David Schectman

Quotes of the Day

- U.S. Government Prepares to Use Reduced-Inflation Index for Cost of Living Adjustments (COLA) 

- 2015 Social Security COLA at 1.7% Would Have Been 9.4% without Existing Gimmicks for Understating Inflation 

- September Annual Inflation: 1.7% (CPI-U), 1.6% (CPI-W), 9.4% (ShadowStats) 

- September Real Retail Sales Fell by 0.4% 

- September Real Earnings Fell by 0.4% 

- Existing-Home Sales Headline Gain Dominated by Surge in Distressed Properties; Year-to-Year Sales Contracted for Eleventh Straight Month 

- Real-World Indication of Faltering Third-Quarter Economic Activity

"No. 668: September CPI, Real Retail Sales and Earnings, New-Home Sales, Prospective GDP "

-Shadowstats.com, October 23, 2014

Since the price highs ($21.50) of mid-July thru the current COT Report, commercial traders, as a group, have purchased 42,400 net silver contracts on the COMEX, or the equivalent of 212 million oz. (This is the headline COT number). The technical funds have sold approximately 50,000 net contracts (long liquidation, but mostly new short selling) in that time (250 million oz), or more than 100% of what the commercial bought (other traders account for the difference). My point is that the technical funds did all the selling in silver---and about the same in the other metals. How could this not be, forget being the prime influence, the sole price influence?

The difference in market structure from July until today is the only difference that matters in all five metals. [Gold, silver, platinum, palladium, copper, plus crude oil---the Big 6. - Ed] There have been no demonstrable changes in actual supply and demand in any of these metals (except, perhaps, to the bullish side of the equation). The only documented change is in market structure on the COMEX/NYMEX. I don't doubt that China, Russia and India have bought important quantities of gold and silver over the past two years, but that buying has not caused the price of each to increase. The only possible explanation for price behavior for the last few months and years comes from COMEX/NYMEX positioning, as documented in the COT Report.

- Silver analyst Ted Butler, Butler Research, October 22, 2014

Last GEAB excerpt - The world afterwards: towards a BRICS gold backed multi-currency system

Our team thus anticipates that, before anyone actually realizes it, an alternative BRICS monetary system will be operational from 2017. Not a common currency, but a lightweight system, multi-currency, mainly based on the Yuan, the Ruble, the other BRICS currencies and perhaps even the yen, all backed by gold and easily exchanged thanks to modern digital tools; a system also upgradable with the ability and ambition to host other currencies one day

- GEAB, October 24, 2014

With the Commercial traders positioned in the 'Big 6' commodities to their maximum advantage---and further improvement possible if next week's FOMC news is used to beat this group of commodities into the ground one last time, we could see important never-to-be-seen-again lows in all of them.

If the powers-that-be want to avoid deflation at all costs, the only credible option they have left is to let commodity prices run to the upside for a while---starting with the four precious metals, plus copper and crude oil.  But as I've also mentioned before, this particular path is fraught with its own dangers, one being that once this inflation genie is out of the bottle, commodity prices included, it's always a tough one to get back in.  But it's a much preferable option to the one that's staring them in the face right now---and that's serious deflation.

Will they do it?  Beats me.  But the gold card is about the only one they have left to play, as money printing and their zero interest rate policy is now a spent force as an inflation-generating tool.

For these reasons, I'll be watching the Sunday night open in New York with great interest, along with the first three trading days of the new week.

- Ed Steer, Casey Research, October 25, 2014

 _________________________

LeMetropole Caf� (When GATA held a sold out London conference at The Savoy Hotel in August of 2011, the price of gold was $1650. Following a US debt downgrade, the price took out $1900 in a month. With all the QE in place, and more coming, The Gold Cartel then began an aggressive campaign to bury the precious metals.)

How have they done it? By secretly taking gold out of the vaults of the central banks and feeding it into the physical market AND influencing the price on the downside using derivatives in the paper market.

Jim Sinclair (Breaking: European Central Banks repatriate gold from USA) (Think you have control of your retirement account? Be careful)

Zero Hedge (Putin Warns Of Risk Of Major Conflict, Says Dollar Losing Reserve Currency Status) (The End Of QE3, Trouble Ahead For The Bulls?)

Bill Holter

"The Debate" ...If You Can Call It That? 

