J.P. MorganChase and the Paper Silver Market
August 27th, 2009Via: GATA:
We know that MorganChase and the Fed are essentially the same entity because MorganChase was selected by the Fed to take over Bear Stearns for $2 per share with no due diligence and apparently no competitive tender between rival banks. When Bear Stearns shareholders protested the $2 per share offer, it was arbitrarily increased to $10 per share. What normal enterprise could suddenly increase a takeover bid by 400 percent without batting an eye in times of great financial stress?
But if you have a money-printing press, who cares what you pay for Bear Stearns?
If MorganChase has access to unlimited dollars, then the firm can roll its Comex futures indefinitely and never have to deliver and never have to cover. But this does not imply that the firm does not care about the silver price rising. The firm’s whole raison d’etre as the big short in Comex silver is to cap the price. I think MorganChase does care if the price of silver rises because the Fed doesn’t want that.
The silver price manipulation will end when there is a silver shortage, but it won’t be MorganChase that defaults, because the firm will continue to roll contracts and cover its dollar losses.
The physical silver market is under growing stress. China’s encouraging its citizens to own silver could be the straw that breaks the camel’s back. China was the last country to be on a silver standard. The word for “bank” in Chinese means “silver movement.” The Chinese associate silver with money just as Mexicans do, because the Mexican peso used to be denominated in silver. There appears to be a cultural affinity for silver, so this is explosive for a nation that, like China, earns so many intrinsically worthless dollars.
Research Credit: Pookie
