Interview with silver market analyst Ted Butler

By Theodore Butler and Jim Cook, SilverSeek

Here’s an interview with Jim Cook of Investment Rarities, Inc. on April 8, 2010.

Years ago, Jimmy Stewart played the lead in a movie titled, Mr. Smith Goes toWashington.  In this case, it was Mr. Butler goes to Washington.  Who did you meet with?

A: I met with the senior staff responsible for regulatory matters for about an hour and a half.

Q: Was the Chairman of the CFTC, Gary Gensler there?

A: He stopped by to introduce himself and chat briefly.

Q: What, in a nutshell was discussed?

A: Basically my long-held premise of a manipulation in COMEX silver via the documented concentrated short position.  They asked an awful lot of on-the-money questions, to which I replied directly.

Q: Did you have reason to believe they agreed with your arguments?

A: Since they didn’t offer any challenges to what I said, and their follow up questions didn’t seem argumentative in the least, I sensed they were in basic agreement.

Q: What stands out about the meeting?

A: The seriousness with which they approached the issue.

Q: The following day, the public hearing took place.  What did you think of that?

A: I thought it was great.  Here we had a public meeting that revolved around the very issues I have petitioned the CFTC on for 20 years.  Much to the Commission’s credit, the fact that they had rejected my contentions in the past didn’t deter them from addressing the issues openly.

Q: What issues were raised?

A: Whether we should have position limits in silver and gold.

Q: What else?

A: Why there is such a big concentrated short position in silver.

Q: What about whether the price is manipulated?

A: Yes, all of that.

Q: Who was on the other side?

A: The big banks, the exchange and all others from the silver “establishment” were opposed to hard position limits.

Q: What was their argument?

A: That is would drive liquidity and business from the COMEX to markets overseas.

Q: What were they angling for?

A: To preserve the status quo of allowing the biggest traders to continue to control the market.  The big banks and the exchange are certainly not interested in having a level playing field.

Q: What about their argument that position limits would reduce liquidity?

A: It clearly was a bogus case, because causing a few large short traders to reduce their positions would actually increase liquidity, not decrease it. Legitimate hard position limits in silver, for example, even if those limits were reduced to the 1500 contract level I recommend would only affect less than 1% of all traders on the COMEX.

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