Saturday, March 20, 2010

Bullion Banks To The CFTC: "Up Yours!"

Well, I've got to say, it sure looks as if the despotic CRIMEX goons have told CFTC Chairman Gary Gensler where he can stick his commodities markets position limits. At exactly 10:10AM est, the wanton criminal of the CRIMEX dropped a 6,000 Gold contracts bomb on the market, and laughed in Mr. Gensler's face.

6,000 Gold contracts is the "equivalent" of 600,000 ounces of Gold. [6000 x 100 oz each] Of course, since these were CRIMEX short contracts, no real "physical Gold was sold Friday...just the illusion was.

If Mr. Gensler needed any more proof of the scam that these CRIMEX goons run day in and day out in New York, he need look no further than Friday's bogus Gold raid described above.

Please excuse me for wondering out loud, but is it not against the law "across the entire nation" to sell something you don't own?

I the Commitment of Traders report [for positions held at the close of trading on Tuesday, March 16th], the net short position in gold is a pretty chunky 242,295 contracts... 24.2 million ounces. The '4 or less' bullion banks are short 18.0 million ounces of that... and the '8 or less' traders [which includes the '4 or less'] are short 22.7 million ounces. This 22.7 million ounces represents 94% of the entire net short position.

As of March 17th there was ONLY 10,021,864 ounces of gold in the CRIMEX warehouses. The CRIMEX goons have clearly sold over 14 MILLION ounces of Gold than they have warehoused. This is against the law! No if, ands, or buts about it Mr. Gensler. If I can see the crime here, why can't you?

Why was Gold bombed in this particular fashion on this particular day? Friday was Quadruple-Witching:

Quadruple Witching occur 4 times per year on the 3rd Friday of March, June, September and December. It refers to the expiration day of stock options, index futures, index options and single stock options futures. This day use to be referred to simply as Triple Witching prior to the advent of single stock futures in 2002.

Obviously a major hit on Gold would stand to benefit those short the Gold shares and their indexes. Factor in the huge number of in the money options on Gold between 1100 and 1150 set to expire late next week [not to mention $144 BILLION in new treasury debt to be sold next week] and the raid on Gold is easily comprehended. That doesn't justify it, or make it legal, but simply explains why it "probably" occurred.

As seen on Harvey Organ's - The Daily Gold [], Richard Guthrie in a letter to CFTC Commisioner Bart Chilton yesterday afternoon wrote:

Subject: Fw: Price Plunge orchestrated from the dumping of 6,000 sell orders

Inquiring with my broker as to what initiated today's almost instantaneous $20 plunge in the price of Gold, he said that one of the Bullion Banks had reputably dumped 6000 sell orders onto the Comex!..

If correct, this is an enormous single sell order and difficult to see as for any other purpose than manipulation in order to lower prices!.. After all there is no way any seller could hope to maximize his price by selling in such a manner!..

I can't help but feel this is something to do with the fact that there's some 50,000 April call and put options due to expire a week today, within the $1,100-$1,150 strike range,.. With contracts equating to the equivalent of circa 160 tonnes of gold at stake, there is a serious interest from a major short or two in seeing the price down below $1,100!..

What a circus the Futures Market has become,.. Please, please, please will the CFTC get a grip of this, as it's inevitable outing sometime in the future will make liable fools of all those who were in the knowledge but did nothing to arrest the irregular,..

Any individual stopped out or panicked to sell from today's orchestrated price plunge has been robbed in the same way as a woman mugged of her purse by a crack addict,.. The only difference is that when caught the crack addict must contemplate the error of his ways from a prison cell, whilst a banker does it from the confines of his New York Mansion!..

Yours faithfully,..
Richard Guthrie

Better to rig the markets, than pay out to those that bet the shares indexes would be higher come options expiration. Can it get anymore crooked than this? Probably...

The Greece Bailout Is Falling Apart
The Greek premier is now threatening to go to the IMF for help if the Eurozone won't come up with hard bailout numbers soon.

These are pretty tough words for someone asking for money:


"We have the worst of the IMF and none of the advantages. This is where Europe must come in and provide what the IMF can offer. Or Greece will have to go to the IMF. We hope that will not be necessary," he said.

"I prefer a European solution as part of the eurozone, to show the world that Europe can act together. This is not to ask for money but to have an instrument on the table to stop the speculation. We expect the EU to live up to the challenge facing it. We are a eurozone country," he said.

Some believe Greece can borrow money more cheaply from the IMF than from Europe.

Sources in Washington say Greece can expect to borrow from the IMF at around 3.25pc. While the EU has not specified its own terms, the Eurogroup said this week that any help would come at a punitive rate above the borrowing costs for other EU states, suggesting a rate of 4pc to 5pc.

So what's the problem? Why might Europe be scared into caving to Greek demands? Because if Greece goes to the IMF, some believe credibility in the euro would be shattered since it would be seen as unable or unwilling to support its member countries when in trouble. Thus Mr. Papandreou is playing a game of chicken he thinks he can win.

I don't recall a bailout ever being how can it fall apart?

Euro retreats vs dollar on nagging Greece worries
NEW YORK, March 19 (Reuters) - The euro fell on Friday and was headed for its worst week since January as traders fretted whether Greece will secure euro-zone aid to tackle its debt crisis, while worries about the UK economy hit sterling.

