Gold Market Manipulation: “It’s Worse Than You Think”

The United States would rather reveal its nuclear secrets than what it is doing in the gold market.   –  Chris Powell, Treasurer of GATA, on GATA’s inability to get information from the Treasury or the Fed under the Freedom Of Information Act

The U.S. Government has used up most, if not all, of this country’s physical gold holdings in order to manipulate the price of gold for the purposes of propping up the fraudulent U.S. dollar.   When this truth is finally exposed for all to see, it will go down as the greatest scandal in the history of the United States.

The the entire U.S. system is a fraud.  This fraud is rooted in the fraudulent representation that the U.S. Government still owns 8100 tonnes of gold.  The U.S. dollar is fraudulent, backed by the “full faith and credit of the U.S. Government.”  The $17+ trillion in Government debt issued in dollars is a fraud.  This debt was issued absent the intent of every repaying it.   It goes on and on…

You can ignore reality, but you can’t ignore the consequences of reality.  - Ayn Rand

GATA’s Bill Murphy wrote a must-read article about the extreme manipulation of the gold market.   It was published in GATA’s subscription site, LemetropoleCafe, and Bill was kind enough to let my reproduce it for everyone:    It’s Much Bigger Than You Think.

Gold is real, honest money.  Fiat currency and debt issued in fiat currency is not.

Speaking of gold and fraudulent businesses, I wrote two recent research reports that I think can generate easy and significant profits for stock investors/traders.    In fact, the gold stock is green today with the sector down and the homebuilder stock is red.  The homebuilder is even more overvalued on a relative basis now than it was at the peak of the housing bubble.   You can access these reports here:   Stock Research Reports.

One more point, although he may have made the assertion at some point, I have been unable to find any point in time for which Alan Greenspan said the gold is not money.  As we know, Ben Bernanke made that assertion in front of Congress, amazingly with a straight face…

20 thoughts on “Gold Market Manipulation: “It’s Worse Than You Think”

  1. todays action in the phony paper markets of the only 2 forms of real money was a complete f*&#ing joke…
    this country is doomed because of the sociopathic MoneyChangers..
    i bought more Silver in spite of these assholes this morn…
    carry on.

  2. Evidences of collapse:

    We learned yesterday (August 4) that the New Jersey governor, Chris Christie, was on tour to announce a major pension reform that the state is unable to meet and must renegotiate with stakeholders: “The promises of pensions can not be required “. Christie is a courageous policy; in fact many other states are affected by this pension crisis that threatens social cohesion and the economy of the entire United States (1).

    There are two month the team GEAB anticipated the current system break U.S. pension payments. Here are two excerpts from our Bulletin No. 86, published June 15, 2014 on the alarming situation of the United States:

    [...] The domino pensions, municipal bonds and Munis dollar
    Among the most serious in the dollar wall cracks are market U.S. municipal bonds and U.S. pension system … Retreats, because an environment of interest rate floor does not allow pension funds to honor performance they had planned; Munis (municipal bonds) for this huge market will collapse if a city of significant size had not repay its obligations. But the two are linked: public pensions are paid for many locally, increasing the pressure on municipal budgets and precipitating the bankruptcy [...]

    [...] The pension bomb
    As for Detroit, the choice for municipalities is often relatively clear, though painful: cutting pensions paid by the city to its former employees, or go bankrupt. For cities in the least distress, he also remains the possibility of lowering costs by sacrificing the public schools, for example. To cite just three examples, public pensions in Illinois, Pennsylvania and Ohio (5th respectively 6th and 7th most populous U.S. states) are in such bad shape, particularly in the education sector , they forced the ASBO to sound the alarm. The system is no longer supported only up to about 50%, and costs will explode to keep afloat. And this is unfortunately not the isolated case of these three states … we have seen, the whole system is underfunded, while retirees are more numerous.

    Translated from French into English
    http://www.leap2020.eu/GEAB-le-bulletin-electronique-no-1-de-lanticipation-politique-un-temps-d-avance-sur-l-actualite-_a16668.html

    Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.

    The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

    http://www.nytimes.com/2014/07/27/business/the-typical-household-now-worth-a-third-less.html?_r=1

    All signs pointed to recovery: In April, after a three-year absence, Portugal successfully returned to the capital markets. One month later, the country left the European rescue framework. And in June, the Portuguese government announced that it would not draw on the last tranche of emergency loans from the European Union and the International Monetary Fund.

    But now Portugal has faced its first setback: Bank Espirito Santo (BES), the country’s leading private bank, is in danger of collapse. Fearing a new banking and financial crisis, the Portuguese government has announced plans to save BES at a cost of 4.4 billion euros ($5.9 billion).

    http://www.dw.de/portugal-prepares-to-rescue-its-biggest-private-bank/a-17831301

    Keep up the good work, Dave!

