Tag Archives: Fed

GATA: Those Who Deny Gold / Silver Manipulation Won’t Answer Basic Questions

IRD Note:  For nearly two decades, GATA has seized on Frank Veneroso’s original research which provided first-hand evidence that Central Banks were actively operating to suppress the gold and has presented direct evidence of precious metals manipulation.  Beyond this, there are public admissions from Henry Kissinger and Alan Greenspan acknowledging this fact.   Unfortunately, those who deny that gold/silver are manipulated have never offered any response to the direct proof that Central Banks intervene directly in gold trading.  The article below presenting just the facts was published by GATA.

Newsletter writer Steve Saville of The Speculative Investor, who long has denied that manipulation of the monetary metals markets means much, has seized on the recent essay by Keith Weiner of Monetary Metals as the conclusive refutation of silver market analyst Ted Butler’s longstanding complaint that JPMorganChase has been rigging the silver market.

Weiner’s analysis, headlined “Thoughtful Disagreement with Ted Butler” and posted here – LINK – argued that JPMorganChase is undertaking only ordinary arbitrage in the silver market, exploiting spreads between bid and ask prices.

Saville, in commentary headlined “A Silver Price-Suppression Theory Gets Debunked” – LINK – cheers Weiner’s essay and goes on to remark: “Entering a debate with someone who is incapable of being swayed by evidence that invalidates his position is a waste of time and energy, so these days I devote no commentary space and minimal blog space to debunking the manipulation-centric gold and silver articles that regularly appear.”

But when has Saville himself ever addressed evidence of manipulation of the gold and silver markets? Of course if he declines to address the evidence, he too can’t be swayed by it. The manipulation deniers never address the evidence. [IRD note: this is similar to Hilary Clinton never denying the allegations of corruption – instead she deflected the issue using the scare tactic of blaming the Russians for making the evidence public]

Weiner’s technical analysis is no refutation of silver market manipulation, for even if JPMorganChase is just doing arbitrage in silver, a judgment on manipulation would require knowing for whom the investment house was doing the arbitrage. JPMorganChase’s former chief of commodity operations, Blythe Masters, said on CNBC five years ago that the investment house had no position of its own in silver and was trading only for clients:  LINK

So might those clients include governments and central banks, entities with nearly infinite resources sufficient to nullify markets?
The question is compelling because filings with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission by CME Group, operator of the major futures exchanges in the United States, assert that governments and central banks are clients of the exchanges and that the exchanges give them special volume trading discounts for trading all futures contracts, not just financial futures contracts: HERE and HERE

Do Weiner and Saville know that JPMorganChase is not trading silver futures for governments and central banks? Do Weiner and Saville know that governments and central banks are not trading gold and gold derivatives surreptitiously? If Weiner and Saville think they know, they’re wrong, for the Bank for International Settlements admits that it operates as a broker in gold and gold derivatives for its member central banks: BIS admission

Indeed, in 2005 the director of the BIS’ monetary and economic department, William R. White, told a conference at BIS headquarters in Basel, Switzerland, that a primary purpose of international central bank cooperation is “the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful“: LINK

The BIS even advertises that its services to its member central banks include surreptitious interventions in the gold market: LINK

Anyone who wants to engage in honest argument about gold and silver market manipulation needs to address a few simple questions:

1) Are governments and central banks active in the monetary metals markets or not?
2) Are the documents asserting such activity genuine or forgeries?
3) If governments and central banks are active in the monetary metals markets, is it just for fun or is it for policy purposes?
4) If such activity by governments and central banks is for policy purposes, do those purposes involve the traditional objectives of defeating an independent world currency that competes with government currencies and interferes with government control of interest rates, objectives documented at length by GATA here?: LINK

Of course if largely surreptitious intervention in the monetary metals markets by central banks and governments is ever acknowledged, technical analysis of those markets is meaningless, which may explain why technical analysts like Weiner and Saville avoid the crucial questions and just sneer at those who raise them.

A Gift From The Fed – AMZN

Don’t worry about the price difference it is already a incredible bargain so $5 is insignificant.  Besides I made $600 on a $1,060 investment selling a BZH call a few weeks ago. On Monday morning I closed a Put option on AMZN that tripled my $1,306 investment in 4 days.  Both of these are because I read your reports on these companies. 

You have a good website with quality info especially during these crazy times.  Thanks for the info.  –  research report testimonial

Note:  AMZN has already faded 9 points off its high of the day while the SPX has “powered” to highs of the day.

The Plunge Protection Team has given us a gift.  Many of you who read my research report have sent me emails about making a lot of money shorting AMZN and buying puts based on my Amazon dot Con report.  I responded by suggesting, especially the put buyers, to take some profits and roll them into further out and lower-strike puts.

