Tag Archives: Deutsche Bank manipulation settlement

Silver And Mining Stocks Continue Up The “Wall Of Worry”

Currently skepticism toward the ongoing rally in the precious metals sector is rampant.  A lot of it based on shamelessly presented analysis of the COT data.   But the COT data analysts have been wrong since March on their doom and gloom outlook based on the attributes of the long/short data in the weekly COT report.

Let me preface this with the proviso that the veracity of the COT data is predicated on the reliability of reports generated by the likes of JP Morgan, HSBC and Scotia.  If these banks are providing bona fide, non-fraudulent Comex data reports, it would be the only area of their entire business for which they are not publishing corrupted financial information.

The narrative promoted by the various false prophets of the precious metals market will have you believe that the net short position of the Comex bullion banks and the net long position of the hedge funds is at a record high and thus we can expect a massive price decline because of this.  But the presentation format is highly misleading.

My fund partner compiles the weekly COT data back to April 2005.  Too be sure, the open interest in silver futures is at an all-time high right now.  But the “net” short / “net” long is quite different than might be construed from the piggishly superficial drivel that has been published.

Currently, the bullion bank short interest as a percentage of total open interest in silver is 71%.   But the highest this ratio has been going to April 2005 is 82%.  The average short interest as percentage of total o/i over the time period is 63%.   Now here’s the shocker: the highest the short interest as percentage of o/i has been is 82% .   In fact, from the week ending December 9, 2005 to the week ending January 27, 2006, the short interest as a percentage of total o/i ranged between 78% and 82%.

For the week ending December 9, 2005 thru the week ending January 27, 2006, the priceUntitled silver traded higher (click on graph to enlarge).  In other words, during a period of time when the relative short position of the bullion banks in relation to the total open interest was at its all time high, the price of silver moved up 37 cents, or 6%.  And there was a violent price take-down in silver (and gold) but that did not occur until mid-May 2006.

Quite frankly I am as guilty as anyone out there in the obdurance of my view that a price correction bullion bank price take-down is imminent.

Too be sure, at some point there will be a hefty pullback in the precious metals market – nothing goes straight up. But anyone who asserts that the market is not manipulated by the bullion banks and the western Central Banks is either disingenuously persuaded by ulterior motives or is a complete idiot.

Make no mistake, in the context of the massive price manipulation of gold and silver that has occurred over the past 5 years, it’s become infinitely more difficult – as if it isn’t hard enough as it is – to use historical measurement devices in order to make educated guesses on the next directional move in any of the financial markets.

SoT Market Update: Gold, Silver And The End Of The Biggest Ponzi Scheme In History

The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation – which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances – Ludwig Von Mises

I re-watched the movie “The Big Short” this past weekend.  It’s worth watching twice if you are interested in learning about how corrupt the entire U.S. financial system is.  Now, my guess is that a lot of viewers left the theatre after watching the movie thoroughly horrified by what was presented in understandable form to the typical “main street” American.

However, most are likely unaware that the original sources of corruption and fraud were never addressed.  In fact, if anything, legislative “reforms” like Dodd-Frank did nothing more than enable the big banks to continue using derivatives and Ponzi-scheme financial structures as mechanisms to continue sucking wealth out of the system.  Perhaps what’s most humiliating about this is that Obama Government and Congress blindly let former Goldman Sachs CEO, Henry Paulson, in his capacity as Secretary of Treasury give these banks an $800 billion blank check from the Taxpayers to continue on with their criminality.

The credit and derivatives problems are, in reality, are worse now than they were in the period leading up to the financial market collapse.   The legislative “reforms” served two purposes:  1) allow the banks to continue their ways under the illusion that the problems were fixed;  2) provide the banks with accounting tools which enable them to better hide the fraud.

It was reported today that the Central States Pension Fund, which handles the retirement benefit programs for Teamster truck driver unions across several large States, has formally filed an application to cut benefits up to 60%.  It stated that the fund would be empty by 2025 if the application is denied.

This reflects how catastrophically underfunded this pension fund was in the first place. And make no mistake, if you are covered by a large institutionalized pension fund, public or private, your fund is equally as underfunded – it just has not yet been affected but it will be sooner or later.

This begs the question:   with the stock market at near-record levels and Treasury bond prices at all-time highs, how is it at all possible that these pension funds are still underfunded to this extent?

The truth lies in the fact that the entire U.S. financial system is one gigantic Ponzi scheme. The Shadow Truth podcast show presents another Market Update in which we discuss the fact that the U.S. financial system is a giant mirage that has been fabricated by the Federal Reserve and the U.S. Government. It’s not a question of IF the next financial market collapse will occur – it’s a question of WHEN:

The Deutsche Bank Gold/Silver Manipulation Settlement: All Show, Little Tell

Until I’m proven wrong, it is likely that the Deutsche Bank gold/silver manipulation settlement with investors will not change the ongoing Central Bank/bullion bank manipulation of the gold and silver markets.

To begin with, the charges and settlement relate to DB’s participation the LBMA gold/silver daily price fix, from which DB removed itself in early 2014.  Deutsche Bank is de facto insolvent.  It would have collapsed under the weight of bad assets and fraudulent OTC derivatives had western Central Banks not cooperated to keep the corpse alive.  Letting DB hang for the sins of the other players was an easy decision.

It’s the Comex that is more relevant than the LBMA with regard to the highly methodical Central Bank intervention in precious metals trading.  The DB settlement isn’t going to change anything – just the names of the players that step in to replace any banks removed from the LBMA.  Why did they wait several months after the LBMA was “reformed” to announce this deal?  Because now they can say “we’ve taken measures to make sure banks like DB can’t manipulate the fix anymore.”  Truth is, all they did is make the process even more opaque and even more susceptible to rigging schemes.  Look at what happened to silver with the 84 cent price plunge at the a.m. silver fix on January 28th. This was  after the so-called reforms were put in place.

One positive note with DB’s settlement agreement:  It’s further vindicated GATA’s efforts to expose the truth about the manipulation that is endemic in the daily trading of gold and silver futures, forwards and OTC derivatives.   Eric Dubin’s (News Doctors) and Jason Burack’s  (Wall St For Main St) Welcome to Dystopia show hosted GATA’s Bill”Midas” Murphy to discuss the DB settlement and factors that are driving gold, silver and mining stock higher right now:

I hope I’m wrong on my assessment of the significance of the DB precious metals manipulation settlement. But everything that has occurred in the financial system over the past couple of decades has happened for a reason.  At the end of the day, the outcome of what appears to be an event that is beneficial to society ultimately turns into yet another device by the big banks to screw the public.