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zilbo79
04-02-10, 06:49 PM
The latest case of regulatory indolence was recently exposed by Andrew Maguire, a successful metals trader and whistleblower who went to the Commodity Futures Trading Commission with data that strongly suggested that a small number of criminal short sellers had rigged the markets for silver and gold. Maguire not only provided the regulators with a Dummies’ guide to how the manipulation generally worked, but also warned them of a specific crime – a dramatic take-down of the gold and silver markets – that he said would occur at an exact time on a specific date in the near future. That is, Maguire told the regulators that a massive crime was about to happen, and the crime happened precisely as he predicted it would.

With Maguire’s warning, the regulators were able to watch a crime unfold, right before their eyes, in real time. Then the regulators thanked Maguire by saying, in essence, “you’re a nuisance, go away.” This is not just appalling, but scary, because the criminal activity that Maguire exposed is much bigger than the Madoff Ponzi scheme, and more likely to result in serious damage to the American economy. Indeed, there is a strong case to be made that our national security is at stake. As Maguire stated in a recent interview with King World radio, the manipulators have likely created a massive naked short position that can easily be exploited by foreign entities who might see financial or even political gain in eviscerating the dollar. [emphases added]

Read the rest here: http://www.deepcapture.com/manipulating-gold-and-silver-a-criminal-naked-short-position-that-could-wreck-the-economy/

Rajiv
04-02-10, 08:41 PM
The links to the King News Interviews

Interview with Andrew Maguire and Adrian Douglas (http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/30_Andrew_Maguire_%26_Adrian_Douglass.html)

Interview with GATA (http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/3/31_GATA.html)

Nathan Lewis' article - It's Ponzimonium in the Gold Market (http://www.huffingtonpost.com/nathan-lewis/its-ponzimonium-in-the-go_b_519893.html)

metalman
04-02-10, 09:20 PM
The latest case of regulatory indolence was recently exposed by Andrew Maguire, a successful metals trader and whistleblower who went to the Commodity Futures Trading Commission with data that strongly suggested that a small number of criminal short sellers had rigged the markets for silver and gold. Maguire not only provided the regulators with a Dummies’ guide to how the manipulation generally worked, but also warned them of a specific crime – a dramatic take-down of the gold and silver markets – that he said would occur at an exact time on a specific date in the near future. That is, Maguire told the regulators that a massive crime was about to happen, and the crime happened precisely as he predicted it would.

With Maguire’s warning, the regulators were able to watch a crime unfold, right before their eyes, in real time. Then the regulators thanked Maguire by saying, in essence, “you’re a nuisance, go away.” This is not just appalling, but scary, because the criminal activity that Maguire exposed is much bigger than the Madoff Ponzi scheme, and more likely to result in serious damage to the American economy. Indeed, there is a strong case to be made that our national security is at stake. As Maguire stated in a recent interview with King World radio, the manipulators have likely created a massive naked short position that can easily be exploited by foreign entities who might see financial or even political gain in eviscerating the dollar. [emphases added]

Read the rest here: http://www.deepcapture.com/manipulating-gold-and-silver-a-criminal-naked-short-position-that-could-wreck-the-economy/

sigh... deepbullshit.com desperate for traffic in a gov't $$$ recovery...

lame.

right up there with zerocred's capital controls fabrication last weekend.

markets & econ bouncing after $3 trillion pumped in? who could have known?

these nitwits need a chill pill.

zilbo79
04-02-10, 09:42 PM
Given the track record of our "regulators", you believe that manipulation cannot happen on a massive scale? Do you believe our regulators are not captured by FIRE?

metalman
04-02-10, 09:58 PM
Given the track record of our "regulators", you believe that manipulation cannot happen on a massive scale? Do you believe our regulators are not captured by FIRE?

you must be new here. let me catch you up.

old farts like me here at itulip heard all this shit 10 yrs ago... gtfo of the stock market manipulation/bubble in mar 2000 (http://www.itulip.com/GlobeArchiveJanszen.htm) & pile into gold in 2001. (http://www.itulip.com/gold.htm)

5 yrs later, here's itulip telling the 'gold bubble' morons to stfu...

http://www.itulip.com/images/goldReal.jpg
gold manipulation? are you friggin kidding me? wanna see manipulation? the fed shoveled $1trillion into the housing market last year.

gold = sideshow

jtabeb
04-02-10, 10:14 PM
you must be new here. let me catch you up.

old farts like me here at itulip heard all this shit 10 yrs ago... gtfo of the stock market manipulation/bubble in mar 2000 (http://www.itulip.com/GlobeArchiveJanszen.htm) & pile into gold in 2001. (http://www.itulip.com/gold.htm)

5 yrs later, here's itulip telling the 'gold bubble' morons to stfu...

http://www.itulip.com/images/goldReal.jpg
gold manipulation? are you friggin kidding me? wanna see manipulation? the fed shoveled $1trillion into the housing market last year.

gold = sideshow

You really need to get your eyesight checked.

What do you think allows them to pump $1 Trillion into the housing market with out the dollar going "Not well".

You see NO RELATION to the facts you describe and gold manipulation. Seriously, no relation at all, Huh?

I think you should talk to Larry Summers. HE SEEMS TO THINK THAT IT IS IMPORTANT. (He EVEN wrote a paper on it) ;)

http://www.nber.org/papers/w1680.pdf

Gibson's Paradox and the Gold Standard

Online access to NBER Working Papers denied, you have no subscription
<table><tbody><tr><td>
</td><td align="center"> Robert B. Barsky (http://www.nber.org/authors/robert_barsky), Lawrence H. Summers (http://www.nber.org/authors/lawrence_summers)

NBER Working Paper No. 1680 (Also Reprint No. r1349)<sup>*</sup>
Issued in February 1990
NBER Program(s): EFG (http://www.nber.org/papersbyprog/EFG.html) ME (http://www.nber.org/papersbyprog/ME.html)


This paper provides a new explanation for Gibson's Paradox -- the observation that the price level and the nominal interest rate were positively correlated over long periods of economic history. We explain this phenomenon interms of the fundamental workings of a gold standard. Under a gold standard, the price level is the reciprocal of the real price of gold. Because gold is adurable asset, its relative price is systematically affected by fluctuations inthe real productivity of capital, which also determine real interest rates. Our resolution of the Gibson Paradox seems more satisfactory than previous hypotheses. It explains why the paradox applied to real as well as nominal rates of return, its coincidence with the gold standard period, and the co-movement of interest rates, prices, and the stock of monetary gold during the gold standard period. Empirical evidence using contemporary data on gold prices and real interest rates supports our theory.

</td></tr></tbody></table>

(which you must now pay $5 to get)

zilbo79
04-02-10, 10:30 PM
Did I say there was a gold bubble? Did the article say there was a gold bubble? The thesis of the article was that market manipulators was driving gold down and that they could use the same mechanism to drive the dollar down. Did you even bother to read it?

Does manipulation in the housing market mean that there is no manipulation in gold?

swannmex
04-02-10, 10:42 PM
You really need to get your eyesight checked.

What do you think allows them to pump $1 Trillion into the housing market with out the dollar going "Not well".

You see NO RELATION to the facts you describe and gold manipulation. Seriously, no relation at all, Huh?

I think you should talk to Larry Summers. HE SEEMS TO THINK THAT IT IS IMPORTANT. (He EVEN wrote a paper on it) ;)

http://www.nber.org/papers/w1680.pdf

Gibson's Paradox and the Gold Standard

Online access to NBER Working Papers denied, you have no subscription
<table><tbody><tr><td>
</td><td align="center"> Robert B. Barsky (http://www.nber.org/authors/robert_barsky), Lawrence H. Summers (http://www.nber.org/authors/lawrence_summers)

NBER Working Paper No. 1680 (Also Reprint No. r1349)<sup>*</sup>
Issued in February 1990
NBER Program(s): EFG (http://www.nber.org/papersbyprog/EFG.html) ME (http://www.nber.org/papersbyprog/ME.html)


This paper provides a new explanation for Gibson's Paradox -- the observation that the price level and the nominal interest rate were positively correlated over long periods of economic history. We explain this phenomenon interms of the fundamental workings of a gold standard. Under a gold standard, the price level is the reciprocal of the real price of gold. Because gold is adurable asset, its relative price is systematically affected by fluctuations inthe real productivity of capital, which also determine real interest rates. Our resolution of the Gibson Paradox seems more satisfactory than previous hypotheses. It explains why the paradox applied to real as well as nominal rates of return, its coincidence with the gold standard period, and the co-movement of interest rates, prices, and the stock of monetary gold during the gold standard period. Empirical evidence using contemporary data on gold prices and real interest rates supports our theory.

</td></tr></tbody></table>

(which you must now pay $5 to get)

Thank you for stating the obvious. It needed to be said.

Rajiv
04-02-10, 11:13 PM
Here is a link to a free pdf
Gibson's Paradox and the Gold Standard (http://www.gata.org/files/gibson.pdf)

Camtender
04-03-10, 12:03 AM
Did I say there was a gold bubble? Did the article say there was a gold bubble? The thesis of the article was that market manipulators was driving gold down and that they could use the same mechanism to drive the dollar down. Did you even bother to read it?