October 27, 2014

I attended the New Orleans investment conference this past week as the guest of GATA's Bill Murphy and Chris Powell for which I am highly grateful.  There were many good and thoughtful speakers which I will write about later in the week.  I specifically wanted to attend this conference for 2 reasons, Alan Greenspan (Mr. Magoo) was a keynote speaker and I not so much wanted to hear what he had to say but more importantly "how" he answered audience questions.  This topic is also for later in the week.  

What piqued my interest most about this conference was the proposed debate between GATA's Chris Powell and Doug Casey of Casey research.  The topic was "Is gold manipulated or not?"  I had such high expectations for this but unfortunately was extremely disappointed.  The format was really not much of a debate, each speaker was allowed 7 minutes to lay out their case followed by a 4 minute rebuttal period each.  The problem was, they did not interact and did not debunk the other's position.  The "debate," if you can call it that was one sided where Chris Powell laid out documentation and fact while Doug Casey gave us his opinion.

Chris Powell started off and was pretty much 100% factual as he laid out printed documentation from the Federal Reserve and the BIS which confirms central bank activity in the gold market.  Because of the time constraint he was only able to get through one quarter of his evidence.  He did however bring up the testimony of Alan Greenspan to Congress in 1998 where he said, "the central banks stand ready to lease gold in unlimited quantities should the price of gold begin to rise."  All of the documentation can be found here.  The way Chris approached the debate in my opinion was genius because he showed document after document and the only way to argue with it was to either say they were forgeries, fakes and don't exist, or they don't mean what they say and his interpretation of them is flawed.  If you disbelieve suppression of gold prices, please do yourself a favor and read through this documentation.  It is clear to me personally that there are enough "pieces of the puzzle" to come to the conclusion, prices are and have been suppressed.

Doug Casey approached the topic from a very different and I would say "emotional" direction.  He started off by saying ALL markets are manipulated including gold and silver.  I expected this as I had seen Doug speak in Vancouver where he started off with the same spiel.  Gold is manipulated he said "but not suppressed," He reasoned if the price was suppressed then why has it gone up over 60 times in dollar terms?  Central banks don't and couldn't care less about gold or its price was another of his main points.  Gold is considered by the central banks as a "meaningless artifact" he argued and one they don't even pay attention to.  Doug said that central banks don't want "stuff" (which gold is also considered) to go up in fiat terms but they cannot control prices so they don't try.  Most interesting was his final point, "why would the Fed try to suppress prices if the Russians and Chinese are buyers, this would help them, why would the Fed aid their purchases?"  Good question and I'll get to it in a moment.

Between the 7 minute statements and 4 minute rebuttals, the moderator Adrian Day asked Chris and Doug to comment whether they believe Fort Knox should be audited or not.   Chris answered in the affirmative but with the stipulation the audit also verifies "ownership" of any gold that's counted   In other words, is the gold U.S. gold or is it "swapped" and in reality someone else's gold?  Casey agreed and said yes we should have an audit but then went on a bit of a tangent.  He said that an audit is really just an argument to abolish the Fed and that dollars should be done away with and gold used as money.  

When the 4 minute rebuttals came, Chris Powell replied to Casey's statement that the issue is almost like a religious issue to goldbugs by saying "no it is not a religious issue, it is a public policy issue plain and simple."  Powell also pointed to Larry Summer's Gibson paradox study where low gold prices also aid in low interest rates and allow for more debt and currency issuance than would otherwise be the case.  He also pointed to documents from the CME that shed light on the fact the central banks are "customers" and actually receive volume discounts for trading.  Chris then mentioned that just because gold has gone higher, this is not evidence of no suppression as gold would or could be much higher in price if it were not for suppression.  In answer to Casey's statement "we would never suppress the prices of gold and silver because this would aid the Chinese and Russians," insider Jim Rickards claims a "deal" has been struck with the Chinese.  

