David Schectman

In today's Featured Articles section, I featured Ed Steer. Ed was on vacation last week so when he came back this week, he had a lot to say. He relies heavily on silver guru Ted Butler's views on silver, JPMorgan and manipulation. Good stuff!

A close BELOW 79 is bad news for the dollar. The dollar closed at 79.11. Let's see if it can hold here. Below 78 and the dollar is in deep trouble.

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Today's Featured Articles:

Ed Steer (Ed and Ted Butler discuss JPMorgan's manipulation of the silver market)

Zero Hedge ("The American Dream Is Dead For Everyone But A Happy Few")

Jim Sinclair (More evidence of the emancipation of physical gold from paper gold as the mechanism for price discovery.)

LeMetropole Café (Banks Sued on Claims of Fixing Price of Gold)

Bix Weir ("How can the CME and CFTC claim the silver price isn't rigged when the sales of Silver Eagles are stronger than ever yet the price of silver goes down?")

Kitco (Metals Demand Heading To China, India; Will Drive Prices Higher - Hecla CEO)

Quotes of the Day

Another hard metal fact at odds with depressed silver prices, both on an absolute and relative basis is the movement in the metal holdings in the big silver ETF, SLV. On Wednesday, April 30th, I described my surprise at the big 3.3 million oz withdrawal following the strong, high volume price action the previous week. I was actually more surprised by an even larger 4.2 million ounce deposit into SLV following a high volume price decline earlier this [past] week. Has the world gone mad - metal withdrawals on price strength and deposits on weakness?  I think there is an alternative explanation in conformity with my previous findings.

Previously, I explained the big withdrawal on price strength as related to a large buyer's desire to avoid hitting SEC reporting requirements that a 5% share ownership would mandate. Converting shares to metal accomplishes the avoidance of reporting. Having reduced SLV share ownership (but not silver metal ownership), the large buyer was free to buy shares again without having to report to the SEC.

Since there are more than 347 million shares of SLV outstanding, a 5% stake would amount to more than 17 million shares. As long as a large entity keep its share ownership below that level, it would not have to report under the 5% mandate. I believe the previous withdrawal reduced the large buying entity's share ownership sufficiently lower that it was able to buy more than 4 million new shares without breaching the 5% reporting cap. If there is an alternative explanation, it escapes me.

When considering the activity in GLD, the big gold ETF, the activity in silver stands out even more. Where the SLV had a huge deposit on price weakness this [past] week, GLD has had nothing but the steady drip of metal withdrawals on price weakness. I don't believe GLD will be significantly drained further, but the big deposit in SLV does stand in stark contrast and points to someone desiring to own more silver and knowing that can be more easily accomplished by manipulating prices lower.

- Ted Butler, Butler Research, May 3, 2014

Bill Holter

Why Now?

May 6, 2014

Why all of a sudden does it look like alliances against the U.S. are being formed everywhere.  The Chinese and Russians are doing deals together.  The Chinese have also formed trade deals and even currency exchange deals with NATO countries like Australia, France and even Britain.  It even looks like the Saudis may be switching sides but this one is not yet in concrete.  After writing this piece and while editing it, news has broken that Saudi Arabia has signed a "drone" deal where they will make drone purchases from China.  Further evidence of the Saudis cozying up to China.

So why now?  Why the sudden acceleration?  I think that if you "look under the hood," you may not see any one single reason but instead many.  First, unless you have blinders on, the "manipulation" is getting beyond brutal.  The markets in the U.S. (and globally) are being pushed, shoved, rammed and manhandled 24/7.  Almost nothing trades as it used to nor does anything trade with "logic."  It has gotten to the point where the press really has to stretch and strain to report market reactions to news because the actions lack any credibility.  The other area that lacks credibility is the economic reports.  Inflation, unemployment, housing sales, earnings, "bank capital," you name it, almost nothing adds up or even comes close to the reality that people see in their everyday lives.