Does manipulation in the housing market mean that there is no manipulation in gold?

Zilbo, here is the MO here,

1) Take someone's post,
2) put a spin on the agenda to included something that was never posted and
3) try to make the person who posted look foolish by manipulating the point of the post.


Just remember..............

Metalman = Tool

zilbo79
04-03-10, 12:27 AM
Very interesting. Thanks for this, Rajiv.

jtabeb
04-03-10, 01:17 AM
Metalman = Tool

Toolman?:D:p

santafe2
04-03-10, 02:03 AM
The latest case of regulatory indolence was recently exposed by Andrew Maguire, a successful metals trader and whistleblower who went to the Commodity Futures Trading Commission with data that strongly suggested that a small number of criminal short sellers had rigged the markets for silver and gold. Maguire not only provided the regulators with a Dummies’ guide to how the manipulation generally worked, but also warned them of a specific crime – a dramatic take-down of the gold and silver markets – that he said would occur at an exact time on a specific date in the near future. That is, Maguire told the regulators that a massive crime was about to happen, and the crime happened precisely as he predicted it would.

With Maguire’s warning, the regulators were able to watch a crime unfold, right before their eyes, in real time. Then the regulators thanked Maguire by saying, in essence, “you’re a nuisance, go away.” This is not just appalling, but scary, because the criminal activity that Maguire exposed is much bigger than the Madoff Ponzi scheme, and more likely to result in serious damage to the American economy. Indeed, there is a strong case to be made that our national security is at stake. As Maguire stated in a recent interview with King World radio, the manipulators have likely created a massive naked short position that can easily be exploited by foreign entities who might see financial or even political gain in eviscerating the dollar. [emphases added]

Read the rest here: http://www.deepcapture.com/manipulating-gold-and-silver-a-criminal-naked-short-position-that-could-wreck-the-economy/

Let's say this conspiracy nonsense is true. And there will be several downturns in the metals market based on these conspiratorial bastards. Isn't that just a good time to buy? Shouldn't we thank those crooks for giving us an opportunity to buy low?

This post is a complete confusion of points and anyone who has followed the metals market for a few years cannot take it seriously. It starts in paragraph one with a take down of metals and ends with the 'eviscerating' of the dollar. Gold is the anti-dollar. This post is too dumb to address in the specific.

Silver brought down the financial system. Silver. Really? That is one of the dumbest things I've ever heard. So silver and gold brought it down. Really? Do these idiots understand that the world financial system could suck up all the silver and gold in the world and not even notice the ownership? It's a side bet, a wager for amusement.

Wow, bigger than Madoff? Do we really care? Are we now comparing Madoff to the world financial system? Madoff screwed his friends. Sure it was big on the ponzi scheme scale but Madoff was nothing. Madoff was a rat who took a ride on the criminal side of the world financial markets.

Here's how it works. During a bull market, metals mostly go sideways, then they go up very fast, especially silver. When they do, sell some because they'll most likely go down again. Then buy more and hold it. Repeat.

Or take the iTulip approach. Buy it when it's lower and just hold until say 2020. Easy enough. Who cares about this nonsense.

FrankL
04-03-10, 03:15 AM
Let's say this conspiracy nonsense is true. And there will be several downturns in the metals market based on these conspiratorial bastards. Isn't that just a good time to buy? Shouldn't we thank those crooks for giving us an opportunity to buy low?

This post is a complete confusion of points and anyone who has followed the metals market for a few years cannot take it seriously. It starts in paragraph one with a take down of metals and ends with the 'eviscerating' of the dollar. Gold is the anti-dollar. This post is too dumb to address in the specific.

Silver brought down the financial system. Silver. Really? That is one of the dumbest things I've ever heard. So silver and gold brought it down. Really? Do these idiots understand that the world financial system could suck up all the silver and gold in the world and not even notice the ownership? It's a side bet, a wager for amusement.

Wow, bigger than Madoff? Do we really care? Are we now comparing Madoff to the world financial system? Madoff screwed his friends. Sure it was big on the ponzi scheme scale but Madoff was nothing. Madoff was a rat who took a ride on the criminal side of the world financial markets.

Here's how it works. During a bull market, metals mostly go sideways, then they go up very fast, especially silver. When they do, sell some because they'll most likely go down again. Then buy more and hold it. Repeat.

Or take the iTulip approach. Buy it when it's lower and just hold until say 2020. Easy enough. Who cares about this nonsense.

points addressed per bolded text
1. depends on if they can keep this thing going indefinitely (or longer than those who hold/buy PM care). Further more, wouldn't you rather get a fair price than a manipulated one (even if that means more expensive to buy)?

2. Would you be so kind to post what sets the silver/gold price? Is it trading in actual physical gold, or is the price heavily influenced by supply/demand for paper silver/gold? Should it be?
What about those huge short positions that JPM and HSBC have? Are those legitimate short positions? How much bullion do they have to possess such huge short positions?

Although I'm not blindly believing any claims of manipulation, based on the claims I'd tend to listen seriously to some of the manipulation arguments. Especially when you look at the history of gold market manipulation by governments/central banks (a lot of papers saying this much have been declassified already).

I'd consider the possibility that these governments and central banks do think that PM manipulation is necessary to keep our fiat currency regime erect; depending on what is required to do, they'll keep it going. At one time in history, confiscation/ban on private ownership was done (was it needed?). Which scenarios are possible? Are they all good for private holders of gold/silver?

renewable
04-03-10, 07:27 AM
The links to the King News Interviews

Interview with Andrew Maguire and Adrian Douglas (http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/30_Andrew_Maguire_%26_Adrian_Douglass.html)

Interview with GATA (http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/3/31_GATA.html)

Nathan Lewis' article - It's Ponzimonium in the Gold Market (http://www.huffingtonpost.com/nathan-lewis/its-ponzimonium-in-the-go_b_519893.html)

Good interviews, especially the Andrew Maguire one. Thank you for posting them.

jtabeb
04-03-10, 02:09 PM
Thank you for stating the obvious. It needed to be said.

That's the problem with this country. Nobody states the obvious anymore.

Camtender
04-03-10, 05:43 PM
Here's how it works. During a bull market, metals mostly go sideways, then they go up very fast, especially silver. When they do, sell some because they'll most likely go down again. Then buy more and hold it. Repeat.

Or take the iTulip approach. Buy it when it's lower and just hold until say 2020. Easy enough. Who cares about this nonsense.


Actually, I care and others do too. I think you are missing the big picture completely and I mean completely, but I like the buy silver low and sell high, I have never heard that before.

Perception defines money. Just ask Native Americans what was used for money before the Europeans and others showed up (you can ask me if you want since I am NA).

What is going to define our currency and the price of commodities going forward is the perception of our creditors, being billions of people across the river.

Therefore, at the end of the day, it matter less and less what anyone in the US thinks FDRs, gold, silver or base metals are worth or where they are headed.

The risk (and the reason for this posting - as far as my perception) is that the allegations of the PM market being traded on a paper fractional system at a 100:1 ratio (or whatever) is true and entities (China & India Inc. included) start wanting physical PMs and supply and demand kicks in. I would suspect we would have a currency problem here in the US at that point, but who cares..............right?????????????????????

Perception defines reality here on earth, and here in the US, our perception is going to matter less and less as we continue to head for insolvency.

santafe2
04-04-10, 12:40 AM
2. Would you be so kind to post what sets the silver/gold price? Is it trading in actual physical gold, or is the price heavily influenced by supply/demand for paper silver/gold? Should it be?
What about those huge short positions that JPM and HSBC have? Are those legitimate short positions? How much bullion do they have to possess such huge short positions?

There are 3 main forces on precious metal pricing. Local currency, inflation expectations and fear. Within the context of that model, there is market manipulation. A smart metals investor is watching the top line issues to understand how metals should be moving. If they appear to be moving in a contrary fashion, one should suspect markets are being moved by other forces. When this happens, PM markets tend to move quickly. If up, take profits. If down, buy. This is not rocket science.

The details of how JPM or others manage their positions are just that, details. JPM doesn't matter in the larger view. Like GS, they are some of the smartest people on the planet, but they can't drive a market when a fair percentage of 6.8B humans can choose to own metals as a safeguard. Let them short and drive the price down for a while. It will be a good time to buy.

If you want to be an investor, invest. If you want to find conspiracies, I'm sure they are out there but I've no idea how one makes money at it.

Rajiv
04-04-10, 11:06 AM
Santa Fe,

Then I presume you do not mind being sold 5 Eiffel Towers in Paris sight unseen for a million dollars each.

Because that is what is happening right now in both the PM market, and the stock market. What came out in the meetings was that the market was being leveraged 100:1 -- in other words for every kilogram of gold that was physically verifiable, they were selling 100 times as much.

Similarly, if you read Deep Capture, there is leverage occurring in the stock market as well (A process known as "Naked Short Selling") There are more stocks being sold than there are shares outstanding -- That has been well documented, and the DTCC had the gall to ask the company to issue more shares to cover that. That was adjudicated on.

