Gold Manipulation

GOLD – It’s Time to Pay Attention

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The last time I shared my thoughts on gold, a subject I had previously wrote about constantly, was all the way back in July of last year. That post was titled, 4 Mainstream Media Articles Mocking Gold That Should Make You Think. Here’s an excerpt:

There are many reasons why I stopped commenting on markets, but the main reason is that I started to recognize I wasn’t getting it right. In fact, in some cases I was getting it spectacularly wrong. Whenever this happens, I try to isolate the problem and fix it. In this case there was no fix, because much of why I was no longer getting it right was rooted in the fact that my heart, soul and passion had moved onto other things. My interests had expanded, and I started a blog to express myself on myriad other matters I deemed important. Providing relevant market information needs intense focus, and my focus had shifted elsewhere. I recognized that I wasn’t intellectually interested enough in centrally planned markets to provide insightful analysis, and so I stopped.

Years ago, Martin Armstrong was saying that nothing goes up in a straight line and that gold would experience a severe correction before beginning its real bull market. We are seeing his prediction unfold before our very eyes. What he also said is that as gold approached the $1,000 per/oz mark or even below, everyone would proclaim that “gold is dead” and start making comically bearish statements. In a nutshell, negative sentiment would plunge to levels not seen in years, if not more than a decade. We are starting to see this now.

I didn’t write this article to “call the bottom in gold” or anything like that. I merely want to flag these four articles due to the hyperbolic nature of some of the statements made (they are exhibiting pretty much exactly the same behavior as the gold bugs they mock do). I do think that something is happening on the sentiment front that warrants we are closer to the bottom than the mid-stages of a bear market.

Fast forward six months, and gold has been more or less flat. Nevertheless, a lot has changed in the interim and it’s time for an update. Specifically, the multi-year fundamental outlook has turned far more bullish, while sentiment remains depressed. Yesterday, following multiple back-to-back  messages about gold on Twitter, someone asked me for my bullish thesis, I wrote:

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Barclays is Launching Finger Scanner that Scans a Person’s Blood Flow to Access Account

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Screen Shot 2014-09-05 at 12.16.53 PMIt’s hard for an article to be simultaneously disturbing and amusing, but this morning’s article in the UK Telegraph about Barclays’ new blood vein finger scanner does just that.

What’s truly incredible about the article is Ashok Vaswani’s (chief executive of Barclays personal and corporate banking) purported obsession with fighting criminality, when in reality there appear to be few bigger criminal enterprises on earth than Barclays itself.

We are told the following about Barclays’ ostensible commitment to the rule of law:

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Meet the “Bandits’ Club” – The TBTF Wall Street Cartel Rigging the FX Market

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Another day, another tale of how the “Too Big to Jail” Wall Street cartel manipulates a major global market with no repercussions whatsoever. Must be nice having essentially every Congressperson and regulator in your back pocket. Get caught? Pay a little fine and get on with it. Everyone wins!

Actually, everyone loses. Except for the handful of FX manipulators, rigging global currency markets from their Essex villages outside of London. These traders for major TBTF banks refer to themselves by various names in their now silenced Bloomberg chat rooms, from The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia.” Very classy guys. Glad we bailed your asses out…

More from Bloomberg:

Now regulators from Bern to Washington are examining evidence first reported by Bloomberg News in June that a small group of senior traders at big banks had something else on their screens: details of each other’s client orders. Sharing that information may have helped dealers at firms, including JPMorgan Chase & Co., Citigroup Inc., UBS AG and Barclays Plc, manipulate prices to maximize their own profits, according to five people with knowledge of the probes.

“This is a market where there is no law and people have turned a blind eye,” said former Senator Ted Kaufman, a Delaware Democrat who sponsored legislation in 2010 to shrink the largest U.S. banks. “We’ve been talking about banks being too big to fail. What’s almost as big a problem is banks too big to manage.”

At the center of the inquiries are instant-message groups with names such as “The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia,” in which dealers exchanged information on client orders and agreed how to trade at the fix, according to the people with knowledge of the investigations who asked not to be identified because the matter is pending. Some traders took part in multiple chat rooms, one of them said.

The currency investigations are taking place as authorities grapple with a widening list of scandals involving the manipulation by banks of benchmark financial rates, including the London interbank offered rate, or Libor, and ISDAfix, used to determine the value of interest-rate derivatives. The U.K. regulator also is reviewing how prices are set in the $20 trillion gold market, according to a person with knowledge of the matter.

Don’t be ridiculous, everyone knows the gold market is the only market on earth that isn’t manipulated.

