And so, the battle rages on between those who ardently believe that large banks like JPMorgan are actively suppressing the price of silver and those who think the likes of Gold Anti-Trust Action ( GATA) and Butler are merely in the business of selling conspiracy theories and not interested in the truth.Are Precious Metals Prices Rigged? This year's Silver Summit, hosted in Spokane, Washington October 20-21, featured a debate on the question “Are Precious Metals Prices Rigged?” Moderated by BNN's Andrew Bell, the debate featured GATA committee chairman Bill Murphy and CPM Group's Jeffrey Christian. While an event like this is always much anticipated among silver bugs and manipulation theory skeptics alike, the actual debate itself wasn't earth-shattering. The positions of both speakers on the questions asked shouldn't come as a surprise to anyone familiar with the two-decade long debate. Murphy extolled the mountains of evidence “of the gold and silver price suppression scheme which has become blatant almost beyond comprehension” that GATA has garnered from the public domain including historical documents and the Fed's own minutes over the past 13 years; Christian, of course, said all of GATA's allegations can be refuted and have been, directing the audience to CPM's website. “In all of this time GATA actually has not come up with a credible shred of evidence,” stated Christian who said he believes Andrew Maguire is merely an “attention seeker” because he has been unable to prove to Christian's satisfaction that he ever worked in the bullion market. He also had some harsh words for GATA, which he considers “a gigantic distraction,” claiming their “allegations are full of internal inconsistencies which simply don't hold up to statistical scrutiny or simple logic.” When asked by Bell, “If this conspiracy is so widespread why is the gold mining industry not screaming blue murder over it?” Murphy said miners are hesitant to go up against the government, which must approve their mining permits, and the bullion banks, to which they turn to for financing. However, Christian rebutted that bullion banks are not the only financial entities providing non-bank financing. He believes the mining firms are headed by “sophisticated, educated executives who can look at the evidence and say there is nothing here to support these allegations. I have to focus on running a business and running it profitably and running it efficiently and this is, again, a giant distraction.”
JPMorgan and HSBCIn response to an audience member's direct question about his position on the allegations against JPMorgan and HSBC, Christian said he doesn't believe that these banks hold an undue concentrated position in the COMEX silver futures market. Their positions in the market are rather primarily hedge positions of physical or OTC market transactions, forward purchases and metal that is leased out, he explained. Christian pointed out that JPMorgan posted record profits on its gold and silver books this year, which he said wouldn't have a happened if the bank had a massive short position in the face of rising prices. Another question concerned CME's decision to raise margin requirements when prices are rising. Murphy said a better question would be “why haven't they lowered the margin requirements” now that volatility in silver has fallen? Christian defended CME's raising margin requirements, “There has never been a default of a major exchange or clearinghouse in the US because the exchanges require people to prove they have the financial wherewithal to cover their positions.” He said higher margin requirements are not a “negative” for those holding long positions, but are rather harder on those holding naked short positions, which are not backed by physical collateral. Naked shorts must increase their margin balance to prevent defaults. Silver price outlook Bell asked both Murphy and Christian for their silver price outlook. GATA's Murphy gave a bullish forecast of $60 an ounce for the white metal in 2012, stating “you're going to hear more about shortages and more about JPMorgan's role in short positions is going to come out.” Christian put forward a more conservative forecast with silver ranging between $26 and $42 an ounce over the next three months as extreme volatility continues to shake the markets. For 2012, he sees silver quarterly averages at around $30 to $33 an ounce with a range of $26 to $38 an ounce for the year.
In the eyes of this reporter, CPM Group's Jeffrey Christian was the clear winner in this debate in terms of his ability to defend his position with logical explanations; while Mr. Murphy relied more on pathos, arousing the emotions of his supporters. But when it comes to the truth of the matter, what's clear is that the debate over who's right and who's completely full of it will continue well past the CFTC's much anticipated decision.You can watch the debate here and form your own opinion. Please feel free to share your comments on the debate in the comment section below. Silver Price Manipulation: Fact or Fantasy? from Silver Investing News