In last week’s “Conspiracy Theory,” we highlighted how the Miles Franklin Blog deals solely with fact, not speculation. My background as a classically-trained financial analyst guides every word I write; and in Bill Holter and myself – who both cut our blogosphere “teeth” on the GATA website, you are reading two of the world’s foremost “gold manipulation experts.” And when I say foremost, I truly believe you can count the amount of people that know more on the fingers of two or three hands. Thus, when we speak so confidently of the fact that PM prices are manipulated – and, frankly, all financial markets – we back up such assertions with undisputed facts.
Over the past 15 years – yes, the manipulation has been ongoing that long – anyone who’s read GATA’s website realizes that proof of gold and silver manipulation is plentiful – including flat out admissions from some of the world’s most powerful bankers, including “Maestro” Greenspan himself (“Central banks stand ready to lease gold in increasing quantities should the price rise”). However, my favorite of all such admissions is from William White, who in 2005 was Head of the Bank of International Settlements’ monetary and economic department.
The BIS, as it is better known, acts as the “Central bank’s Central bank” essentially, acting as a storehouse for Central bank assets and coordinator of major market interventions. For example, recall the December 2011 “Operation PM Annihilation II” PM raids, commencing an hour after the ECB cut its benchmark interest rate from 1.50% to 1.00% (today it is 0.25%, en route to 0.00%), in what can only be described as a wildly PM-bullish development. “Mysteriously,” gold’s subsequent surge was stopped cold when it breached the very key round number of $1,750/oz. – what a shock, just after the 8:20 AM EST COMEX open. Just an hour later, gold had nonsensically plunged by $40/oz. – and silver $1.70/oz. – in an attack so blatant, it could only be compared to May 2011’s “Sunday Night Paper Silver Massacre” and September 2011’s “Operation PM Annihilation.”
Lo and behold, just hours later, the infamous “gold sale headline” came across the tape reporting that the Fed (which lies about having significant gold reserves), the Bank of England (which doesn’t even claim to have material gold reserves), and the Bank of International Settlements were “selling gold” after it reached a session high. The statement was later retracted by Germany’s MNI news service, but never refuted by the Fed, BOE, or BIS. I have no doubt they sold something to quell the markets – most likely, naked shorted paper gold on the London or New York futures markets. But either way, the BIS showed its hand, for posterity, as an active gold manipulator. I mean, how much more desperate could one get?
Market sources report BIS, BOE, and Federal Reserve were selling gold after it popped to session high at GMT 1335 – MNI News via Bloomberg.
–Zero Hedge, December 8, 2011
And thus, William White’s speech from six years earlier became corroborating proof that the BIS actively suppresses gold prices, per below…
The intermediate objectives of central bank cooperation are varied. “First, better joint decisions, in the relatively rare circumstances where such coordinated action is called for. Second, a clear understanding of the policy issues as they affect central banks. Hopefully this would reflect common beliefs, but even a clear understanding of differences of views can sometimes be useful. Third, the development of robust and effective networks of contacts. Fourth, the efficient international dissemination of both ideas and information that can improve national policy making. And last, 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.
–Gata.org, March 9, 2006
Clearly, White was not “whistleblowing” in 2005, when still an active member of the BIS’ staff. Moreover, gold manipulation – outside of GATA, of course – was not a widely discussed topic; and thus, he probably didn’t realize the historical significance of what he was saying. Kind of like Jim Cramer, in this infamous 2006 video, giving a non-television broadcasted interview in which he admitted illegally manipulating markets was obviously unaware that YouTube technology would eventually come back to bite him.
However, White obviously has inclinations toward speaking the truth just as former Fed governor and PPT member Kevin Warsh. Just before resigning from the Fed in early 2011, Warsh wrote a scathing Wall Street Journal op-ed piece, opposing the Fed’s temporary fix monetary policies – and a year later, admitted Fed policy manipulates market values. Better yet, in early 2009, while still a Federal Reserve Board member, he admitted to GATA that the Fed engages in off-balance sheet gold “swap” agreements with foreign banks; essentially, proving the U.S. government doesn’t have the 8,133 tonnes it claims – while at the same time, refusing to share details of such agreements, based on the financial equivalent of “national security.”
In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.
–GATA.org, September 17, 2009
Back to said “rogue” William White, it was literally shocking to read his current assessment of Central bank policy – as well as the fragile, dire outlook for hyper-inflated financial markets. White, who retired from the BIS in 2008, now acts as Chairman of the Economic Development and Review Committee of yet another international bureaucratic organization, the OECD. In this tell-all interview, he eviscerates fellow Central bankers and their insane policies, with a series of damning quotes such as this.
