A couple of weeks ago I was asked why JP Morgan was accumulating physical silver. I didn\u00e2\u20ac\u2122t really have an educated answer for you, so I jumped into the JP Morgan Chase rabbit hole.<\/p>\n
Today we\u00e2\u20ac\u2122re looking behind the scenes of JP Morgan Chase, arguably the biggest and most powerful bank in the world. In fact, the Financial Stability Board (FSB) classifies them as the most dangerous \u00e2\u20ac\u0153Systemically Important Financial Institution\u00e2\u20ac\u009d due to their size and how they are integrated globally, because If their business fails, so would the entire global financial system.<\/p>\n
Shockingly, Deutsche Bank is considered less risky.<\/p>\n
Reviewing research publications from J.P. Morgan Asset Management, you can get a pretty good idea of where they believe we are in this trend cycle. What we see is a clear credit bubble breakdown pattern shift coupled with a lack of liquidity in both the stock and, more importantly, bond market. They know that this is an accident waiting to happen.<\/p>\n
Perhaps that\u00e2\u20ac\u2122s why they\u00e2\u20ac\u2122ve accumulated 1,608,694.685 ounces of physical gold and 114,217,102.774 ounces of physical silver. In fact, by all accounts, JP Morgan has now accumulated the largest physical silver hoard in history.<\/p>\n
Perhaps there are additional reasons. We know they inherited the largest and most dangerous NAKED short (derivative) silver position when the Feds engineered they\u00e2\u20ac\u2122re takeover of an imploding Bear Sterns. The key to understand from that Wall Street Speak is that as silver prices rise there are NO LIMITATIONS ON LOSSES on these contracts. Some think that\u00e2\u20ac\u2122s why Bear Sterns failed.<\/p>\n
JPM had to neutralize this derivative bomb. How could they do this and make money too? By controlling the entire silver market.<\/p>\n
In 2011 they began accumulating physical silver as they were managing the buying and selling of these contracts. This is a very complicated operation and is conducted on and off exchanges and therefore, on and off-balance sheets. The bottom line is an almost opaque market\u00e2\u20ac\u00a6why?<\/p>\n
What we can see is that the top 8 Silver Speculators (manipulators) have sold 200 days of mine production. JPM accounts for 38% or 76 days of silver production.<\/p>\n
I wonder how much physical labor and energy that takes. And here, wall street pushes a button and reduces the \u00e2\u20ac\u0153NOMINAL\u00e2\u20ac\u009d value of that silver and therefore all that human labor and energy.<\/p>\n
All in the name of speculation and profits, because, interestingly enough, since JPM began accumulating physical silver, they have NEVER TAKEN A LOSS on their short derivative silver position. Defies normal market luck.<\/p>\n
At the same time taking advantage of depressed prices by accumulating physical silver and buying back those Bear Stern legacy silver derivatives. Doesn\u00e2\u20ac\u2122t sound legal does it.<\/p>\n
You might be wondering if perhaps you should accumulate silver too. Some even ask, is silver better than gold? Of course, those are answers must be determined by you, but I believe that everyone needs both. It just depends on what we\u00e2\u20ac\u2122re trying to accomplish.<\/p>\n
We can see that JPM holds both too. I\u00e2\u20ac\u2122d bet they have a plan. Do you?<\/p>\n