Proposed Global Class Action Gold & Silver Manipulation Lawsuit

This news was originally disseminated by GATA on February 5th.  A British law firm, Leon Kaye Soliciters, has proposed the initiation of a class-action lawsuit charging that six “well known” financial services groups conspired to manipulate the London Gold Fixing from 2004 – 2014.   The proposal cites the recent settled Deutsche Bank class action suit for in New York and the ongoing billion dollar class action suit in Ontario, Canada.  The class action suit would be open to investors globally.  If interested contact Leon Kaye at info@leonkaye.co.uk.  Here’s a summary of the proposal:

Based on documents in the public domain to which we refer below, we consider that there are good grounds to believe that members of six well-known financial services groups combined together to manipulate the outcome of the London Gold Fixing between about 2004 and 2014 and that members of four of those groups combined to manipulate the outcome of the London Silver Fixing between about 1999 and 2014. The effect of this was to create false market prices, in particular by artificially depressing prices after the 3pm (London time) Gold Price Fixing and to increase bid-offer spreads in physical gold, physical silver and their respective derivative instruments. The relevant institutions did this to increase their profits from their own activities in these markets at the expense of other market participants who have therefore suffered loss and damage, probably running into hundreds of millions of pounds in aggregate.

If it can be established that these financial institutions participated in price fixing then we consider that there can be little doubt that they have breached section 2 of the Competition Act 1998 and are liable to pay damages to any other market participant that suffered loss and damage as a result.

Market participants who have suffered loss and damage are entitled to claim damages in proceedings in the Competition Appeal Tribunal (“CAT”) in a class action pursued either on an ‘opt-out’ or an ‘opt-in’ basis.

You can read the entire announcement here:  Proposed Precious Metals Class Action Suit

While I’m skeptical that this will have an impact on the market, even if the suit is ultimately filed, there’s always the chance that court-ordered discovery – assuming these banks have not destroyed and wiped clean any evidence – could reveal the truth.   And the truth will set the gold/silver price free.

The U.S. Can Learn From India’s Move To Digital Currency?

In short, we can learn to not let it happen here.

In August, Obama’s Defense Secretary, Ashton Carter, appointed Jeff Bezos to the little-known and highly secretive Defense Innovation Advisory Board.  This for me confirmed that Bezos was an integral part of the Deep State, which I began to suspect when Amazon’s cloud computing division started receiving contracts from various Deep State divisions (like the CIA).    This “advisory” board is chaired by Googles Eric Schmidt.

This position dovetails nicely with Bezos’ ownership of the Washinton Post, which has been transformed into part of the Deep State’s program to proliferate propaganda – or “fake news.” Funded by the taxpayers, the work being done by this Board has intentionally been “kept under wraps,” as Business Insider describes.

After, all the Washington Post has been well respected  for decades as one of the primary “go-to” newspapers for domestic and international political news reporting.  Trusted as such, historically if a news item was reported by the WashPo, it had to be true, right?

Under Bezos’ control, and in the context that Bezos is part of the Deep State mechanism, the WashPo has become an Orwellian device in the “war on truth.”  In addition, Bezos can use the “power of the pen” as a powerful political weapon against politicians or Government bureaucrats who oppose the Establishment and the Deep State.

With that as a backdrop, the Washington Post published a curious report on the Indian Government’s of the removal of the most commonly used cash bills by the Indian populace titled, What The U.S. Can Learn From India’s Move Toward A Cashless Society.  The article goes on to describe all of these “benefits” but only casually mentions the huge economic disruption caused by the move.

Of course, these “benefits” all had to do with the implementation of technology which makes it easier for the Government to identify, track and ultimately control the individual. It should come as no surprise to us that, given the role Bezos plays as part of the Deep State, Bezos’ newspaper would be promoting the digital banking system.

A crucial fact not known by most is that the former Chairman of India’s Central Bank – the Reserve Bank of India – was appointed as the Vice Chairman of the BIS in 2015.  This fact calls into question the idea that digitizing India’s banking system was motivated by anything other than the western elitists’ goal of implementing totalitarianism.

