Guest Post: "An Unavoidable Comparison", by Ted Butler

Tue, Apr 7, 2015 - 12:24pm

"Uncle" Ted takes the time to summarize the fallacy of the CFTC sanctioning Kraft Foods while turning a blind eye to metals market manipulation.

"An Unavoidable Comparison"

by Ted Butler

A rare event occurred this past week; the CFTC charged a major food company, Kraft, Inc., with price manipulation in the wheat market. You can count on one or two hands the number of times the federal commodities regulator has charged anyone with price manipulation in its 40 year history.

For what it’s worth, the agency’s case looks convincingly laid out and seems to contain all the elements of proving price manipulation, including intent and the ability to control prices. That said, the Commission has a very poor record of prevailing in the manipulation cases it has brought.

One thing telling about the case was that a large commercial trading entity who was supposedly using the futures market for strictly hedging purposes was accused of engaging in a variety of market schemes for strictly speculative gains. So much for the widespread argument that commercial traders are always “only hedging” and how I should cut them a break. As you know, I have long held that the commercials, at least on the COMEX, are just speculators gaming other speculators and little legitimate hedging occurs. Certainly, that’s what the CFTC alleged in its complaint against Kraft.

Quoting from the CFTC’s press release –

Aitan Goelman, the CFTC’s Director of Enforcement, stated: “This case goes to the core of the CFTC’s mission: protecting market participants and the public from manipulation and abusive practices that undermine the integrity of the derivatives markets. A market participant who is not happy with cash prices available to it may not resort to manipulative trading strategies in an attempt to artificially lower that price.”

Yes, Director Goelman is correct; the core of the agency’s mission is to protect public market participants from manipulation and abusive trade practices that undermine the integrity of derivatives markets. And no, a market participant not happy with cash prices may not artificially lower those prices to secure physical supplies. Wait a minute – isn’t that exactly what I’ve alleged JPMorgan has done and is doing in silver, namely, shorting on the COMEX in order to scoop up physical silver at bargain basement prices? Haven’t I been writing this two times a week for a very long time? (In the interest of full disclosure, I have sent Director Goelman every article I’ve written since he has been the agency’s enforcement director).

In fact, I’ve based my allegations about what JPMorgan has done in silver primarily on the agency’s own public data and that from the exchange (COMEX) and other public sources. The CFTC’s case against Kraft is derived from private trading records and internal emails. Further, there is a bit of complexity in the agency’s case against Kraft, in that the company’s trading strategy involved buying futures contracts in order to impact the basis (the price differential between futures and cash grain prices) and lower the cash price. With JPMorgan, there is no complexity as this crooked bank has used futures market short sales to depress the price of silver in order to buy physical silver at artificially cheap prices.

Importantly, the Commission’s case against Kraft most likely came as a result of a complaint from a disgruntled insider who was damaged by Kraft’s futures market activity and not as a result of widespread complaints or damage to the public. To my knowledge, this was not a case publicly discussed prior to the charges being filed. Compare that to silver, where many thousands of market participants and observers have petitioned the agency for years about the manipulation by JPMorgan and where investors and silver producers have been and are being damaged by artificially depressed silver prices.

The unmistakable conclusion is that this agency is bought and paid for or otherwise not acting in the public’s best interest. For a federal agency, I don’t think there is a more serious allegation.

So the real question is why the selective prosecution of the law? Why is the CFTC going after Kraft on a complicated case with an alleged payoff that looks like chump change (around $5 million total profit to Kraft), when public data indicate JPMorgan shorts the silver market whenever prices rise to cap and drive prices lower in order to profit on those short sales and accumulate silver at unfairly low prices; with JPM’s cumulative illicit take running into the hundreds of millions if not billions of dollars?