I have no proof of this one way or the other but it does make perfect sense to me.  I could write an entire piece on this subject but for now a paragraph will have to suffice.  If China (and India) are buying more than the entire year's global production of gold ...yet the price has been dropping during this operation ...the metal HAS to be coming from somewhere.  The ONLY "somewhere" this can be is from where it is (has) being stored, central bank vaults.  The only possible way for prices to not rise when physical demand grossly exceeds supply is through the use of paper derivatives.  It is really just this simple.  In my opinion what Jim Rickards has said must have some truth behind it, some sort of deal has to have been struck which allows China/India (and Russia) to purchase increasing amounts of gold at decreasing prices.  As I have said all along, once China cannot receive gold in exchange for dollars ...then of what use are their dollar holdings?  Do you see?  The game will be up and there will be no incentive to China whatsoever to hold any dollars which will ...end the game.  

Doug used his 4 minutes with more opinion.  He said the argument is pointless and that this is all "conspiracy theory."  He said traders are like little girls and if there truly was some sort of conspiracy it would be out in the open because traders all talk to each other.  Casey also responded to Greenspan's testimonial to Congress by saying we should never believe central banker's statements.  Another claim he made is that there are never complaints when any commodity is rising because the public is always long and they are "idiots" (his words).  I know my description of Mr. Casey's words is "all over the place" but this was how he spoke jumping from one topic to another.  

So, what exactly did I get from this so called "debate?"  Not much really because the question itself is rigged, the word "suppressed" should have been used rather than "manipulated."  Another aspect was this debate was not structured correctly because they couldn't "go at it" so to speak.  The personalities didn't work too well either as Chris Powell is all business, scholarly and a true journalist where nothing is said unless he has proof.  Casey on the other hand likes to make the audience laugh, he argues by and with his opinion.  In this case, when he says that "governments don't even care about gold," I don't believe he has quite thought it through all the way.  Governments care more about gold than anything else, this is like saying a company doesn't care anything about their direct competitor ...a foolish thought process in my opinion.  I don't even know if he believes what he debates as he seems to enjoy stirring up the pot and getting laughs from the attendees.

By now you probably know my personal opinion, gold and silver prices are and continually "HAVE TO" be suppressed, when the rig finally fails then so will the entire financial system.  If gold prices were to rise dramatically it would be seen internationally as a sign of "weakness."  Doug Casey said that central banks don't care about gold.  I believe this is 100% wrong.  I believe central banks, (particularly the Fed) care more about gold than anything else including oil.  This is because gold is the thermometer or "ballot box" if you will, where the votes are counted regarding monetary (and fiscal) policy.  There is no other "report card" on the planet as easy to read or as important as gold is.  Yes, other aspects and housecleaning must support their policies such as falsified economic reports, supported bond markets and a media cheerleading squad but an out of control gold price would trump any and all other efforts.  THIS is why the gold price is suppressed.  THIS is also why silver prices are suppressed.  Were silver to get its legs on, gold would only be a half step behind it!

As for the debate, it was actually painful to watch.  The format was poor and the participants were completely mismatched in style.  As I said earlier, I had high expectations and hopes Doug Casey would actually respond to some (any?) of the factual documentation Chris Powell displayed.  He didn't respond to or even make an effort to address anything whatsoever except to say "you shouldn't believe what central bankers say."  Maybe he should take his own advice as Alan Greenspan claims the Fed has never traded in, swapped or leased gold?  More on the New Orleans conference as the week goes on. 

Brink's Montreal - The World's Best Precious Metals Storage Program

October 24, 2014

Following the 2008 financial crisis, Miles Franklin sought to create a unique storage program, encompassing all the positive aspects one's "storage checklist" would require, whilst excluding the myriad negatives.  To that end, we pursued a situation where one could be 100% confident their metal was not just a "paper entry" on a computer; but alternatively...

1. a real, fully segregated stash,
2. within a non-financial institution,
3. easily retrievable or saleable,
4. amenable to American investors,
5. verified by not just third party auditors, but Miles Franklin officers themselves,
6. and priced not via the industry standard of percentage of bullion value, but fixed cost per ounce

It took several years of diligent research and negotiating; but finally, in late 2011, we found what we were looking for. In our view, our Precious Metals storage solution with Brink's Canada Limited in Montreal, Canada is the world's best; and certainly, in the Western Hemisphere. I wrote this article upon my initial visit to the facility in December 2011; and since then, we have diligently updated readers of the program's progress, which has been significant. To wit, we wrote this article when I sent my personal metal there in October 2012; this one in March 2013, when I visited the vault with our independent auditors; and this one in April 2014, when Bill Holter visited the facility. The program has experienced substantial growth in its first three years, and we are proud to announce several new, highly incremental features that will not only improve the product for existing clients, but make it accessible to numerous others.