The honest truth is no one has ever seen anything like this. Not even during the Great Depression in the Thirties has monetary policy been this loose. And if you look at the details of what these central banks are doing, it’s all very experimental. They are making it up as they go along. I am very worried about any kind of policies that have that nature.
–Fuw.ch, November 4, 2014
White couldn’t be more correct that today’s Central bankers are literally “making up” new policies as they go along. However, the over-arching goal of hyper-inflating the money supply to devalue escalating debts and prevent instantaneous collapse of the fiat currency regime dates back 1,000 years, to the first fiat currency collapse in 11th century China. And thus, you can be assured that when “Goldman Mario” Draghi states that “a stronger Euro will trigger looser ECB policy,” as he did this morning, he is simply following the age-old precedent of currency corruption that has doomed all 599 prior fiat currencies; and which ultimately, will wipe out all 180 of today’s fiat regimes.
As for this morning’s “trading,” there really aren’t words to describe the aforementioned blatancy of TPTB’s attempts to “calm” markets by propping up desirable assets like stocks and suppressing undesirable ones like gold and silver. On Friday, amidst the exact same market conditions that prompted Thursday’s (capped) PM surge, gold and silver closed in very slightly negative territory via prototypical DLITG, or “Don’t Let it Turn Green” algorithms. Remember, “Cartel Rule #1” is “thou shalt not allow PMs to surge whilst the Dow plunges” – let alone, for two straight days, as would certainly have occurred in freely-traded markets. And as for silver, I’ll bet you can guess which key round number the Cartel made sure to close it below, in the final minutes of trading no less.
This weekend, the big news was that not only is the Ukrainian crisis dramatically escalating – to the point of imminent military confrontation but Russia and major Western nations openly feuded about it in the United Nations. Precious metals, of course, opened higher in Asian trading that is, until a prototypical “cartel herald” algorithm was executed to commence the 35th “Sunday Night Sentiment” PM raid in the past 36 weeks – followed by the 203rd “2:15 AM” raid in the past 229 days, as stock futures declined and oil surged. And wouldn’t you know it, silver was stopped not once, not twice, but three times at the “$20/oz battlefield” level – whilst Cartel lackey Goldman Sachs again trotted out its comically ridiculous $1,050/oz. gold forecast.
As for todays’ U.S. “news,” Citibank joined Well Fargo in reporting a record plunge in mortgage originations; quite the omionous development, given that interest rates, thanks to “QE to Infinity,” have barely budged from their all-time lows. Moreover, the first quarter earnings bloodbath continues, with most reports well below expectations, and overall EPS growth – fudged accounting and all – bording negative year-on-year change. But have no fears, as amidst GM’s all-time high channel stuffing activity last month, whilst auto demand plunged, we’re told that March retail sales rose 1.1% due to – get this – surging automobile sales! Yeah, in today’s decrepit labor market, I’m sure auto sales were 9% higher than last year’s level. Don’t you agree?
As you can see above, the Cartel waterfall declined gold by $4/oz. when the so-called “bullish” retail sales number was published; as when the manipulators are determined on producing a desired result, they’ll use any excuse to attack. If retail sales came in a full percent below expectations, gold would likely have gradually risen by a few bucks, before being violently capped and attacked. However, with retail sales “beating expectations” by a whopping 0.1%, the Cartel attacked with impunity, aiming for their “holy grail” of MSM headlines proclaiming “stocks soar, gold plunges on evidence of strengthening recovery.”
However, holding prices below the cost of production – amidst the most bullish fundamental environment in generations – is not so easy; given that such actions simply yield higher physical demand, and dramatically reduced physical production – per Harvey Organ’s comments below…
Today,the front one month GOFO’s rates went into backwardation with a negative GOFO. However the rates are so low in all months, as it is still signalling a lack of London good delivery bars that the criminal bankers use to attack gold.
–HarveyOrgan.blogspot.com, April 10, 2014
And thus, PMs are now moving sharply higher biding time, and fighting off an increasingly weakened Cartel, before they inevitably explode higher, in what may one day be viewed as the most violent price surge in financial history. By the way, notice how gold is now up exactly 1.0%; i.e., the Cartel’s “limit up” level on roughly 99% of all trading days. Let’s see what happens throughout the week; especially if, as we wrote in “this is why we do what we do,” the Ukrainian crisis does in fact morph into a significant military confrontation.
As the saying goes, “no one rings a bell at the bottom.” However, in the case of Precious Metals, the odds that this occurred late last year are as strong as can be; as aside from ever-increasing expectations of global, hyper-monetary inflation, gold and silver mining are simply not viable at the current, ultra-depressed levels. Moreover, no one will “ring a bell” before the next “2008-like” crisis begins; which is why now is the time to protect your life’s savings with the safety of physical gold and silver – much less, at historically undervalued prices.