Posted on 01/14/2017 8:36:42 PM PST by Tours
Major U.S. and international banks cheat their customers and rig markets. Revelations have been piling up since the 2008 financial crisis. Hundreds of billions have been paid in fines, penalties, and settlements. The fraud, price manipulation, lying, and theft – once considered conspiracy theories – are now incontrovertible conspiracy facts.
This reality is dawning now in the precious metals industry. GATA, the Gold Anti-Trust Action Committee, labored for years making the case for price manipulation in the markets. They, and others, made a powerful argument complete with price charts and trading patterns that simply could not be explained in free and fair markets.
But their argument was universally disregarded by regulators and largely ignored by major players inside the industry. Gold and silver miners, refiners, and users never took meaningful action to combat price rigging, even as price volatility wreaked havoc in their business. GATA lacked enough “smoking gun” evidence, and most people simply assumed their claims couldn’t be true.
The recent settlement deal in which Deutsche Bank handed over 350,000 pages of internal documents and more than 70 voice recordings is changing that. Attorney’s behind class action suits against a handful of major banks say the trove of information is “smoking gun” evidence of a widespread and systemic campaign to cheat customers and rig markets.
It is one thing to look at trading data and surmise that someone is trying to manipulate prices. It’s another to see chat logs where traders laugh about actually manipulating prices and sticking it to unwitting market participants:
June 8, 2011
UBS [Trader A]: and if u have stops...
UBS [Trader A]: oh boy
Deutsche Bank [Trader B]: HAHA
Deutsche Bank [Trader B]: who ya gonna call!
Deutsche Bank [Trader B]: STOP BUSTERS
Deutsche Bank [Trader B]: deh deh deh deh dehdehdeh deh deh deh deh dehdehdeh
Deutsche Bank [Trader B]: haha16
The chat above, and a host of others like it, demonstrate what GATA has been saying for almost 20 years. The metals markets are a playground for unscrupulous bankers, and price discovery is completely dishonest.
It looks more and more like these phony markets are working just as officials in our government hoped. Here is an excerpt from a memo sent from London to the U.S. Treasury Department in 1974, compliments of Wikileaks:
TO THE DEALERS' EXPECTATIONS, WILL BE THE FORMATION OF A SIZABLE GOLD FUTURES MARKET. EACH OF THE DEALERS EXPRESSED THE BELIEF THAT THE FUTURES MARKET WOULD BE OF SIGNIFICANT PROPORTION AND PHYSICAL TRADING WOULD BE MINISCULE BY COMPARISON. ALSO EXPRESSED WAS THE EXPECTATION THAT LARGE VOLUME FUTURES DEALING WOULD CREATE A HIGHLY VOLATILE MARKET. IN TURN, THE VOLATILE PRICE MOVEMENTS WOULD DIMINISH THE INITIAL DEMAND FOR PHYSICAL HOLDING AND MOST LIKELY NEGATE LONG-TERM HOARDING BY U.S. CITIZENS. The “expectations” were spot on. The futures markets have been plagued by extraordinary volatility, paper trading is hundreds of times bigger than physical trading, and ownership of bullion today is a tiny fraction of what it once was.
A conspiracy theorist might say our government has an interest in undermining gold as money, in favor of the fiat dollar.
Officials view the futures markets as an essential tool for achieving those ends.
Price volatility, concentrated short selling, and pain for metals investors serves to discourage ownership so regulatory agencies like the Commodity Futures Trading Commission (CFTC) turn a blind eye.
After all the CFTC spent five years investigating price rigging in silver and failed to prosecute a single case. One wonders how they managed to miss what appears to be overwhelming evidence of systemic cheating, and if the trove of documents and voice recordings now available will be grounds enough to reopen an investigation.
The civil courts, not the regulators, appear to be metals investors best shot at recovery of some of what has been stolen from them in these rigged markets, and for moving toward free and honest price discovery. The Deutsche Bank settlement and the evidence it produced is changing the game.
