an almost equiavlent amount.

Let us digress to the verifiable facts as they stand for now and back then...

The Hunt Brothers Silver Buying

1973 to 1980: 100 million oz silver bullion  (plus 100 million oz of backfiring paper silver leverage)

A few second-generation wealthy trust fund brothers in the 1970s supposedly drove silver to a then record high price of $50 oz USD. Of course they were not alone and the long Hunt Brothers story is much more complex and interesting than that.

Yet likely mostly driven by price inflationary fears, the facts are that the Hunt Brothers amassed 100 million oz of physical silver bullion holdings throughout the decade.

They combined their relatively safe silver bullion bet with outsized, riskier trades using leveraged derivative betting on the COMEX silver futures contract exchange.

An exchange which was likely set up with the intent purpose to help control and likely exacerbate precious metal price volatility (e.g. explicitly setting up the COMEX gold futures contract through 1974 US Treasury cable communications).

Regardless here is the silver Hunt Brothers timeline according to main stream financial press:

Silver Hunt Brothers timeline SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion

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By early on in the year 1980, the COMEX commodity futures exchange abruptly and temporarily changed silver futures contract trading rules (e.g. liquidation trading orders only). Note the massive drop off in silver futures contract trading volumes in the chart below.

The Hunt Brothers and other long COMEX silver futures contract traders (those betting silver prices would keep climbing) were mostly all caught flat footed.
The Hunt Brothers subsiquently lost billions of US dollars in the inevitable no more going long silver price collapse. Little known too is that the Federal Reserve had to step in and assist various banks coordinate a $1.1 billion USD silver bailout


COMEX silver price and trading volume all time SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion


As a result of this COMEX silver futures contract price collapse, the Federal Reserve and a consortium of banks were forced to bailout the Hunt Brothers to a tune of $1 billion USD.

This billion dollar silver bailout was coupled with record high early 1980s interest rates. The Hunts were later tried in court and fined hundreds of millions of dollars. As well these guys were openly scapegoated by the court of public opinion and are still so to this very day.


Silver COMEX trading volume price all time SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion



Most uncoincidentally, other commodities and precious metals like gold, platinum, and palladium also hit record high prices in early 1980 without market ‘cornering’ traders attached.

The same was the case for crude oil prices and other important commodity value spikes at the time.

All four physical precious metals we currently trade in here at SD Bullion spiked to all time price records within the first half of 1980, see below for this fact.


1970s 1980 Gold Silver Palladium Platinum Prices Silver COMEX trading volume price all time SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion



Warren Buffett, Charlie Munger: Berkshire Hathaway Silver Buying

1998 to 2006: 129.7 million oz silver bullion

Berkshire Hathaway (BRK) under the directive of Charlie Munger & Warren Buffett, bought their then record sized 129.7 million ounce silver stack in 1998.

The most obvious motive for this move was mainly proft driven and market moating domination. We can see that by the blow out of silver lease rates at the moment of market cornering right here, as well as words from Berkshire Hathaway's very own press release.

In 2006 the holding company allegedly sold its silver bullion holdings to start the underlying beginning silver position of the still most popular silver ETF traded today (SLV).

Also interesting to note that during this similar timeframe, Warren Buffet's buddy Bill Gates also made an investment play in silver through PAAS silver mining shares.
Bought in 1999 and owned over a similar timeframe into 2006. It looks like Gates' silver play back then perhaps netted him over $50 million USD or a tripling in nominal values invested.
Berkshire Silver Buffet Munger 1998 2006 1970s 1980 Gold Silver Palladium Platinum Prices Silver COMEX trading volume price all time SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion



Coincidentally or not, since the year 2006, JP Morgan (JPM) has been an active SLV Authorized Participant (one of only a few financial institutions able to withdraw physical silver bullion bars for SLV equity shares). As well, JP Morgan has been the sole or lone SLV Custodian since the silver ETF began trading worldwide in 2006.
Moving on to the largest single entity physical silver position in modern time.

