MYSTERIOUS SILVER

“$80 an ounce in the 80’s”.  In his annual speech to a standing-room only audience at the Northwest Mining Association in Spokane, Washington in early December 1979, Paul Sarnoff, the leading silver guru of his era, predicted that silver would rise to $80 in the 1980s.  Silver was $21 at the time, having risen from $6 in January 1979.  Silver peaked at $50 on January 20, 1980, largely on speculative buying by the Hunt Brothers of Dallas, Texas and other silver bulls throughout the world.  On January 21, 1980 the N.Y. Commodity Exchange (COMEX) board of directors changed trading in silver futures contracts to “liquidation only”, to disallow new buying but allow the shorts to buy out their contracts.  At the time, four COMEX board members had major short positions in silver futures (page 86, Silver Bulls by Paul Sarnoff, 1980).  The price plummeted, reaching a low of $10.80 on March 27, 1980.  The Hunts’ large paper profits were turned into large real losses.

“$90 an ounce in the 90’s”,  In a speech on November 28, 1989, thesame Paul Sarnoff predicted that silver, which averaged only $5.50 in 1989, would reach $90during the decade of the 1990s.  His analysisincluded a very large increaseof silver usage in photography in both China and Russia.

Kelly Patricia O’Meara, a well-known investigative journalist, in her March 30, 2004 article, stated that “a growing number of investors believe the silver market has been manipulated to hold down the price of silver…..and that regulators have allowed short traders to commit fraud…”  She also quoted independent silver consultant Ted Butler  (ButlerResearch.com) as questioning why the silver price did not rise even though consumption exceeded production for the last 15 years.  Stated Butler, “If the price of silver appears to be immune to the law of supply and demand, there is something wrong”.

“Four Largest Traders Net Short 260 Million Ounces”  In his weekly
commentary of November 27, 2007, analyst Theodore Butler detailed the
case for exposing concentrated excessive short selling used to manipulate COMEX silver prices over a long period of time. Butler persistently presented his case to the Commodity Futures Trading Commission (CFTC) for many years but to no avail.

“JP Morgan, HSBC Accused of Manipulating Silver Futures.”  As reported by Bloomberg News on October 27, 2010, an investor’s lawsuit filed in Manhattan accuses these firms of violating U.S. antitrust laws.  Spokespersons for the accused firms declined comment.

“CFTC Investigation a Boon for Silver.”  A Mineweb/InfoMine report of October 28, 2010, stated that a CFTC commissioner said “There have been fraudulent efforts to deviously control silver prices.”  A CFTC investigation of allegations of price manipulation in the silver futures market began in September 2008.

Silver Fundamentals  Silver is the planet’s best conductor of electricity and heat as well as being malleable, ductile and beautiful and having great anti-bacterial properties. Many bullish factors are converging to support the price of silver. The industrial use of silver has risen sharply in recent years. China recently legalized the ownership of silver and now encourages its citizens to buy silver bars. Worldwide investment in silver bullion coins (especially U.S. silver eagles) has increased significantly in 2009 and 2010. Silver also has become the safe haven of the middle class.

The above information is provided as an educational service by Silver Jewelry by JC and Medallion Consultants, Inc. (MCI).  MCI provides minting services and sells some commemorative silver medallions, such as the Lewis & Clark in Idaho series. Email:  jcolgan@bresnan.net. Rick Colgan, Pres., MCI