If you do not own physical PM totally under your control, you own nothing. Similarly, if you do not have the stock certificate of a company, duly registered with the company, you own nothing.

What this does is to allow price manipulation by artificially increasing the supply, and to steal from true owners of a publically traded company, and from those who want to have their savings in PMs and commodities.

Master Shake
04-04-10, 11:20 AM
Santa Fe,

Then I presume you do not mind being sold 5 Eiffel Towers in Paris sight unseen for a million dollars each.

Because that is what is happening right now in both the PM market, and the stock market. What came out in the meetings was that the market was being leveraged 100:1 -- in other words for every kilogram of gold that was physically verifiable, they were selling 100 times as much.

Similarly, if you read Deep Capture, there is leverage occurring in the stock market as well (A process known as "Naked Short Selling") There are more stocks being sold than there are shares outstanding -- That has been well documented, and the DTCC had the gall to ask the company to issue more shares to cover that. That was adjudicated on.

If you do not own physical PM totally under your control, you own nothing. Similarly, if you do not have the stock certificate of a company, duly registered with the company, you own nothing.

What this does is to allow price manipulation by artificially increasing the supply, and to steal from true owners of a publically traded company, and from those who want to have their savings in PMs and commodities.

I'm not sure how reliable Deep Capture is as a source of information. Barry Ritholz of The Big Picture is certainly no fan of Deep Capture's Patick Byrne.

http://www.ritholtz.com/blog/2009/12/deepcapture-com-scraping-facebook-friends/

cobben
04-04-10, 11:55 AM
Mitchell's (Byrne's?) point of view was interesting, still digesting it.
Here's another piece to the puzzle that debunks GATA to some extent at least.
There are obviously lots of opposing vested interests fighting it out here.
Watch the markets, "the truth" will appear there first.

Of Gold Bugs and Market Parables (http://seekingalpha.com/article/196615-of-gold-bugs-and-market-parables)
http://seekingalpha.com/article/196615-of-gold-bugs-and-market-parables


"I seldom comment on anything having to do with precious metals because, well, the subject tends to bring out, how to say it?, er, enthusiasts. Monomaniacal enthusiasts. But I feel somewhat compelled to do so, because Adrian Douglas, a board member of the Gold Anti-Trust Action Committee (GATA) structured his comments to the CFTC about metals position limits around one of my older writings on manipulation. (Douglas’s comments are all over the web–that’s just one link.) (Douglas delivered some impromptu testimony at the CFTC hearings on the subject.)
. . .

GATA and other gold bugs have chronic difficulties distinguishing between stocks and flows. They point to the fact that the volume of trades in gold exceeds actual gold stocks. The aptly-named (since it is high variance) ZeroHedge breathlessly repeats such things, claiming that this is evidence of a Ponzi scheme. Did these guys just fall of the turnip truck?: this is true for virtually every major commodity market. For a variety of reasons, the number of transactions, and frequently the open interest, is a multiple of the underlying deliverable supply.
. . .

The facts that the volume of trades, and open interest, exceed deliverable supply, and that very few contracts are settled by delivery, have characterized commodity markets since the birth of futures markets in the late-1860s. They have been the subject of comment and frequent criticism since that time. This is not, contrary to what Douglas says, a new thing.. . . ."


addendum:

What he is pointing out is that there is a fundamental difference between the stock market, which is a actual physical market of stocks where naked positions are really counterfeiting, and any futures market, which is a zero-sum game of inherently "naked" promises to deliver/receive at specified dates no less.

The London market is supposedly a true physical market and as such is more interesting.
<!--IBF.ATTACHMENT_909759-->

Master Shake
04-04-10, 12:13 PM
Mitchell's (Byrne's?) point of view was interesting, still digesting it.
Here's another piece to the puzzle that debunks GATA to some extent at least.
There are obviously lots of opposing vested interests fighting it out here.
Watch the markets, "the truth" will appear there first.

Of Gold Bugs and Market Parables (http://seekingalpha.com/article/196615-of-gold-bugs-and-market-parables)
http://seekingalpha.com/article/196615-of-gold-bugs-and-market-parables


"I seldom comment on anything having to do with precious metals because, well, the subject tends to bring out, how to say it?, er, enthusiasts. Monomaniacal enthusiasts. But I feel somewhat compelled to do so, because Adrian Douglas, a board member of the Gold Anti-Trust Action Committee (GATA) structured his comments to the CFTC about metals position limits around one of my older writings on manipulation. (Douglas’s comments are all over the web–that’s just one link.) (Douglas delivered some impromptu testimony at the CFTC hearings on the subject.)
. . .

GATA and other gold bugs have chronic difficulties distinguishing between stocks and flows. They point to the fact that the volume of trades in gold exceeds actual gold stocks. The aptly-named (since it is high variance) ZeroHedge breathlessly repeats such things, claiming that this is evidence of a Ponzi scheme. Did these guys just fall of the turnip truck?: this is true for virtually every major commodity market. For a variety of reasons, the number of transactions, and frequently the open interest, is a multiple of the underlying deliverable supply.
. . .

The facts that the volume of trades, and open interest, exceed deliverable supply, and that very few contracts are settled by delivery, have characterized commodity markets since the birth of futures markets in the late-1860s. They have been the subject of comment and frequent criticism since that time. This is not, contrary to what Douglas says, a new thing." <!--IBF.ATTACHMENT_909759-->

The comments section was interesting.

Rajiv
04-04-10, 12:47 PM
I think the disconnect between Ritzholtz and Byrnes takes place because Byrnes considers the practice widespread, and a systemic risk, while Ritzholtz seems to think it is minor, and practiced only by a few bad apples, and therefore not a systemic problem.

If Byrnes is correct, then it takes the carpet out from underneath everybody who makes a living from financial markets -- and therefore the first reaction is always one of disbelief. If one hasn't been burnt by these shenanigans, then one will generally underplay Byrne's allegations -- no matter how well documented.

Rajiv
04-04-10, 12:59 PM
I think you are missing what happened at the CFTC meeting -- from - It's admitted to the CFTC: London gold market is a Ponzi scheme (http://www.gata.org/node/8478/)


As dramatic as this revelation was at the CFTC hearing, there was another bombshell at the hearing. This was the testimony I was able to deliver at the hearing while assisting Harvey Organ with his testimony. I was able to show that the London Bullion Market Association (LBMA) over-the-counter gold market is nothing but a massive "paper gold" Ponzi scheme. What was then astonishing is that the bullion bank apologist, Jeffrey Christian of CPM Group, who has always been staunchly against GATA, endorsed my comments as being "exactly right" and went on to confirm that the LBMA trades more than 100 times the gold it has to back the trades.

There were lots of almost as equally explosive admissions at the hearing, so I have made a transcript of the relevant section of the webcast. I have posted the two short video clips here and here which are what have been transcribed.

http://www.youtube.com/watch?v=9wIMpe9SjfQ
http://www.youtube.com/watch?v=e9bU0r6JP4s

The transcript is given below with some notes added by me.

* * *

COMMISSIONER SCOTT O'MALIA: Both Mr. Organ and Mr. Epstein in the second panel raised the concerns that short positions exceed the physical supply. The second panel kind of argued that that wasn't a concern. Are you concerned that the shorts will not be able to deliver if called upon?

JEFFREY CHRISTIAN: No. I am not at all concerned. For one thing, it has been persistently that way for decades. Another thing is that there are any number of mechanisms allowing for cash settlements and problems, and a third thing is, as many people who are actually knowledgeable about the silver market and the gold market have testified today, that almost all of those short positions are in fact hedges -- the short futures positions are hedges, offsetting long positions in the OTC market. So I don't really see a concern there.

[NOTE: It is interesting that Christian is not concerned about the ability of the shorts to deliver because they can cash-settle. He clearly has no understanding that when someone wants to buy precious metals, giving him cash instead is a failure to deliver, a default. But Christian is not concerned. He says that the short position is actually hedged by a long position on the OTC, but we will see later in this testimony how he describes the "OTC physical market" and we will see that the long position is not bullion but is in fact an unbacked (or only partially backed) IOU for bullion.]

COMMISSIONER O'MALIA: Mr. Organ, would you like to respond?

HARVEY ORGAN: I do see a risk on this, and I think it is a risk that we have to be very, very careful of. As countries like China, South Korea, and Russia start demanding and taking physical delivery of their gold and moving it offshore to their shores and putting pressure on the Comex, we will probably come to a point in time where we will have a failure to deliver.

ADRIAN DOUGLAS: Mr. Chairman, could I make a comment?

CHAIRMAN GARY GENSLER: No. Who are you?

ADRIAN DOUGLAS: I would ...

CHAIRMAN GENSLER: No. I said no.

DOUGLAS: Oh, you said no?

CHAIRMAN GENSLER: I don't know, who is this?

DOUGLAS: I am Adrian Douglas. I am assisting Harvey.

CHAIRMAN GENSLER: All right, Sir. Yes.

