Silver nugget. Photo: Jurii (CC)

“The conspiracy and scheme was enormously successful, netting the defendants substantial illegal profits” in the billions of dollars  … JPMorgan and HSBC together “controlled over 85 percent the commercial net short positions” … William D. Cohan writes in the New York Times:

As Americans know all too well by this point, commodity prices — for corn, wheat, soybeans, crude oil, gold and even farmland — have been going through the roof for what seems like forever. There are many causes, primarily supply and demand pressures driven by fears about the unrest in the Middle East, the rise of consumerism in China and India, and the Fed’s $600 billion campaign to increase the money supply.

Nonetheless, how to explain the price of silver? In the past six months, the value of the precious metal has increased nearly 80 percent, to more than $34 an ounce from around $19 an ounce. In the last month alone, its price has increased nearly 23 percent. This kind of price action in the silver market is reminiscent of the fortune-busting, roller-coaster ride enjoyed by the Hunt Brothers, Nelson Bunker and William Herbert, back in 1970s and early 1980s when they tried unsuccessfully to corner the market. When the Hunts started buying silver in 1973, the price of the metal was $1.95 an ounce. By early 1980, the brothers had driven the price up to $54 an ounce before the Federal Reserve intervened, changed the rules on speculative silver investments and the price plunged. The brothers later declared bankruptcy.

The Hunts may be gone from the market, but there are still plenty of people suspicious about the trading in silver, and now they have the Web to explore and to expand their conspiracy narratives. This time around — according to bloggers and commenters on sites with names like Silverseek, 321Gold and Seeking Alpha — silver shot up in price after a whistleblower exposed an alleged conspiracy to keep the price artificially low despite the inflationary pressure of the Fed’s cheap money policy. (Some even suspect that the Fed itself was behind the effort to keep silver prices low, as a way to keep the dollar’s value artificially high.) Trying to unravel the mysterious rise in silver’s price is a conspiracy theorist’s dream, replete with powerful bankers, informants, suspicious car accidents and a now a squeeze on short sellers. Most intriguingly, however, much of the speculation seems highly plausible.

For more information, see original article.

Hurry and respond before the April 4 deadline! The U.S. Mint wants the public’s thoughts and suggestions regarding what metals to use for producing the currency of the future. Personally, I’m pulling for tungsten, or anything that glows in the dark, really.

The United States Mint today announced that it is requesting public comment from all interested persons on factors to be considered in conducting research for alternative metallic coinage materials for the production of all circulating coins.

These factors include, but are not limited to, the effect of new metallic coinage materials on the current suppliers of coinage materials; the acceptability of new metallic coinage materials, including physical, chemical, metallurgical and technical characteristics; metallic material, fabrication, minting, and distribution costs; metallic material availability and sources of raw metals; coinability; durability; sorting, handling, packaging and vending machines; appearance; risks to the environment and public safety; resistance to counterfeiting; commercial and public acceptance; and any other factors considered to be appropriate and in the public interest.

The recently enacted Coin Modernization, Oversight, and Continuity Act of 2010 (Public Law 111-302) gives the United States Mint research and development authority to conduct studies for alternative metallic coinage materials.

• The trouble with being a contrarian is that you can never be quite contrarian enough. We began having doubts about the ‘feds inflate…gold soars’ hypothesis last year. It was too easy…too obvious. And if it were that easy to inflate a nation’s currency, how come the Japanese couldn’t get the hang of it in the ’90s?
• Inflation, yes…but not for a while. And gold? Well, we are in it for the long run. In the short run, anything could happen.
• To clarify our view on gold, The Daily Reckoning is not bearish on the metal. It is not bullish on the metal either. It is buggish. We are gold bugs. In the long run, gold will retain its value. Since that’s all we ask of it, we are always satisfied. Even if it is down in the short run – and it went through an 18-year down cycle from 1980 to 1998 – it will come back in the long run.
• A wave of risk aversion swept through global markets, triggering massive technical selling in the precious metals.
• Bullion tumbled more than 4 percent in heavy trade, briefly falling below $1,060 an ounce as escalating sovereign debt fears in Europe prompted investors to bid up the dollar and unload riskier assets.

The “experts” are having trouble explaining the movements in the precious metals markets because they just can’t comprehend a debt-based monetary system.

The process that the Federal Reserve, or any bank, uses to create money “consists of making an entry in a book, that is all,” says Graham Towers, governor of the Bank of Canada. “Each and every time a bank makes a loan (a debt) . . . new bank credit is created—brand new money.”

There is just no limit to the amount of monopoly those scoundrels behind the Federal Reserve can create out of “thin air” that they use to manipulate the dollar on the foreign exchange market and the precious metals at the Comex.

You are free to blame them for keeping investors from being wealthy while everyone else is out of work, out of hope and living in tent cities, but be sure and thank them for postponing the greatest calamity the world has ever seen.

When The Powers That Be can no longer keep the precious metals from taking off and the dollar from landing at zero, look out, Mad Max and the breakdown of society is around the corner: This is an Ominous Neutral Sign.

Previous article at disinfo: Ominous Signs Are Aligned: Not A Particularly Good Sign

Coming soon: An Oily Obaminous Sign

The end of our consumer society is on the horizon, which should be no surprise to anyone who took Economics 101. Do we really expect to spend our way out of this mess by buying and selling each other useless cheap stuff from China?

