Thursday, August 19, 2010

Raising Cheating To A Whole New Level

The bullshit in the Silver market at the CRIMEX is about to reach a crescendo. The blatant efforts to stifle Silver at 18.50 now reach beyond the absurd. That this completely ILLEGAL activity is allowed to persist only proves the importance of Silver in the dynamic of the fraud known as fiat currency, aka: The US Dollar. An explosion in the price of Silver will trigger an implosion in the US Dollar. There can be no doubt now. Gold may be the nuke that can overwhelm and silence the US Dollar, but Silver is the detonator.

This is why Bear Stearns was wed to JPMorgan with the backing of the US Federal Reserve. Had Bear Stearns gone down in flames short Silver at $21 an ounce in the Spring of 2008, the US Dollar would have been destroyed along with the entire world fiat money system as Silver scorched a path to over $100 an ounce. It is so obvious now... Who has the biggest ILLEGAL short position in Silver? JPMorgan. Who is the long arm of the US Federal Reserve? JPMorgan. Who has the largest derivatives position in the World? JPMorgan.

Launch Silver, destroy JPMorgan. Destroy JPMorgan, destroy the US Federal Reserve. Destroy the US Federal Reserve, save the USA.

September is the next delivery month in Silver, and there is no Silver to meet delivery demands from the previous three delivery months: March, May, and July. If there was Silver, $18.50 would be dim in our rear view mirrors. Because it remains a wall only confirms the corner the CRIMEX finds itself. And when Rat Bastids are cornered they raise cheating to a new level, but cheaters never prosper.

Buy Silver while you still can. It is about to disappear, along with several bullion banks. And ultimately, the US Federal Reserve.

The Failure of the Second London Gold Pool[MUST READ]
By Adrian Douglas
This article is a sequel to my article entitled “Gold Market is not “Fixed”, it’s Rigged” which is essential reading before reading this article. The previous article demonstrated that had a trader consistently bought gold on the London AM Fix and sold it the same day on the London PM Fix and repeated it every day from April 2001 through to today the cumulative loss would be $500 per ounce. Yet gold has been in a bull market during that time and a “buy and hold” strategy over the same time period would have returned a gain of $950 per ounce.

The London Gold Fix is conducted by the representatives of five bullion banks: HSBC, Deutsche Bank, Scotia Mocatta, Societe Generale, and Barclays. The “fix” is no longer conducted in an actual meeting but by conference call. The bullion banks’ representatives communicate with their trading floors and with each other during the conference call to find the clearing price at which all buying interest and all selling interest is balanced. When this price is determined the price is said to be “fixed”. This is exclusively a physical gold market activity. It is balancing the number of bars of gold for sale with the number of bars demanded for purchase at a particular price.

It follows that if buying and selling were matched at the AM Fix price but then the PM Fix price is lower, then significantly more gold is being offered for sale compared to demand at the time of the PM fixing. The trend of the cumulative intraday change in Figure 1 shows that the selling into the PM Fix is manipulative because it has consistently countered the primary trend of the market and has proportionately increased as the gold price has increased. The PM Fix is the target for manipulation (price suppression in this case) because it stands as the global bench mark price at which physical gold trading is done until the following AM Fix, -- that is, a period of 19 ½ hours each day.

Though the official London Gold Pool disbanded in 1968 when it suffered massive outflows of bullion trying to frustrate free market forces that were manifesting themselves as insatiable demand for the metal, someone is now operating, albeit covertly, a second London Gold Pool. However, what I will show unequivocally in this article is that this “Second London Gold Pool” is about to suffer the exact same fate as the first one did.

It looks like the demise of the gold price suppression scheme is very close at hand. Over the years GATA has uncovered a lot of anecdotal and circumstantial evidence that the Western central banks have been dishoarding gold at an unsustainable rate in order to suppress the price. This is the first concrete evidence that, just as GATA has long been predicting, the gold price is set to blow up because physical demand for gold is overwhelming the manipulators’ ability, or willingness, to provide it.

The result of the 1968 failure of the London Gold Pool to suppress gold was an appreciation of the gold price from $35 to $850 per ounce. A similar percentage today would carry gold to almost $30,000 per ounce. This is not a price forecast but an indication that when free market forces have been frustrated by market manipulation for a very long time, the equilibrium price can be many multiples of the suppressed price, and the rise is typically rapid when the suppression is overcome.

