A Critical Point?
By: Theodore Butler | 14 May, 2008
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| Here are a few brief observations on the current market structure, as depicted in the most recent Commitment of Traders Report (COT), for positions held as of the close of business May 6. On the surface, there were no big surprises, with slight reductions being recorded in the total net commercial short positions in both COMEX silver and gold futures. Full Story |
Another Sick New Record
By: Theodore Butler | 5 May, 2008
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| The engineered sell-off of gold and silver by the big commercial shorts continued over the past week. However, there were decidedly mixed results in the dealers’ attempt to force speculative long liquidation in each market, even though gold declined almost $50 and silver $1.20 in the latest reporting week (ended Tuesday). Full Story |
An Interesting Week
By: Theodore Butler | 29 April, 2008
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| Over the past week, important news continued to develop in silver. Let me try to touch on some of it, before getting into today’s topic. There was the sharp sell-off in price, which occurred after the cut-off for the weekly Commitment of Traders Report (COT). It’s always difficult to pinpoint precise lows, in terms of price and time, but I am still of the mind that the sub $17 price level in silver represents great long-term value. Full Story |
Then and Now
By: Theodore Butler | 22 April, 2008
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| Recently, the price of silver has been at levels not witnessed since 1980, some 28 years ago. That’s a pretty good chunk of time. For instance, 28 years ago, half the world’s 6.5 billion population had yet to be born. On a personal basis, it was almost half a lifetime ago for me. How old were you and what were you doing in 1980? Full Story |
Super Concentration
By: Theodore Butler | 15 April, 2008
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| In spite of the recent reduction in the number of contracts held short in the commercial category, the true concentrated short position held by the largest traders in COMEX silver and gold, in percentage terms, has reached a dramatic new level. Full Story |
Believing Your Own Eyes
By: Theodore Butler and Israel Friedman | 8 April, 2008
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| From the beginning, I have steadfastly maintained that a silver commitment should be made for the long term, after one has done sufficient investigation into the facts surrounding the commodity. Now, more than ever, I believe that to be the correct approach. Full Story |
Real Regulatory Reform
By: Theodore Butler and Carl Loeb | 1 April, 2008
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| Record demand, no increase in supply and sharp price sell-offs? Your head should be spinning. That cannot occur in a free market. It can only occur in a rigged or manipulated market. That this is clearly a case of the COMEX futures markets dictating and setting the price to the cash market is as blatant a violation of basic commodity law as is possible. Full Story |
All In
By: Theodore Butler and Israel Friedman | 24 March, 2008
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| What does a shortage in silver mean? In a word, everything. If the initial clues of a silver shortage get transformed to the industrial silver users and large investors, in terms of increased physical demand for 1000-ounce bars, the industry standard, then say good-bye (and good-riddance) to the silver manipulation. Full Story |
Life After Bear Stearns
By: Theodore Butler | 18 March, 2008
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| As most longtime readers know, my prime objective has been to end the silver price manipulation. It still is. Secondarily, I have consistently advocated the ownership of physical silver on a long-term basis by individual investors, AKA, "the little guys." Today, I’d like to direct this silver message to large investors, both extremely wealthy individuals and institutional investors, since these were primarily the types of investors that Bear Sterns serviced and advised. Full Story |
Still a Great Trade
By: Theodore Butler & James R. Cook | 11 March, 2008
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| The price moves in silver have been dramatic. Volatility looks to be increasing. It is something we must adjust to. After all, prices are 4 to 5 times greater than the lows of several years ago. Volatility should be greater. I’m convinced that one day we will look back to the current volatility as being contained. Everything is relative. Full Story |
Up Against The Wall
By: Theodore Butler | 4 March, 2008
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| Is this the time for an epic short panic in silver? Perhaps, especially as more people recognize the problem. The combination of severe recent financial stress on the shorts, the fundamentals and index fund buying, combined with the impossibility of buying back the out-sized short position easily makes it a difficult situation for the shorts. A wounded animal is always dangerous, depending on how serious the wounds. They are up against a wall and, if not resolved soon, it is likely to fall on them. Full Story |
The Real Deal
By: Theodore Butler | 26 February, 2008
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| This is a very unique situation, that so much silver has been pre-sold by those who don’t have it, from the big COMEX shorts to all those entities that have issued unbacked certificates and pool accounts. Yes, there is a very large combined short position in gold, but nowhere near the levels in silver, where more silver is pre-sold than real metal that exists in the world. This will invariably drive prices to unbelievable heights. Full Story |
Deep Into The Danger Zone
By: Theodore Butler & Israel Friedman | 19 February, 2008
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| The extreme market structure in COMEX silver (and gold) continues to get more extreme. In other words, the concentrated net short position held by the largest four and eight traders in COMEX silver continues to grow. Full Story |
Back to Basics
By: Theodore Butler | 12 February, 2008
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| Frankly, I think the case for silver is more compelling today than it was five years ago. When we compare today’s circumstances with the current price, silver looks better today. Of course, a 50-cent sell-off then is the equivalent of a $1.50 sell-off now. But a tripling in price then brought us to $13 to $15, now triple brings us to $40 or $45. Full Story |
The Real Lesson Of SocGen
By: Theodore Butler | 5 February, 2008
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| I know it sounds too simple, but the problem in the SocGen episode was that too large of a position was held by a single trader. But it wasn't the large size of the position alone that was the problem, it was the fact that it was held by a single trader on a very leveraged basis. Full Story |