As the financial collapse gathers steam, gold and silver oracles like Butler, Friedman, Morgan and Turk who have been predicting for years the launch of the price of silver to the moon will see their prophecy fulfilled, but a celebration is not in order.

Being wealthy during the last 60 years of unprecedented prosperity at the expense of the Third World and the environment is one thing, but profiting from a bull market in silver when millions of hungry Americans are living in tent-cities next door is quite another.

A default at the Comex that will ignite the explosion in the price of silver and gold is in progress. Investors turned away from the bullion and coin dealers who refuse to sell silver at the $9 paper price opened commodity futures brokerage accounts.  They hope to take delivery of the real thing–silver bars with serial numbers–at the manipulated price of $9 an ounce before the Comex has to shut down and admit they never had enough real silver.

Silver delivery at $9 per ounce is courtesy of The Shorts, the largest concentrated short position by four or less dealers in financial history.

Ted Butler, a brilliant researcher, has been writing about the concentrated short position in silver for years and initially thought the default at Comex would come when the dealers ran out of liquidity, but his research suggested otherwise: “Even when holding extremely large short positions and incurring massive unrealized paper losses, measuring in the many hundreds of millions of dollars, the dealers have never collectively turned tail and bought back their short positions to the upside.”

Shorts to Comex and the regulators: The dramatic price decline in August from $21 to $9 is our parting gift to you for looking the other way during our obvious manipulation of prices in the War on Precious Metals. We had to prevent gold and silver from gaining legitimacy as stores of value or consumerism would not have become hyper-consumerism. Mopping up our mess will be easier at $9 instead of $21.

The Comex maintains a guarantee fund and insurance policy to meet a clearing member default, but it has only about $250 million, which is insufficient to cover the losses, but imagine a default at $50 or more per ounce.

Why has the price of silver historically been suppressed, stuck for years in the $4 to $5 trading range?

The downward price manipulation of silver caused by the excessive and uneconomic short position on the Comex has been the subject of most of Butler’s research. His explanation for market fluctuations are often greed-and-profit but he just as often contradicts himself and writes:  “It is my contention that this uniquely large and concentrated short position in silver explains why the price is still cheap. Therefore, in spite of the open losses the shorts are experiencing and the great profits accruing to silver investors, the price manipulation is still in place.” James R. Cook, president of Investment Rarities, credits Ted Butler for the vast majority of investment silver purchased in the past seven years, but when Cook asks the obvious question, “Isn’t the manipulated downward price consistent with a strategy to encourage the purchase of silver?”, Ted is unable to provide a greed-and-profit motive and repeats what has become his mantra,  “My main motive has been and still remains doing what I can to end this manipulative crime in progress.”

It is manipulative and it is a crime, but Ted Butler is unable to consistently support a profit motive because there isn’t one. The Puppet Masters manipulate the paper price of the precious metals downward to prevent gold and silver from gaining legitimacy as stores of value instead of the fiat currencies we call money.

Behind every consumer society is the reality of a credit-based monetary system and a fiat currency.  There is not enough gold and silver in the world to back the trillions of dollars required for the industrial revolution and the global consumer economy. Behind every fiat currency is a Federal Reserve or a Central Bank controlled by the same men: Rothschild, Rockefeller, Kuhn, Loeb, and Ted Butler’s prime suspect in the “ongoing intentional not accidental” great crime of keeping the price of silver low so investors can “buy a lot more metal”: JP Morgan Chase. “The paper margin calls and technical selling in silver was intentionally planned and forced on us by those who held big short positions.”

One of the more absurd notions that found its way into the history books and the writings of economic experts is that somehow these men were made wealthier from the Monopoly money they printed, the same money that enabled consumers to buy houses, cars, furniture and electronics, i.e. the cheap “stuff” we use on a daily basis. Recall that in 1910 these men already controlled one-sixth of the entire world’s wealth, and it was real wealth: gold, silver and raw materials in a world before we had a “throw away” mentality and the planet’s ecological structures were still in balance.

The Federal Reserve puppet masters orchestrated the Industrial Revolution, the Great Depression, the stagflation of the 1970’s and the dot-com and the housing market bubbles, all of which resulted in unprecedented prosperity.

Consumers can thank the puppet masters for all that “stuff” they have because as Ron (sound money) Paul puts it,  “Our current system gives us a free ride, our paper (fiat) buys cheap goods from overseas, and foreigners risk all by financing our extravagance.”

Thank them also for the unprecedented environmental damage and pollution caused by our hyper-consumer society.

We have consumed the resources of our planet; and it’s time for a change to a sustainable, non-consumer society. When people still had jobs and weren’t scared to go shopping, I recommended The Story of Stuff but, thanks to the financial meltdown, consumerism is on the way out, so now the video to watch is the sequel:  The Power of Community – How Cuba Survived Peak Oil.

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Robert Singer is an Entrepreneur and the author of a forthcoming book on the Federal Reserve. His articles cover politics and the financial and environmental implications of our consumer society.  The articles have been main headlined and can be found on numerous popular websites: Marketoracle, Silverseek, Goldseek, disinformation.com, Daylife, LAprogressive, Canadafreepress, Opednews, Daily.pk and many of the Wordpress sites. Richard Daughty, The Mogambo Guru, proclaimed him a Junior Mogambo Ranger (JMR).