The opportunity to acquire bullion before prices go dramatically higher is disappearing fast.

Gold manipulation: Central banks are now in deep trouble
Alasdair Macleod, FinanceAndEconomics.Org
Central banks have routinely manipulated the gold market since the beginning of fractional reserve banking, but they have always eventually failed in their quest. This time there is circumstantial evidence that we could be on the verge of the most spectacular failure so far.

Physical bullion differs from other investment media because today there is no secondary market. Buyers of bullion are not speculators, or even investors: they take delivery, hoarding it from the market, and are not tempted to resupply it at any price. To some degree this loss from the market has been replaced by newly mined gold and scrap, but the size of the market is such that gold from these sources is now insufficient for hoarding demand. So when the bullion banks try to shake out the bulls, as they have recently, they may manage to reduce their short position in the paper markets; but the lower prices for bullion simply generates extra physical demand. The result is that the size of the paper market has become increasingly dangerous relative to the physical gold actually available.

A fascinating insight into this process is recorded in an interview of one of the leading American coin dealers, who described how the fall in the gold price in 2008 from $1,000 to $700 was the opportunity for hoarders to clean out the market. I quote:

“…all product worldwide disappeared. Within weeks the U.S. Mint was shut down. The Canadian, Austrian, and Australian Mints were all eight to 12 weeks back-ordered or shut down. The Australian Mint stopped taking any new orders in July or August for the rest of the year. The Rand Mint, for the first time ever, sold out of all its product. One wealthy Swiss businessman flew his own 747 there and cleaned them out.”

The interview, which is well worth reading in its entirety, can be found here. It is particularly apposite given the recent shake-out in the futures market, raising the question, how much physical disappeared in the process? Not surprisingly, the interviewee is also worried that rising prices will merely generate yet more demand; so the absence of a secondary market is crucial to understanding the problem facing central and bullion banks today.

Lies, Manipulation and Deception. – All for Naught.
Ian Gordon,
I’m just saying, there’s hanky panky going on in the stock market, which, I think, is being propped up by the people responsible for the American economy.

This is being done to reassure American investors, and there are lots of them, that at least, that measure of their wealth is not being eroded. But it’s not just the stock market that is being manipulated. Every official economic government statistic has been presented in the best light possible so as to convince the public that things are better than they actually are. I am convinced that the officials who run the US government, at least from a financial and economic perspective, Larry Summers, Robert Rubin, Ben Bernanke, Tim Geithner et al, are presenting dishonest data in an effort to revive the US economy, which is at least 70% dependent on the US consumer. These officials are trying to convince consumers that they will soon be able to live the life that they were living until 2007 brought them down to a dose of reality. That reality was debt doesn’t make you rich; in fact, eventually, it leads you to the poorhouse, which is the place, where many Americans are now, sadly, en route.

So, all the numbers, whether they are unemployment, GDP, housing starts and others are always presented in the most positive way. In many cases these numbers are adjusted more negatively in the period following their release, which just goes to show that the initial numbers
were bogus. Officially, US unemployment numbers currently stand at 9.6%. John Williams who tracks the US government numbers shows that total US unemployment, if you add in the short and long term discouraged workers is now 21.7%. (See

To some extent, we understand that governments must be the leading cheerleaders in economics and finance, because they have now become such big fishes in the economic pond. Every government, including the US government, now accounts for a significant portion of GDP, which means that their sole income to finance their economic participation must come via taxes. A strong and viable economy is necessary to finance this massive government involvement. Hence the perpetual “bullish government” speak on the economy, which maintains, “if you do well (the consumer), we’ll do well, because of the taxes you’ll pay us.”

When the last Depression hit after the 1929 stock market crash, government officials including President Hoover, were quick to acknowledge the dire straight of the US economy. In fact, in May 1930, President Hoover acknowledged economic depression, when he said to a delegation of US businessmen asking for government assistance, “Gentlemen you have come too late, the Depression ended 30 days ago.” Well of course the depression hadn’t ended, it had just begun, but at least the President was prepared to call it as it was.