I can see the agency going after Kraft, but I can’t see any legitimate reason for it not to go after JPMorgan for the far more egregious silver activities the bank is involved in. Worse, why won’t the agency explain why the public data doesn’t point to JPMorgan doing what I allege the bank is doing? Can the Commission refute that JPMorgan has been the big concentrated short seller in COMEX silver futures since acquiring Bear Stearns in early 2008 and has been accumulating physical silver while remaining short COMEX futures for the past four years? That’s the key, no one - not the CFTC, not JPMorgan, not the CME – can offer a reasonable explanation for JPM’s control and manipulation of the silver market and what has transpired these past seven years.

Beyond the shadow of any doubt, the CFTC knows what price manipulation is; otherwise it never would or could have charged Kraft. So how can the agency see it with Kraft in wheat and not with JPMorgan in silver? Why is JPMorgan above the law? I think it’s because the bank was given a “get out of jail card” for agreeing to take over Bear Stearns and its massive short positions in silver and gold in 2008 at the US Government’s request. Since then, JPMorgan has exploited the arrangement in suppressing the price of silver and accumulating physical silver under fair market value.

The problem with selective enforcement of the law is that it undermines and makes a mockery of the whole system. It is a betrayal of the highest order. Yes, I’m fairly sure that the free pass to JPMorgan to allow it to continue the silver manipulation was given by Treasury and Federal Reserve officials to preserve market order and was considered to be to the public’s benefit. But look at what it has morphed into seven years later – a market more distorted than ever before and in which JPMorgan has amassed the largest hoard of silver in history.

I would remind you that the Enforcement Division (before Goleman arrived) even took five years to supposedly formally investigate JPMorgan’s concentrated short position in silver and ended that investigation without ever addressing the issues. Shame on all involved at the time, most particularly the two who knew better, former chairman Gensler and Commissioner Chilton. Now the shame has been passed to those currently in charge. It is my understanding that all senior officials at the agency swear an oath of office to uphold the law. Clearly, the law is not being upheld in silver or with JPMorgan. I don’t know how the senior officials of the agency can live with themselves considering their extreme dereliction of duty to the law and their betrayal to the citizens of this country.

I know these are very strong accusations and I do not make them lightly. And to be fair, I would be happy to amend them if any reasonable explanation were forthcoming, although that is unlikely. There are many problems for the world and for the US and the ongoing silver manipulation may not rank high in most minds. However, anytime basic law is perverted it diminishes us all. And such a perversion is self-evident in silver.

I know that if someone accused me of doing something seriously wrong and the accusations were unfounded, I would respond forthwith, as I’m sure would anyone. I’m accusing the CFTC and, specifically, Enforcement Director Goelman and his staff of dereliction of duty and the selective application of the law that all swore to uphold. To my mind, the refusal to apply commodity law evenly and protect the public is almost treasonous in nature. Of course, should a cogent alternative explanation be issued by the Commission or the Enforcement Director explaining the role of JPMorgan in the silver market in legitimate terms, I will retract my statement and offer a public apology.

This is a serious matter – open and unqualified allegations of market manipulation by the nation’s most important banking institution and the failure of the regulators to deal with that manipulation or explain why the allegations are unfounded. Since the silver manipulation has become so clear (with the recent COT reports and JPM’s continued physical accumulation), I can’t help but feel we are close to the critical point where the enough outsiders recognize the scam JPMorgan has been running and the regulators’ illegal cover up of that scam. I know without a doubt that silver is artificially depressed in price by JPMorgan and other collusive commercial traders on the COMEX and as this story is discovered a wave of physical buying must occur.

Silver (and gold) investors and producers are being damaged by the continued price fixing on the COMEX. Because the evidence of manipulation is increasingly obvious it is appropriate to demand that the regulators treat silver and gold in the same manner as they regulate other markets. Or explain why they shouldn’t.

If you agree that there is something fundamentally wrong with the Enforcement Division’s double standard in the Kraft wheat case versus the JPMorgan silver case, please take the time to contact Director Goelman. Ask him to charge JPMorgan with manipulation or at least for him to explain how it could be OK for the bank to accept physical delivery on the maximum number of COMEX silver contracts while holding a massive net short position in silver futures. Not how it could be done – how it could be OK.