JP Morgan Silver Buying

2011 to 2018: +152.3 million oz silver bullion

This newest record silver bullion acquisition saga stretches its alleged start back to the Global Financial Crisis of 2008.

Any one paying attention to this matter over the last few decades likely knows, long time silver analyst Ted Butler has beed documenting in high public detail, the ongoings within the COMEX silver market

In March 2008, Bear Stearns (a then large trader in silver futures derivatives) collapsed and was taken over by JP Morgan, perhaps at the request of then US authorities.

A few years later JP Morgan began adding mass quantities of silver bullion to its silver COMEX warehouse, coincidentally just after the $50 oz price high for silver 2011, in late April.


JP Morgan Silver Warehouse 2018 SD Bullion SDBullion.com


This is indeed the same firm, whose namesake once testified before the US Congress over a century ago stating “Money is gold, and nothing else”.

JP Morgan now has a record high 152.3 million ounces of physical silver in its COMEX warehouse inventory.

Of course this all begs the question...

Why?


JPMorgan Silver Warehouse 2018 Large Silver Holding SD Bullion SDBullion.com.png

Crash JP Morgan Buy Silver meme 2010 2011 SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion

The start of JP Morgan’s COMEX silver bullion stacking began only a few months removed from outspoken financial commentator Max Keiser's November 2010 public plea to ‘Buy Silver, Crash JP Morgan’.

The following was broadcasted across the world on Russia Today (btw Youtube reminds us that RT is funded in whole or in part by the Russian government).



As a quick aside, the Russian Federation has been actively acquiring bullion heavily over this same timeframe. Here are their pictures to prove it (both Official Russian Federation gold and silver bullion holdings, in large volumes).

Perhaps an early 2009 silver price of $9 oz to a 2011 spring $50 oz high, gave JP Morgan a long silver trade idea which it has since acted upon?

Could they and their silver bullion holders be making a similar play on what the Hunt Brothers were involved in during the last 1970 - 1980 secular bullion bull market?

1980 gold silver bubble chart SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion


Today still, the CME Group's COMEX (commodity futures contract exhange) is the most important price discovery mechanism for world silver bullion and silver ore prices.

Allegations of gold price manipulation on the COMEX statistically stem back to the beginning of this 21st Century Gold Rush (1999 - 2002) and more recently appear to be simply prolonging the inevitable price reversions ahead for bullion.

Even now the COMEX's parent company (CME Group) very own CEO is on record stating current gold, precious metal, and silver bullion prices are too low while simultaneously incentivizing government central banks to actively trade in their futures market price discovering deriavtives (high volume trading discounts supposedly end on January 31, 2019 by the way).

Hear for yourself some of CME Group Chairman, COMEX head, Terry Duffy's thoughts on precious metal price from the summer 2017 below.


As well, Gold Antii-Trust Action Committee (GATA) response to Terry Duffy's precious metal price comments is here.

So why does JP Morgan have so much Silver Bullion currently?

The answer currently is rather speculative yet there are some human motivating clues as to perhaps why.

Currently JP Morgan now holds over 50% of the total COMEX physical silver bullion holdings. Surely there are various reasons for this, at their most base levels are likely a combination of perhaps fear and greed at play.

FEAR: maybe by acquiring large bullion positions JP Morgan is hedging higher ‘capital buffer requirements’ mandated by the BIS’ Financial Stability Board. The FSB explicitly cites JP Morgan as the most risk-laden global systemically important bank (G-SIB) today. Well if this is indeed the case, why not buy and own large amount of a Tier 1 Asset like gold bullion too? Perhaps China, Russia, and other eastern nation gold demandf has the physical gold bullion market under enough stress already.

Perhaps the major motivation for record large silver bullion holdings is simpler than that... maybe mere future profits. 