Interview With Theodore Butler
By: James Cook & Theodore Butler | 29 January, 2008
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| Theodore Butler is universally recognized as the world’s leading authority on silver. The following interview took place in late January between Mr. Butler and IRI president, James Cook. This interview reflects the bullish views of Mr. Butler on the future of silver. Full Story |
The Coming Investment Boom in Silver
By: Theodore Butler | 22 January, 2008
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| I believe we are in the very early stages of a long-term price boom in silver that will be caused by investment demand. The combination of an extremely small and tightly-held existing investment inventory, combined with a large potential investor base, funded with the largest buying power in history, hungry for the next hot investment, and still unaware of the true silver story is the stuff that makes investment dreams. Full Story |
Danger Zone
By: Theodore Butler | 15 January, 2008
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| In simple and absolute terms, the gold and silver markets are in the most dangerous position since I’ve followed them, or more than 35 years. I have definitely not turned bearish on silver, nor am I expecting lower prices in the long term. Although I expect near term volatility to increase, I’m more bullish on silver than before, if that’s possible. Then, what’s the danger? Full Story |
Doin’ The Right Thing
By: Theodore Butler | 7 January, 2008
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| Considering their history and bag of dirty tricks, I don’t feel comfortable in pronouncing the dealers dead until they have a wooden stake through their hearts. Long-term silver positions should be held, but with the recognition we are in high-risk territory. Full Story |
The Best Stock in the World
By: Ted Butler | 1 January, 2008
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| Over the years, I have tried to make the case for investing in silver, by comparing it to other commodities, gold and even raw land. I believe those comparisons (all of which favor silver) are as valid as ever. Today, I will try to convince you about the merits of silver by comparing it with common stocks. I will attempt to demonstrate why silver will be a better long-term investment than virtually all common stocks. Full Story |
More CFTC Speculation
By: Theodore Butler | 18 December, 2007
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| The simple fact is that the days of the concentrated silver short position are numbered. All that remains to be seen is whether the end comes with or without regulatory involvement. As has been the case since I have written about silver, the best way for an investor to capitalize on this phenomenal story is by buying and holding real silver. Full Story |
The Cop On The Beat – Part III
By: Theodore Butler | 10 December, 2007
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| Commissioner Chilton, this is truly a grave situation. This is not about the sharply higher silver prices to come, as nothing can prevent that. This is about doing the right thing for our country. The time to take action is now, as an ounce of prevention is worth more than a ton of emergency cures later. Full Story |
A Beautiful Idea
By: Theodore Butler and Israel Friedman | 4 December, 2007
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| Today, I am publishing two articles by my good friend and mentor, Israel Friedman, Long-time readers are probably aware that I consider Izzy the most intelligent man I know. For newer readers unaware of his background, Izzy immigrated to this country some thirty-odd years ago, became a citizen and raised a family here. I’ve been blessed by his friendship for most of that time. Full Story |
Sheer Speculation?
By: Theodore Butler | 27 November, 2007
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| The facts, as contained in the COT, are clear; 4 or less large traders are net short (when the uneconomic spread transactions are subtracted) more than 50% of the entire COMEX silver futures market, and more than 40% of the gold market. With such an extreme level of concentration, it is not possible that these large traders are not manipulating silver and gold prices. Ask yourself this – what would the price of silver and gold be if this concentrated short selling did not exist? If your answer is, as it must be, (much) higher, you must conclude that these are manipulated markets. It’s as simple as that. Full Story |
The Cop On The Beat – Part II
By: Theodore Butler | 20 November, 2007
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| If a concentrated net position of more than 50% of the total market, held by a few traders, is not manipulative, then what percentage would be considered manipulative? Contentions that these few large traders may be hedging does not excuse manipulation. Full Story |
The Cop On The Beat
By: Theodore Butler | 13 November, 2007
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| Since August, the COMEX gold futures market has also developed the characteristics of a manipulation in progress, due to an unusual concentration on the short side, where the 4 and 8 largest traders have amassed a concentrated short position larger than at any point in history. As I am sure you know, concentration and manipulation go hand in hand. Full Story |
Interview With Theodore Butler
By: James Cook & Theodore Butler | 6 November, 2007
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| What we have in silver is a material problem, not a money problem. Most problems we have in the world currently are money problems. The credit crisis, the housing situation, the dollar, even the gold short position are money problems. At some price and for some amount of money, these problems can be solved. Not so in silver. Full Story |
A Simple And Constructive Solution
By: Theodore Butler | 30 October, 2007
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| In the waning days of the Cold War, the late President Ronald Reagan, in arms negotiations with the Soviets, often repeated the phrase, "Trust, but verify." Rather than insult someone by suggesting that you don’t believe him, it was a nice way of saying, we believe you, but we’d like to confirm what you say. Full Story |
Money for Nothing
By: Theodore Butler | 23 October, 2007
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| I am sure that eventually we will read about the great losses some institutions have suffered from very high silver prices because they sold silver to clients that they never actually purchased. People will scratch their heads and ask how those firms could do something so foolish, just like many today question how big firms could offer mortgages to borrowers of poor quality. Full Story |
Rope-A-Dope?