Last week, Keith Neumeyer of First Majestic Silver, one of the largest primary silver producers in the world, announced he hopes to join in the class action. He is also working to recruit other big players in the industry. Mr. Neumeyer will be our guest on the Money Metals podcast to discuss these issues Friday. Stay tuned.
“A conspiracy theorist might say our government has an interest in undermining gold as money, in favor of the fiat dollar.”
Getting back to basics: Gold is real money; the fiat dollar is a promissory note that only promises to pay in promissory notes.
Prison. Time for a LOT of people to go to prison.
Bookmark
Back in the early '60s some guy sent in a $20 note (below) to a Federal reserve Bank and asked to redeem it in lawful money as per the notation on the bill.
They sent him back two $10 bills. He complained (loudly) to the press, who printed a couple of editorials saying that redeeming one IOU with two smaller IOUs was not sound monetary practice.
In 1963 the feds started issuing a new note, as below, to shut everybody up.
IOW, "It's money cuz we say so."
Yeah, so do I buy, sell, or hold Gold?!
I could tell you a very good gold mining company whose share are dirt cheap. However, it has been that way for a long time because of the manipulation, so I don’t how long it is going to be before things break loose.
Many gold miners have negative earning. Other have P/E in the 50 to 500 range. SLW, a silver miner touted to me, has a P/E of 639. ABX (gold miner) -8. That’s right minus 8. NEM (gold miner) -34. GG -3. A lower minus number is worse, not better. -3 means its value will go to zero in 3 years. KGC (gold) -5. AUY -1.7. AEM P/E 129.
AU P/E 45. HMY P/E 15.5. Worth further research. HMY 2013, 2014 and 2015 showed steep losses; South Africa, so also factor political risk.
In other news, the sun will rise in the East this morning.
The mechanism of suppression is the creation of fake supply, in the form of 'paper gold' and 'paper silver'.
Paper gold, also known as synthetic gold, is a promise to deliver gold.
Paper silver, also known as synthetic silver, is a promise to deliver silver.
Depending on whose figures you trust: there are now between 80 and 400 ounces of fake, not-real, synthetic promissory Gold for every real ounce out there. I don't remember the fake-ratio for silver but I seem to remember that it's similar.
And these fake-ratios increase every year, as the suppression continues.
Knowing that, it's obvious what we need to do.
Buy real gold and silver, take delivery, store them and stand guard over them with an automatic weapon.
As the price of precious metals IS suppressed, and will one day become unsuppressed, one might imagine that the miners are in fact the best buy in history. They are hated, and one day they will be loved.
I am leary of miner stocks though. They are incredibly undervalued, and when the suppression breaks the miners will become some of the best investments in history. On paper.
But for the suppression to end, we would need physical demand to finally overwhelm physical delivery. Which will happen when the fiat currency breaks, which will happen when the bond market breaks.
That's going to be one hell of a week, and I don't trust Governments to uphold the laws of property when it happens.
Miners will be vulnerable to nationalisation and seizure.
But even if that doesn't happen the company can dilute their value by over-issuance. So I figure it's safer to hold physical metal.
Gold and Silver, guarded by Steel and Lead.
CDE has been berry, berry good to me.
buy and hold a mutual fund owning miner stocks
I’ve been learning about gold and silver, mostly from the wisdom of FReepers sharing their knowledge. I would NEVER trust someone to hold a precious metal for me. The whole point of choosing metals as an inflation and/or banking crisis hedge is that the promises of paper money aren’t reliable. So why are promises that someone is holding gold or silver for me any more reliable? It just doesn’t make sense to do that.
The Germans were able to get all of their gold back from Paris. The folks in New York, however, have been unable to come up with enough in their vaults to return the German gold that was supposedly held there.
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“The Germans were able to get all of their gold back from Paris. The folks in New York, however, have been unable to come up with enough in their vaults to return the German gold that was supposedly held there.”
It is likely that the crooks who control the NY Fed Branch took the German gold years ago. I suspect Fort Knox might also be empty. It will be interesting to see if Trump will continue to allow the rigging of the gold and silver prices.
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