If "2+2" doesn't add up to 4 for the average Joe on the street, do you think that the leaders of Russia or China are fooled by our markets or our reporting?  China is a major buyer in many markets and they know "how much" they have bought and are buying.  Take gold for example; do you think that they don't know how much gold they are buying in relation to total global production?  Do you really believe that they haven't done the calculations of how much they have bought versus how much the West (supposedly) had?

Or how about the Russians?  Do you believe that Mr. Putin just sat back during the Ukrainian coup and thought to himself "oh well, the population wants a new ruler?"  Do you really believe that the "West" had no hand in the coup whatsoever?  Or how about Egypt, Syria...or Benghazi?  Did these things just happen on their own?  All of this goes back a long time now, do you think that there are not Russian and Chinese engineers whom have not done studies to see whether or not steel buildings can both fall from a fire?  Or a 3rd one from nothing at all?  Mainstream media may be able to "work" on the populace but not on knowledgeable people who are skeptical in the first place.  Go back in your own mind 40 years ago, did Pravda "work" on the Russian people?  To some extent it probably did, but did their propaganda work on Americans?  No, because it did not make any sense and "their 2+2" never added up correctly with other known facts.

So, back to my original question..."why now?"  I believe it is because the rest of the world senses weakness.  They sense economic, financial, moral and maybe even military weakness on our part.  They know that the "numbers" are all fudged and our markets are all rigged.  They see our moral compass spinning around like an over loaded electric meter.  They see us tolerating all sorts of things that used to mean jail time and they see financial fraud that not only goes unpunished but is actually rewarded.  I am truly sorry to say this but the rest of the world sees a bully that is broke financially, drunk with grandeur, fat, lazy, lies, steals and cheats.  Do you wonder why they "don't want to hang out with us" anymore?

From a logistical standpoint, the world simply does not "need" the U.S. anymore like they once did.  The world has rebuilt and grown up since WWII.  They once relied on our knowledge, productive capacity, our capital and even our protection... they now have much of this on their own and no longer need our "help."  Especially when our "help" came at great costs and when "deals" didn't turn out to be such "good deals for them."  What is happening now is merely what should have been expected.  If you were in business with an overbearing partner that twisted the truth, changed the rules (your deal) whenever it suited them and could not be trusted ...would you keep doing business with them?  This is where we are today and why it looks like we are living in a massive "convergence" of international change.  Call it whatever you'd like, George Bush first called it a "new world order" although what is occurring now was probably not part of his vision.  

It is important that you understand the basic concept of mankind that "gold always flows to where power and wealth is being accumulated."  You are being told every single day that "gold is not money" from various and many sources in the West.  The East however deeply believes that gold is money.  It is crystal clear that gold is flowing like a river eastward along with our productive economy and finances.  Who should you believe?  Not only that, who do you think will "price" gold in the future?  Those who have it or those who don't?  

My point is this, we have many different events all lining up together at the same time and none of them "pro U.S."  Alliances are being formed by "up and coming" nations that have disdain for the U.S. and the dollar, AND who believe that gold IS in fact money.  Greenspan, Bernanke and anyone else in the U.S. can perjure themselves in front of Congress and say that gold is not money ...it doesn't, can't and won't make it so.  It won't make it so because as the U.S. becomes more and more isolated, the new alliances become more and more powerful.  Along with this "power" comes the ability to "make the rules."  Remonetizing gold is not even a rule that is difficult to make since it runs alongside that of Mother Nature.  The tough rules to make or enforce are the ones the West has tried to enforce by convincing the world that gold is not money which are naturally and patently false.  Call it whatever you'd like, re monetization, re set, or what have, the rest of the world wants it, Mother Nature demands it...it is coming soon whether you are ready for it or not! 

What It All Comes Down To

May 6, 2014

Today is one of those days in which nothing occurred overnight. Japan was closed for a holiday, Chinese stocks were unchanged and little transpired in the European and U.S. pre-market sessions. Regarding the latter, the PPT is hard at work ensuring the "Dow Jones Propaganda Average" rises as it nearly always does on Tuesdays, in perhaps the most blatantly obvious "sixth sigma" market intervention imaginable.