While the WashPo did mention the disruption to India’s economy caused by the removal of the most common currency bills, the article did not mention the fact that the move temporarily undermined the population’s ability to buy gold during the country’s biggest seasonal gold buying period.  This latter effect was likely one of the primary motives behind the move and it underscores the control over India that can be exerted by the western elitists and their Central Banking cartel.

The bottom line is that India was used as “testing ground” for the western global elitists’ plan to digitize the global currency system. This will be used to exert Orwellian totalitarian control over the masses. It should come as no surprise that the wealthiest elitists like Bill Gates and Jeff Bezos have been advocating a cashless banking system, backed by the “intellectual” support of “academics” like Harvard’s Larry Summers and Kenneth Rogoff.

There’s no question that subtle and gradual effort will be used to implement a cashless banking system in the U.S.   All the warning signs are flashing.  I also suspect that, at some point, the “national security” card will be pulled in persuading the masses that cash is the “currency of terrorists.”

Ben Franklin once warned, to paraphrase him, that if we give up some of our freedom in exchange for security, we will eventually end up with neither.   That is where we are headed unless there’s an effort to prevent the elimination and use of cash in our economic system.

U.S. Political Crisis Foments While China & India Devour Gold

The demand for gold in India and China so far this year has soared, a fact which is completely ignored by the western financial media. The ex-duty Indian gold import premiums (approximately $10 earlier this week) are quite remarkable, “as the need to import kilo bars only arises if Indian demand is not satisfied by Dore imports (which had a duty advantage of $15.52/oz this afternoon) and smuggled gold. Reports of apprehensions at Indian airports are continuing to appear, indicating that smuggling has in fact revived” – John Brimelow’s Gold Jottings, brimelowgoldjottings@gmail.com).

Brimelow also reported that 162 tonnes of gold were delivered into into Shanghai Gold Exchange on Monday this week, preceded by 79 tonnes on Friday. The Friday delivery is the largest by far that I’ve observed in watching this statistic over the last several years.

While the eastern hemisphere is busy converting fiat currency into physically delivered gold, the United States political system is becoming increasingly unstable and unpredictable, as the Trump White House, in an effort to repair the frayed relations with Russia, is under systematic attack from the Deep State.  Trump’s erratic leadership combined with the Deep State’s political terrorism will likely spark political and social chaos in the U.S.

The relentless buying strength of physical gold in the east along with the incipient instability of the U.S. are fundamental catalysts to drive the price of gold and silver a lot higher.  Furthermore, the emergence of accelerating price inflation thrown into the mix has the potential to create the “perfect storm” for higher precious metals prices.

In an earlier post I explain why now is the time to use the manipulated paper gold price take-downs as buying opportunities.  This viewpoint was vindicated during the two-day Fed Chairman staged Congressional propaganda event, which historically is a period  in which the banks slam the gold market with tonnes of paper gold in order to prevent the price of gold from signaling a message that conflicts with the economic and financial fairytale artfully spun by the Fed-head (or not so artfully, as it were, in Yellen’s case).

Gold was slammed nearly $20 just prior to and during Yellen’s hot air exhalation sessions on Capitol Hill on Tuesday and Wednesday.  The catalyst was a series of paper gold volume surges on the Comex in which the NY Fed and its agent bullion banks drop a payload of gold futures on both the Comex floor and into the CME Globex trading system, targeting the stop-losses set by hedge funds that are long gold contracts.  This detonates an avalanche of selling by momentum-chasing hedge fund algos.