Previously, it was very difficult for non-Canadian clients to have their metal returned to them in Canada.  If an American had an account at a Canadian bank, the metal could be shipped to that bank for personal retrieval.  However, most Canadian banks no longer accept Americans clients - care of FATCA, FBAR, and other onerous U.S. government regulations.  Thus, for the average American (and other non-Canadian) client, the only way to retrieve one's metal would be via shipment to their own country.  As one of the primary reasons foreigners send metal to Canada is the fear of future U.S. capital controls (myself included), we diligently sought a process for foreign clients traveling to Canada to retrieve their metal.  And as of now, we are happy to say we have found the solution!

To that end, one of Canada's largest overnight shipping services has agreed to ship client goods to either clients or designated third parties (friends, family, etc.), anywhere in Canada.  Moreover, the metal is not only deliverable to personal residences, but hotels, businesses, and other addresses. 

Additionally, we have an exciting new option for Canadian citizens, enabling utilization of the Montreal facility at a reasonable cost and convenience; as Brink's has agreed to offer Miles Franklin Vault Clients yet another industry first in Canada - the acceptance of client metal at its drop off window near the Toronto airport, where it can be reviewed on site and promptly shipped to Montreal.  Moreover, Brink's security personnel will attend you at the Toronto drop off location; and under specific circumstances, it can be arranged for a Miles Franklin employee to be present while utilizing the viewing room.  Moreover, through Brinks' vast global network, clients can send metal to our Montreal vault from nearly anywhere in the world.

Conversely, Brinks' "Toronto window" can be used to retrieve metal from the Montreal vault, upon prior request to Miles Franklin's storage program administrators.  Furthermore, you can request to view your Montreal-stored product personally; as it can now be arranged for your product to be shipped directly to the Toronto shipping room, where a Miles Franklin employee can meet you to review your inventory, before having it shipped back to Montreal (additional expenses paid by client).

Finally, we are happy to announce the aforementioned fixed cost per ounce agreement has been extended to our clients through 2017 - for gold, silver, platinum, and palladium.  We are not aware of any other program in the industry offering this, and cannot overemphasize how valuable it may be.  As essentially all clients anticipate higher prices in the coming years - certainly by 2017 - the cost savings of static pricing could be substantial relative to the prevailing industry standard of percentage of bullion value. 

The main reason to store one's gold is protection, and we believe our Brink's program provides as strong a level of protection as one can find anywhere.  And given that Miles Franklin's principals not only keep their own metal there, but personally participate in audits, you can be sure that every effort is being taken to protect your assets, too.  On a personal basis, the reason I chose to ship my metal to Brink's Montreal was that unlike other programs, I had not a shadow of a doubt that my metal was being safely stored, properly segregated, and regularly audited - not just by one of the world's leading third party inspectors, but Miles Franklin officers themselves.  Frankly, given these enormously value-added factors, its unique pricing structure was just "icing on the cake."

If you have any questions, please call us at 877-685-4705, or email me personally at ahoffman@milesfranklin.com.  And please listen to the fantastic interview I taped with Miles Franklin's President and co-founder, Andy Schectman this week, in which we discuss the exciting new features of "the world's best Precious Metals storage program."

PROTECT YOURSELF, and do it NOW!

Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.

10/23 GATA ... And Why It Is So Important To Know What Our Camp Knows - www.lemetropolecafe.com

GATA ... And Why It Is So Important To Know What Our Camp Knows

(Not meant to be verbatim)

Hello Everyone

As you know, my colleague Chris Powell will be presenting tomorrow, and then will debate Doug Casey about the gold manipulation issue. I hope moderator Adrian Day takes a show of hands of who you believe won the debate when it concludes.

Thus, it is with great pleasure to be the opening act for Chris and set the stage for both he and GATA. To do that I thought it would be informative to get into our history a bit; some of what we have done over the years; and how what we have learned is so important to know ... knowledge that may greatly enhance your investment portfolios in the years ahead.

