Credit: Shutterstock photoBy Martin Tillier
Jamie Dimon, the CEO of JP Morgan Chase was recently called to testify on Capitol Hill regarding a declared $2 Billion loss on a “hedge” placed by a trader in London. Congress’s favorite Wall Street banker was given an easy ride by the Senators, but details of the loss tarnished the “squeaky clean” reputation of JP Morgan for many people. This is something potential silver investors should take note of.
There have long been rumors in the market that JP Morgan had a huge short position in silver. Many people believed that they were doing everything in their power to keep the price down to protect their position. Simply Google “JP Morgan + silver” for thousands of results. Those who denied this persistent rumor pointed to the reputation of the firm as more conservative and better behaved than the other Wall Street banks. We all know how that has played out.
Whether the rumors are true or not, and they likely are, JP Morgan’s troubles will have a positive effect on the price of silver. If they are true, the firm, in the light of increased scrutiny, will have to begin to unwind their position. They cannot afford another story about excessive risk. At the very least, they will have to stop holding the market down. They benefit enormously from being Washington’s favorite, but politicians of all stripes will change favorites faster than a 5 year old in the playground if improper manipulation of thesilver marketis shown to have happened.
In an interview with Money Morning, silver expert Ted Butler says “Together, the eight largest commercial silver shorts on the COMEX generally account for 50% to 60% of the entire net COMEXsilver market with JPMorgan alone holding around 25% or more of the entire market.” When the short covering starts, the move up will be spectacular. Don’t be left out. There is nothing wrong with profiting from another’s trouble when the other is a Wall Street bank. After all, every cloud has a silver lining.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