Ted Butler

April 7, 2015

For additional information, please go to

About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 7, 2015 - 12:26pm

For anyone new to all of this

Turd has "Low E"...

(be sure to note the date)

Apr 7, 2015 - 12:39pm

Mr. Butler was my eye opener

way back when...

Oh, first.

Apr 7, 2015 - 12:43pm

interesting !!!

Gold must be money because the commodity regulators are ignoring it wink


Joseph Warren
Apr 7, 2015 - 1:12pm

Election season is coming up

the cynic in me suspects that this will all go away with appropriate campaign donations

Apr 7, 2015 - 1:39pm

Yes it is,has been and will be manipulated, but

I do not understand why people think these criminals will be brought to justice, even though they should.

Did they not create a law back in the 1930's making it is perfectly legal to do ANYTHING to preserve the dollar? Including and especially manipulating gold.

Please, am I missing something here?

Apr 7, 2015 - 1:56pm

the never ending hunt for Bigfoot

If there were actual markets trading to feed the silver chart...


...and has been since the 1930s!!!

Paddling Juniper Run under dense forest canopy

Apr 7, 2015 - 2:23pm

That may be so but be honest

That may be so but be honest and open about it, to the market, investors and the people. A limited number of banks have created a money machine that makes them millions on a daily basis. Cornering the market, changing the numbers, trying to leave no trace. That is criminal. And has nothing to do with the manipulation of the gold price for helping to protect a/the financial system.

Safety Dan
Apr 7, 2015 - 7:49pm

Another Unavoidable Comparison: War vs Policing

This article was sent to us by a reader who said, “If war is a racket, policing is even more so…


Excerpt from the article:

Possible New Revenue Streams

A group of experts in the fields of city government, business, real estate, and entrepreneurship assembled in April 2008 to identify possible new income streams that could be initiated by law enforcement.2 Their suggested new revenue streams serve as an example of ideas that can be generated in a short period of time. Each idea must be weighed against the feasibility of implementation, profit potential, and appropriateness for law enforcement involvement. Their most prominent recommendations were

  • fees for sex offenders registering in a given jurisdiction,

  • city tow companies,

  • fine increases by 50 percent,

  • pay-per-call policing,

  • vacation house check fees,

  • public hours at police firing range for a fee,

  • police department-run online traffic school for minor traffic infractions,

  • department-based security service including home checks and monitoring of security cameras by police department,

  • a designated business to clean biological crime scenes,

  • state and court fees for all convicted felons returning to the community,

  • allowing agency name to be used for advertisement and branding,

  • triple driving-under-the-influence fines by the court,

  • resident fee similar to a utility tax,

  • tax or fee on all alcohol sold in the city,

  • tax or fee on all ammunition sold in, the city,

  • public safety fees on all new development in the city,

  • 9-1-1 fee per use,

  • police department website with business advertisement for support,

  • selling ride-a-longs to the public, and

  • police department–run firearm safety classes.

In addition to concepts that may lie ahead, there are also many examples of revenue-generating ideas that have been tried and proven in actual use.

Safety Dan
Apr 7, 2015 - 7:56pm

Wall Street Wants Banks Nationalized Vs Dollar Rally

Wall Street Wants Banks Nationalized, Dollar Rally Manipulation

April 7th, 2015 |

Soaring dollar puts the world on sale for Americans…

Greece draws up drachma plans, prepares to miss IMF payment…

Edit:​ Skip the first 2:30 of the 8 min video. He is talking to himself. 