DOUGLAS: I would just like to make a comment. We are talking about the futures market hedging the physical market. But if we look at the physical market, the LBMA, it trades 20 million ounces of gold per day on a net basis, which is $22 billion. That's $5.4 trillion per year. That is half the size of the U.S. economy. If you take the gross amount, it is about 1 1/2 times the U.S. economy. That is not trading 100-percent-backed metal; it's trading on a fractional-reserve basis. And you can tell that from the LBMA's Website, because they trade in "unallocated" accounts. And if you look at their definition of an "unallocated account," they say that you are an "unsecured creditor." Well, if it's "unallocated" and you buy 100 tonnes of gold even if you don't have the serial numbers, you should still have 100 tonnes of gold, so how can you be an unsecured creditor? Well, that's because it's fractional-reserve accounting, and you can't trade that much gold -- it doesn't exist in the world. So the people who are hedging these positions on the LBMA, it's essentially paper hedging paper. Bart Chilton uses the expression "stop the Ponzimonium" and this is a Ponzi scheme. Because gold is a unique commodity and people have mentioned this, it is left in the vaults and it is not consumed. So this means that most people trust the bullion banks to hold their gold and they trade it on a ledger entry. So one of the issues we have got to address here is the size of the LBMA and the OTC markets because of the positions which are supposedly backing these positions which are hedges, but it is essentially paper backing paper.

[8 seconds of silence]

CHAIRMAN GENSLER: Oh. I guess I get time. Errr. ... Umm. I don't have any other questions. Commissioner Dunn.

COMMISSIONER MICHAEL DUNN: I appreciate the difficulty of trying to do this by remote, but at the end of your testimony you start talking about bonafide hedge exemptions for commercial traders and must be part of position limits and not to grant hedge exemptions to swap dealers would be devastating for liquidity of exchanges and the price discovery capacity, and we got into who determines what is legitimate. But could you amplify on that a bit and what you see as a danger there?

CHRISTIAN: Yes, I can amplify on it. But amplifying on it a bit is more difficult because it is a very big subject. The first thing is that precious metals, copper, other metals, energy -- these are all traded internationally and are fungible commodities, by and large. There are a lot of strange things that have been misspoken about the difference between the wholesale and the retail market and we don't really have the time to go over those, I think. But the fact of the matter is. ...

[The lights go off.]

CHRISTIAN: Oh, excuse me. I am in a building with motion-sensitive lighting and it doesn't recognize what I do as human activity.
CHAIRMAN GENSLER: Those were your words, not anybody's here.
CHRISTIAN: No, they were my wife's! If you start putting position limits on bonafide hedgers, for example, the bullion banks -- and the previous fellow was talking about hedges of paper on paper and that is exactly right. Precious metals are financial assets like currencies, T-bills, and T-bonds; they trade in the multiples of a hundred times the underlying physical and so people buying them are voting and giving an economic view of the world or a view of the economic world, and so when you start saying to a bank I have a number of people. ...

[NOTE: This is mind-blowing. Christian openly admits that the LBMA OTC market is not trading in physical gold or silver but in paper promises. But gold is not intended to be a "financial asset" like T-bills and currencies. That is the whole point of owning it. Actual physical bullion is a tangible asset with intrinsic value that doesn't have counterparty risk. Christian believes that the purpose of trading paper promises in gold is for investors to "vote" on their view of the economic world. He confirms that the LBMA trades hundreds of times the real underlying physical gold. This is even a higher estimate than I have made. The LBMA is, as I asserted before the commission, a giant Ponzi scheme.]

CHRISTIAN: Well, actually let's go back to a concrete example of Mr. Organ when he was talking about August of 2008 when there was an explosion in the short positions in gold and silver held by the bullion banks on the futures market and he seemed to imply that that was somehow driving the price down. If you understand how those bullion banks run their books, the reason they had an explosion in their short positions was because they were selling bullion hand over fist in the forward market, in the physical market, and in the OTC options market. Everyone was buying gold everywhere in the world, so the bullion banks who stand as market makers were selling or making commitments to sell them material and so they had to hedge themselves and they were using the futures market to do that. So if you place position limits on the futures market, they will have to find some other mechanism to hedge themselves -- and they will. And someone else will provide that market.

COMMISSIONER DUNN: Jeffrey, I am going to cut you off because I want to ask another question of Mr. Organ.

[NOTE: It is hard to imagine more inane drivel than this. Christian conjures up the image of bullion bankers selling bullion like crazy to the public, which is in a feeding frenzy, and the bullion bankers are "hedging themselves" by selling gold short on the Comex!? Did he get that idea from a blonde? A little while later Chairman Gensler also realized that this was the biggest baloney ever concocted as a cover for massive gold market manipulation by JPMorgan Chase and HSBC in 2008 and so he poses a follow-up question.]

CHAIRMAN GENSLER: I would like to follow up on Commissioner Dunn's question for Mr. Christian, if I might, because I didn't quite follow your answer on the bullion banks. You said that the bullion banks had large shorts to hedge themselves selling elsewhere, and I didn't understand. I might just not have followed it and you're closer to the metals markets than me on this, but how do you short something to cover a sale? I didn't quite follow that?

CHRISTIAN: Well, actually I misspoke. Basically what you were seeing in August of 2008 was the liquidation of leveraged precious metals positions from a number of places and the bullion banks were coming back to buy it, and they were hedging those positions by going short on the Comex and that is really what it was.

[NOTE: Even on a second attempt Christian invents the most ridiculous poppycock to explain away the blatant manipulation of the precious metals in 2008. If, in his own words, investors were buying gold hand over fist everywhere in the world, why would leveraged long holders dump all their long holdings? They ordinarily would have been making a fortune. The bank participation report of August 2008 shows that two or three bullion banks sold short the equivalent of 25 percent of world annual silver production in four weeks and the equivalent of 10 percent of annual world gold production. There was simultaneously a decrease in their long positions, which were almost non-existent anyway, which is incoherent with a notion that the bullion banks were mopping up dumped leveraged investments. For an intelligent and coherent explanation of what happened in August 2008 read my CFTC written testimony here:]

https://marketforceanalysis.com/index_assets/CFTC%20HEARING%20ON%20METAL... (https://marketforceanalysis.com/index_assets/CFTC%20HEARING%20ON%20METALS%20MARKETS.pdf)

CHAIRMAN GENSLER: So I am glad I asked because I really didn't follow that. But if I think of the earlier charts of the positions of the bullion banks that Mr. Sherrod had, these concentrated shorts have been, well, you know, reasonably consistent. They are not exactly the same on every day, but his charts showed a similarity across a couple of years. So what are bullion banks -- I mean, I am just trying to understand -- what are bullion banks hedging on the other side? We heard from other panels, but you seem to be familiar. Is it warehouse receipts? What is it?

CHRISTIAN: Well, it's a tremendous number of things. You were at Goldman shortly after me and we had an MIS system that kicked out a daily gold book.

CHAIRMAN GENSLER: That's really remarkable because we don't seem to have a lot of similar views, but, you know, a lot of people were at Goldman Sachs.

CHRISTIAN: Well, I didn't like the trends at Goldman, so I left in 1986. But honestly, and bad jokes aside, if you look at a bullion bank's book -- its gold book, for example -- you will see an enormous number of things. There will be gold forward purchases from mining companies. There will be forward purchases from refineries. There will be gold that has been leased out to electronics manufacturers, component manufacturers, and countless manufacturers and jewelers. As gold flows through the beneficiation process -- and again, these are all long, complex issues that are hard to reduce -- but, you know, a lot of producers will sell their gold the moment it leaves their possession at the mine. It might be in concentrate form or it might be in dore form. It then goes to a smelter or a refinery. The bullion bank buys that and it agrees a price at the time it is buying it but it won't be allowed to sell that metal until the refinery outturn, which is maybe two weeks but it could be six months. So they will go into the market and short the market in order to cover the commitment they have made to buy at that price and then when they get the metal in the physical market, then they can either sell that metal in the physical market and unwind the hedge in the futures market or the forward market or do something else. There are all sorts of other derivative contracts that investment banks and bullion banks will sell to investors, to other banks, pension funds, to insurance companies, and each of those will often have a long exposure in gold, which will be hedged with an offsetting short position. [NOTE: There he goes again with that blonde idea that when you sell gold to someone, you hedge that with a short position.] So if you look at a bullion bank's gold book or silver book, you would find a large range of topics. One of the things that the people who criticize the bullion banks and talk about this undue large position don't understand what is the nature of the long positions of the physical market and we don't help it. The CFTC, when it did its most recent report on silver, used the term that we use, "the physical market." We use that term as did the CFTC in that report to talk about the OTC market -- in other words, forwards, OTC options, physical metal, and everything else. People say, and you heard it today, there is not that much physical metal out there, and there isn't. But in the "physical market," as the market uses that term, there is much more metal than that. There is a hundred times what there is. If I look at the large short positions on the Comex, my question is: Where are the other shorts being hedged? Because the short position that I believe the bullion banks use to hedge their physicals is larger than their short position on the Comex, and the answer is that they hedge it in the OTC market in London.

