Some proof that Gold and Silver are being manipulated.
First thanks to speedybure for turning me on to www.gata.org. I've been pretty sure gold and silver have been manipulated for a while, but never had much proof until now.
I'd like to start with the statement that the government has successfully substituted inflation for economic growth for more than 2.5 decades now and has had help from most of the world. Other than technology, (where we are losing ground, BTW) we have little else to export. Yet, we are still able to consume far greater than the rest of the world economies that contribute much more. We can do that because we have had an agreement to trade consumption for the growth of other key economic countries that contribute money to our politicians. I'd like to do a future blog post giving a broader perspective on our economy later, but I'd like to concentrate this one on gold and silver now.
Let's start with GATA's ad in the WSJ . Wow! a ton of bricks right there! Notice how they back up each and every statement though!
Well the first link I clicked on was the Barricks link. It gives you a level 1 perspective on how to manipulate a metal price. First, you loan the metal out from the central bank to the bullion bank. The bullion bank immediately sells the metal on the open market to dilute the price. You offset this by getting a contract bid from a metal miner to sell you metal in the future at a rate slightly higher than the diluted price. The bullion bank then returns the metal it got from the contracted miner to the central bank. Easy Peezy, Lemon squeezy! Now the bullion bank named in this lawsuit is JPM, but I believe that JPM is only one of the four horseman of market manipulation. The first horseman is the PPT, (plunge protection team) A government organization that was formed strangely enough about 2.5 decades ago. The second horseman has pulled up lame lately, but is AIG. I believe they were the strongest non-government entity before, but they are the weakest of the horseman now as they concentrate on just surviving. GS has taken over the role of the big dog now, and has been making money hand over fist because of it! It's the only reason that explains how a company that excepted tarp money to survive, can trade 5 times more out of their private account than they have ever traded before, multiple times, just a few months later, in one of the most volatile markets in history. JPM was the last of the 4 horsemen and they aren't very good at covering their tracks yet, just like GS wasn't a few years ago. One of the biggest things I got out of the court documents, was an estimation of the central bank gold temporarily on the market for the purposes of dilution, to be 4600 tons. That's about 14.7 billion dollars worth of gold for just the first step of market manipulation. Even if that is all the government did to manipulate the market, that's a huge amount of money.
Now on to market manipulation strategy # 2! Play the shorts! Normally shorting the market in any commodity is a bad idea, unless you know ahead of time that you have enough power to bend the market to your will. Market makers look at shorts before they look at futures and options. Well this guy points out that the shorts are concentrated in too few institutions. Let's see, a few banks controlling the commodity price of something, is there a pattern here? I'll bet I can guess the names of the few banks. An explanation goes on about how usually when there is a concentration of only a few banks like this, it is because the banks have a large amount of miners that are clients that are hedging their positions. It also makes a point to let everyone know that miners are not hedging at all at this point.
Market manipulation strategies# 3 and 4 are futures and options respectively. They are the easiest for a government to do, because they involve leverage. The government can easily give the appearance of leverage without risk, especially when they have a few banks under their control.
If anything I've posted so far shocks you, you should take a harder look at our government.
Everything is wrong, and it's been wrong longer than you've been aware.