Safety Dan
Apr 7, 2015 - 8:01pm

US/Oklahoma Tornado Disaster Needs Vs Foreign Aid

FEMA denies assistance for Oklahoma but sends aid to foreign governments and fly’s in illegals

Video unavailable

​Letter from FEMA is read in the short 2:54 min video

Safety Dan
Apr 7, 2015 - 8:18pm

GDP 1977 vs GDP 2015 Q1 (The Weather Did It)

1977 winter: snowed in Miami, citrus crop damaged. The “Buffalo Blizzard” with 33″ of snow and 75mph winds. Q1 1977 GDP growth: +4.7%

1977 winter: snowed in Miami, citrus crop damaged. The "Buffalo Blizzard" with 33" of snow and 75mph winds.

Q1 1977 GDP growth: +4.7%

— GreekFire23 (@GreekFire23) April 7, 2015

U.S. GDP by Year GDP History Compared to Debt, Recessions and Other Major Events

Blizzard of 1977

The blizzard of 1977 was a deadly blizzard that hit the Western N.Y. state area upstate New York and […]


I had to add this article as it fits right into the topic:

Jim Grant Warns: Cost Of "The Unmasking Of The [Fed-Driven] Mis-Allocation Of Capital" Is Dire

Jim Grant 'unedited'...  

"If companies can't fail that means somebody else can't start. You're looking at a petrified forest rather than dynamic capitalism,"

Behold "The fruit of heavy-handed government manipulation... no matter what 'famous-blogger' Ben Bernanke says"

See his interview here:

Safety Dan
Apr 7, 2015 - 8:32pm

Google Patents Directed

Google Patents Directed Energy Nanoparticle Wearable Device

The device is described in the patent as follows:

Functionalized particles in the blood are able to selectively bind to targets in the blood that have adverse health effects. The binding of the particles to the targets allows the targets to be selectively modified or destroyed by energy from outside the body such that the adverse health effects are reduced or eliminated. The energy is generated by a wearable device which is able to direct the energy into the subsurface vasculature of the wearer of the wearable device. Further, one or more of the functionalized particles may be magnetic, allowing a magnetic field generated by the wearable device and directed into the subsurface vasculature to concentrate the bound targets in a lumen of the subsurface vasculature proximate to the wearable device.

Brings a whole new meaning to the clip of Google CEO and Bilderberger Eric Schmidt (seen in the video below) chortling over the fact that Google likes to step right up to the creepy line and not cross it when he told The Atlantic that, ” I would argue that implanting things in your brain is beyond the creepy line. At least for the moment until the technology gets better.”

That was back in 2010.

Skip ahead a few years, and now the company will just offer wearables that generate and release directed energy into the body which target functionalized nanoparticles in the blood that can be “selectively modified or destroyed” by the wearable.

Once you are inside the body, the creepy line has definitely been crossed. Do we really want our modern-day version of Skynet shooting directed energy into our bodies that target nanoparticles in our blood?

And what if that energy has other effects on the electromagnetic biofields already surrounding our bodies? What if someone hacks the wearable?

Of course the device is described for use only against targets that have adverse health effects, but as we all know, technology is inherently neutral.

See link for video and more..

Safety Dan
Apr 7, 2015 - 10:40pm

JPMorgan Chase CEO, Jaime

JPMorgan Chase CEO, Jaime Dimon, paid a $9 billion fine to prevent a whistle-blower from testifying in one of the biggest white-collar crimes in American History.

Submitted by IWB, on April 7th, 2015

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'”

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She’s had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

The deal was widely considered a good one for both sides, but Chase emerged with barely a scratch. First, the ludicrously nonspecific language surrounding the settlement put you, me and every other American taxpayer on the hook for roughly a quarter of Chase’s check. Because most of the settlement monies were specifically not called fines or penalties, Chase was allowed to treat some $7 billion of the settlement as a tax write-off.

Couple this with the fact that the bank’s share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal. What’s more, to defray the cost of this and other fines, Chase last year laid off 7,500 lower-level employees. Meanwhile, per-employee compensation for everyone else rose four percent, to $122,653. But no one made out better than Dimon. The board awarded a 74 percent raise to the man who oversaw the biggest regulatory penalty ever, upping his compensation package to about $20 million.

Read more:


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