By: Theodore Butler | 16 October, 2007
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| By now, even casual observers of the Commitment of Traders Report (COT) are aware that we are at record extremes in the COMEX gold futures market, with new records occurring almost daily. The net long position of the large non-commercials and the net short position of the dealers appear to have reached epic proportions. Full Story |
A Picture Worth A Thousand Words
By: Theodore Butler | 9 October, 2007
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| I know of no legitimate economic reason why silver would have such a large concentrated short position, when compared to every other physical commodity. I conclude that the abberation in silver (and, to a lesser extent, gold) can only be explained by manipulation. This is the point that the CFTC and the NYMEX continue to evade. Full Story |
Looking Back, To See Ahead
By: Theodore Butler | 3 October, 2007
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| Leaving aside concerns about manipulation for now, the buying and selling in COMEX gold and silver contracts had nothing to do with the long-term merits of each. As such, it would be a mistake to read into the resultant price moves in gold and silver as being related to any legitimate fundamentals. The $100 gold price rally was all about big traders trying to make a quick buck on a purely technical move. How it turns out will be clear in time, but don’t delude yourself that it was anything but the COTs behind this move. Full Story |
Still Extreme
By: Theodore Butler | 25 September, 2007
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| The unprecedented disparity between the respective market structures in COMEX gold and silver continues. The most recent Commitment of Traders Report (COT), for positions held as of Sept. 18, indicated continued severe deterioration in gold, and relatively minor deterioration in silver. Full Story |
Different Patterns
By: Theodore Butler | 18 September, 2007
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| Manipulation has created what I believe is the investment opportunity of a lifetime. If it were not for the fact that the price of silver has been manipulated, given the powerful supply/demand fundamentals, there is no way that it could, or would, be priced as cheaply as it is today, Simply put, the manipulation has caused the price of silver to be so low that it has created a rare gift. Full Story |
Stir It Up
By: Ted Butler | 11 September, 2007
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| A few comments before I print a discussion I had with my friend Israel Friedman some weeks back. Once again, the bullish COT set up was accurate in predicting the impressive recent $70 gold rally. Less impressive has been the rally in silver, which appears to being dragged upward by gold. If one were to analyze strictly on short-term price behavior, the price action in silver could not be considered constructive. Then again, short-term price behavior is not the way to properly analyze a market. Full Story |
Actions Speak Louder Than Words
By: Theodore Butler | 4 September, 2007
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| In a surprisingly bullish development, the latest Commitment of Traders Report (COT) recorded a shocking further improvement in COMEX silver futures. For the week ending August 28, the dealers bought heavily again, as large speculators sold aggressively. There was some deterioration in gold, but we are still in COT territory highly suggestive of a significant potential advance. A number of other markets, including the Euro, are similarly aligned bullishly in COT terms. Full Story |
The Royal Scam
By: Theodore Butler | 28 August, 2007
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| The most recent Commitment of Traders Report (COT) confirmed the epic clean out of speculators in silver and gold, and a host of other commodities in the dramatic sell-off centered on Thursday, August 16. The COT, for positions held as of August 21, indicated dramatic speculative selling and commercial buying in gold and silver, resulting in unusually bullish set-ups in each. Full Story |
Fighting Back
By: Theodore Butler | 21 August, 2007
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| Make no mistake, the intent of the recent silver sell-off, was to liquidate as many leveraged traders as possible. It not only applied to silver, but many other commodities and currencies. A quick review of the Commitment of Traders (COT) market structure in the markets involved shows that whatever side the large non-commercial speculators (hedge funds and other traders) were most heavily weighted, the markets moved sharply the other way. Thus, the price moves in a great number of seemingly unrelated markets, from metals to soybeans to oil, moved against the large speculators. It was a perfectly executed campaign against the speculators. Full Story |
Amid The Turmoil, A Great Set Up
By: Theodore Butler | 14 August, 2007
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| It’s no secret we have been experiencing highly unusual financial market developments. I can’t recall a time when the financial news flow has been this intense, or price movement so hectic. Conflicting opinions are the order of the day. Housing and mortgage obligation woes, hedge fund blow-ups, credit crunches and central bank rescues, inflation or deflation, boom or bust, correction or crash. Full Story |
An Ugly New Record
By: Theodore Butler | 31 July, 2007
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| The possibility of a sell off in gold and silver caused by the deterioration in the market structure, as indicated in last week’s article, was quickly realized. In a three-day period, gold sold off $30 and silver declined almost 90 cents from the recent price peaks. As usual, the explanation for the sell off was found in the Commitment of Traders Report (COT). Full Story |
Still The Same
By: Theodore Butler | 24 July, 2007
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| The recent sharp rallies in the price of gold and silver have confirmed, once again, the importance of the market structure approach to determining price moves, as defined by the Commitment of Traders Report (COT). Recent extreme readings in the COTs did, in fact, pinpoint low-risk/high reward set ups in both gold and silver, culminating in the near $50 climb in gold and $1.25 increase in silver from the lows of a few weeks ago. Full Story |
The Principle of Substitution
By: Theodore Butler | 17 July, 2007
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| We are all familiar with the concept of substitution. This principle holds that, given no dramatic fall-off in quality, it is rational to replace one item with another based upon a cost advantage. In other words, we all try to get the best bang for our buck. We substitute as retail consumers, constantly seeking out the best product or service. Whether shopping for big or small ticket items, we seek the best over-all value. Full Story |
As Good As It Gets?