Per below, yesterday demonstrated the typical "dead ringer" trading pattern turning equities sharply higher at exactly the 10:00 AM EST time that Fed POMO or "Permanent Open Market Operations" are affected. To wit, just as "quantitative easing" is but a euphemism for printing money and monetizing treasuries, POMO is printing money to invest in the stock market. In this case, for the second straight day, the goal was to convince the world Friday's NFP report was actually "good news"; and thus, early, large stock losses were - voila! - converted to gains within 30 minutes time.

As you can see, the 10-year Treasury yield surged from its QE-created all-time low of 1.60% last May when the "tapering" propaganda scheme commenced; and for the past ten months, 2.60% has served as a de facto "floor" level - staunchly defended by the Fed in an attempt to convince the masses a "recovery" is in fact progressing. Forget the fact that rates are clearly rising for numerous reasons, few of which have anything to with "recovery" but instead, simply consider 2.60% as a "recovery propaganda tool" used to "signify" such. And thus, you should keep your eyes firmly trained to the all-important 10-year yield which as we speak, the Fed is desperately supporting at the new 2.60% "battlefield." Or as we commonly refer to in the Precious Metals realm, its "line in the sand."

 

I'd say "sorry" for highlighting manipulation so much but as long-time readers are well aware, it is clearly the most important aspect of the Precious Metals market. Without knowledge of - and understanding of the why, when, and how - "analysis" of such is incomplete. In baseball terms, does anyone believe Barry Bonds would possibly have hit 755 home runs without steroids?  

The reasons for owning gold and silver are myriad and 5,000 years of history prove it. Most importantly, they are the only substances to consistently serve as money given the unique properties demonstrated in this quick, must see video. In my two-and-a-half years as Miles Franklin's Media Director, I have consistently highlighted this slide in my presentations, as the most important wisdom I can proffer. That is, only gold and silver define money as opposed to the 599 fiat currencies that have decidedly failed to do so, with ZERO exceptions.

Sure, one can point to gold's role as "catastrophe insurance" - as in the case of a regional or global - war focused on the Ukraine which, frankly may well occur. Per this breaking story, take a wild guess what Ukraine's government intends to do with the IMF loan it is supposed to utilize to repay debts to Russian natural gas giant Gazprom.

Kiev will use the first portion of the International Monetary Fund (IMF) loan for augmenting its gold and currency reserves in order to stabilize the financial situation in the country, National Bank Chairman Stepan Kubiv said on Monday, May 5.

-Itar Tass.com, May 5, 2014

"Gold and currency reserves," by the way, is another euphemism - in this case, for GOLD; as historically, central banks are reluctant to show how much gold they're buying and thus, mix them with "currency reserves" in official publications. In this case, it should be crystal clear they are not taking currency earmarked for debt repayment to simply buy another currency; as quite obviously, the Ukrainian government is well aware that many other currencies face the same fate as their hyrvnia - down 40% since year-end.

And of course, one can simply view gold as insurance against Central banks' only policy tool - money printing especially in a fiat regime's terminal stage, as depicted by plunging economic activity, soaring debt, and rampant poverty. Such monetary "policy" must expand exponentially and no matter how hard TPTB attempt to mask it with propaganda, all money printing accomplishes is expanding inflation and broadening wealth disparity.

In other words, "what it all comes down to" is the irrefutable fact that Central banks inevitably inflate ALL currencies into oblivion; typically, in at most 50 years. And now that the global, dollar-based standard is 43 years old, with nearly all worldwide debt measures at, or nearing, parabolic growth rates, it's just a matter of time before "Economic Mother Nature" does what she always does. Thus, I figured it was a good time to highlight this excellent article by Jeff Clark of Casey Research - who collaborated with John Williams of Shadow Stats to show just how far gold has to go before fully discounting the inflation masked by government "cooking" of the CPI. Or better put, just how much gold has been suppressed since the global economy peaked at the turn of the century.  