  3. Jim Sinclair has always maintained that the external liabilities of the country can be made creditworthy by revaluing the dollar price per ounce of gold, held by the Treasury, to equal the total indebtedness. When asked “What if there isn’t any gold there”, he seemed to think that perception of gold ownership was sufficient. I could never understand that idea. If you don’t have the gold, you can’t offset shit. Unless, of course, the state decides to steal it from it’s citizens.

    Now, I’ve never believed that the Treasury has anywhere near the gold they represent to the public, given what I’ve witnessed over the past 25 years that I’ve been investing in precious metals. This gold price manipulation has been going on since the dollar faced collapse in the 70′s. I wonder if Mr. Sinclair has revised his opinion.

    1. Actually, the manipulation of gold has been going on at least since Bretton Woods. The U.S. had roughly 21,000 tonnes when that treaty was signed. What happened to that gold?

      The “perception” of gold ownership works until the bluff is called. If the BRICs rollout a gold-backed currency and demand that anyone who trades with them use their currency, the U.S. might say “hey man, we got 8100 tonnes backing our currency – we’re good and so is our currency.” But what happens if the BRICS say “hey man, that’s cool, but let’s see the gold and then we’ll consider convertibility of our currency into the dollar.” What happens then, Jim?

      1. Here’s what I think happens: The U.S. will incite global military conflict before it gets to the point at which it is forced to “lift its skirt” on the gold issue.

      2. The gold was redeemed lawfully, mostly by the Government of France, and a bit by Germany. This was in response to the perceptions of both governments, and others, that the US had printed far too many dollars in excess of the gold backing, which was fixed at $35 per oz. The famous French economist, Jacques Rueff was always against the B_W arrangement because it allowed the US to have what he called, “deficits without tears”, realizing very early that the US would resort to settling trade accounts with debt rather than gold.

        Remember that under the B-W arrangement, US treasuries, as well as gold, were reserve assets. US Treasuries could be redeemed for gold by central banks, such as the Banque de France and the Bundesbank, when presented to the Treasury. Rueff recommended to De Gaulle that this be done, and so they did.

        Nixon, when advised by Treasury officials that the US gold hoard was in danger of being depleted, terminated the redeemability of gold by the foreign cb’s. In effect, the US was facing a balance of payments crisis, which they avoided by not paying in real money. And the US has been in a perpetual trade balance deficit ever since.

        You are correct in saying the manipulation was occurring back then, but in a different manner then now, as there were no paper futures contracts for gold. The London Gold Pool was established to manage the price of gold in the cash market. It finally ran out of the gold used to suppress the price on the market. This was done to disguise he fact that the quantity of dollars far exceeded the official fox per oz.

        The whole episode is well described by James Grant in his book “Money of the Mind”, which I recommend to anyone interested in the evolution of the banking industry in America to its current state.

        1. Jim Grant couldn’t even spell gold until a few years ago. Everything you mention was well-documented by GATA 15 years ago. Physical gold was dumped on the market in the 50′s and 60′s. Physical dumping is much more powerful than the paper selling. The U.S. and the UK started running low on gold plus De Gaulle and Swizterland were getting reading to ready turn in all their Treasuries in exchange for gold per Bretton Woods. The U.S. insiders got wind of this and Nixon was ordered to close the gold window.

          Yes paper gold wasn’t erected until 1974. But something was required to help enable them to keep a lid on the price of gold. During the 60′s, it was mandatory to mainain the $35 peg. Once the window was closed, gold shot up pretty quickly to $200. They needed futures to beat it back down.

          Did Mr. BowTie mention that J Aron/Goldman Sachs developed the idea of Central Bank gold leasing and sold it to the Fed. The idea was originally conceived by a J Aron partner. J Aron was acquired by Goldman in 1981. Gold leasing of the remaining stock of U.S. gold held by the Fed was utilized in the 1990′s and early 2000′s. Both the US and the UK were running out of gold to dump on the market in any form of transaction and that’s what prompted the Bk of England to unload half of its remaining gold reserves – 400 tonnes – on the market. It was announced in 1999 and executed in 2000 and that’s about when gold bottomed at $250 (there’s a famous statement regarding that “we were staring into the abyss” by BOE Chairman Gordon Brown).

          The ONLY reason gold has moved from $250 to where it is now is because China et al started accumulating physical gold in the early 2000′s (contrary to common view which attributes 2009/2010 as when this started happening) and the West ran out of most of its gold to unload on the market. That’s when GLD was conceived – to “absorb” huge waves of retail and institutional money that they knew would flood into gold. GLD was a paper “capture” mechanism. I’d bet my dog’s life that the GLD’s true unenencumbered gold holdings is a mere pittance of what it supposed to be. The last decade also saw the proliferation of gold hypothecation/rehypothecation schemes, which used gold borrowed from big wealthy private accounts safe-kept at banks like JPM in London vaults to dump on the market. That is exactly why Jeffrey Christian unwittingly admitted in a hearing held on silver manipulation that paper claims on gold on the LBMA were 100x greater than the available physical. He later denied the calculation but a Finance official from India used 93x when he was discussing it.