A report on Thursday that Greece saw limited prospects for euro-zone assistance raised doubts about the country's ability to service its debt. On Friday, the euro fell as far as $1.3502, its lowest level in more than two weeks. It was down 1.7 percent this week, its worst showing since late January.

Greece also said it may have to turn to the International Monetary Fund for help, though it dismissed news reports that it was planning to do so as early as April. [ID:nLDE62H0LL].

"The tensions surrounding Greece are escalating. This whole IMF situation has become a game of brinkmanship and the whole uncertainty is undermining the euro," said Michael Woolfolk, senior currency strategist, at BNY Mellon in New York.

I've said it before, and I'll say it again:

"Greece is but a pimple on an elephant's ass when compared to California."

If the only thing keeping the US Dollar from falling off a cliff is "uncertainty" about the Euro, then the Dollar is in a whole lot worse shape than we can imagine. The financial truth about the "states" here in America is bubbling just below the surface of the media's attention. The Euro would be better off without Greece, I don't think the USA can say the same about California. Or New York, or Illinois, or New Jersey, or Pennsylvania, or... Absent the media's unending "coverage" of the Obamacare Disgrace, the front pages would be covered with stories about the impending demise of over half the States in the Union. Of course by the time the media gets around to "reporting this news", it will be old news.

Unemployment soars in U.S. metropolitan areas
WASHINGTON (Reuters) - Unemployment rates in 363 U.S. metropolitan areas rose in January, and 346 areas reported year-on-year declines in their number of jobs, the Labor Department said on Friday.

Nearly 200 metropolitan areas reported jobless rates of at least 10 percent in January, showing that unemployment problems persist at the local level.;_ylt=AkCJ2ZnFfNc_P1A_nCG2FhO7YWsA;_ylu=X3oDMTE1YXRuNGFnBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawN1bmVtcGxveW1lbnQ-?x=0&sec=topStories&pos=5&asset=&ccode=

This data seems to run counter to what the Federal Government is telling us about employment. It would appear things are not quite as rosy as they would like us to believe with their convoluted unemployment numbers. Not only that, but this sure looks like a great reason to dump 6,000 Gold contracts onto the CRIMEX exchange on a Friday morning.

Federal Reserve Must Disclose Bank Bailout Records
March 19 (Bloomberg) -- The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.

The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.

The Fed was assuredly not happy with this news. This was probably an even better reason to dump 6,000 Gold contracts onto the CRIMEX Friday morning. This is huge news. Just the fact that a US Court ruled AGAINST the Fed is huge news, but the implications of this for the Fed going forward as the public seeks disclosure about the Fed's shenanigans are immense.

GATA Chairman Murphy's planned testimony to the CFTC
The formal statement GATA Chairman Bill Murphy plans to submit as a witness at the U.S. Commodity Futures Trading Commission's hearing next week on position limits in the precious metals futures and options markets has been posted at GATA's Internet site, complete with footnotes, here:

Now this could be reason to dump 6,000 Gold contracts onto the CRIMEX on a Friday morning.

"Put that in your pipe and smoke it Mr. GATA!" crow the CRIMEX goons.

This from Warren Bevan's weekly email:

John Williams of Shadowstats calculates government numbers as they
were once reported before the inputs were changed in order to make results
appear better than they are in reality.

Using metrics of days gone by and not using seasonal adjustments he
calculated the inflation adjusted 1980 high of $850, to be $7,494/oz in today’s
devalued dollars. That’s more like it!

Using the same metrics he calculated that silver would have to hit, sit
down now, $436/oz in order to hit it’s 1980 high of 49.45 in today’s dollars.

Watch the Bond Market, not Bank Lending or Velocity
The important point to note is that deflationary forces lead to hyperinflation. Once again, it is not demand, bank lending or increased velocity. Those things do not trigger severe inflation; they merely can be a symptom after the trigger. And by the way, increased velocity is basically another form of increased demand. Fundamentally, they are no different.

Is anyone paying attention to the first domino in the sovereign debt crisis?

Iceland’s Economy Shrinks 8% as Prices rise by 11%. Deflationary forces are causing severe inflation, as Iceland’s government is bankrupt. Moreover, bank lending in both the US and the UK has been sliding, yet we see price inflation increasing in the UK and starting to pickup in the US. Even amidst deflation in the private sector, Gold has risen to an all time high against both the Dollar and the Pound and also the Euro.

The deflationists have it backwards. As we’ve illustrated, severe deflation is what leads to hyperinflation. Debt crisis’ go hand in hand with currency crises. In fact, if we had an increase in bank lending, consumption and velocity, we’d be assured we wouldn’t have hyperinflation. We’d end up with rising price inflation for certain, but not hyperinflation. Hyperinflation has never occurred at a time of strong or growing demand.

So what is the real debate then?

The debate and discussion should be about the bond market. If one were against the hyperinflation scenario, then they would have to think the bond market is going to hold up. If one believes we will see severe inflation then they have to believe in a major break in the bond market. We don’t believe in Weimar or Zimbabwe style hyperinflation. That is just too extreme. We do believe that we will see severe inflation worldwide as a result of a loss of confidence in governments and currencies. Falling bond markets and rising interest rates will reflect this.

For Gold watchers, now is the time to start watching the relationship between Gold and bonds. According to Wikipedia, the worldwide bond market is $82 trillion and the US bond market is $34 trillion. Clearly, the crowded trade is bonds. Gold’s bull market will accelerate when money starts to move out of bonds and into Gold.

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