By: Theodore Butler | 10 July, 2007
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| The most recent Commitment of Traders Report (COT), for positions held as of July 3, contained some surprisingly bullish data for silver. The report indicated another sharp reduction in the total net commercial short position, by almost 6000 contracts, to the smallest net short position (42,000 futures contracts) in nine months. While the total net short commercial position in gold widened a bit, we are still at a very low level of commercial net shorts in gold, indicating that both silver and gold are structured to move higher. Perhaps sharply higher. Full Story |
The Raptors Rumble
By: Theodore Butler | 3 July, 2007
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| The remarkable saga of the raptors continues. I’m referring to the commercial traders on the COMEX, aside from the four and eight largest traders in the Commitment of Traders Report (COT). To summarize, over the past year or so, a pattern has developed where the smaller commercial traders in the large commercial category seem to be aggressively stepping in front of the dominant shorts in silver (and gold). Full Story |
Blood From A Stone
By: Theodore Butler | 26 June, 2007
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| My prime focus is to analyze on a fundamental supply/demand basis for the long term, supplemented by studying the market structure, as defined by the Commitment of Traders Report (COT), for shorter-term price movements. The long term is simple – silver has never looked better as a long-term investment based upon real supply and demand. Increasingly, the $13 price level in silver is looking like the $5 level used to look. Full Story |
The Raptors Rule
By: Theodore Butler | 19 June, 2007
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| Less than one month ago, I started writing about the Raptors, which I defined as those smaller silver (and gold) traders in the large reporting commercial category of the Commitments of Traders Report (COT), other than the 8 largest traders. I advanced a theory that suggested these smaller commercial traders were now calling the shots in the COMEX gold and silver markets and were, quite literally, eating the big traders’ lunch. Subsequent COT reports have confirmed this theory. Full Story |
Jim Cook Interviews Theodore Butler
By: James R. Cook & Theodore Butler | 12 June, 2007
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| After 60 years of deficit consumption, the amount of silver available per capita is the lowest in history. At precisely the same time the amount of investment buying power is the highest in history. Throw in the manipulation, the short position, the unrelenting demand from China and India, and the obstacles to increased mining production and I need to lie down and be calm to tone down my long-term bullish feelings. Full Story |
It’s Alright, Ma (I’m Only Bleeding)
By: Theodore Butler | 5 June, 2007
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| Additional confirmation continues to roll in concerning the changing nature of the price-setting struggle between the dealers and the tech funds in COMEX gold and silver. Recently, I have taken to using analogies to the dinosaur world, writing about T. rex’s, raptors and their food supply, the plant-eating tech funds. I had attributed the declining asset base of the tech funds, due to losses and investor redemptions, as at the heart of the changes. Further, it was my hope that these changes might mark the end of the era of the silver price manipulation. Full Story |
Raptor Update
By: Theodore Butler | 29 May, 2007
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| In last week’s article, The Raptors, I described how that term applied to the smaller commercials that seemed to be outmaneuvering the largest commercial traders which I dubbed the T. Rexs. I speculated that the T. Rex commercials looked increasingly trapped in their massive concentrated net short position, and how this might portend profoundly bullish implications for the silver market. My reasoning centered on this increased dealer competition as an indicator that the long-term manipulation in silver might be on its last legs. Full Story |
The Raptors
By: Theodore Butler | 22 May, 2007
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| I’d like to report on a profound new development in the silver market. It’s a development that has been over a year in the making, but I wanted to be sure I wasn’t jumping the gun in writing about it. Let me give you the conclusion upfront. It’s a new and powerful reason for making a long-term investment in silver. Full Story |
A Clear Parallel
By: Theodore Butler | 8 May, 2007
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| Everyone must look at the facts and decide what’s best for them and for their families’ financial security. Unless you think it was just blind luck that my campaign, ten years ago, about leasing/forward selling turned out the way it did, I would suggest that you get positioned to take advantage of what lies ahead for silver as the huge short position in silver is bought back and covered. I believe it will have a much greater impact on the price of silver than anyone now imagines. Full Story |
An Opportunity Still Available
By: Theodore Butler | 1 May, 2007
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| The important point is that big institutional money is flowing into silver on a disproportionate basis, as the statistics indicate. It is only a matter of time before this buying causes a disproportionate impact on the price of silver. For me, it’s never been a case of gold not being a good investment, but a case of silver being far superior. If you fit the profile of someone who can take advantage of this opportunity, please don’t let it pass by. Don’t wait for the mo-mo guys to buy first. Full Story |
Increasing COMEX Inventories
By: Theodore Butler | 24 April, 2007
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| As happens periodically, the silver inventory levels at the COMEX-approved warehouses have increased recently. As of this writing, the total silver inventory has climbed to 131 million ounces, up about 11 million ounces over the past few weeks. Invariably, this causes confusion among silver investors, who have trouble reconciling how there can be increasing inventories at a time of perceived tightness or deficits. Full Story |
The Day of Reckoning
By: Theodore Butler | 17 April, 2007