          Right now the gold available to deliver into China/India/Russia etc is runnning very very low, if not depleted. We are near the end-game.

          Jim Grant has the equivalent of about high school or weak college level understanding of gold. At least based on his public commentary. I saw him speak last week here in Denver and I was most unimpressed. I’m not sure why he is cited as a gold expert, but his knowledge and understanding is surprisingly superficial.

          1. Dave,
            I have neither the knowledge nor expertise to question your assertion that we are near the “end-game”, but I do have to wonder “Are we really?” Because, as you pointed out, they started the manipulation back in the ’50s and ’60s selling gold into the market until reaching an “end game” at which point they changed the game to Bretton Woods until they reached that end game, then they moved on to the GLD scam which has now reached it’s end game. Given this history and their seeming total control of all the levers of power, isn’t it feasible they think of some other means of keeping the plates spinning? Is this really the end of the road for the scams or just a time to think up a new scam? Their corruption is exceeded only by their creativity and the ability to remain corrupt. Is honest money really just around the corner? One could hope, but there is valid reason for skepticism.

          2. They’re almost out of physical gold available to deliver to the east, derivatives are reaching the tipping point again, big banks and insurance companies are in way worse shape than they were in 2008. We’re seeing the signs in the fact that the big bond fund managers are whining like pussies for a mechanism to bailout a derivatives collapse and, even more to the point, the fact some of the “Club Med” country banks’ are hitting the wall. BES was bailout by a Portuguese-funded taxpayer fund. That fund is tapped now. BES was bailout because it would have ignited a derivatives catastrophe. What about the next big bank that goes tits up?

          3. The Fed is doing QE to inject close ot $3 trillion of “cushion” into the big banks in this country. In a sense, it has been “pre-funding” the next big financial catastrophe. But it won’t be enough…

          4. Institutional Investor magazine just published an article on the coming liquidity catastrophe in the bond market. The mainstream “institional” thinking is finanlly catching up to my bond market thesis: collapse by reason of derivatives.

            Right now everyone is blaming this on the fact that dealers don’t have the capital to use to provide “liquidity” to the bond market. But there’s a reason: that’s why we collapsed in 2008. So when big institutions go to dump insanely overpriced bond issues, who will buy it? ROFLMAO

          5. I don’t think I cited James Grant as a gold expert – whatever that means. I cited his book as as being a reference for the Nixon gold default – the circumstances and reasoning behind it.

            I’m a big fan of GATA, and admire their work, as I do anybody who works to uncover the corruption of our financial system. However, there were a lot of people who had a good knowledge of what was happening in the gold market before their time.

            Before the internet, a lot of digging and research was needed to understand what was going on. James Grant’s book – which was a history of American banking, from the civil war up until the time of grifters such as Mr. Milken and Ivan Boesky, was published in 1992 . It was a good reference for understanding how the gold default happened.

            For those who didn’t know what the internet was, or if they did, couldn’t use it until browsers became available – somewhere in the mis-90′s if I recall – acquiring this knowledge was difficult. And even so, little to none of this information was on it anyways.

            Back then, I was a VP for a mining company that grub-staked one of the biggest gold strikes in N. America, in the past 50 years. We lived and breathed gold. All market info was private subscription and word of mouth from investment specialists like Sprott and Pollitt.

            Personally, I wouldn’t be too hard on guys like Grant. The gold sector needs all the friends it can get.

  4. Like you, Grant is selling a service, targeted to institutions. I’m sure he moderates his commentary appropriate to his subscribers. That doesn’t make him a phony, but this is your website and you can say whatever you wish.

    1. I can tell you like to have the last word in any discussion. That’s fine. Let’s just leave it that we’ll agree to disagree on Grant.

  5. Thought you’d appreciate this Dave…

    We have a local Asian market, really big place, also has a jeweler there sort of a store within the store. Went in looking for a ring, knowing they’d have 22K and 24K gold, and they had a really great selection. So I asked, “why is it so easy to get 24K jewelry here, when no other jewelers in the area have any?” The lady helping me leans in close and says quietly “because to us, gold is money. And we don’t want 10K or 14K, we want it pure, because it’s not just jewelry for us, it’s money.” And she added, with extra emphasis, “we don’t trust our government, and the value of paper money”.

    The message wasn’t surprising, of course – all we gold buyers agree. But hearing it from a Chinese woman, and the conviction in her voice….I could tell that she didn’t believe it because she read it in a newsletter, she believed it because she’s lived it.

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