Från Ted Butlers senaste nyhetsbrev:
Keep this one fact firmly in mind – the unusually frantic COMEX silver warehouse turnover began when silver prices were close to $50 and continued for nearly 4 years; the same four years where the price of silver put in its worst performance of all time, falling 70% from the highs. While I always believed the turnover would prove ultimately bullish for the price of silver, I don’t believe I made that representation on a short term basis, suggesting the turnover was the driving force behind short term prices (as are the COTs). My point is that no one should fear the end of the physical warehouse turnover as it has coincided with absolutely rotten concurrent price action. On the surface, we should be rooting for the movement to end.
Over the past year or so (I can’t remember exactly when) I have speculated that JPMorgan has accumulated the largest stockpile of physical silver ever amassed in history. And where I thought the physical silver movement in the COMEX warehouses was originally driven by strong industrial demand, more recently I have come to believe the movement was related to JPMorgan’s silver accumulation. The two thoughts, moreover, are not that far apart. While I suppose I would have preferred the movement to have been caused by straight industrial demand and not by buying by JPMorgan if I had the choice; in reality, I had no such choice. When the good Lord gives you lemons, you make lemonade or lemon pie; you don’t moan that you don’t have oranges. While I further suppose that if I am correct about JPMorgan accumulating silver that some might argue that the world’s most crooked bank might then sell that silver to continue to depress prices; I’m of the belief JPM is more likely to make the financial score of all time by arranging to sell at unimaginable high prices.
I guess the bottom line here is that if the COMEX silver warehouse turnover has or is coming to an end , it might signal that JPMorgan has finished its silver accumulation phase and would begin to consider the distribution phase of its hoard (at much higher prices). That doesn’t mean we go straight up from here—and considering the current COT setup, that would appear unlikely. But the COT setup will likely change in fairly short order and when it does, there will be no reason for JPMorgan to continue to depress silver prices as they have over the past seven years. – Silver analyst Ted Butler: 07 February 2015