Subsequent Yellen’s freak show on Capitol Hill, gold promptly defied the paper market deviance and shot up $21 to a new year-to-date high.  If the deteriorating economic fundamentals manage to chew through the safety-net that has been placed beneath the stock market, a real rush into gold – physical and derivative – will be triggered.   In the meantime, the nature of the precious metals trading has shifted from shorting rallies and covering those shorts on sell-offs to buying dips and selling rallies.   Eventually the hedge fund algos will be programmed to buy dips and aggressively buy rallies.  That’s when the real fun begins, especially in the junior mining stocks…

Gold & Silver: Buy The Paper Price Attacks

These premiums [the ex-duty import prices being paid for legal kilo bar imports in India] are actually quite remarkable as the need to import kilo bars only arises if Indian demand is not satisfied by Dore imports (which had a duty advantage of $15.52/oz this afternoon) and smuggled gold. Reports of apprehensions at Indian airports are continuing to appear, indicating that smuggling has in fact revived. – excerpt from John Brimelow’s Gold Jottings Report (contact John at brimelowgoldjottings@gmail.com to learn more about his service)

The price of gold & silver have had a big move since mid-December, despite the flood of “fake news” connected to the temporary disruption of gold imports into India precipitated by Modi’s now-failed attempt to limit the ability of Indians to buy physical gold and despite the plethora of fake news about the quantity of gold flowing into China both before and after after the week-long Chinese New Year observance.

Brimelow goes on to assert in one of his Monday updates that, “Viewed from a US-centric and technical perspective, gold’s friends have something to worry about. However the Asian buying is about as strong as it ever usually gets and for that reason the Bears’ prospects are probably limited.”  Note, the “technical perspective” indirectly references that use of paper gold by the western bullion banks in their attempt to control the global price of gold.

As an example of the price-control mechanism implemented in the western paper market, you’ll note that after a surprise bounce in gold on Friday, likely stimulated by paper short-covering on the Comex, was met with an attack after the Monday a.m. LBMA gold price “fix” and again right after the Comex floor paper gold trading commences:

These are typical times during the day, when the physical gold buying markets in the east are closed for the day and the western paper market manipulators take control of global gold trading via LMBA forwards and Comex futures and OTC derivatives.

Just as notable about Friday’s move higher in gold during NY trading hours is that fact that the price was moving in correlation with a move higher in both the dollar index and the U.S. stock market.  Often, there is an inverse correlation between gold and the USDX/Dow/SPX.

There’s is an “invisible hand” in the market pushing the prices of gold and silver higher in defiance of the attempted price control schemes being exerted in London and New York. This silent operator is without the pressure being exerted in the physical market.

This week I’m sure will prove to be a bit of a price roller-coaster, as the semi-annual “Humphrey-Hawkins” (as it used to be called) Fed Chairman testimony on monetary policy and the economy is a time used by the western CB’s and bullion banks to control the price of gold using paper. After all, they can’t have the price of gold moving higher when the Fed’s El Hefe is extolling the virtues of the fiat currency and fractional banking system in front of Congress and the world, which begins today.

The point here is that it’s my view that the next longer term trend move in gold is higher, which means that price attacks should be used as buying opportunities, both for the metal and the mining shares.  In fact, the mining shares were quite stubborn about going lower when gold was being hit hard in New York after being hit hard in London.  Typically this is a signal to the market that prices in the precious metals sector are going higher.

 

What Happens To Gold & Silver When Trump Attacks The Dollar?

Get prepared because we’re going to have the worst economic problems we’ve had in your lifetime or my lifetime. – Jim Rogers, Macro Outlook in the Trump Era – MacroVoices

Make no mistake, it’s going to get ugly at some point in 2017. Elijah Johnson at Silver Doctors invited me to discuss why I believe Trump’s policies, assuming he gets anything passed and implemented, will be phenomenal for gold. Another factor not being discounted or widely discussed is an acceleration in the rate of inflation over and above the ability of the Government’s CPI sausage grinder to mute actual price inflation in everyday consumables.

Demise Of The American Farmer Reflects The Demise Of The Middle Class

Too much debt, poor capital allocation decisions (McMansions, expensive leased cars, spending to “keep up with the Jones’) and declining disposable income.  It’s hitting the general middle class in America similarly to the way in which it is hitting the American family farmer.