CHAIRMAN GENSLER: I thank you for that detailed discussion
* * *

This is a stunning revelation. Christian confirms that the "physical market" is not in fact a physical market at all. It is a loose description of all the paper trading and ledger entries and some physical metal movements that occur each day on behalf of people who believe they own bullion in LBMA vaults but in fact don't. They are told they have "unallocated gold" or "unallocated silver," but that does not mean the LBMA has physical metal set aside for those customers and has just not given specific bar numbers to the customers.

No, it is the most cynical and corrupt definition of "unallocated" -- the customer has NO bullion allocated to him. NONE!

The LBMA defines the owners of "unallocated accounts" quite clearly as "unsecured creditors." That means they have NO collateral. NONE.

Can it be any clearer? It is a giant Ponzi scheme.

zilbo79
04-04-10, 01:08 PM
Mitchell's (Byrne's?) point of view was interesting,

The facts that the volume of trades, and open interest, exceed deliverable supply, and that very few contracts are settled by delivery, have characterized commodity markets since the birth of futures markets in the late-1860s. They have been the subject of comment and frequent criticism since that time. This is not, contrary to what Douglas says, a new thing.. . . ."

<!--IBF.ATTACHMENT_909759-->

Interesting. So basically what he's saying is that price manipulation by false paper promises (counterfeit) in this market has been in place since the beginning therefore it is OK I can trust this market.

I tend to agree with Mitchell that this just makes the notion of a market laughable. How is it a market when you can't trust the quotes when you know someone is just creating false paper promises (counterfeit) upon paper promises with no actual deliverable gold?



What Christian was saying is that every ounce of gold or silver is being sold 100 times. This would not be problematic if we were speaking of some dusty market in Central Asia with rows of traders’ stalls wherein some commodity (such as gold, silver, radios or Kalashnikovs) were being sold and resold in rapid-fire succession: there, our sensibilities about scarcity, value, and price discovery would actually grip reality. Here, however, we are talking of markets where the distinction between reality and representation has become as blurry as the last round of a game of musical chairs, enabling some sellers to offload paper IOUs promising eventual delivery of silver and gold – promises that would be impossible to keep if some small segment of the buyers were to demand delivery of the real thing.

...

This is slightly absurd. Later in his testimony, Christian himself said that it was “exactly right” to say that the hedges are nothing more than hedges of “paper on paper” – a particular sort of merry-go-around where one IOU is settled by another IOU, with these IOUs outnumbering real gold and silver by multiples of a hundred times.

As for the notion that cash settlement solves the problem, Maguire noted in his radio interview that cash settlement “is the very definition of default. If somebody wants to buy gold and silver and instead they’re given cash, that is a default.” In addition, “there are people who will not want cash – Chinese, Vietnamese, Russians – people looking for the metal, they will want to take it, and that will cause a default on the Comex [the metals exchange] because the Comex will be drained…that was the word that was used by several people making testimony [at the CFTC meeting], that the Comex would be drained…” [emphasis added]

It seems that Mitchell's article makes the case for owning physical gold all the more stronger.

cobben
04-04-10, 01:34 PM
"I think you are missing what happened at the CFTC meeting -- from - It's admitted to the CFTC: London gold market is a Ponzi scheme (http://www.gata.org/node/8478/)"

What I see is an amazing lack of interest in understanding how these various markets really work together as a whole.

That does not mean that the LBMA is necessarily a ponzi scheme, just that Christian seems to be semi-clueless as to what is really going on. That in itself is scary enough.

Rajiv
04-04-10, 01:49 PM
What that shows to me is that most players are not buyers of gold, but rather speculators, and therefore do not take delivery of the commodity or instrument.

This action allows market makers the opportunity to "skillfully" apply the "art" of market making to "temporarily" increase the "supply" of gold and line their own pockets ("brokerage fees") -- however, this "temporary" increase in supply makes a hash out of price discovery -- and therefore the market really becomes a meaningless method of bringing a balance between supply and demand.

This process I believe is occurring in most financial markets today.

cobben
04-04-10, 02:05 PM
"the market really becomes a meaningless method of bringing a balance between supply and demand.

This process I believe is occurring in most financial markets today."

A quick look at their site shows offhand that the LBMA is much more than a simple physical market clearing organization, so what one really wants to know then is to what extent the LBMA system has been corrupted, if at all.


http://www.lbma.org.uk/london


The London Bullion Market

London is the focus of the international Over-the-Counter (OTC) market for gold and silver, with a client base that includes the majority of the central banks that hold gold, plus producers, refiners, fabricators and other traders throughout the world.
Members of the London bullion market typically trade with each other and with their clients on a principal-to-principal basis, which means that all risks, including those of credit, are between the two counterparts to a transaction. This is known as an ‘Over the Counter’ (OTC) market, as opposed to an exchange traded environment.
The London bullion market is a wholesale market, where minimum traded amounts for clients are generally 1,000 ounces of gold and 50,000 ounces of silver.
Unlike a futures exchange – where trading is based around standard contract units, settlement dates and delivery specifications – the OTC market allows flexibility. It also provides confidentiality, as transactions are conducted between the two principals involved.

Southernguy
04-04-10, 02:17 PM
First thing Monday morning: Selling all GLD. Buying physical (at a 6% surcharge, where I live) buy nevertheless....the real thing is always THE REAL THING.




Interesting. So basically what he's saying is that price manipulation by false paper promises (counterfeit) in this market has been in place since the beginning therefore it is OK I can trust this market.

I tend to agree with Mitchell that this just makes the notion of a market laughable. How is it a market when you can't trust the quotes when you know someone is just creating false paper promises (counterfeit) upon paper promises with no actual deliverable gold?

It seems that Mitchell's article makes the case for owning physical gold all the more stronger.

icm63
04-04-10, 02:19 PM
Metal Man,

I believe the whistle blower and Gata made a more important point rather than mere price manipulation, the point that concerns me was that paper gold may not be backed with 1 x 1 physical gold, and that it could be as high as 100 x 1 (paper gold to physical gold).

NOTE: Enron, Lehman, had auditors as well.

Which is super charger bullish for physical GOLD ONLY. Anything hard, silver, copper, oil, etc

cobben
04-04-10, 02:29 PM
"So basically what he's saying is that price manipulation by false paper promises (counterfeit) in this market has been in place since the beginning"

No, what he is saying is that there is no such thing as a "naked short" in a futures market, as they are all paper zero-sum games dealing in future promises to deliver/receive, not in the physical commodity.

The US futures markets are uninteresting in the big picture gold manipulation discussion, other than short-term options-related shenanigans (which may well be criminal).

It's the LBMA that is interesting, and it doesn't seem to me that for example Christian understands it, nor does GATA for that manner.

zilbo79
04-04-10, 03:10 PM
No, what he is saying is that there is no such thing as a "naked short" in a futures market, as they are all paper zero-sum games dealing in future promises to deliver/receive, not in the physical commodity.


No way to game the system via naked short selling, eh? Maguire's accurate predictions were merely coincidental I reckon.

Promises on promises upon promises, eh? That sounds familiar. Why, that sounds like credit derivatives.

http://www.cbsnews.com/stories/2008/10/26/60minutes/main4546199.shtml

We've seen this movie before. This is most likely seeds for the next crisis.

zilbo79
04-04-10, 03:14 PM
All I hear from Ritholtz is ad hominems. That is a tell-tale sign of a weak argument. He presents no data to refute DeepCapture's mountains of evidence:

http://www.deepcapture.com/category/data/

icm63
04-04-10, 03:15 PM
If you believe that equities will have a dip in price this year, there will be contagion selling is strong assets (ie Gold), of at least $200, just like 2008

BUY then.

Of course will the sell off start at GOLD @ 1300 or 1200 or 1100

http://www.youtube.com/watch?v=F6Ba1pWqbqA&feature=related

Bearish info here : http://www.itulip.com/forums/showthread.php?t=15062

cobben
04-04-10, 03:30 PM
"No way to game the system via naked short selling, eh? Maguire's accurate predictions were merely coincidental I reckon. "

I wrote:

" other than short-term options-related shenanigans (which may well be criminal)."

This is still not naked shorting (of the physical), they are selling futures (promises) which someone else is buying.

zilbo79
04-04-10, 03:36 PM
First thing Monday morning: Selling all GLD. Buying physical (at a 6% surcharge, where I live) buy nevertheless....the real thing is always THE REAL THING.

Agreed. It makes it easier to sleep at night I think. :)

surfersdsb
04-04-10, 03:38 PM
M-man. As a long term energy trader on wall street I read your columns with amusement. You seem to take yourself way to seriously. Your condescending view of others points is a bit much. How and the world can you even dare to speak with so much smugness, Would love to know the details of your background and work experience that allows you to speak with such smugness.

As we you to say regarding the successful traders and talker. The real traders were independently wealthy based on their ability to understand risk. The talkers were just that, talkers.

Something tells me you live in 4 story walk-up below 14th st on the east side, scratching out your opinions, while the four gold coins you own prop up your wobbly desk.

I have yet to read anything from you that would make anyone any money. Except to state " us old guys at itulip" read Eric.

