Gold and Silver Price Manipulation Part 2 of 11 by Illuminati Silver

Video transcript:

Today is Thursday 7th January 2016 and we are addressing the issue of Gold and Silver price manipulation. In Part 1we mentioned the views of economist Jim Rickards who broadly stated that there is price manipulation in these markets, primarily carried out to assist China in increasing its gold reserves cheaply. Today we are going to reflect on the views of Dr Paul Craig Roberts and GATA and Andrew Maguire.

In July 2015 Paul Craig Roberts (former Assistant Secretary to the Treasury) published an article on his blog establishing that the price of gold and silver in the futures markets, in which cash is the predominant means of settlement, is inconsistent with the conditions of supply and demand in the actual physical or current market, where physical bullion is bought and sold. He quotes: “The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply.”

He confirms that in his view Gold manipulation “is obvious.” And he gives his opinion as to why the authorities tolerate it?

“Perhaps the answer is that a free gold market serves both to protect against the loss of a fiat currency’s purchasing power from exchange rate decline and inflation and as a warning that destabilizing systemic events are on the horizon. The current round of on-going massive short sales compressed into a few minutes during thinly traded periods, began after gold hit $1,900 per ounce in response to the build-up of troubled debt and the Federal Reserve’s policy of Quantitative Easing. Washington’s power is heavily dependent on the role of the dollar as the world reserve currency. The rising dollar price of gold indicated rising discomfort with the dollar. Whereas the dollar’s exchange value is carefully managed with help from the Japanese and European Central Banks, the supply of such help is not unlimited. If gold kept moving up, exchange rate weakness was likely to show up in the dollar, thus forcing the Fed off its policy of using QE to rescue the “banks too big to fail.”

He then added that the mainstream media is also involved in this process as it frequently interviews those who state that gold is not money. This is Craig Roberts reply to that charge:
“Gold is considered a part of the United States’ official monetary reserves, which is also the case for central banks and the International Monetary Fund. The IMF accepts gold as repayment for credit extended. The US Treasury’s Office or the Comptroller of the Currency classifies gold as a currency, as can be seen in the OCC’s latest quarterly report on bank derivatives activities in which the OCC places gold futures in the foreign exchange derivatives classification.

The manipulation of the gold price by injecting large quantities of freshly printed uncovered contracts into the Comex market is an empirical fact. The sudden debunking of gold in the financial press is circumstantial evidence that a full-scale attack on gold’s function as a systemic warning signal is underway.”

To further support the view that Central Banks are indeed involved in such manipulations, In 1999, at the close of what many believe to be the “second” Great Gold Smash (the first being the infamous London Gold Pool of the 1960s), this quote was attributed to the late Sir Eddie George, former Governor of the Bank of England: “We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, and manage it.”

On Sunday, 22 Mar 2015 Chris Powell, Secretary of the Gold Anti-Trust Action Committee Inc, (GATA for short) explained to CNBC why global central banks are intervening in the gold market.
He stated that Central Banks use Investment Houses or Intermediaries to manipulate the gold market price. They use Futures, Options and derivatives which both deceives Investors and destroys markets. The main reason for the intervention is to control the gold market to defend the US currency and Government Bond prices.

Now what about silver price manipulation? Well some have argued that any disruptive move to the upside in precious metals is negative for the U.S. dollar and for other un-backed currencies. While a higher gold price would reflect directly on major currencies, a higher silver price would both reflect on currencies and also have a ripple effect through several industries. A sharp rise in the silver price could be a leading indicator of broad price inflation. The U.S. dollar would lose value specifically relative to products that require silver in their production and generally relative to global commodities. In other words, sharply higher silver prices could destabilize the U.S. dollar and undermine its strategic role as the world reserve currency - or so it is argued.

And finally, Andrew Maguire: Whistle-blower, Independent London Metals Trader & Analyst – with 35 years trading experience, both as an institutional and independent trader has said on KWN lately that gold and silver manipulation cannot go on much further and he sees a major price breakout any time soon.

Part 3 will pose additional advocates of manipulation and then parts 4 and 5 will show how these alleged manipulations are being carried out and who is doing the manipulating.
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Disclaimer:

Illuminati Silver owners come from a background of Banking, International Wealth Management and Economics. Having now retired from these worlds we are not qualified to give investment advice. Therefore, this and other productions must not be deemed to be giving such advice and merely represent the personal views of its owners.