“Some of these problems developed over many years without anybody speaking up,” said Andrew Tyrie, chairman of Britain’s Commission on Banking Standards and Parliament’s Treasury Select Committee. “This is remarkable. It suggests something very wrong with the culture at these institutions.”

Blasphemy!

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Is Venezuela Selling Gold to Goldman Sachs?

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The following article was published in the Venezuelan newspaper El Nacional, and it appears to imply that the struggling South American nation has agreed to sell or swap the gold it still holds overseas at the Bank of England to Goldman Sachs.

This is one of the major problems with gold. Despite what some may say, it is probably the most manipulated asset on the planet. Given the fact that so much of the gold is in the hands of sovereign nations and Central Banks that can be pressured by the U.S. empire, this is what happens. In fact, as I have said on many occasions, many of the Central Bank purchases we hear about do not consist of countries actually moving gold to within their borders, but rather just paper purchases. This does nothing to tighten supply/demand for gold. The main countries who’s Central Banks actually appear to buy and deliver gold within their borders are China, Russia, Iran, and well, Venezuela. Until that changes, gold will be relatively easily manipulated, which is exactly why I support Bitcoin and why is taking off as it has.

From a sentiment perspective I think gold is buy, but personally I am waiting to see if we get one more major flush.

Here are excepts from the article courtesy of GATA. I believe it is a google translation and the actual sourced article in Spanish can be found here.

Venezuela’s Central Bank and Goldman Sachs are ready to sign an agreement to swap or exchange international gold reserves, with a start date in October, as stated in the contract, and until October 2020.

The negotiated amount, equivalent to 1.45 million ounces of gold, are deposited in the Bank of England and the transfers are made directly to Goldman Sachs once delivery times are stipulated.

The operation involves the delivery of gold from the central bank, which will receive dollars from the U.S. firm. The transactions are made through the creation of a financial instrument that is traded in the international market.

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CME President on Gold: “They Don’t Want Certificates, They Want the Real Product”

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What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real  gold.  That’s going to show you, people don’t want certificates, they … Read more

Professor Fekete on the Gold Smash: “Who Said the Hydra Would Take it Lying Down”

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Ostensibly a lower gold price would solve the problem Bernanke has. Demoralized gold bugs would be forced out of their holdings through margin calls. Disillusioned investors would shun gold. This would make physical gold available to rescue the strapped gold futures market.

In fact, however, a lower gold price is making the problem more intractable, not less. The Fed is diving from the frying pan into the fire. This is the point missed by almost all observers and market analysts. They ignore the underlying flight into physical gold that continues unabated, in spite of (or, better still, because of) the panic in the paper gold market. The Fed’s intervention in bankrolling short interest is going to back-fire, for the following simple reason. The Fed’s strategy is inherently contradictory. A lower price for paper gold makes it easier, not harder, to demand delivery on maturing futures contracts.

– Professor Antal E. Fekete

Of all the articles I have read since the attack on the precious metals markets, this piece by Professor Fekete is the best one yet. I completely agree that this was an extremely desperate and brazen attempt by the Central Planners, one that is quite clearly backfiring big time.  My favorite excerpts are below:

In waking up too late that there was a problem after gold futures markets have been flirting with backwardation for a year or so, officialdom was forced to act. Act it did in a typically haphazard fashion. A few days ago, on April 12 and 15 the paper gold market was demoralized by a ferocious attack on the lofty gold price. This in and of itself is proof that Bernanke is fully aware that permanent gold backwardation is imminent, and that it will create and unmanageable situation. It’s got to be stopped in its track at all hazards.

Well, well, well. Gold is not the same as frozen pork bellies after all. The Hydra is not taking it lying down. The kid gloves have finally come off.

Bernanke is trying to stop gold backwardation by selling unlimited amount of gold futures contracts through his stooges, the bullion banks. He is underwriting losses they are certain to suffer in due course. We can take it for granted that they haven’t got the gold to make delivery on their contracts. In fact, delivery of gold will be suspended under the force majeure clause. Short positions will have to be settled in cash, to be made available by the Fed’s printing presses. Gold futures trading will be a thing of the past.

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GATA Meets CNBC: Host Calls Gold Market a “Matrix”

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First off, fantastic job by Chris Powell in this interview.  The host cracked me up when he describes the gold market as “almost like the matrix.”  My favorite line from Chris is when he says “the banks are bigger than the government.”  Those two lines sum up a lot of what’s wrong with the world … Read more

Gold Manipulation is Going Mainstream

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The article below written by Thomas Pascoe in the UK’s Telegraph is to me evidence that the gold manipulation story is about to go mainstream.  I spent many years writing all about precious metals (physical metal held outside the banking system) as the most logical wealth protection tool in the current environment, as well as … Read more