JP Morgan Cornering Silver Bullion Market?

by Mark O’Byrne

JP Morgan Chase, the largest US bank, one the largest providers of financial services in the world and one of the most powerful banks in the world, has accumulated one of the largest stockpiles of silver the world has ever seen.

The total JP Morgan silver stockpile has increased dramatically in the last 4 years. In 2011, they had little or no physical silver. By 2012, they had acquired 5 million ounces of silver bullion.

In the last 3 years, their silver stockpile has increased tenfold and is now over 55 million ounces; in the last few weeks they have accumulated more than 8 million ounces of physical silver. In fact, JP Morgan may currently hold far more than their official figure of 55 million ounces.

This is a huge amount in a short space of time. Are they accumulating silver at these depressed levels in anticipation of geopolitical and financial turmoil?

JP Morgan has been acquiring this vast hoard of physical silver while holding the largest short position in the silver futures market, i.e. while suppressing the silver price with its unlimited access to free money.

Will banks take their thumb off the electronic silver market and allow prices to rise in the near future? This seems increasingly likely.

The fundamental reasons for a bullish outlook on silver are: continuing (increasing) global macroeconomic, systemic, geopolitical and monetary risks; silver’s historic role as money and a store of value; the small and declining supply of silver; significant industrial demand; and, most importantly, significant and increasing investment demand, including from the largest bank in America.

Silver is currently trading at just over $16 per ounce, but it will likely surpass its high of $50 per ounce in the coming years. Indeed, silver may surpass its inflation-adjusted high of over $150 per ounce in the next 5 to 7 years.

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