The Wall Street Journal posted an article titled, “The Next American Farm Bust Is Upon Us” earlier this past week.  The bubble in farm land, just like the general real estate bubble, was precipitated by the Fed’s money printing and general easy money policies.  The cover story was that the policy was directed at stimulating economic activity.  But the actual result varies, with banks, corporations and ultra-wealth elitists benefiting to the detriment of the rest of the country.

A friend and colleague of mine who happens to be a wheat farmer shared with me his real life experience with trying to compete against the Monsanto-driven corporate farms in this country.  He’s working to move the production of his farm from wheat to industrial hemp but will need legislative help in his State to accomplish this:

Where some farmers get in trouble is spending too much for new equipment, and/or not fertilizing enough (or at all)… and/or not being good farmers in general.

For farmers carrying a high debt load, it’s challenging right now. Prices for wheat and corn will rebound eventually, but I’m not sure these grains are the best crops for farmers to grow going forward.

Russia is the world’s largest exporter of wheat, with Canada and the US tied for #2. Russia is also increasing their corn production (non-GMO) to be competitive with American farmers. Although demand for wheat and corn will never go away, these reasons are why I’m bearish on grain farming… and bullish on industrial hemp.

That’s why I’m cautiously optimistic about the industrial hemp bill becoming law in my State this year (fingers crossed).

Make no mistake, the plight of the farmer parallels that of the general middle class.  While some portion of the middle class is doing the proverbial celebratory end zone dance right now over the few thousands in paper profits they are making in the greatest stock bubble in U.S. history.   Most if not all of them will hang around too long and watch paper profits turn into paper losses when this historic equity bubble pops.

Meanwhile the Establishment elitists are coming out of the woodwork and warning the proletariat to take their profits out of the market and run, like these comments from James Tisch, CEO of Loews Corp, Tisch family scion, member of the Council on Foreign Relations and former director of the NY Fed.  In reference to the average retail investor.

In addition to Tisch, several other Establishment elitists have issued warnings, including Bill Gross, Larry Fink, Ray Dalio, George Soros and Sam Zell.   As my good friend and colleague, John Titus of Best Evidence Videos has said presciently:

One of the rules by which the elite aristocrats abide is they consider it rude to not issue a warning before they do something bad to us. They’re like criminals with manners. In other words, it’s gauche to flush the toilet while the serfs are taking a shower without giving a “heads up.”

 

Patrick Buchanan Is Insane

The U.S. Constitution – not that the Constitution is relevant anymore after 16 years of Bush and Obama – provided for the separation of powers in the three branches of Government:  Legislative (Congress), Executive (White House) and Judicial (court system).   The three were supposed to operate independently, acting as a system of checks and balances on the distribution of political power and the application of law-making.

The legislative and executive branches of Government have been completely hijacked by corporate and wealthy individual money (see the Citizens United SCOTUS decision, which codified the ability of using money to buy power).  Even the newest President has already been bought and sold by Wall Street.  The judicial branch is largely corrupted by money but there are some courts which have maintained some adherence to the Constitution.

One of these courts is presided over by the judge who overturned Trump’s travel ban Executive Order.  Speaking of EO’s, they should be completely eliminated.  The Executive Order tranforms the Oval Office into a de facto Emperor’s  Roost.   Every Executive Order signed by Bush, Obama and Trump has been used to override the Legislative “check and balance” provided in the Constitution and has overridden the Constitution itself.  For the most part, the Judicial Branch has looked the other way.

Now that a district court justice has properly and rightfully overturned Trump’s travel ban EO, Patrick Buchanan is calling for Trump to “break Judicial power” under the guise that Trump’s EO falls under the “wartime” provisions which give the President limited unilateral decision-making powers.

That’s complete insanity.  What war?  The illegal “war on terror?”  The world isn’t at war with the U.S.  The U.S. Government is trying to impose it’s will on the entire globe.   What’s most amusing about Trump’s travel is the inclusion of Iran and Yemen.  Iran is an anti-Jihadist Government and Iranians have never been found to have attacked or even threatened the U.S. Government.  Yemen is a war-torn country that is being flattened by the U.S.-funded Saudi Arabian military.