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| In keeping with a recent theme of publicly responding to reader e-mails, I’d like to address the topic that garners more questions than any other issue, as well it should. The questions revolve around the manipulation that I allege exists in silver. While I try to write about all aspects of the silver market, with a goal of correctly analyzing silver as an investment, it has long been obvious to me that the price of silver has been artificially depressed below what free market forces would dictate. If my allegation that silver is a manipulated market is correct, then it is the most important factor, by far, as nothing could possibly matter more than if a market is free or not. Full Story |
The Excellence of Silver
By: Theodore Butler | 3 April, 2007
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| I write today about investments in general. But I want to make it clear that I am not intending to offer personal financial advice on how anyone should invest. You can’t offer anyone specific financial advice unless you are familiar with their personal financial situation. That may sound contradictory, since I have been an outspoken advocate for the merits of silver, but I don’t see it as contradictory. I observe the silver market closely, offer my analysis and opinion and back up what I write with factual data. After that, the individual must decide. Full Story |
The Long Term
By: Theodore Butler | 27 March, 2007
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| Short-term volatility should have little bearing on the long-term silver investors, save to allow low-risk buy points. The volatility at $13 or $14, dollar-wise, is more than it was at $4 or $5. The volatility will grow as prices increase further. There’s not much one can do about that, except to mentally prepare and adjust to it. Admittedly, the volatility is easier to adjust to for silver purchased in the $4 and $5 and $6 range, but no one can turn back the clock and I am convinced we will look back from the $20 and $30 levels and consider current prices to be incredibly low. Full Story |
After The Deficit
By: Theodore Butler | 20 March, 2007
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| In simple terms, I am of the opinion that the structural silver deficit of the past 60 years is over, because that which enabled the deficit to last so long, the accumulated inventory of thousands of years has been effectively exhausted. In other words, I am not saying the world is suddenly producing silver in surplus amounts, I am saying we have just about run out of available inventories to sustain a continued long-term deficit. Full Story |
Back To The Future Revisited
By: Theodore Butler | 13 March, 2007
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| Simply put, the run up in real estate prices has resulted in a glut of vacant and other inventory for sale, while the run up in silver prices has created no obvious unwanted inventory. It follows, almost without saying that unwanted inventory creates downward price pressure. No unwanted and excess inventory, no downward price pressure. That is not to say that silver will not, and cannot, go down in price, just that it won’t be from real inventory liquidation. Paper inventory liquidation on the futures market is a separate and temporary issue. Full Story |
Keeping It Simple
By: Theodore Butler | 6 March, 2007
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| I hadn’t planned to write this week, but market developments were dramatic enough to warrant some commentary. Since my recent articles concerned potential high risk/reward and volatility, due to an extreme mismatch in the futures market structure in gold and silver, the subsequent sell-off and volatility were not unexpected. Granted, the $50 gold and $2 silver thumping was extreme, but so too was the tech fund long/dealer short position on the COMEX, as documented in the Commitment of Traders Report (COT). Obviously, we truly were at a critical juncture. Full Story |
A Critical Juncture
By: Theodore Butler | 27 February, 2007
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| This is another fascinating time in the gold and silver markets. It’s not just that we have experienced a rapid short term run up to significant high-water marks, rewarding all long-term investors, but also that price volatility, both up and down, promises to stick around for a spell. The current market structure just about guarantees price volatility dead ahead. That might sound like an analyst talking out of both sides of his mouth, predicting that the price could go up or down, but sometimes the short term picture does get uncertain as to price direction. Full Story |
Time Frames
By: Theodore Butler | 12 February, 2007
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| Investment cycles, like all things in life, run in both short-term and long-term time frames. I’ll define short term as days, weeks and months, and long term as years and decades. For the average investor, the best hope for success lies with a long-approach. Contrary to TV infomercials and other hype, short-term trading won’t and can’t make the masses rich. That’s why I have always counseled a long-term approach to silver and intend to do that again today. Full Story |
Buyer Beware
By: Theodore Butler | 30 January, 2007
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| Lately, I have been thinking once again about investment pool accounts and certificate programs for unallocated silver (and other precious metals). Although I have written about such accounts frequently in the past, I still get questions from readers. So let me be clear. My new thoughts lead me to believe that at some point it must end in disaster for both the buyers and issuers of these programs. I will try to explain why and convince you to the best of my ability to get out of these programs now. Full Story |
First Choice
By: Theodore Butler | 23 January, 2007
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| Silver is an investment opportunity that sounds too good to be true. In fact, the silver story is so good that, when you first hear it, you are inclined not to believe it. How could it be possible that an item that has been right in front of us all along holds potentially spectacular investment promise? How could such a universally known commodity be overlooked for so many years by the investment establishment? These are legitimate questions that deserve an answer. I think the answer has to do with self-interest. Full Story |
Changing of the Guard?
