Markets can't be manipulated...unless

[dlry]

Manipulation of Precious-metals Market Under Fire
Written by Alex Newman
Thursday, 06 May 2010 11:56

The banking cartel’s manipulation of supposedly “free” markets is coming under increasing fire as a broad coalition of activists, legislators, and non-profit groups target the Federal Reserve System with lawsuits, investigations, criminal complaints, and federal transparency legislation. Now whistleblowers, and even some government officials, are also taking aim at “irregularities” in the precious-metals market being orchestrated by the banking cartel and its government allies.

In a recent article entitled "Fed Facing Lawsuits, Criminal Complaints Over Market Manipulation," The New American reported on the central bank’s blatant activities distorting the real-estate and the stock markets, as well as various efforts aimed at discovering details and restoring accountability. But the manipulation of precious-metals prices is just as serious, and equally secretive.

http://tinyurl.com/2g8gcce

[dlry]

Wonder if anyone knew this story on Friday...check that midday silver spike.

Silver Breaks Above 18 in a Nearly Vertical Move, and Gold Follows Higher - Response to a CFTC Warning?
http://jessescrossroadscafe.blogspot.co ... -move.html

The New York Post tomorrow will report that the U.S. Justice Department has begun a criminal investigation of JPMorgan Chase & Co. in regard to trading in the precious metals markets and that the U.S. Commodity Futures Trading Commission has begun a civil investigation.

The forthcoming Post story was disclosed by its reporter, Michael Gray, at his Internet blog last night:

http://mgray12.wordpress.com/2010/05/07 ... er-trades/

On April 11 Gray reported extensively on GATA's disclosure at the March 25 hearing of the U.S. Commodity Futures Trading Commission that a London silver trader had alerted the CFTC in advance to a silver market manipulation by Morgan Chase traders:

http://www.gata.org/node/8529

[defio70]

...You cannot invest or trade in markets that behave this way; it is impossible to go to sleep with a position, either bullish or bearish, and not wake up to find it ridiculously underwater. This isn't "stability" being demonstrated as the Euro folks and Bernanke claim, it is schizophrenia, it's destructive and it's impossible to be involved in a market that behaves this way without eventually waking up to all your money being gone.
It is time to give up folks and leave the machines to themselves.
http://tinyurl.com/37ysjk2

[defio70]

I cannot come up with any explanation for market activity for last 15 months other than treasury intervention. Probability of other explanation is nonexistent. But if that is the case...
http://tinyurl.com/37h8eo7

[sowhat]

...Certainly, the problems are not as severe as in 2008 but spreads are widening and corporate bond sales have collapsed. Those are not endemic of a recovery....

Investment Grade Corporate Bond Sales Collapse in Eurozone; "Lack of Trust" Pummels Bank Lending
http://tinyurl.com/2e5hkgu

[GSIMMERLE]

...Sadly, people are like sheep and can be herded by dogs – dogs in the form of central bankers if you will. A week ago Monday and again yesterday, prices started moving in the direction that European monetary and political authorities wanted. When I saw the price movement of those big banks in France, Germany and Italy, I remarked that the Interventionists were snapping at our heels and Mr. Market was being diverted from the long Dollar and long gold/Silver trade.
This morning there is more herding dogs at work. It’ll be interesting to see if they’ll be able to fence us in...

http://tinyurl.com/283rbj2

[dlry]

Trader Dan’s Mailbox

Hi Dan,

I hope you are well. I am simply writing you today to vent.

I own gold. It is insurance. It affords me peace of mind. But I’m also a speculator. I own futures options and mining shares. As of today, I quit.

I’ve been a licensed rep for my entire adult life, almost 20 years. I have never, ever witnessed, on a daily basis, a market that is so blatantly manipulated as gold on the Comex. Furthermore, the manipulation takes place so publicly in the clear light of day, agents of the Fed and the Treasury act to systematically blunt all natural market forces. This happens in America, for the love of Pete!! Additionally, willing accomplices in the financial media carry the water for the criminal manipulators with their daily cause-and-effect market musings to the uninformed masses who fail to recognize the obvious verbal contradictions from one report to the next.

- 5/11-14: Euro collapse. Buy Gold. (while Goldman and JPM sell theirs to dupe algos and hedgies).

- 5/17-18: Euro collapse. Sell Gold. (while Goldman and JPM sell more to paint the tape and create "resistance").

Gold is becoming the currency of last resort and that it not going to change because a Central Bank floods a system with liquidity and makes money available. The effects of this compounded increase in the amount of money in the system are going to be felt in an inflationary outbreak down the road. You will be glad you own the metal then.

I personally think that the more the price riggers jack with the system and play games in the paper market, the higher the price is eventually going to go. The harder you press down on a spring to compress it, the more fiercely it uncoils.

http://tinyurl.com/2dldarz

[defio70]

Like the Good Ole Days
http://tinyurl.com/369x52f

[dlry]

Strange Days http://tinyurl.com/leh2u9


Analyzing the semi-annual report on gold derivatives published by the Bank for International Settlements, Golden Sextant Internet site proprietor Reg Howe finds evidence that the gold exchange-traded fund, GLD, has replaced direct central bank gold sales and leases as a major mechanism for gold price suppression.

Howe writes:

"... the design of GLD is a distinct improvement upon the [gold] carry trade as a vehicle for blunting upward pressure on gold prices from rising investment demand. Gold moves in and out of GLD in 'baskets' of 10,000 ounces created by 'authorized participants.' The list of authorized participants includes all the major bullion banks, which as noted appear free to create baskets with gold loaned or swapped to them by central banks and then to transfer those baskets to GLD in return for shares to be sold to investors.

"In that event, unlike the gold carry trade, official gold is not fully surrendered to the international market by the intermediary bullion banks and subsequently transported to God only knows where. Rather, with GLD as the (presumably bona-fide) purchaser from the intermediary bank, the gold moves to an identified vault subject to the jurisdiction and laws of the United Kingdom. The central banks, as before, can continue to count it in their gold reserves, but now with more practical justification since it also remains within the banking system and their effective control."

Howe's conclusion fits nicely with the recent study written by GATA board member Catherine Austin Fitts of Solari Inc. and her lawyer, Carolyn Betts, "GLD and SLV: Disclosure in the Precious Metals Puzzle Palace" (http://solari.com/archive/Precious_Meta ... le_Palace/), which noted that the custodians of the metal claimed by those exchange-traded funds, J.P. Morgan Chase & Co. and HSBC, are also the major shorts in the gold and silver markets, a practice not disclosed in the GLD and SLV prospectuses. The idea seems to be to concentrate the banking system's possession of the precious metals so they can be allocated most sparingly to markets where delivery is demanded in a fractional-reserve gold and silver banking system. That is, a system where most claims to precious metals can never be backed because so much more in claims has been sold than there is metal.

It is a strange situation. Gold for spot delivery and bullion funds with high credibility for physical possession of metal in the amounts claimed are selling at premiums over paper of lesser reliability. But where gold is arbitraged against currencies on the basis of relative interest rates, it remains in contango. Freer private markets are increasingly disconnecting from more regulated and controlled official markets. Backwardation is arriving in gold, but ass backwards. Of course, nobody should be surprised. That is the way central banks typically operate.

Howe's commentary is headlined "Gold Derivatives: GLD and Ass Backwardation" and you can find it at the Golden Sextant here:

http://www.goldensextant.com/commentary37.html

[defio70]

Fed’s Next Move? Cut Rate on Dollar Loans to Europe
http://tinyurl.com/34hp5pp