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JP Morgan acknowledges commodity manipulation on CNBC

April 10, 2012 by The Golden Rule

It is well known in precious metal circles that there exists a large silver short position at JP Morgan…By large I mean it is likely larger than the amount of physical silver traded in a year’s time and large enough to bring the mega-bank to its knees if physical silver prices ever got out of hand. This has been rumor-fodder on the internet since at least 2008 when Bear Stearns collapsed and was subsequently acquired by JP Morgan (Here), however, little acknowledgement of this weighty charge has ever been offered by JP Morgan itself…until now.

On Thursday of last week Blythe Masters, head of global commodities for JP Morgan, told CNBC that the mega bank is not in the speculation business.

“It’s not part of our business model. It would be wrong and we don’t do it,” she said.

The misperception, rampant in the blogosphere, comes from what JPMorgan does for clients, Masters said.

“We store significant amounts of commodities, for instance silver, on behalf of customers. We operate vaults in New York City, in Singapore and in London. Often when customers have that metal stored in our facilities they hedge it on a forward basis through JPMorgan, which in turn hedges in the commodities market,” she said.

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