By: Theodore Butler | 16 January, 2007
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| The good news for silver investors is that buying by the index funds of the ETF is better than buying of futures contracts. That the tech funds are fading as the index funds emerge is a beneficial development for silver investors. It will contribute to a price rise. As they say, out with the old, in with the new. Full Story |
The Logic of Silver
By: Israel Friedman & Theodore Butler | 9 January, 2007
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| Too few people are using logic as their first tool for investment decisions. I look for logic first before deciding on an investment. Let’s take the real estate market as an example. When the interest rates started to fall sharply several years ago, due to Federal Reserve actions, logic had to tell you that real estate would be a good investment. Prices exploded. When interest rates started rising, logic would say it was a signal to take profits. Full Story |
Reflections
By: Theodore Butler | 2 January, 2007
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| At this time of year, it is natural to analyze and review. In addition to normal year-end reflections, I find myself especially contemplative as I have just celebrated 30 years of marriage and will soon cross the milestone of having spent 60 years on this earth. Round numbers just seem to make you more reflective. I am most grateful for the gift of life and for sharing it with a woman of unique inner and outer beauty. But, of course, this essay is about silver. Full Story |
Interview With Theodore Butler
By: James Cook & Theodore Butler | 19 December, 2006
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| Theodore (Ted) Butler must certainly be the foremost silver analyst of our time. Not only is he a pioneering thinker on the subject of silver, he is also way ahead of the curve with what’s happening in the silver market. Many of his ideas are original and new. It’s no exaggeration to say that almost everything you see other people write about silver today comes from Ted Butler. Full Story |
The Record Speaks For Itself
By: James Cook & Theodore Butler | 11 December, 2006
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| Without question, silver has been artificially depressed in price due to a blatant and easy to prove manipulation. This manipulation has so distorted the supply and demand fundamentals as to create a lifetime investment opportunity for those who take the time to investigate my claims. Full Story |
What Happens At $100 Silver
By: Theodore Butler | 4 December, 2006
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| I’m going to depart from my normal message today, namely, the long and short-term investment case for silver. Instead, I am going to ask you to put aside the question of whether the price of silver will achieve dramatic new historical heights and focus on something else. I want you to suspend, temporarily, the continual (and very normal) internal and external debate we all have about the future price path of silver and think of only one thing – that silver does achieve that historic price. Then what? Or more precisely, what does that mean to you? Full Story |
Us And Them
By: Theodore Butler | 13 November, 2006
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| For the past month or two, I have written about how the market structure in silver and gold, as depicted by the Commitment of Traders Report (COT) had indicated low risk and decent upside potential. That depiction proved correct, as prices rallied from dead low points to recent highs by around $2.50 in silver and $70 in gold per ounce. Once again, the COTs provided an accurate assessment of the low-risk nature of the recent bottom in silver and gold. Now what do the COTs suggest? Full Story |
About Ted Butler
By: James Cook | 8 November, 2006
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| Mr. Butler claims the price of silver must inevitably go to dramatically higher price levels. He’s talking about five or even ten times current prices. His arguments are powerful and compelling, especially since he’s been right so often. Not only have his predictions been accurate, he’s introduced a bunch of unknown facts about silver, as well as providing shrewd insights into how the markets really work. He’s the guy that everybody reads and listens to. Full Story |
A Red Flag?
By: Theodore Butler | 31 October, 2006
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| The good news is that the price of gold and silver has advanced, as expected, due to the washed-out Commitment of Traders (COT) structure. The bad news is that, so far, the advance appears garden-variety in nature, namely, speculative buying and more dealer short selling. While the overall level of dealer short selling in silver is not excessive, the concentrated net short position of the 4 largest traders has grown to levels not seen in six months. Full Story |
The Real Gold/Silver Ratio Part II
By: Theodore Butler | 24 October, 2006
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| I’d like to continue on a theme I wrote about last week, namely, attempting to uncover the true relative value of silver compared to gold. You see, I am convinced that the most widely used yardstick, dividing the price of gold by the price of silver, may be inadequate and even misleading. I don’t believe that enough information is provided by price alone. It’s kind of like trying to determine the weather by temperature alone – 72 degrees Fahrenheit sounds pleasant, but not if you’re in the grip of a hurricane. Full Story |
Relativity
By: Theodore Butler | 16 October, 2006
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| One of the soundest money principles is relative value. The true value investor is always on the hunt for that which offers the best intrinsic value when measured against comparable choices. This is a common sense exercise for all of us when buying anything, from groceries, to gasoline, to clothing on a daily basis, or big-ticket items like cars or computers or houses. We instinctively seek out the best relative value, the best buy. It’s all about getting the most bang for your buck. Full Story |
Silver for the Optimist, Gold for the Pessimist
By: Israel Friedman & Theodore Butler | 10 October, 2006
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| Many things are written about gold and silver, but at this time I would like to take a practical view. What looks more profitable – investing in gold or silver? I am more a silver bug than a gold bug, and you may think that I am prejudiced. But that aside, I think you will find out why I believe that silver will be a more profitable investment than gold. Full Story |
Why Silver is More Valuable than Gold