GREED: for years now, hosts of silver market analysts have explicitly defamed JP Morgan’s activities in the world silver markets. They publically allege continued fraud and market manipulation by JP Morgan in silver without any defamation or libel lawsuits as repercussion (perhaps JP Morgan has lawsuit discovery process fears and thus has not engaged). Regardless assertions remain that JP Morgan actively engages in a concentrated silver price suppression scheme (on the COMEX) whilst simultaneously acquiring physical silver bullion ounces on the cheap (via COMEX and SLV, etc.).



And not merely the current record 152.3 million ounces of silver bullion that is transparently published in JP Morgan’s COMEX silver warehouse data.

Which could of course have their client interests attached judging by the 41% customer vs 59% house account contract stop delivery data we have compiled below.

JP Morgan Silver COMEX house vs customer deliveries 2011 - 2018 SD Bullion SDBullion.com

Also alleged are additional 100s of millions of more silver bullion ounces that have been withdrawn from SLV holdings.

Even alleged (and we would argue unfound) some potentially purchased silver through sovereign silver bullion coin mint programs (specific estimates are as high as +675 million ounces in total).

Why allegedly acquire about 75% of a commodity’s annual global mine supply over a 7 year timeframe if not for speculating on substantially higher prices in the medium to long term?

Short squeeze profits similar to the late 1998 Warren Buffet market corner?

Buy low, sell high perhaps?

Bloomberg commodity vs equity chart 2018 SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion

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Answers to many of these speculative questions will likely take years to play out and still many will go unanswered formally.

Yet the fact remains that JP Morgan now has a bigger silver bullion position than any long silver bullion buyer that has existed in the modern age.

With assistance from record size derivative trading, this 21st Century secular bullion bull market is running about 2.5Xs the length of the last 1970s and 1980 version.

How long and how high precious metal values go this go round is still an answer no one but perhaps colluding governments might help markets answer some day (especially in terms of gold values).

Even a bond portfolio manager at PIMCO recently called for a sudden $5,000 oz USD gold price revaluation by the Federal Reserve to induce currency inflation to help ease debt and unfunded liability burdens.

2000s Gold Silver bubble potential chart SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion


We expect a 2020s mania phase likely peaking silver prices and bullion item values in terms of their real world goods and service buying powers.

Bullion’s current cyclical price downside appears to be rather limited at today’s paltry price points (i.e. low bullion values compared to today’s ‘everything bubble’ historic valuations).

This current JP Morgan silver stash saga is just one of the most intriguing bullish silver setups ongoing. But there’s trillions of other reasons to be long physical silver and other precious metal bullion products currently.

Total global debt levels have now risen +56% above their 2007 starting points (IIF & BIS data). Expect a future combination of write off bankruptcies and currency debasement to service them.

The former head of BIS research is again ringing alarm bells calling for governments to step in to resolve the next financial crisis. Most will not hear or simply ignore him akin to his last warnings ahead of the 2008 Financial Crisis.

Which among these precious metal or other currency derivatives will endure throughout and beyond our lifetimes?


BIS Money Flower Wonder Which Will Last... SD Bullion SDBullion.com Do like JP Morgan doing Buy Silver Bullion

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According to the Bank for International Settlements (BIS) and any monetary historian who knows the facts. All c̶u̶r̶r̶e̶n̶c̶y̶ p̶r̶o̶x̶i̶e̶s̶  fade away in time.

Only precious metals endure and right now (late winter 2018) they are relatively cheap vs other asset classes.

Hmmm, what to do with all this information?


Perhaps if we wait too long, it will be too late to act when answers unfold as to what JP Morgan is actively doing with record silver bullion horading.

Maybe now is the time to acquire your silver bullion and other physical precious metals for the long term. Thanks for visiting us at SD Bullion.

Stay tuned for future updates on JP Morgan's current record silver bullion position on the COMEX, and perhaps elsewhere as time unfolds.

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