It all began with this 1998 Gold Book Annual produced by Jefferson Financial's founder Jim Blanchard, and my old friend Frank Veneroso, the author. I remember meeting Jim way back, and discussing the project. The key revelation in the book was that the gold loans of the central banks were far greater than reported ... meaning gold was being secretly fed into the physical market and not being reported by the gold establishment world ... the effect of which was to suppress the price. Little did we know at the time what a big deal that would eventually be.

GATA was formed in January of 1999 by Chris and I to oppose the manipulation of the gold price by the bullion banks. We later realized it was MUCH bigger than we thought. The manipulation included the BIS, the Fed, the Treasury, and other central banks ... which we named The Gold Cartel.

What makes GATA different is that we decided to actively do something about it ... and developed a plan to get the job done. That plan included going to Washington to meet with the Joint Economic Committee, the Speaker of the House, the CFTC, Ron Paul, etc. It also included focusing on where the price suppression scheme was doing the most damage: South Africa, a country, which was adversely affected by that scheme to the tune of a million people.

We decided to have a conference in Durban, SA in May of 2001. To promote the conference, I toured the country in advance, visiting Cape Town, Johannesburg, Pretoria and Durban. When in Durban, I met with the great grandson of Africa's greatest warrior, SHAKA. Many of you may remember that fabulous movie, ZULU, staring Michael Caine.

THE KING AND I

The conference was a great success with representatives from five African countries attending and was covered by the SABC. It also marked the exact bottom of the gold market at $252.

Those of you who watched the movie might remember that SHAKA's great strategy to win so many battles was called THE ENVELOPING HORN.

GATA decided to use our own version of this strategy to defeat The Gold Cartel. The point of the horn was to take legal action against our adversaries. It has been an ongoing process ... the most effective of which was to receive a court ordered $2870 check from the Fed for illegally withholding a document. The Federal Court ruled it was OK to keep a number of other documents SECRET. But, what is there to be secret about if the US gold reserve of 8,133.5 tonnes is just sitting there as the Fed and Treasury claim? It makes no sense, Mr. Greenspan.

On the left flank of the horn, our effort was to inform the press of the gold price suppression scheme. What an eye opener that has been. What we have learned is that we do not have a free financial market press in America. As we are taking on the rich and powerful, the press won't even mention GATA. It has been more than 15 years since I was on CNBC; the veteran Bloomberg gold reporter Claudia Carpenter told us in London that she is not permitted to mention GATA; and so on,

Had to laugh the other day when a CNN reporter was relating how the Chinese censored the recent commotion in Hong Kong. Hellllooo CNN, what about the U.S.?

Now, we also have had great success in another aspect of our left flank efforts, which I will get into shortly.

As for the right flank ... that was about railing against the big hedgers way back when ... like Barrick and AngloGold, whose massive hedging operations with gold below $300 an ounce were aiding the dark side. We were vociferous about this horror show ... so much so that Gold Fields gave us $20,000. GATA was on Barrick's case so much that AngloGold matched that contribution to have us pipe down about them. Eventually, both firms took a combined loss of some $17 billion on those hedges.

In August of 2005 we held our next conference WAY up North ... In Dawson City in The Yukon. We had so much fun with our SHAKA bit, we used it to promote that Gold Rush 21 conference...

ZULU - thrown in here for those of you who are sleepy after a long travel

http://youtu.be/kQQNZZobzyo

And it truly was a magical time in that historic town. What I thought might be helpful to you before listening to Chris tomorrow is to get a better understanding of the depth of the GATA camp. For years we have had to put up with The Tin Foil hat description, when nothing could be further from the truth.

To point that out I thought you might like to watch my favorite video, a short trailer of that conference, which featured many of the speakers. This is who they are in order of appearance, with some basic background:

Reg Howe - (pointing to a chart) Harvard Law

Bob Landis - Harvard Law

Peter George - The "Mr. Gold" of South Africa

John Embry - who along with conference attendee Eric Sprott are Canada's "Mr. Gold" James Turk -GoldMoney.com

John Brimelow - Stanford Business School

Adam Fleming - former Chairman of Harmony Gold and now Wits Gold Chairman ... Adam is related to Ian Fleming of James Bond note

Hugo Salinas Price - the "Mr. Silver" of Mexicoand last but not least, Chris -

***

The price of gold was $436.