Casey Research

And for those propagandizing gold's "bubble," take a gander at this chart of gold's relative performance in the freely-traded 1970s versus the suppressed 2000s and 2010s. Yes, its 2011 "explosion" to $1,920 doesn't even appear as a blip on the chart, compared to not only the parabolic surge of 1979 but the powerful rises of 1973-1975 and 1977-1978.

Casey Research

  

Here at the Miles Franklin Blog, all we can do is tell the TRUTH. Ultimately, it is up to

you to decide how to best protect your wealth - particularly given that all fiat currencies have ended up the same way. We cannot be more emphatic regarding our views of the ultimate outcome and equally so, vehement that once "fiat fear" spreads it will be diminished PM

supply that will be your worst enemy.

Hopefully, you'll take measures to at least partly insure yourself against Central bank madness; and if you do, we hope you'll call Miles Franklin at 800-822-8080, and give us a chance to earn your business!

 

 

Ted Butler: The World's Most Undervalued Asset - www.caseyresearch.com

By Ed Steer

May 6, 2014

Yesterday in Gold & Silver

The U.S. Mint reported the last three sales days of April as follows.  They sold 7,000 troy ounces of gold eagles---3,500 one-ounce 24K gold buffaloes---and a whopping 915,500 silver eagles.

The April sales stats are as follows:  38,500 troy ounces of gold eagles---17,500 one-ounce 24K gold buffaloes---and 4,590,500 silver eagles---along with 1,200 platinum eagles.  Based on these numbers, the silver/gold sales ratio for April works out to 82 to 1.  That's amazing!  Year-to-date the silver/gold sales ratio from the U.S. Mint works out to 70 to 1.

I'd been checking the Royal Canadian Mint's website every day [including weekends] for the last couple of months waiting for their 2013 annual report and, of course, it came out last Friday while I was on holidays.

Here, in a nutshell, is what they said in the Management Discussion and Analysis section on Page 25 of that report---Sales of bullion exceeded the historic records established in 2011. Sales of Gold Maple Leaf (GMLs) coins increased 47.7% to 1,140,400 troy ounces compared to 771,900 troy ounces in 2012 while sales of

Silver Maple Leaf (SMLs) coins increased 55.8% to 28.2 million ounces from 18.1 million ounces in 2012. The

Mint continues to maintain a leading market share of the global investment bullion coin market.

This is what Ted Butler had to say about it on Saturday---and I'm in full agreement with his assessment of the situation:

"However, a new report on sales of Silver Maple Leafs from the Royal Canadian Mint indicates surging silver sales are not confined to U.S. coins, as new records were established in Canadian [bullion] coins in 2013. As was the case with Silver Eagles, it does not appear that plain vanilla retail buying was responsible for the surge in Silver Maple Leafs. By process of elimination, that leaves a big buyer being behind the silver coin sales surge."

I'm borrowing more commentary from Ted's weekly review to his paying subscribers that he posted on his website on Saturday.

"Let's look at the turnover or movement of metal into and out from the COMEX-approved silver warehouses. Please keep in mind that this is as physical (and not paper) as it gets; every bit a reflection of actual metal as would be the mining and fabrication of silver. This [past] week (after two weeks of "average" movement), more than 5 million oz of silver flowed into and out from the various COMEX warehouses, as total inventories fell again, to 173.1 million oz, down a significant 3 million oz for the week. Again, it's not the ocean, it's the motion.

While I am virtually alone in my focus on this easily verifiable daily data series, I remain convinced of its importance and the message it is sending. No one moves this quantity of metal without good reason. This [past] week's 5 million oz turnover equates to 250 million oz on an annual basis, a truly staggering amount. As I explained [last] Wednesday, after subtracting the amount of silver that is owned by investors (and therefore would not be involved in the turnover), there may be a core working inventory of 35 million oz or much less in the COMEX silver warehouses. This week's turnover is staggering compared to total inventories; compared to the true working inventory, it is almost beyond description. Tightness, hand to mouth supply conditions or any other depiction is inadequate to explain this phenomenon. That this physical turnover exists against a backdrop of chronically weak prices is other-worldly; with that other world being price manipulation in COMEX futures trading."