Agreed with the other post Metal=Tool

No offense:
surfersd retired, trading and surfing in Sd

zilbo79
04-04-10, 03:50 PM
" other than short-term options-related shenanigans (which may well be criminal)."



Now we're just arguing over the semantics of fraud. :)

There's obviously fraud going on here, to what extent nobody knows for certain because the CFTC and other "regulators" won't do their job. And that's the scary part because one sees the warning signs (like in the Madoff case) but yet nobody in authority is doing anything about it.

So we might argue over whether NSS is happening (there's no reason to disbelieve it given the track record of our indolent regulators) but you can't refute that there's manipulation unless you believe Maguire's accurate predictions were pure coincidence.

Spartacus
04-04-10, 05:55 PM
I'm not ever going to trade COMEX so I haven't read the contracts, but apparently, like LBMA, COMEX is not supposed to be naked either; anything naked on COMEX was supposed to be temporarily naked- the short was supposed to be able to produce within some reasonable timeframe, like a mining company that shorted & was able to produce the product.

That's what Ted Butler has been complaining about for so long -
1. COMEX/NYMEX/CBOT seemingly sets no visible limits on shorts
2. COMEX/NYMEX/CBOT does not let longs go unlimited long
3. COMEX/NYMEX/CBOT sets exceedingly small position limits for longs and no reasonable limits for shorts
4. After all the previous instances of complaints to COMEX/CFTC, COMEX/CFTC has always claimed (without providing verifiable proof) the short position was " ... fully backed by physical ..."

If unlimited shorting on COMEX is OK, why would COMEX/CFTC need to make that claim repeatedly?

COMEX tried to introduce a no-delivery contract a few years ago and it was a ocmplete failure.


Mitchell's (Byrne's?) point of view was interesting, still digesting it.
Here's another piece to the puzzle that debunks GATA to some extent at least.
There are obviously lots of opposing vested interests fighting it out here.
Watch the markets, "the truth" will appear there first.

Of Gold Bugs and Market Parables (http://seekingalpha.com/article/196615-of-gold-bugs-and-market-parables)
http://seekingalpha.com/article/196615-of-gold-bugs-and-market-parables


The London market is supposedly a true physical market and as such is more interesting.
<!--IBF.ATTACHMENT_909759-->

Spartacus
04-04-10, 06:08 PM
What happens when your workplace reeks to high heaven?
you eventually shut out the stench


not mean that the LBMA is necessarily a ponzi scheme, just that Christian seems to be semi-clueless as to what is really going on. That in itself is scary enough.

Or as EJ once wrote, no one believes the bullcrap more than those whose paycheques depend on that belief.

ThePythonicCow
04-04-10, 07:45 PM
I'm not sure how reliable Deep Capture is as a source of information. Barry Ritholz of The Big Picture is certainly no fan of Deep Capture's Patick Byrne.

http://www.ritholtz.com/blog/2009/12/deepcapture-com-scraping-facebook-friends/
That's ok -- Patrick Byrne probably feels the same way about Barry Ritholz :D.

The truth is elusive, no doubt about that.

phirang
04-04-10, 08:43 PM
The goldbugs are going to get hammered when the market realizes what is truly going to drive (we haven't had it yet!) inflation in 2010/2011.

Obama says we're not broke anymore. I'm not fading him.

phirang
04-04-10, 09:27 PM
Ted Butler is a fraud AND moron and anyone trading off of this CRAP deserves to be wiped out.

The sooner the idiotic bugs get blown up, the better.

swannmex
04-04-10, 09:37 PM
Ted Butler is a fraud AND moron and anyone trading off of this CRAP deserves to be wiped out.

The sooner the idiotic bugs get blown up, the better.


The goldbugs I know, myself included, have made fortunes investing in gold over the last 10 years. When I look at the gold ounces I bought in 2002 for less than $300.00 I don't feel asinine or dumb, I feel right. Say whatever you like about "goldbugs" but we have made a ton of money being right over the last 10 years. Good luck day trading "professionally" but I will keep 'goldbug" profits for the last 10 years and enjoy my retirement.

jtabeb
04-04-10, 09:37 PM
Ted Butler is a fraud AND moron and anyone trading off of this CRAP deserves to be wiped out.

The sooner the idiotic bugs get blown up, the better.

Phirang, my 10 year total return is 400%.

What's YOURS?

(yeah, thought so)

zilbo79
04-04-10, 11:21 PM
What happens when your workplace reeks to high heaven?
you eventually shut out the stench



Or as EJ once wrote, no one believes the bullcrap more than those whose paycheques depend on that belief.

Good ones!

phirang
04-05-10, 04:16 PM
Phirang, my 10 year total return is 400%.

What's YOURS?

(yeah, thought so)

That's not that great.

If you bought GGP at the bottom (under $1), you made over 15x's your money in under a year. CRE equities posted amazing gains over the past year.

jpatter666
04-05-10, 04:48 PM
Ford (F) 12X. Genworth (GNW) over 18X (!)

I had a friend buy Genworth at the lows. Made a fortune. Wish I'd listened....but that seems to be the way with the markets right now. Junk goes to the moon.

Ford still has tons of issues. Genworth is highly exposed if things turn downward again. What is Amazon (a retailer) doing sporting that PE?

There are times when I think the correct strategy is to do the stupidest thing I can think of....

FRED
04-05-10, 04:51 PM
Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen (http://www.itulip.com/forums/showthread.php?p=156095#post156095)

zilbo79
04-05-10, 05:07 PM
One quote that sticks out:



To be fair, GATA’s focus is not on long-term gold and silver investors like me but traders who have to duke it out in the gold and silver spot and futures markets on a daily basis.

I don’t trade because I don’t think I can win more money on short-term bets than it costs me in time and transaction costs compared to other things I can be doing. I don’t blame anyone else for trying, but whether illegal manipulation is occurring in the markets or not, I view markets as battlegrounds where the big players always have an advantage over the little guy.



Thanks for sharing. Much to consider. I'm a long-term gold holder myself so, yeah, it doesn't affect me much considering I own physical gold anyway. But the scary part is the implication that if there is even a 20% chance that the supposed mechanism for manipulating PMs can also be used to destroy the dollar, that's the take away from Mitchell's article.

jtabeb
04-05-10, 07:57 PM
That's not that great.

If you bought GGP at the bottom (under $1), you made over 15x's your money in under a year. CRE equities posted amazing gains over the past year.


No you misunderstood.

My ACTUAL RETURN WAS 400%, for a BUY and HOLD strategy, no trading, just accumulation.

What is YOUR ACTUAL RETURN over the same 10 year period?

jtabeb
04-05-10, 08:03 PM
There are times when I think the correct strategy is to do the stupidest thing I can think of....

I Did that, worked like a champ!

jtabeb
04-05-10, 08:09 PM
Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen (http://www.itulip.com/forums/showthread.php?p=156095#post156095)

ZH is going bonkers, now they put this up

http://www.zerohedge.com/article/national-inflation-association-silver-short-squeeze-could-be-imminent

FRED could you comment on ZH's motivations here.

We had the Capital Control Scare, and now this one.

Do you know what's going on over there, or who they are working for?

Foxbuisness is carrying it too.

http://www.foxbusiness.com/story/markets/industries/finance/silver-short-squeeze-imminent/


What's going on here?

Rajiv
04-05-10, 08:22 PM
Maybe it is just that NIA discovered "PRNewsWire (http://www.prnewswire.com/news-releases/)"

metalman
04-05-10, 08:39 PM
ZH is going bonkers, now they put this up

http://www.zerohedge.com/article/national-inflation-association-silver-short-squeeze-could-be-imminent

FRED could you comment on ZH's motivations here.

We had the Capital Control Scare, and now this one.

Do you know what's going on over there, or who they are working for?

Foxbuisness is carrying it too.

http://www.foxbusiness.com/story/markets/industries/finance/silver-short-squeeze-imminent/


What's going on here?

ej said... 'we are entering a new age of unreason'

zh learned that craaaazzzzzz = traffic...

http://imgur.com/rLJh1.png

more crazy = more traffic = more ad revenue

santafe2
04-10-10, 01:41 AM
Ted Butler is a fraud AND moron and anyone trading off of this CRAP deserves to be wiped out.

The sooner the idiotic bugs get blown up, the better.

I've not read Ted Butler regularly in 10 years but he offered some excellent guidance for early PM investors. I don't read him today but I can assure you he's neither a fraud or a moron. While I have many differences with his ideas, I conversed with him on several occasions 10 years ago. I found him to be a passionate advocate for silver and a reasonably good analyst. My early investment in PM was largely based on his assessment of the late 90s market.

While I can't defend your position on his current observations as CRAP, I would advise that he's a fairly smart guy. At least he was a guy who got it right when metals turned. The 'moron' idea is without merit.

santafe2
04-10-10, 02:13 AM
points addressed per bolded text
1. depends on if they can keep this thing going indefinitely (or longer than those who hold/buy PM care). Further more, wouldn't you rather get a fair price than a manipulated one (even if that means more expensive to buy)?