Now, there’s no acknowledgement of the severity of the situation; there’s no word of ‘Depression’, only partial acknowledgement of the “Great Recession”, which has only been admitted to by the US press and never has been part of the parlance of present US government officials. These people would like to talk in more benign terms, using such euphemisms as “slowdown,” or “contraction,” which means that everything adverse in the economy is only temporary and we are all going to getrichagain in the not too distant future. Following a recent regularly scheduled meeting of the Federal Reserve’s Open Market Committee meeting, there was an admission that the recovery was laboring and its pace “likely to be more modest in the near term than had been anticipated.” This acknowledgement, “however weaselly the phrasing, that the recovery is losing traction, stoked immediate fears that, in truth, things are worse, maybe much worse, than the Fed perceives (to be kind) or is willing to admit (to be, well, realistic). Alan Abelson. Barrons, August 2010.

The Great American Disaster: How Much Gold Remains In Fort Knox?
by Chris Weber
Yesterday marked the 39th anniversary of the day when the US Government declared bankruptcy. Oh, they didn't call it that at the time. But what happened on August 15, 1971 was that the US defaulted on its promise to pay gold for dollars.

Before that day, gold was the legal linchpin of the world monetary system. Although every currency was defined in terms of the US dollar, the dollar itself was legally defined as 1/35th of a troy ounce of gold.

Since then, there really has been no center to the international monetary system. The "reserve currency" continues to be the US dollar. But there is no official definition of what a dollar is. Like every other currency, its value changes every ten seconds as it is traded on the global currency markets. It is a promise to pay nothing. Its value has been devalued for years. On top of that, enormous effort has since been put into the global currency markets: buying, selling, manipulating...none of which has caused anything productive to the world economy. Oh, sure, currency investing has made some of us rich, but is it really the same kind of wealth that, say, Steve Jobs has created with Apple?

After cutting that last tie to gold, there was no longer any discipline left to keep the value of the dollar steady. The US dollar of August, 1971 is as of 2009 worth just over 18 cents, according to the Inflation Calculator. Thus, in purchasing power, the dollar has lost over 80% in the past 39 years.

Only foreigners were legally able to turn in their US dollars and get gold from the US Government from 1934 to 1971. August 15 of that year closed off that last power of convertibility.

In 1934, gold was confiscated from US citizens, melted from coins into bars, and gathered over the next few years into a new storage facility at Ft Knox, Kentucky. After that, the official price of gold was raised from $20.67 to $35, a devaluation of the currency that was an attempt to inflate the economy out of depression. It didn't work, but what it did do was to attract more gold in one place than had ever been seen.

At a time when deflation was depressing prices for all assets, the drastic rise in the official gold price made people all over the world want to sell their gold to the US Treasury. For many years, $35 an ounce was higher than the market price, so foreign sellers got a bargain.

The peak amount of gold held in Fort Knox reached 701 million ounces of gold. This was in 1949. This amount equaled 69.9% of all the gold in the world; never before had so much gold been gathered in one place.

But soon after that, gold began to leave Ft Knox and was shipped to the foreign persons and institutions who ponied up their $35 in Federal Reserve Notes for each troy ounce of gold they wanted. At some point in the 1950s, $35 became too cheap a price for gold.

From then until 1972, at least 75% of official US gold left the nation in exchange for paper dollars which can be printed at will. However, I think the total amount of real gold which remains is even less. The exact amount that remains is now officially listed at 147.3 million ounces. From the peak, that is a decline of 79%.

China Greenlights Gold: The Secret and Not-So-Secret Plan
By Jim Trippon
What if you learned that China was about to push world gold prices much higher? Would you believe it? Would you act now?

I wrote last year that China had been secretly building its hoard of gold reserves. As a result it had suddenly become the world's fifth largest holder of bullion. This hush-hush process had been going on for six years.

Nobody was sure how China had managed to gather more than 1,000 metric tons of gold without alerting gold bugs worldwide. After all, any ordinary purchase through the IMF would become public almost immediately.

But that didn't happen.

Beijing said it had bought all that bullion quietly from Chinese mines. But gold-watchers at the Standard Bank said no. They believed that China had been buying gold through secret government channels from South Africa, Russia and South America. You will see why that matters today in just a moment.

Gold prices have ballooned by 34% since I first wrote about Beijing's secret gold hoard in April of last year. So what would happen in Chinese demand for gold rose even more dramatically?

Well, that's exactly what's about to happen. And it's not entirely a state secret this time.

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