Gold, silver bullion manipulation now obvious

So who's doing it and why? Let's take a look. Photo: Columbia Pictures

WASHINGTON, December 5, 2012 – Nothing much to report today, really, as the stock market continues on its erratic, unpredictable course. Volume is quite low, making it very treacherous for small investors including the Maven, who is slowly exiting from most of his remaining positions. One exit we regret is from our gold and silver ETFs. We’re apparently in the midst of another bear raid—the second in as many weeks, and our suspicion is growing that this market is being very heavily manipulated by forces that we can’t play against with any degree of success. Is Auric Goldfinger still alive?

This isn’t a conspiracy theory. You can see it happen in the trading action across international exchanges. Gold, for example, took a tremendous pounding yesterday and no one quite knew why except for rumors that a massive, perhaps multi-billion gold bullion sell order was executed on the Tokyo exchange. Whodunit? Why was it done? Nobody seems to know. And the press doesn’t much seem to care.

Lately, when the precious metals market—which we generally follow via the precious metal ETFs—GLD, IAU, and SLV—starts leaping higher, the move is quick and violent. But then, it’s followed by an even more rapid, unpredictable waterfall move toward the basement. Rinse, repeat. The price of gold bullion seems capped right now at approximately $1700 an ounce, while silver seems deathly afraid of roughly the $34 per ounce range. When either metal touches the top of its range, the recoil is dramatic, vicious, and immediate. There’s clearly a lot of firepower behind each of these moves.

What’s going on? Market manipulation, that’s what. And we can’t get our overpaid financial media to dig into the reasons why. We suspect that two things might be afoot: some big institutions and/or investors are short the precious metals and can’t afford to allow them to go up past the aforementioned range; or a cabal of banks and/or central banks is arrayed against the advance of precious metals, which advance would foil their long-term plan to inflate their countries’ economies out of the present black hole. Prices and inflation could skyrocket if gold or silver were allowed to seek their natural levels which, given hidden inflationary pressures, could very well be considerably higher than they are now.

In other words, something or somebody—some entity or entities—happens to be fully involved in full-scale, behind-the-scenes collusion to protect the assets of those who hold them while concealing their moves from the public-at-large which is being slowly bled dry by the manipulators who seek to consolidate their positions amidst the fiscal calamity that they alone have caused.

Metals are not exactly our strong suit here, as trading is often complex and, worse, opaque. We did run into the following lengthy video today, however, courtesy of Jesse’s Café Américain, one of a couple of decent gold bug sites we follow. We’re not gold bugs ourselves, but appreciate the relationship—or lately the non-relationship—that exists between gold and “fiat currencies,” i.e., paper money.

Auric Goldfinger to James Bond: “I expect you to die.” Appropriate enough, as that’s what today’s market manipulation teams expect small investors and their 401(k)s to do, apparently. As fans of the James Bond film ‘Goldfinger’ (1964), we’d have preferred to post a photo of Honor Blackman (Pussy Galore) rather than this one of Goldfinger (Gert Frobe). But then again, greedy fat cats are the topic of today’s post, right? (Movie still: Columbia Pictures.)

At any rate, the video that follows, should be taken with at least a partial grain of salt, as it’s the product of, part of the major international news broadcasting arm of Russia Today (RT). RT is described in Wikipedia as “an international multilingual Russian-based television network. It is registered as an Autonomous Non-profit Organization funded by the Federal budget of Russia through the Federal Agency on Press and Mass Communications of the Russian Federation.In other words, RT is part of Russia’s state-owned and controlled media, serving much the same sophisticated propaganda function in Europe, primarily, as NBC—America’s primary state-controlled media outlet—does over here.

So rest assured that our Rushkie friends at RT, in spite of their nice, capitalist-seeming page layout and professional looking videos, still have Commie hearts when nobody is looking, and will do anything to undermine confidence in Western governments and banking systems. That said, the interviewee in this RT video, British investment maven Ned Naylor-Leyland, offers a chilling and largely plausible explanation as to how the secretive—and huge—London bullion market works to protect its own; and how its secretive nature could be concealing a massive short position in physical metal that they don’t own and can’t deliver. The way they can protect their “naked” shorts is to hammer gold down whenever it reaches the point where the manipulators could be short-squeezed out and forced to sell something they don’t even happen to own.

The video is close to 25 minutes long, is a bit wonky, and is punctuated by high-decibel know-it-all comments by the show’s host, Max Kaiser, who makes Bill O’Reilly seem like a pussycat in comparison. Nevertheless, roughly the first two-thirds of the video makes a pretty good case, at least in part, as to what’s gone terribly wrong in the bullion markets. This in turn is having a very negative effect on stock markets, which are already roiled, at least over here, by the fiscal cliff nonsense. If you can’t hedge your positions comfortably by holding precious metals, at least via ETF proxies, just what can you do?

Anyhow, check out at least part of this video if you want to gain some insight on what’s going on here. We’ll be back tomorrow, assuming we can find any news for you that makes even a particle of sense. These are the most corrupt and frustrating markets we’ve seen in our lifetime and we’re increasingly concerned that the whole thing is going to end rather badly.

(UPDATE: The video is proving a little recalcitrant and starts with material not germane to our point. Start the video and once the commercial is over, move ahead to about 12:34 in the video to get to the part we’re talking about.)

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. Stock investments currently include positions mentioned in recent articles. The maven is currently paring back positions in IAU, SLV for reasons outlined above.

Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.


Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17



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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  



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