Here are a couple of comments about last week's COT Report that I stole from Ted as well.

"The biggest difference between gold and silver is that the 8 largest shorts in gold are holding an historically low short position, while the big 8's silver short position is historically large at more than 320 million oz. The difference can be explained by JPMorgan having been successful in getting to be the biggest long in gold, while remaining the largest short in COMEX silver. The fact that the actions of one bank can explain the difference also makes it easy to point to JPMorgan as the prime market crook in COMEX gold and silver.

Under the hood, there also was a surprise with technical fund positioning in silver (as was the case in gold) in that they increased their gross short position by more than 1800 contracts. This is unabashed good news as it puts the technical fund gross short position over 30,000 contracts and close to the historical high water mark. Aside from the role that JPMorgan plays, a real standout in COMEX gold and silver is the technical funds' gross short positions in each market.

In the current disaggregated COT report, the technical funds' gross short position in silver is actually slightly larger than these funds' gross short positions in gold; something that I believe has not occurred previously. It's not so much that the gross short position of the tech funds is slightly larger in silver than it is in gold, but more the fact that COMEX gold is two and a half times or more the size of the COMEX silver market in contract terms. For silver to be larger in any category compared to gold must be considered highly unusual."

The Wrap

Ted Butler is of the opinion that we are, one again, "locked and loaded" for an upside price move in silver---and most likely all the other precious metals as well.  I totally agree.  But the age-old question always rears its ugly head at times like this---and that is whether the sellers of last resort will put in an appearance when these rallies begin.  So far, with the last three business days being the latest examples, even the slightest attempt by any of them to break free have been met with resolute selling by JPMorgan et al---and I have to wonder if these rallies, when they finally do manifest themselves, will meet the same fate or not.  Time will tell.

But one of these days it certainly will happen---and as I've speculated before, it will most likely come on a price reset of biblical proportions that will be concurrent with some other event, so that the 'powers that be' can point at it and say that that was the reason.  The repricing will be hidden by a false flag operation of some description---and certainly won't happen as a result of admitted wrongdoing.  All bets will be off after that.  All the "stuff" that is going on behind the scenes buried deep within the Commitment of Traders Report, the Comex warehouse stocks, SLV and GLD inventories---and silver eagle/silver maple leaf coin sales, is [I suspect] just the table being set in advance for just this kind of event by the powers that be that know what's coming.  Only the day of reckoning is unknown.  And as I've also stated before, when it does occur, it will be ugly.

I mentioned in my column dated April 25 that I was "quite comfortable putting my marker down" that we'd seen the low for silver [and gold] prices for this move down that occurred on April 24.  I still am, but "da boyz" outdid themselves on May 1 while I was away and took the silver price down even lower than that.  The low tick on that date set a new low that was only bested by the low that occurred way back at the end of June 2013.  Can we go lower from here?  I suppose, but there isn't much left for "da boyz" to pick up in the way of long liquidation or new shorting by the technical funds or small traders.  There's still room left in gold to the downside if they decide to push the issue---but can they, or will they?  Beats me.

Here are the 3-year charts for both silver and gold so you can see the macro picture.  But don't forget that these charts are a total fabrication---a paint-the-tape job by JPMorgan et al from one end to the other.  They really don't mean much.  All that matters is what the sellers of last resort do when the technical funds begin to cover their monster short positions that they've been suckered into placing.

Casey Research

Casey Research

Continue reading on Casey Research.com.   

