The Commodities Futures Trading Commission (CFTC) has been long viewed as one of the most corrupt of American institutions – and that’s saying a lot. Putting aside all the accusations with regard to silver manipulation in recent years, the most stunning controversy occurred back in 2010 when a retiring judge accused the other remaining judge of being a total bought and paid for Wall Street crony.
The retiring judge was George Painter, who accused fellow judge Bruce Levine of not once ever ruling in favor of an investor in his 20 years on the bench. Not only that, but he claimed this was the result of a promise Levine made to Wendy Gramm, the former head of the CFTC and the wife of Phil Gramm. Phil Gramm was the Congressman who spearheaded the repeal of Glass-Steagall in 1999, which is seen by many (including myself) as one of the most catastrophic pieces of legislation in American history since it laid the groundwork for the financial crisis of 2008, as well as the continued cancerous permanence and power of TBTF banks. FiredogLake covered the CFTC controversy in 2010:
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While today was an interesting day in “the farce” on a lot of levels, I want to focus on gasoline. In the morning it traded down to a new recent low, but it reversed hard to close with a more than 1% gain. See chart below.
Well so what right? Gasoline has pulled back recently and had a small bounce today you say. Perhaps. The reason why I think it is important is because equities were generally very weak and on days like that you wouldn’t expect to see such a divergence. In addition, I think Obama’s latest very public political witch-hunt for oil speculators scared off longs in the energy market and that was part of the recent weakness. Here is my take on the speculator meme. If that is correct, then the market may be trying to adjust itself back higher where it actually belongs in order to price out unproductive consumption in a world where a larger and larger percentage of global GDP represents an unproductive misallocation of capital due to the welfare state and money printing. If this is the case, it will also be a huge thorn in the side of the Central Planners who are obviously attempting to smash commodity prices as much as possible before announcing QE3.
Precious metals and the FOMC
Also of note to me today was gold. It was slammed hard but came back in very impressive fashion. Silver not so much…In any event, the key day this week will be Wednesday when The Bernank and his cadre of clowns will announce their latest rate decision. In the last couple of months the Central Planners have used any comment out of the Bernank to raid the precious metals. Will Wednesday be the same? No one knows but I suspect physical buyers are waiting in the wings to pounce this time if they try it again.
China is Headed for a Revolution of Some Sort
As China’s economy continues to weaken we are seeing increased signs of tension. This quote from a Bloomberg article today really demonstrates how much of a tinder box this place really is.
Chinese legislators have amassed outsized assets, with the wealth of the richest 70 members of the National People’s Congress amounting to $90 billion last year, 12 times the combined wealth of the 660 top officials in the U.S. government, Bloomberg News reported Feb. 27.
My guess is that some savvy political mind will start to tap into domestic frustrations and blame those Chinese leaders in bed with the Western elites. This will create further riffs between the U.S. and China going forward. Read the Bloomberg article here.
Ok this is hilarious…the following is an excerpt from silver manipulation expert Ted Bulter.
You just know that JPMorgan et al‘s price fixing operation in silver has become blindingly obvious when the following question showed up in a crossword puzzle in a major daily newspaper in the Netherlands this past weekend….18 Across: “The price of this precious metal is kept artificially low by the business bank JP Morgan Chase.” In Dutch that reads as follows…”De prijs van dit edelmetaal wordt kunstamtig laag gehouden do”or de zakenbank JP Morgan Chase.”