Ted Butler To Silver Miners: COMEX Is Responsible For Low Silver Prices

This is an excerpt from Ed Steer’s daily gold and silver newsletter (recommended to subscribe):

As usual, silver analyst Ted Butler came out with his mid-week commentary yesterday—and he had something to say to all the primary silver producers out there that are prepared to listen and save themselves before they go bankrupt—and take all their shareholders, including me, with them.

I never asked his permission to reprint what he had to say, but I thought I’d include this lengthy commentary, so I’ll be ready for an ear full when I talk to him later today, but this is important enough that it should be posted in the public domain.

I, like you you, have stuck by the silver miners through thick and thin, even though I’ve discovered over the years that these silver miners [along with their golden brethren] don’t give a flying #%@# about any of their stockholders – including you or me.  As I’ve said before on several occasions, if I do manage to get to a position where I can sell their equities for the prices that they should be selling for, I’ll never own another mining share in my entire life – and for good reason.

Here’s what Ted had to say:

“There does seem to be a budding reaction building among the leaders of the primary silver miners to the COMEX action of depressing silver prices, namely a recognition that the continued existence of their enterprises is threatened. This has long been recognized by the shareholders of mining stocks and is reflected in the prices of the shares. An intelligent reaction by the primary silver miners to the artificial price-setting on the COMEX could have a profound influence in hastening the coming resolution and in ending the continuing silver price suppression. But what’s the most intelligent reaction by the primary silver miners at this time?

“While understandable, withholding production alone is not the best way of fighting back, simply because the extremely low price of silver is not caused by overproduction, but by COMEX dealings. And forget about any illegal cartel of silver miners. As I’ve suggested previously, the best thing for the primary silver miners to do, either individually or collectively, is to openly petition the regulators to address the price manipulation on the COMEX. But wait a minute – didn’t I just say that there would never be a regulatory resolution? Yes, I most certainly did and I still believe that to be true. Please hear me out.

“The primary silver miners (the byproduct producers aren’t necessarily excluded either) have to go the regulators, even if the regulators will do nothing, because it’s the right thing to do. In fact it’s the only practical approach the miners can take. Petitioning the regulators is the only legitimate action the miners can take (although I am always open to other suggestions). Forget low-cost, my approach is no cost to the miners. Further, shareholders would applaud any mining leader who took this approach.

“Most importantly, the miners have a responsibility to adopt such an approach for the simple reason that they have the most legitimate reason for complaining about the COMEX price setting. It is this legitimacy that makes the silver miners the perfect candidates to petition the regulators. Miners are not speculators or market analysts desirous of higher prices; they have a legal right to expect the level playing field of a non-manipulated price. Producers of every product hold important protections against dumping and artificial price restraints.

“But why should the miners petition the regulators if the regulators will do nothing?  Because of the message that will send to the rest of the world. Try to imagine the potential reaction in the investment world to news that a silver miner or group of miners asked the regulators to investigate evidence of manipulation? It is one thing for an Internet analyst (me) to make such allegations, but quite another for a legitimate producer to do the same. It’s all about legitimacy. It is well-known that in establishment media circles the allegations of a silver (and gold) manipulation is populated by conspiracy types and that’s a big reason the scam has lasted so long. But if a silver miner or miners the allegation, it just might prompt some of the establishment types to actually look at the evidence, something none have done to this point.

“The only thing a silver miner must be careful about in adopting an approach of openly petitioning the regulators to address the goings on in COMEX dealings is to stick to the facts and don’t say anything wrong. Unfortunately, there are an incredible amount of misstatements of fact regarding the COMEX’s role in setting silver prices that a miner repeating them will reduce any petition to a fool’s errand. Ego aside, I don’t think I’ve ever made an error when petitioning the regulators and it is this careful approach that has made me immune from a counter reaction in calling JPMorgan and the CME market criminals. Of course, I would assist any miner desiring to petition the regulators.Silver analyst Ted Butler: 12 November 2014

[Note: the bolding and underlining is mine. – Ed]

Please feel free to send Ted’s commentary to any silver mining company that you feel might be interested in higher silver prices.  You should even send this to The Silver Institute, even though it will be for naught, as they are not at all interested in helping their members in this regard.  Here’s the link to their “Contact Us” page.

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