By: Theodore Butler | 6 October, 2006
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| With gold selling for around 50 times the price of silver, you may be perplexed to hear me say that silver is more valuable than gold. It seems like an obvious contradiction. What I mean, exactly, is that silver has heavy demand by industry, while gold has limited demand, other than for jewelry. In terms of its necessity to a modern society, silver has the highest value and the greatest utility. An ounce of silver has more value to industries that must have it than does an ounce of gold. An opportunity exists because the current price doesn't reflect this fact. Full Story |
Extreme Liquidation
By: Theodore Butler | 3 October, 2006
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| The current market structure in both gold and silver, according to the Commitment of Traders Report (COT), is excellent. That’s one of the benefits of sharp sell-offs. I am not denying that these sell-offs cause extreme pain and damage to leveraged holders, as that would be to deny reality. Because there has already been a significant liquidation of speculative long positions and corresponding dealer buying to cover shorts, there appears to be little risk of a meaningful sell-off from current levels (just under $11 on silver). Instead, the path of least resistance from here should be to the upside. I know it doesn’t feel like that, but that’s the way markets, even manipulated markets, work. Full Story |
Concentration
By: Theodore Butler | 26 September, 2006
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| The big market news for the week was the sudden and shocking blowup of the large hedge fund, Amaranth Advisors. In little more than a week or two, the fund reportedly lost $6 billion, or 65% of its capital, making it the largest derivatives loser in history, principally as a result of bad natural gas spread trades. (Previous big derivatives losers, like Barrick Gold, must have welcomed being surpassed.) Full Story |
You Make The Call
By: Theodore Butler | 18 September, 2006
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| This article answers the CFTC’s response to the articles and letters sent to them alleging manipulation in the silver market. My allegations were based upon evidence provided by the CFTC itself in its weekly Commitments of Traders Report (COT). It showed a small number of traders were short more silver than existed in world deliverable inventories and represented a concentration greater than had ever existed in any prior manipulation. This extremely large concentrated short position held on the COMEX is the necessary requirement for manipulation. Full Story |
Blatant Manipulation
By: Theodore Butler | 11 September, 2006
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| In a holiday-shortened Labor Day week, the concentrated short sellers attacked gold and silver with a vengeance. Gold broke out earlier in the week, only to collapse in price on Thursday, Friday and today, Monday. Silver lost almost two dollars in three days. Since it is crystal clear to me what transpired, I’d like to explain what I think occurred. Full Story |
Interview With Ted Butler
By: James Cook & Ted Butler | 25 August, 2006
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| Ted Butler sees silver strictly as a money-making opportunity. He predicts silver will rise ten times or more. That's the kind of gain that makes a difference in a person's life. He has assembled an army of facts to support his conclusion. He's developed a powerful intuition from his fifteen-year obsession with silver. No significant authority has ever challenged him head on and overturned any of his facts or major conclusions. There have been quibblers and back biters, but no one has persistently mounted a credible challenge to any of his main premises. Full Story |
First Nickel, Then Silver?
By: Theodore Butler | 21 August, 2006
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| This past week, the investment world witnessed an event that has only occurred rarely in the past. I am referring to the extraordinary developments in the nickel market on the London Metals Exchange (LME), the largest base metals exchange in the world. Due to an unprecedented scarcity of metal, the LME was forced to revise the delivery terms of its nickel contracts. In return for allowing short sellers to delay delivery of metal, a daily penalty fee of around 1% of the contract value was payable by the shorts to long holders. Full Story |
Better Than Ever
By: Theodore Butler | 15 August, 2006
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| Since I don’t like to beat around the bush, let me state that right now I think silver is a better investment than it has ever been. Yes, I know silver was much cheaper a short while ago. At that time I tried my very best to convince as many people as I could to buy it under $5. Many did and are glad they bought it. Full Story |
A Blind Man's World
By: Theodore Butler | 8 August, 2006
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| I can’t remember the first time I heard it, or who might have said it, but it’s a thought I’ve pondered for many years, namely, the question of how would you describe color to someone blind from birth? Or music to someone deaf? Just the notion of it brings about the perspective that we take many basic gifts for granted for which we should be profoundly grateful, and how our hearts go out to those deprived of life’s blessings. Full Story |
Locked And Loaded
By: Theodore Butler | 25 July, 2006
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| The most recent Commitments of Traders Report (COT) indicates no real change in silver, but some pretty notable changes in gold, especially if you extrapolate from the Tuesday cut-off. In gold, it appears the tech funds were lured onto the long side on the big recent rally and whipped out on the more recent decline into Monday, July 24. As such, gold now appears washed out to the downside. Full Story |
Physical Silver Yes, Speculation No
By: Israel Friedman | 18 July, 2006
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| I hope that the sell-off in the metals made you think about the way you perceive gold and silver as investments This wasn’t just a correction, this was a slaughter by the paper short sharks who call themselves commercials. Mr. Butler wrote to the authorities in detail and asked why these so-called commercials can break the law. But up to now, he has not received any answers. I am in the camp that believes you can’t change the paper market to be honest. But that doesn’t mean you can’t do anything about it, because you can. Full Story |
Shorts To CFTC: Drop Dead
By: Theodore Butler | 10 July, 2006
