Silver Investing News readers are intrigued to down right passionate when it comes to the topic of silver price manipulation. In a recent survey, we asked the question, “Do you believe the silver market is rigged?” to which an eye-popping 66 percent responded, “Yes!”
By Melissa Pistilli—Exclusive to Silver Investing NewsIn a recent Resource Investing News Network survey, we asked the question, “Do you believe the silver market is rigged?” to which an eye-popping 66 percent responded, “Yes!” We shared our results with some of the precious metals markets' most notable names and a few were kind enough to comment on what many consider a highly contentious subject. “The Silver Institute, like the majority of your readership, believes in an open and transparent silver market,” said Michael DiRienzo, Executive Director and Secretary of The Silver Institute. “The CFTC handed this investigation to its own Enforcement Division three years ago after issuing letters in 2004 and 2008. We eagerly await their findings and will comment when they are released,” he added. Jeffrey Christian, Managing Director and founder of CPM Group — who has at times been accused of being a government plant by some ardent supporters of the silver manipulation theory — is not shy when it comes to voicing his position on the topic. He told Silver Investing News that “over 90 percent of those invested in physical silver are not into conspiracy theories; they are not the 'guns and bunker' crowd,” to which “silver is not just an investment, it's a religion.” While Christian may think those 66 percent are representative of the “fringe,” long-time silver manipulation crier Ted Butler, founder of Butler Research, said he's “trying to figure out what the heck the other 34 percent are looking at that they don't see it.” For a few decades now, gold and silver analysts and investors have debated the validity of allegations concerning precious metals price manipulation through COMEX futures contracts by a cartel that supposedly includes large bullion banks as well as the US Treasury and Federal Reserve. By maintaining an overly large short position in the silver futures market, so the theory goes, these banks have been at times able to suppress the price of the white metal in the face of bullish fundamentals. However, the US Commodities Futures Trading Commission (CFTC) at the urgent request of independent investors has looked into the allegations of price manipulation in the silver market, first in 2004 and then again in 2008, and each time has reported finding no significant proof. In 2010, the most recent investigation began when independent bullion trader Andrew Maguire went public with allegations of manipulation of the gold and silver markets by JPMorgan Chase and HSBC, which prompted a class action lawsuit against the two banks. In September of this year, HSBC was dropped from the lawsuit with reports that the plaintiffs and the bank had entered into a tolling agreement, which is often used to allow sides to negotiate a settlement while also leaving plaintiffs the ability to file a new complaint if negotiations prove ineffectual. Although the current investigation by the CFTC is considered ongoing and Commissioner Bart Chilton has said he believes violations have take place, the CFTC has yet to finalize its investigation.