Patrick, which country exactly would you say is sponsoring terrorism and the imposition of military hegemony around the globe?  Buchanan references Eisenhower’s quote about the SCOTUS seats filled by President Eisenhower, but where’s Eisenhower’s quote about the military complex?   The unelected Deep State spends hundreds of billions each year that is unaccounted for and largely unauthorized.

If Trump embarks on an effort to repudiate the power of the last few remaining courts in the land which are fulfilling the function of “checking” the balance of power in the Government, then we may as well anoint “Emperor Trump” and move a throne into the Oval Office.  The U.S. Government has been slowly moving in the direction of Totalitarianism and Patrick Buchanan’s plea would pave the way for the Presidency to become a Dictatorship.  It’s sheer insanity.

11.1 Tonnes Of Paper Gold Dumped In Sixty Seconds

Central banks stand ready to lease gold in increasing quantities should the price rise.  – Alan Greenspan, 1998 in Congressional testimony on OTC derivatives

Gold has been in a steady uptrend since December 18th, bottoming at $1131 after a four and half month price correction.  Firmly back over the 50 dma, the price momentum appears to be a threat to the “bullion”  banks who suppress the price of gold in the paper derivatives market on behalf of the western Central Banks and, ultimately, the BIS.

The banks must feel threatened by the recent activity in both physical and paper gold trading.  This morning the price of gold was attacked in the Comex paper market after St. Louis Fed-head, James Bullard, delivered remarks about interest rate policy that should have propelled the price of gold higher:  “We think the low-safe-real-rate regime is unlikely to change in the near term. This means the policy rate can also remain relatively low over the forecast horizon” (link).

Instead, the Comex was bombed with paper:

At 9:54 a.m. EST, 3,927 April gold futures contract (paper gold) was dropped on the Comex. Prior to this, the the average number of contracts per minute since the Comex had opened was under 500 contracts. This is 11.1 tonnes of paper gold which hit the Comex trading floor and electronic trading system in a 60 second window.  It represents approximately 30% of the total amount of gold the Comex vault operators are reporting to be available for delivery under Comex contracts – dumped in paper form in 1 minute.

This reeks of fear.  The western Central Banks have grossly underestimated the eastern hemisphere’s appetite for physically deliverable gold.  Despite an attempt by the BIS to mute India’s demand by restricting the availability of cash in India’s banking system, India’s current demand is robust and will likely increase as Indian’s now have cause to fear the Indian Government’s war on cash.

In addition, China’s demand for gold seems to be accelerating.  Based on Swiss export numbers, 158 tonnes of gold was shipped to China in December.  Far higher than the numbers presented by “official” organizations tracking gold flows.   Current premiums to the global market price of gold on the Shanghai Gold Exchange are running in the low teens.  So far this week well over 100 tonnes of gold have been delivered onto the SGE.  Except for the PBoC, all gold distributed inside China must first pass through the SGE.

The western Central Banks will have a problem if the price of gold begins to take-off, as they will lose control of their ability to control the price using derivatives.   Perhaps in addition to the standard price containment operation on the Comex this morning, the attack on the price of gold in the paper market was in response to Eric Sprott’s comments on King World News yesterday:

“There’s no doubt about it if they (investors) keep coming in and buying that kind of tonnage. At some point they will look inside at what little gold is left in the Western vaults and say, ‘No mas. We can’t keep doing this at the rate that they are buying tonnage because we will run out of gold.’ And if they see that they are going to run out of gold in a year or so, when do they raise the white flag? I have told you many times that the Western central banks have been making up for the imbalance in term of supply and demand by dishoarding their gold hoard surreptitiously”

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Rare Honesty From A Corporate CEO

In my view, the mood of these markets is in stark contrast with the many unknown from our current economic and political landscape, both here and abroad. For me, it’s a major disconnect, and it concerns me.  – James Tisch, Loews CEO (call transcript sourced from from Seeking Alpha)

James Tisch shared some extraordinarily candid observations about the financial markets on Loews Corp’s Q4 earnings conference call on Monday.   I say “extraordinary” because I do not believe I have ever heard, in well over 30 years of capital markets experience, any corporate CEO – or any corporate officer – ever speak honestly about the condition of the financial markets.