GR 21 Trailer http://www.gata.org/node/20

-END-

That was over 9 years ago. Regarding my comment back then about central banks not getting their gold back ... As many of you know, Germany expected to get 300 tonnes of its gold held by the Fed by 2020. Last year it received a whopping 5 tonnes. There is more than a major problem here.

Earlier I mentioned GATA success on the left flank, unlike our experience with the financial market press. Through our efforts with the press and making contacts, one of President Putin's top economic advisors, Andrey Bykov, attended the conference.

Le Metropole Cafe

Two days later the price of gold began to take off and rose to $700 in the ensuing 9 months. Not for nothing, this picture surfaced two months after our conference

Le Metropole Cafe

 

In addition GATA made headway with the Chinese. We have had three conference calls with the Chinese Sovereign Wealth Fund and discovered, via Wikileaks, communiqu�s to our State Department about Chinese discussion over the rigged gold market. They know what GATA knows and what it is going to lead to.

Some of what you saw in that trailer has already occurred and some is relevant as to what is occurring right now? When it comes to the gold price action these past years, surely Black is White and White is Black. When common sense dictates the price ought to go up, it goes down. As Peter George said so aptly nearly a decade ago. "It is a joke!"

And at times, JOKE is too kind of a description of what has transpired, led by the ludicrous bombing of the price in April of last year, when gold fell more than $200 an ounce around a weekend when few traders were around.

During this entire period, we have made note of the details of The Gold Cartel in action, just some of which includes...

*Capping the price constantly at 3 AM NY time when the cabal's London traders go to work - it happened just yesterday again

*limiting upside daily gains-as in the 1 % Rule - also happened yesterday

*Not allowing Upside follow-through - none today

*Crushing budding excitement over the price action - exactly what happened today

*PM Fix coming in lower than AM Fix, which eventually called attention to the rigging of the Fix itself, which will be changed.

During these past years, nothing which was bullish fundamentally has mattered, and that includes the massive amount of buying by the Chinese. Heck, in 2013 the Chinese people and central bank bought up almost all the world gold mine supply and yet the price was trampled.

Speaking of jokes, how about the price of gold vis-a-vis Fed money printing/QE? When QE3 was announced, the price of gold was $1790. As you all know, asset prices (such as our stock market and real estate) took off... yet gold and silver crashed. The Gold Cartel has gone out of their way to make gold, the barometer of US financial market health, dysfunctional. As to what it might lead to ... When not feeling well, would you like your doctor to take your temperature with a broken thermometer?

While The Gold Cartel has been always easy to spot, their activity over the past couple of months has been the most intense on a daily basis of the past 16 years. Never seen anything like it, especially in silver, which recently went down 12 weeks in a row.

Having been around commodities markets for 40 years, I know something about how they work. What The Gold Cartel/JP Morgan did to silver these past many months is both unprecedented and historic ... and that is no exaggeration.

With the all-in production costs of most silver producers at $23 an ounce, the price was driven down to $16.60, with the open interest on the Comex rising to near all-time highs ... while the gold open interest was right off five year lows. In every market I have ever followed, open interest decreases significantly when the price contracts so much, especially when it falls so much below production costs.

It seemed very clear to GATA that The Gold Cartel has been desperate to drive silver into oblivion because it is their Achilles Heel in the gold price suppression scheme. With physical supply getting tighter and tighter, they have been afraid of losing control of silver on the upside. Lose control of silver, then gold is next.

It would appear THEY are desperately afraid of a sharply rising gold price, which could adversely affect the dollar, our interest rates, and the quadrillion dollars of derivatives on the books of the financial institutions. Nobody really knows what sort of counterparty risk has been structured with all these derivatives should they suddenly go nuclear.

According to JP Morgan's own CEO, Jamie Dimon, they have a secret trading operation in Florida which trades 2 trillion dollars in derivatives on a daily basis ... and that is just ONE operation.

Could this Gold Cartel actually be DESPERATE with the maniacal way they have gone after gold and silver? I think so ...The silver nightly Access Market opens at 6 PM. Recently the silver price, as tracked by GATA's James McShirley, a lumber company CEO, came in lower than the Comex close 114 out of 118 times and 77 times in a row. Do any of you believe that is possible in a free market?

