Ted Butler: The smoking gun

Submitted by cpowell on 10:46AM ET Friday, August 22, 2008. Section: Daily Dispatches

2:45p ET Friday, August 22, 2008

Dear Friend of GATA and Gold:

Just as James Turk of GoldMoney and the Freemarket Gold & Money Report discovered in government documents the "smoking gun" of the gold price suppression scheme, silver market analyst Ted Butler has just discovered in government documents the "smoking gun" of the silver price suppression scheme, as well as another "smoking gun" for gold.

In commentary published today, Butler examines data from the U.S. Commodity Futures Trading Commission and reports:

"As of July 1, 2008, two U.S. banks were short 6,199 contracts of COMEX silver (30,995,000 ounces). As of August 5, 2008, two U.S. banks were short 33,805 contracts of COMEX silver (169,025,000 ounces), an increase of more than five-fold. This is the largest such position by U.S. banks I can find in the data, ever.

"Between July 14 and August 15, the price of COMEX silver declined from a peak high of $19.55 (basis September) to a low of $12.22 for a decline of 38 percent.

"For gold, three U.S. banks held a short position of 7,787 contracts (778,700 ounces) in July, and three U.S. banks held a short position of 86,398 contracts (8,639,800 ounces) in August, an 11-fold increase and coinciding with a gold price decline of more than $150 per ounce.

"As was the case with silver, this is the largest short position ever by U.S. banks in the data listed on the CFTC's [Internet] site. This was put on as one massive position just before the market collapsed in price."

GATA urges U.S. citizens to forward Butler's report to their members of Congress and ask for an investigation of the CFTC's refusal to enforce commodity trading law in the gold and silver markets.

You can find Butler's commentary, headlined "The Smoking Gun" at GoldSeek's companion site, SilverSeek, HERE