Critical Reads

Even the CME is Getting Tired of Silver Manipulation

Everyone has seen them: those "inexplicable" bouts of furious selling in gold and silver, coming out of nowhere with no news or catalyst, which serve no rational price discovery purposes (because no normal seller takes out the bid stack, telegraphs a massive sell order and executes at the worst possible price) but merely are there to reprice the market higher or, as happens in 90% of the cases, lower.

In fact, look no further than what happened first thing Thursday morning, when an unknown seller, smashed all stops in one big sale, and took silver to its lowest price for 2014.

There was no news, so one can't even blame a rogue algo overreacting to some headline and taking momentum ignition strategies a little far.

In short: this was a premeditated and deliberate selling of silver with one simple purpose: push and reprice silver lower.

This is another "old news" story---but the take on it from Zero Hedge late week is right on the money, of course.  Ted Butler and I are both of the opinion that the CME Group will never put daily trading limits on precious metals unless instructed to by JPMorgan---and if it does happen, it will occur after both gold and silver are at their 'new and improved' prices.  It's definitely worth reading if you haven't already---and I thank Harry Grant for bringing it to our attention.

Read more...

"The American Dream Is Dead For Everyone But A Happy Few" - www.zerohedge.com

Submitted by Tyler Durden on 05/05/2014 19:49 -0400

$250 Million homes in Europe, $150 Million homes in the US, and as Bloomberg notes Million-dollar homes in the U.S. are selling at double their historical average while middle-class property demand stumbles, showing that the housing recovery is mirroring America's wealth divide. As CoreLogic notes, "the real estate market is the ultimate reflection of confidence, wealth and income," as purchases costing $1 million or more rose 7.8% in March, while sales of homes costing less than $250k plunged 12%, as "the same factors driving the income stagnation in the middle are driving the income momentum at the top." The luxury markets are indeed on fire as foreign (and domestic) super-wealth floods into real estate but as NewEdge's van Batenburg notes, echoing her very words, "The American Dream is dead for everybody but the happy few who have enjoyed the tailwinds of the appreciating stock market."

Continue reading on Zero Hedge.com.

***

"Washington Intends Russia's Demise" Warns Paul Craig Roberts - www.zerohedge.com

Submitted by Tyler Durden on 05/05/2014 18:31 -0400

Washington has no intention of allowing the crisis in Ukraine to be resolved. Having failed to seize the country and evict Russia from its Black Sea naval base, Washington sees new opportunities in the crisis.

Continue reading on Zero Hedge.com.

***

Gold Vs The CRB Commodity Index - www.zerohedge.com

Submitted by Tyler Durden on 05/05/2014 17:54 -0400

Economist John Maynard Keynes described the effects of inflation citing Vladimir Ilyich Lenin this way:

"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. 

As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

This is why governments love inflation so much and hate gold.

Continue reading on Zero Hedge.com.

In The News Today - www.jsmineset.com

Posted May 5th, 2014 at 3:08 PM (CST) by Jim Sinclair

Jim Sinclair's Commentary

More evidence of the emancipation of physical gold from paper gold as the mechanism for price discovery.

Gold industry shifts east as Dubai plans huge refinery, spot contract - www.reuters.com

Mon May 5, 2014 7:27am EDT

By Andrew Torchia

DUBAI, May 5 (Reuters) - In the desert on the outskirts of Dubai, one of the world's biggest gold refineries is under construction. When completed next year, it will help to alter the balance of power in the global gold industry.

Growth in demand for the precious metal is shifting east, to Asia's fast-growing economies. But key industry activities such as refining and clearing - matching investors' buy and sell orders - remain dominated by Europe and the United States.

The $60 million refinery being built by Kaloti Precious Metals in Dubai is part of efforts to change that pattern, as is a plan by the Dubai Gold and Commodities Exchange to introduce a spot gold contract this June.

"Dubai is already a top global center for gold trading," Tarek El-Mdaka, chief executive of Kaloti Precious Metals, said in an interview. "The refinery is part of the next stage, making Dubai a top center for physical gold refining and clearing."