2. Would you be so kind to post what sets the silver/gold price? Is it trading in actual physical gold, or is the price heavily influenced by supply/demand for paper silver/gold? Should it be?
What about those huge short positions that JPM and HSBC have? Are those legitimate short positions? How much bullion do they have to possess such huge short positions?

Although I'm not blindly believing any claims of manipulation, based on the claims I'd tend to listen seriously to some of the manipulation arguments. Especially when you look at the history of gold market manipulation by governments/central banks (a lot of papers saying this much have been declassified already).

I'd consider the possibility that these governments and central banks do think that PM manipulation is necessary to keep our fiat currency regime erect; depending on what is required to do, they'll keep it going. At one time in history, confiscation/ban on private ownership was done (was it needed?). Which scenarios are possible? Are they all good for private holders of gold/silver?

You have to focus on the investment. Does it have value? If so, invest. If not, move on. You are focused on the possibility of manipulation. No one ever made a dime on manipulation unless they were an excellent manipulator. That's not me so I have to focus on the investment and I still like PM.

Camtender
04-12-10, 01:23 AM
http://jessescrossroadscafe.blogspot.com/

NY Post: Trader Blows Whistle On Gold and Silver Price Manipulation (http://jessescrossroadscafe.blogspot.com/2010/04/thanks-to-ny-post-for-breaking-ranks.html) [/URL]

"Every society gets the kind of criminal it deserves. What is equally true is that every community gets the kind of law enforcement it insists on." Robert Kennedy
The CFTC hearing in Washington was about safeguards against, and limits on, naked short selling at the COMEX. The LBMA in London is a 'cash market' and while short selling is accepted, large leverage and blatant naked short selling is not. The crux of the scandal is that the Banks and hedge funds have been selling what they do not have in order to manipulate the price and cheat investors, in this market as they have been shown repeatedly to have done in other markets.

The story gets sticky in the States because, as disclosed in the motions in a New Orleans trial, the players filed a motion claiming immunity because they were acting in partnership with the Treasury and the Federal Reserve, and other central banks who were not within the Court's jurisdiction.

Watch this story unfold, and then make up your own minds. But be prepared for smears, diversions, misconceptions, and false denials. The accused parties will consistently try to ignore this, and change the subject. The attempts to pressure the media to ignore tihs altogether are a 'tell' if there ever was one.

I am shocked at the extent to which the Banks influence and control the American media. This was testimony at a public hearing, and it has been largely squashed. Judging by history, this is going to get ugly.

Thanks to the NY Post for breaking ranks with the mainstream media. Despite some significant behind the scenes pressure, the Post is actually publishing some words that the Banks do not wish the American people to hear. And many Americans to not wish to hear it, because it shakes their faith in the system, and threatens them with the unknown. And too many, including economists and even bloggers, are only too willing to 'go along to get along' and be invited to the posh gatherings of the famous, and receive some sinecure from the monied interests.

I do not know if this is true or not, or what the truth may be. But I do have a strong passion for bringing the light of day to shine on this, and for these markets to be much more transparent, as a reform, to prevent frauds which we do know have occurred and most likely are still occurring. For me the light of day is not smearing the messenger and making their life dangerously miserable, but that is what too often passes for journalism in the US today, as is seen in the case of other whistleblowers, most famously in the Plame affair.

Naked short selling in size is a cancer in the financial markets. And the way in which the Banks are obstinately fighting against any and all reforms that attempt to limit naked short selling shows the objective observer that they are firmly committed to a status quo that is designed to distort the markets and the real economy for their short term advantage.

Let's be clear about this: naked short selling in size is not a trading strategy, it is a means to a fraud.

This may be the Madoff ponzi scheme writ large, the heart of the darkness in the financial fraud that is the US financial system. The crowning achievement of the financial engineers at the Fed, who have built a Ponzi economy and an empire of fraud.

NY Post
Metal$ are in the pits
By MICHAEL GRAY
4:33 AM, April 11, 2010

Trader blows whistle on gold & silver price manipulation

There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.

The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.

Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public.

Maguire -- in an exclusive interview with The Post -- explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves.

"JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer," Maguire said.

In the gold pits, Maguire sees HSBC betting against the precious metal's price without having any skin in the game in the form of a naked short.

"HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size," Maguire added.

"No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a company spokesman. HSBC declined to comment. (Maguire seems to be creeping into the corporate consciousness. Earlier, JPM tried to deny that he even existed. Now they admit he exists but no one there knows him, despite his have traded alongside them for 40 years, and traded at a sister firm, Goldman. HSBC has at least enough conscience to simply sulk. - Jesse)

Also during the CFTC hearing, Jeff Christian, founder of the commodities firm CPM Group, said that the LBMA, the physical delivery market for gold and silver in the UK, has been using leverage, which is another way to depress the price of gold and silver.

Christian said that the LBMA -- the same market Maguire trades in -- has leverage of about 100-1 on the gold bars settled on the exchange. In layman's terms, that means if 100 clients requested their bullion bars be delivered, the exchange could only give one client the precious metal. (Note: the LBMA is not a 'futures' market like the COMEX where naked short selling is an accepted, if not entirely explicit, practice. The CFTC hearing was essentially about safeguards against and limits on naked short selling on the COMEX, despite the noise and distractions surrounding it. - Jesse)

The remaining requests would have to be settled for cash equivalent. "That is tantamount to a default on the trade," says Bill Murphy, chairman of the Gold Antitrust Action committee...

Read the rest [URL="http://www.nypost.com/p/news/business/metal_are_in_the_pits_2arTlGNbMK7mb1uJeVHb0O/0#ixzz0knioYd8m"]here. (http://2.bp.blogspot.com/_H2DePAZe2gA/S8I2r6E6kFI/AAAAAAAAMYo/81aI0ZoRW8k/s1600/ThreatMeter.jpg)

santafe2
04-12-10, 02:09 AM
The CFTC hearing in Washington was about safeguards against, and limits on, naked short selling at the COMEX.

Who cares? Let them drive metals to zero. Aren't we all buying on the way down?

thisandthat.nowandth
04-12-10, 02:28 AM
Viral:

China takes note of GATA's presentations to CFTC (http://www.gata.org/node/8534)

Australia's largest newspaper notes GATA's complaint to CFTC (http://www.gata.org/node/8532)

-joaquin-

Camtender
04-12-10, 02:31 AM
Article in China


http://www.popfinancing.com.cn/gupiao/zixun/201004/08-14270.html

skyson
04-12-10, 11:12 AM
And the itulip.com's official position IS.....(drum rolling): that is just another conspiracy theory.:eek::eek:

FRED
04-12-10, 12:24 PM
And the itulip.com's official position IS.....(drum rolling): that is just another conspiracy theory.:eek::eek:

The fact that this conspiracy story is getting picked up worldwide means what?



$134.5 billion in fake government securities: Case closed, sans tin foil hat (http://www.itulip.com/forums/showthread.php?p=105962#post105962) http://www.itulip.com/forums/../images/tinfoilhat150.jpg (http://www.itulip.com/forums/showthread.php?p=105962#post105962)June 23, 2009, iTulip

Why did the government take so long to comment? Why did government representatives say so little? Why were the perpetrators Japanese? Why did the Italian authorities let them go? Why has the mainstream media said so little about it? No secrets revealed! More … (http://www.itulip.com/forums/showthread.php?p=105962#post105962)

radon
04-12-10, 02:24 PM
And the itulip.com's official position IS.....(drum rolling): that is just another conspiracy theory.:eek::eek:

Shorting into the thinly traded futures market in order to force a margin call on someone and take their money is a tactic as old as time. Why is there an assumption that everyone trading options either expects or desires physical delivery of the underlying metal? There is no conspiracy here except that the general public has a misunderstanding of contracts, counter party risk, and the markets in which they are bought and sold.

As for tungsten, I'll believe it when a jeweller or manufacturer ends up with a bar of it. Many companies buy gold and use it, so why we havn't seen any tungsten bars in the wild? Maybe that is because it is, like most conspiracy theories, complete fiction.

I have been hearing from gold bugs that the exchange is going to blow up on expiration day for years now. They scream loud when gold goes up and louder when it goes down. No matter what happens they keep screaming buy buy buy and the end of COMEX is near. Who knows? Perhaps one day they could be right, but even a stopped clock gives the right time twice a day. And gold bug advice is not good for trading.

They need to take some of their bullion and beat it into thin sheets then cover their head with it. It might help. The conspiracy BS sells web hits, nothing more.

metalman
04-12-10, 02:55 PM
Shorting into the thinly traded futures market in order to force a margin call on someone and take their money is a tactic as old as time. Why is there an assumption that everyone trading options either expects or desires physical delivery of the underlying metal? There is no conspiracy here except that the general public has a misunderstanding of contracts, counter party risk, and the markets in which they are bought and sold.

As for tungsten, I'll believe it when a jeweller or manufacturer ends up with a bar of it. Many companies buy gold and use it, so why we havn't seen any tungsten bars in the wild? Maybe that is because it is, like most conspiracy theories, complete fiction.

I have been hearing from gold bugs that the exchange is going to blow up on expiration day for years now. They scream loud when gold goes up and louder when it goes down. No matter what happens they keep screaming buy buy buy and the end of COMEX is near. Who knows? Perhaps one day they could be right, but even a stopped clock gives the right time twice a day. And gold bug advice is not good for trading.