With regard to the amount of capital and credit made available by the Fed:

In the credit markets, spreads on the high yield securities are approaching historically tight levels, while key credit metrics such as leverage and coverage ratios are showing signs of weakening. The leverage loan market has been overrun by such massive inflows of capital that you could probably get loan to buy a fleet of zeppelins at this point in time.

That statement references the flood cheap capital made available by the Fed that has facilitated the greatest mis-allocation of capital since Greenspan inflated the tech bubble and Bernanke inflated the housing/mortgage bubble.

The merger market is being driven by large pools of private and corporate buyers, the wave of private capital combined with the abundance of available leverage at remarkably low rates has enabled private equity firms to pay big prices for companies that haven’t already been gobbled up by strategic buyers.

That statement is quite remarkable.  Thinly veiled in diplomatic finesse, Tisch essentially acknowledges that the private equity investors have fomented a massive M&A bubble and are significantly overpaying for acquisitions.

And the coup de grace:

In my opinion, the markets are priced for perfection, and they have been that way for quite some time, complacency reign supreme. However, my experience has shown me that this state of affairs won’t go on indefinitely.

In short, the market is historically overvalued and it will not end well for those who continue to hold long positions in the stock market.

In 2000 Greenspan has created a tech bubble which he said he could not see.  In late 2007 there was a housing and mortgage bubble, the existence of which Bernanke denied.  And now there’s an “everything” bubble, to which Yellen is role-playing Hellen Keller.

Panera Bread stock is a text-book example of the insanity in the stock market right now. PNRA announced earnings yesterday and “beat” the Street.  But here’s a synopsis of its numbers:

System-wide same store sales increased just .7%.  Franchise SSS dropped 1.4%. Franchised stores are 55% of the store base. Operating margin dropped 40 basis points. Net income in Q4 dropped $22.8 million from $24.7 million in 2015. Company bought back nearly $400 million in stock during 2016. It just issued another $200 million in debt. If it wasn’t buying back shares, it would not have needed to issue that debt. The share buybacks make the EPS look better but the net income of operations fell quarter over quarter and year over year.  That’s how PNRA “beat:” financial engineering because its net income declined quarter over quarter (2016 vs. 2015) and year over year.  – excerpt from an email exchange with a Short Seller’s Journal subscriber

For that, PNRA stock is up 8.4% today.  A $4 million year over year drop in net income has generated a $400 million one-day jump in PNRA’s market cap. This stock is trading at 38x trailing income as its ability to generate profits.  No wonder insiders are selling stock more quickly than passengers jumped off the Titanic.

I look at dozens of companies every week and insiders are furiously shoveling their shares into the market at well over 90% of these companies.  They all understand the same problem in the capital markets to which Tisch addressed.  In that latter regard, it was as refreshing as it was unique to come across an insider who was honest.

IRD To Mitch McConnell: Exactly Who Is The Thug?

The NY Post reported that Senate Republican “leader,” Mitch McConnell called Vladimir Putin a “thug” in response to DJT’s interview on 60 minutes.   It’s hard for the U.S. Deep State to hide the U.S. military build-up in the NATO countries surrounding Russia’s borders. This includes the takeover, in effect, of Ukraine by the Obama Government.   I think we can all agree that NATO is a de facto “shell” for U.S. military operations.   With that in mind, I pulled the interesting graphic to the right, with some edits from me (click to enlarge) from an article written by an options trader who also posts commentary on Zerohedge.

The U.S. has been literally flooding the NATO countries surrounding Russia’s borders with offensive military assets.  Recently the U.S. deployed tanks and special forces personnel in Poland.  A week later, the U.S. deployed 900 marines in Norway – the first time since World War Two that foreign troops have been allowed to be stationed in Norway, which is a NATO member.

So Mitch, looking at the actions the graphic above and interpreting the actions of the U.S. Department of Defense, who exactly is the “thug?”