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| Old-timers (yes, I’m one) will know the title of this article is a play on the famous headline, 30 years ago, in the NY Daily News, which angrily described President Ford’s refusal to offer aid to New York City during a financial crisis. ("Ford To City: Drop Dead") It has been said that the headline contributed to Ford being unable to carry New York in the subsequent election won by Jimmy Carter. The author of the headline, William Brink, passed away last year at age 89, but his five words will live on. Full Story |
The Road Ahead
By: Ted Butler | 5 July, 2006
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| I would also point out to Congress as I have to the Chairman of the SEC that a new derivative offered on the AMEX exchange, SLV from Barclay’s Global Investors, creates a linkage between any manipulation on the COMEX and the interests of shareholders protected by the SEC. Simply put, if a manipulation continues on COMEX to depress the price of silver through a concentrated short position, it is harming small investors in SLV whose price is pegged to the price of silver. Full Story |
Still Short
By: Theodore Butler & Carl F. Loeb | 27 June, 2006
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| I hope there is no doubt in anyone’s mind why silver sold off more than 5 dollars in a month. It was not accidental, but rather a deliberate effort by the big COMEX shorts to frighten and shake out as many leveraged longs as possible. These shorts drove the price sharply lower by collusively pulling their bids when they knew liquidity was at its lowest, principally in the overnight markets. Faced with growing daily margin calls, those that held silver contracts on margin sold their contracts by the thousands, either because of fear of further losses or lack of additional funds. It was not a voluntary liquidation. The commercial shorts then covered their short sales by buying back the thousands of contracts being dumped under duress. Full Story |
Dialing 911
By: Theodore Butler & Carl F. Loeb | 20 June, 2006
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| Perhaps one of life’s greatest pleasures and passages occurs when children teach their parents to look at something in a different perspective. I experienced this event, just before Father’s Day no less, when my son Ross shared with me a thought of his. Full Story |
Silver Default Looming?
By: Theodore Butler | 12 June, 2006
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| The just released COT, for positions held as of June 6, 2006, shocked and dismayed me. Not only did it confirm my contention that the largest short traders on the COMEX continued (and actually increased) their dominance over long traders by excessive concentration, the new COT contained data that was so disturbing that it raised the possibility of a looming default in COMEX silver. At a minimum, the new data fully explains the recent sharp sell-offs in silver and strengthens my allegations of a downward price manipulation. Full Story |
Proving The Silver Manipulation Again
By: Ted Butler | 6 June, 2006
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| Over the past ten years, I have argued that silver has been manipulated in price. One of my goals for writing publicly about silver was to terminate this manipulation. While I know that many people can’t understand my obsession with the manipulation, I make no apologies for my convictions. There is nothing more basic or important than keeping a market free of manipulation. This is the cornerstone of our market economy. Full Story |
Facts and Speculation
By: Theodore Butler | 30 May, 2006
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| Usually, I much prefer to write about silver on a long-term basis, as I am convinced that is the only real way the average investor can hope to succeed. Leveraged, short-term trading is not suitable for most investors. Fortunately, the long-term supply/demand fundamentals in silver look as promising today as they were before the price of silver doubled and tripled. Furthermore, as an analyst, it is generally safer and easier to stick to the long view. Full Story |
Jim Cook Interviews Ted Butler
By: Jim Cook & Ted Butler | 24 May, 2006
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| The institutions will continue to invest in the silver ETF, causing silver to be bought and taken off the market. The sponsors of the ETF are either going to run out of silver at current prices, or they are going to sell out the entire 130 million ounces relatively quickly. If they run out of silver at current prices, the price must go up to bring out the required silver. If they sell out the entire 130 million ounces, that will prove there is great demand for silver and the next step must include plans for another silver ETF. We have multiple gold ETFs, so there may more silver ETFs. Full Story |
The Final Wash Out?
By: Theodore Butler | 17 May, 2006
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| I want to emphasize that this silver/gold liquidation is very blatant and very bullish for silver, when it is completed. You don’t have to be Albert Einstein to see what the dealers are doing, or know their real motive. For long term investors of all types, retail and institutional alike, I would like to reaffirm my suggestion that gold only investors take advantage of the dealers’ actions and the aberration in the silver/gold spread to establish long term silver positions, using gold as a source of funds. This applies particularly to those institutional investors with gold ETF positions and no silver ETF positions. Full Story |
Buffett Loses His Silver
By: Theodore Butler | 9 May, 2006
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| The recent revelation that the renowned investor Warren Buffett sold his silver was a mega-event. It was big news when Mr. Buffett bought silver some 8 or 9 years ago, and its sale is also big news. Let me state the facts as I know them, and then I’ll speculate. Full Story |
A Long Time Coming
By: Theodore Butler | 25 April, 2006
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| It has been almost eight months since I’ve been able to write about a dealer short-covering clean out in silver. It seemed like it took forever. No matter how long it has taken, the good news to the blasting to the downside we have just witnessed is that the dealers (including Mr. Big) have used the sell-off as an opportunity to buy back a large number of their shorts. Actually, it’s a little more involved than that; the dealers created the sell-off by collusively pulling their bids on the decline. Full Story |
A Cornered Rat?
By: Theodore Butler | 18 April, 2006
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| The only thing that separates these new financially strong and sophist |