If Dubai succeeds, it will be a new example of how the emirate can use its proximity to top consumers in India and China, low-tax environment and highly developed transport sector to muscle in on industries controlled by others.

Continue reading on Reuters.com.

5/6 Alan Feuer - Banks Sued on Claims of Fixing Price of Gold - www.lemetropolecafe.com

Banks Sued on Claims of Fixing Price of Gold

By Alan Feuer

Frustrated traders and offbeat activists have complained for years in whispers and in online screeds that the price of gold has been subject to collusion. On Monday, these accusations of manipulation found a more august arena for expression: the federal courts.

At a 40-minute hearing, lawyers for more than 20 plaintiffs gathered in Federal District Court in Manhattan to coordinate their linked lawsuits against the five banks that make up what is known as the London gold fix. The suits, filed by hedge funds, private citizens and public investors like the Alaska Electrical Pension Fund, contend that the banks have used their privileged positions as market makers to rig the price of gold to their benefit.

The lawsuits - the first of which was filed in March - question the integrity of the gold fix, which dates to 1919, when a handful of bankers began to meet in the wood-paneled offices of N. M. Rothschild & Sons in London. The purpose of the fix is to set a benchmark price for gold, which is subsequently used by dealers, central banks and mining firms to buy and sell the precious metal and its various derivatives.

These days, the fix takes place by phone twice a day - at 10:30 a.m. London time and again at 3 p.m. - and generally lasts 10 minutes to an hour.

According to one of the suits, "The 'great flaw' of the gold fixing process is that the member banks trade on the information exchanged during the call to manipulate the price of gold and gold derivatives before publication of the gold fix to the wider market."

Each of the banks - Barclays, Scotiabank, Deutsche Bank, HSBC and Société Générale - denied, or declined to comment, on the accusations of collusion, which - at least traditionally - have been dismissed as a conspiracy theory. Nonetheless, concerns that the gold fix may be rigged have escalated of late in part because of investigations into the setting of the London interbank offered rate, or Libor, and suspicions about manipulation of global foreign exchange rates.

"A lot of conspiracy theories have turned out to be conspiracy fact," said Kevin Maher, a former gold trader from New York, who filed the first suit against the banks. (The case is Maher v. Bank of Nova Scotia, 14-cv-01459.) "We now know that Libor was manipulated and that a bad odor is coming out of the Forex market. So why not gold?"

Mr. Maher, who started trading gold in 1993, said he filed his suit reluctantly and only after he became convinced that official regulators were unwilling or unable to investigate the fix. "I didn't feel like there was any oversight, either from the government or from self-regulating entities," he said in an interview last month. "A lawsuit seemed to be the only means to rectify the problem."

Over the last few weeks, so many plaintiffs have joined Mr. Maher with copycat complaints that a hearing was held to consolidate the cases and to appoint a lead lawyer. The fourth-floor courtroom was so full of lawyers that it took nearly 15 minutes for all of them to introduce themselves. "I want to do this in an organized way to figure out who's who," said Valerie E. Caproni, the presiding judge. "Not," she added, "that I'll remember."

The lawsuits - and there are still more being filed - center on two main aspects of the gold fix: the fact that it is unregulated and that member banks can trade gold, and gold derivatives, during the call.

"The gold fix is by its very nature not transparent and therefore vulnerable to conspiratorial and manipulative behavior," one of the suits maintains. The suit claims: "The lack of prohibition against trading during the calls allows defendants to gain an unfair trading advantage because pricing information exchanged during the calls provides them with insight into the immediate future direction of gold and gold derivative prices."

As proof that collusion exists, the suits point to a handful of academic studies - some of them unpublished - that describe what one of the studies calls "significant spikes in trading volume during, but not after, the fixing period, when defendants are free to share information with each other and their clients." Because the fix is private and not monitored, it enables its participants "to coordinate with their respective trading desks," one suit said, and "to disseminate information" about the price of gold "while the process is occurring."

The price-setting of gold has drawn some regulatory scrutiny, particularly in Britain and Germany.