They need to take some of their bullion and beat it into thin sheets then cover their head with it. It might help. The conspiracy BS sells web hits, nothing more.

http://www.itulip.com/images/clapping.gif

well said.

by my count this is the 24,345th bogus gold conspiracy theory since 1981 when the fed took rates up to 20% & gold died... it'll turn out like the 24,344 before it... fade away... no follow-up... no proof... on to the next one... as bad as the msm... or worse.

ThePythonicCow
04-12-10, 03:07 PM
They need to take some of their bullion and beat it into thin sheets then cover their head with it. It might help. The conspiracy BS sells web hits, nothing more.I see you earned a round of applause from metalman for this post. Good work.

This Faux debate between the "respected" and the "conspiracy nuts" is distracting us from a better understanding.

The problems we face, in the gold markets as well as others, are more serious than the respected allow, and more subtle than the conspiracy nuts portray.

Perhaps we should quit watching the iTulip variation of a weekend football game and continue our studies and learning.

radon
04-12-10, 05:32 PM
I see you earned a round of applause from metalman for this post. Good work.

This Faux debate between the "respected" and the "conspiracy nuts" is distracting us from a better understanding.

The problems we face, in the gold markets as well as others, are more serious than the respected allow, and more subtle than the conspiracy nuts portray.

Perhaps we should quit watching the iTulip variation of a weekend football game and continue our studies and learning.

I would argue that it is the steady stream of sensationalist horse hockey that is distracting us from a better understanding. I agree that debating such a person is pointless. If you have ever had a debate with a gold bug you will find that it is their religion and self worth. They have to be right because it is embedded in their identity. They talk their book continuously and spread bizarre rumors. They will not listen to any evidence to the contrary. They invent straw men in an attempt to show you are wrong or attribute the position you hold to be supporting the invisible conspiracy against them. In the end they construct a fantasy world designed to support this belief system.

Meanwhile in real life COMEX keeps chugging along.

In case you are wondering I have some friends and family who fall into the above category and the discussion of investment topics is completely off limits. They will buy into something and refuse to trade out even at the top of the bubble. Then they will follow it down all the while insisting that they are right and that everyone else in the world is wrong - as if believing they are right makes it so.

I would much rather listen to someone "reputable" who is actively trading and can be somewhat instructive. But hey, to each their own. Just like any information from news feeds or blogs we all have to decide whether it is credible or not. At the end of the day the market will tell us objectively who is right and who is wrong.

ITuip replacing bad information with good information is not a football game in the sense that the opinion of both sides equal weight.

metalman
04-12-10, 06:15 PM
I would argue that it is the steady stream of sensationalist horse hockey that is distracting us from a better understanding. I agree that debating such a person is pointless. If you have ever had a debate with a gold bug you will find that it is their religion and self worth. They have to be right because it is embedded in their identity. They talk their book continuously and spread bizarre rumors. They will not listen to any evidence to the contrary. They invent straw men in an attempt to show you are wrong or attribute the position you hold to be supporting the invisible conspiracy against them. In the end they construct a fantasy world designed to support this belief system.

Meanwhile in real life COMEX keeps chugging along.

In case you are wondering I have some friends and family who fall into the above category and the discussion of investment topics is completely off limits. They will buy into something and refuse to trade out even at the top of the bubble. Then they will follow it down all the while insisting that they are right and that everyone else in the world is wrong - as if believing they are right makes it so.

I would much rather listen to someone "reputable" who is actively trading and can be somewhat instructive. But hey, to each their own. Just like any information from news feeds or blogs we all have to decide whether it is credible or not. At the end of the day the market will tell us objectively who is right and who is wrong.

ITuip replacing bad information with good information is not a football game in the sense that the opinion of both sides equal weight.

er, you're talking to a guy who believes the usa gov't blew up the world trade towers. nuff said.

ThePythonicCow
04-12-10, 07:03 PM
er, you're talking to a guy who believes the usa gov't blew up the world trade towers. nuff said.
aw shucks - thanks for the kind words
http://www.wistravel.com/images/aw2007-08-23_01.jpg

ThePythonicCow
04-12-10, 07:04 PM
I would argue that it is the steady stream of sensationalist horse hockey that is distracting us from a better understanding.I'll agree with that much.

Zorro
04-13-10, 09:56 AM
2. Would you be so kind to post what sets the silver/gold price? Is it trading in actual physical gold, or is the price heavily influenced by supply/demand for paper silver/gold? Should it be?
What about those huge short positions that JPM and HSBC have? Are those legitimate short positions? How much bullion do they have to possess such huge short positions?

A) The price at COMEX is heavily influenced by speculation. (Paper Trading)
B) Speculation is a fact of life in all commodities.
C) There is no evidence (nor can anyone support the claim) that JPM or HSBC hold any given amount of short positions at COMEX.
D) A short position is no less "legitimate" than a long position. To suggest that any short position (supposedly held by JPM or HSBC) is not legitimate, shows a lack of understanding the futures market. If it were intent that allows for credibility in the futures market, the bulk of all long positions (the driving force of higher prices) would be most suspect. It is without question that 73% of all long contracts in the COMEX silver market are held by speculators with no intention of taking delivery of a single ounce.
It can not be said that the sell side of a contract is not legitimate when the buy side never intended to take delivery in the first place.
E) The physical holdings and the identity of those firms offering to sell into a market are not subect to review. It would leave all firms at a disadvantage if it were publicly known who they are, and how much physical supply they wish to market.

Z

Spartacus
04-13-10, 01:38 PM
E) The physical holdings and the identity of those firms offering to sell into a market are not subect to review. It would leave all firms at a disadvantage if it were publicly known who they are, and how much physical supply they wish to market.

not subject to review? you must mean something other than what I'm reading there.

they are not supposed to be publicly disclosed by the exchange or the CFTC, but aren't COMEX/CME and CFTC both supposed to review the holdings and the positions, long and short?

Aren't the auditors of the companies supposed to review the holdings, and the short positions, and the long positions, to prepare accurate financial statements?

The firms themselves, and individuals once their position sizes get above a certain point have reporting requirements with the exchange and/or the regulator, and if the regulator doesn't have the power to audit, or the power to demand independent audits, they're a very strange regulator indeed

When Chilton wrote that they did a year long investigation into allegations about the Silver market, I'm sure he did not mean
"no holdings of any trader are subject to review"

thisandthat.nowandth
04-13-10, 02:25 PM
Darryl R. Schoon: Gold, Professor Fekete And The Economic Armageddon Signal

Best read at the link.

Snip:


Apr 13, 2010

THE WEST’S WAR ON GOLD

After 1971 when gold was no longer anchored the currencies of the West, Western central banks embarked on a campaign to defend their now fiat paper currencies against any rise in the price of gold, oil and other commodities that would expose the declining value of their paper currencies.

Thus began the West’s war on gold, a war directed by the West’s central banks. In an article written in 2001, Peter Warburton expertly deconstructs and details what to most is still opaque, the reason why the gold market is manipulated by Western ruling elites.

Warburton’s article exposes why the US Commodity Futures Trading Commission last month chose to ignore charges that gold and silver markets are manipulated. The central banks (and the CFTC) are well aware of the manipulation; the reason being that central banks are responsible for the manipulation and Warburton explains why:


Full Text (http://www.marketoracle.co.uk/Article18608.html)

ThePythonicCow
04-13-10, 03:12 PM
F) The main bullion banks, such as HSBC and JPMorgan, avoid excessive systemic risk, obtuse contracts and convoluted counter-party arrangements, even if it harms their short term profits and bonuses. (yeah, right :rolleyes:.)

In other words, speaking straight up, we can be rather certain by now that when the SHTF, there will be much pain. We can be rather certain that major players have overly optimized short term gain (whatever that be for them) at the expense of long term robust stability in the face of market challenges. We can be rather certain that the distribution of the size of participants in this market, like so many others, is sufficiently skewed that when the few biggest participants are severely stressed, it will threaten the entire market.

It's a top heavy boat, rigged for speed. She'll capsize in the next storm, or else the cargo will be impounded and the crew taken prisoner by some other larger, more nefarious ship as part of an inevitable "rescue."

Zorro
04-13-10, 04:18 PM
not subject to review? you must mean something other than what I'm reading there.

they are not supposed to be publicly disclosed by the exchange or the CFTC, but aren't COMEX/CME and CFTC both supposed to review the holdings and the positions, long and short?

Aren't the auditors of the companies supposed to review the holdings, and the short positions, and the long positions, to prepare accurate financial statements?

The firms themselves, and individuals once their position sizes get above a certain point have reporting requirements with the exchange and/or the regulator, and if the regulator doesn't have the power to audit, or the power to demand independent audits, they're a very strange regulator indeed

When Chilton wrote that they did a year long investigation into allegations about the Silver market, I'm sure he did not mean
"no holdings of any trader are subject to review"


I must not have been clear....traders are not subject to public review.

They are subject to internal review by the exchange.
Z