Notwithstanding today’s bogus GDP revision in which the Government’s mathematically-challenged statisticians are attributing an increase in “economic wealth” to a massive build-up in auto, housing and electronics inventory that will go largely unsold, this bounce in the stock market is absolute gift to anyone looking to capitalize on stocks, like AMZN, that are more overvalued than at anytime in history.

Here’s my “swing trade” call on AMZN – click to enlarge:

Untitled You can purchase the research report that goes with this chart here:

AMAZON dot CON

When someone presents you with a “gift horse,” it’s a mistake to examine its teeth.

Russia Buys 30 Tonnes Of Gold In March

I guess Obama’s economic sanctions and the crash in the price of oil isn’t affecting Russia’s economy the way the western media propaganda would have us believe:

It’s interesting that Russia is still buying because it’s economy has taken a knock from Western sanctions and from lower oil prices,” David Jollie, an analyst at Mitsui & Co. Precious Metals Inc., said by phone from London. “This sends a very bullish signal to the gold market.”  (Bloomberg article link)

Everyone remember when the rumors were floated last fall that Russia was selling gold to raise money because it was getting squeezed from sanctions?   As it turned out, Russia added a significant amount of gold to its reserves at that time.

There is an egregious error in that Bloomberg report.  It cites the World Gold Council as reporting that the U.S. has 70% of it foreign reserves in gold.  I guess that’s accurate if you count lease receivables and gold “I.O.Us” from bullion banks as being the equivalent of possessing physical gold.

Recall that several years ago the BIS changed the standards by which Central Banks can account for gold by enabling CB’s to consolidate “lease receivables” into just “gold” in its asset account.  This is because most, if not all, of the Fed/ECB/BOE gold has been leased out.

It’s fascinating to watch Russia and China accumulate a massive amount of physical gold while western Central Banks continue to use paper gold in order to keep the price capped. I don’t know what event will trigger a failure in the west’s gold capping abilities, but I have a feeling that it will be an event that will make life very uncomfortable for everyone.

“OH NO!” – The FOMC Forgot The Word “Patient”

Reader response:  “Dave, you are right. I just turned on Bloomberg TV and every 2nd word is “patient”. What a joke! (Michael P);    “This whole market is embarrassing”(Chris G)

I wonder if Grandma Yellen forgot her Depends today (play on an old undergrad economics class joke that the favorite phrase of economists in response to a question is, “well it depends”).

If measured in terms of manpower dollars/hour, the word “patient” is probably the most expensive word in history.   Think about – in terms of dollars paid per hour – all the extraordinarily overpaid Wall Street analysts and buy-side fund managers who spent the better part of the last month talking about the word “patient.”  How about the amount advertising dollars spent during the time used while idiots on financial tv blew hot air discussing the word “patient.”

And then there’s this (source: Marketwatch, edits are mine) – click to enlarge:

MW-BX052_FOMC_m_20140319160153_MG

The above pic shows the 12 FOMC voting plus other sundry Fed “Einsteins.”  Perhaps collectively they might have the brainpower of Shakespeare.   21 Fed officials – probably about $10 million combined in annual compensation.   Think about, from a cost allocation standpoint, how many hours were spent by this brain trust determining whether or not to include the word “patient” in today’s FOMC policy statement and, if not, how to leave it out in a way which implies that we won’t raise rates any time soon.

And now the poor saps who have nothing better to do than watch CNBC, Bloomberg or Fox Business all day long are going to be subjected to another couple weeks of incessant squawking about what the removal of the word “patient” means and to grotesquely foolish forecasts for when the Fed might ever so slight nudge interest rates up one-quarter of one percent.

Here’s your answer – for free:  NEVER.   Not until the market forces the issue and by then the entire U.S. financial and political system will have collapsed.

The “Patient” Insanity

Here’s a prediction, highly educated/paid analysts and “economists” will spend more time debating whether or not the FOMC will remove the word “patient” this week than they spend collectively in an entire year researching and analyzing the actual data and fundamentals underpinning our entire Ponzi system.

Whether or not the FOMC removes one word from its “policy” statement is completely irrelevant to the discussion that should be occurring about whether or not our financial and economic system is collapsing  Which it is.

In fact, the issue of whether or not the Fed raises its Fed rate to .25 from zero – and it’s effectively a negative rate after real inflation is accounted for – is complete lunacy.  Zero-percent interest rates are not stimulating real economic growth.  Raising rates an insignificant amount after 72 months of ZIRP will not have a significant affect on the economy.   The Fed could take rates nominally negative and it won’t stimulate growth.  It will stimulate a bigger financial bubble, which seems to be all the Fed cares about.

tumblr_inline_nleopraNdd1smgagj_500

Here’s my prediction:   Our system is at the beginning of a  massive collapse.  The early stages of Mises’ “crack-up boom.”   The Fed is entirely irrelevant anymore except to the extent that it enables the big banks and elitists to loot our system.   That’s why they put a useless piece flesh like Grandma Yellen at the helm.  She knows how to follow orders.