The Financial Conduct Authority of Britain began looking at other benchmark rates, including for gold and silver, as part of its investigation into the rigging of Libor, a person briefed on the matter said.

The Federal Financial Supervisory Authority of Germany, or BaFin, has acknowledged that it is looking at the trading of precious metals as part of its inquiry into potential manipulation of the currency markets.

More than 20 traders have been suspended or fired as part of internal investigations into potential manipulation of currency markets. But no suspensions have emerged related to precious metals trading.

In the United States, the Commodity Futures Trading Commission routinely reviews the prices of commodities, but has not opened a formal investigation into gold, a person close to the agency said.

Deutsche Bank has announced that it will no longer participate in the fix as of May 13, though it still remains a defendant in the consolidated cases. Judge Caproni is considering whether to split the plaintiffs into two groups - one for those that trade physical gold and another for those that trade gold futures - but her decision will not come until at least the end of May.

To read the full article, please subscribe to Le Metropole Cafe.com.

________________________

Road to Roota - Bix Weir

Many people have commented on the divergence of the price of silver and the extraordinary demand for Silver Eagles. Here's the usual comment:

"How can the CME and CFTC claim the silver price isn't rigged when the sales of Silver Eagles are stronger than ever yet the price of silver goes down?"

Great question and one that the CME and CFTC cannot, and will not answer.

Price suppression is one answer for the price/demand mismatch but there is another reason behind the amazing growth of Silver Eagle sales. I believe that this one simple fact may be the most compelling reason of all to explain the extraordinary demand...

Silver Eagles are, BY DEFINITION, the money of the United States of America!!!

More on the significance of this fact and what it will mean in the near future for Private Road Member here:

Why Silver Eagles are FLYING OFF THE SHELF!!

http://www.roadtoroota.com/members/1375.cfm

Now is not the time to get cute with your investment decisions. Stay safe and stay out of the system with physical silver in your own possession...and US Silver Eagles and pre-1965 coinage will fetch MASSIVE premiums if you live in the USA.

May the Road you choose be the Right Road.

Bix Weir

www.RoadtoRoota.com

PS - I even swapped most of my physical silver bars for Eagles and pre-1965 coinage. Even after paying the cost of making the switch the value difference will be well worth it as the Monetary System IMPLODES and people scramble for REAL US DOLLARS!!!

Metals Demand Heading To China, India; Will Drive Prices Higher - Hecla CEO - www.kitco.com

By Alex Létourneau of Kitco News
Tuesday May 6, 2014 11:15 AM

(Kitco News) - Metals prices will rise as the middle class in China and India grows, according to Phil Baker, Hecla Mining Co's (NYSE:HL) president and chief executive officer.

"This quarter's strong performance was in a weak metals price environment, but it's not always going to be that way," Baker said during the company's first-quarter earnings conference call. "We see growing demand from the growing middle class of China, which grew 26% alone last year, and India (driving metals prices higher).

"History has shown us that as a country's middle class gets wealthier, it consumes even more precious metals," he continued. "Metals demand is leaving the west and the factors that will determine its price are going with it - it's going to the east, it's going to Asia."

A report from Ernst & Young focusing on the Chinese and Indian middle class supports Baker's statements.

"Today, China has around 150 million people earning between $10 and $100 per day," Ernst & Young said. "As long as China continues to grow, and necessary economic reforms are made, we expect as many as 500 million Chinese could enter the global middle class over the next decade.

"India's global middle class, meanwhile, at around 50 million people, or 5% of the population, is much smaller," the report said. "We expect this to grow steadily over the next decade, reaching 200 million by 2020."

While Baker won't peg a timeframe for when these two middle classes will swing metals prices higher, he said he sees it as inevitable.

"I don't know if it's next week or next year, but the prices will move higher at some point," Baker said. "And when that happens, Hecla will, like it has in the past, we think, will lead precious metals equities higher.

Continue reading on Kitco.com.

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