How can the CFTC let that occur without a major investigation? Simple, the CFTC IS the problem. The same CFTC, which spent five years investigating the silver market and found nothing wrong. There is no rule of law when it comes the manipulating of the gold and silver markets because our own government is a part of it ... and that includes the Fed's bank JP Morgan, which has been given a free pass to do whatever they want by the CFTC ... as per the ludicrous silver Access Market openings. The same JP Morgan which has been fined $28 billion these past years for market manipulation and wrong doings.

This on Morgan, from yesterday: EU fines JPMorgan €61.7M in cartel aimed at manipulating derivatives, based on Swiss franc LIBOR

Now, how can all of this be of assistance to you and your investments?

When GATA held a sold out London conference at The Savoy Hotel in August of 2011, the price of gold was $1650. Following a US debt downgrade, the price took out $1900 in a month. With all the QE in place, and more coming, The Gold Cartel then began an aggressive campaign to bury the precious metals.

How have they done it? By secretly taking gold out of the vaults of the central banks and feeding it into the physical market AND influencing the price on the downside using derivatives in the paper market. What Frank Veneroso discovered so many years ago and was revealed in this book is ongoing via gold loans and sales.

For five years, beginning in 2003, GATA reported on Chinese buying of gold, which was not reported on by the mainstream gold world supply/demand statisticians. Then, in 2008 China announced having bought 450 tonnes of gold.

Just recently, GATA consultant Koos Jansen reported on Chinese gold buying, stating that they consumed 2,000 tonnes of gold in 2013 when the World Gold Council reported them as 1,000 tonnes. How can this be?

The reason has been the same all these years. The gold world establishment cannot account for where the supply is coming from (as in CENTRAL BANKS), so they continue to understate demand. I seriously doubt that the central banks have close to 10,000 tonnes of gold left, instead of a reported 28,000 tonnes. It is a financial market fraud of epic proportions ... and will prove out to be the most egregious financial scandal in US history, as it relates to our decimated gold reserves. At some point the gold market is going to BLOW UP.

Over the next few days you are going to be listening to many superb speakers with much to absorb. Thus, I am hoping you will take this one theme home from this presentation as far as your investments are concerned.

Simply put: the prices of gold and silver have been orchestrated down to artificially low prices, which CANNOT be sustained.

If gold had just kept up with inflation, the price would be more than double what it is today. For whatever reason, the price of silver was $50 34 years ago, and nearly that 3 � years ago. With all that is going on, for the price of silver to be one third of that is absurd.

The artificially created low precious metals prices of today are not going to stand. Because of the blatant price suppression, the prices are going to explode in volatile fashion, probably out of nowhere. It will be just like how the DOW, oil and bond markets traded last week, except on the upside. And this will occur because The Gold Cartel is going to hit the wall in terms of being able to deliver physical supply to meet world demand. The price of gold will take out $2,000 an ounce and keep on going ... with silver probably leading the way as it streaks for $100+. The Gold Cartel has overplayed their hand and will pay dearly for it in the not too distant future.

The last few years have been brutal for all those involved in the gold/silver industry. But at least we in the GATA camp know WHY it has been this way ... and we know what is coming as a result of this farce. It is only a matter of time before the frowns of today turn into happy face smiles of tomorrow.

THANK YOU

Chris Powell: The crucial questions financial journalism won't ask and central banks won't answer

Remarks by Chris Powell, Secretary/Treasurer

Gold Anti-Trust Action Committee Inc.

New Orleans Investment Conference

Hilton New Orleans Riverside Hotel

New Orleans, Louisiana

Thursday, October 23, 2014

For many years this conference has bravely invited GATA Chairman Bill Murphy and me to speak here about the evidence of manipulation of the gold market, particularly manipulation undertaken directly or indirectly by central banks, and every year there has been new documentation to report. This documentation has been compiled at GATA's Internet site, GATA.org, whose home page you can see here --

http://www.gata.org

-- with the "Documentation" section noted at the top left, along with a section called "The Basics," which summarizes the documentation as well as the purposes and history of central bank policy of suppressing the price of gold, gold being a currency that competes with government currencies.

The last two months have brought confirmation that, as we long have suspected, GATA has outlined only a small part of the surreptitious market manipulation being undertaken by central banks -- that this manipulation is actually comprehensive, that it covers nearly every major market in the world.

This confirmation is largely the work of Eric Scott Hunsader, founder of the market data and research company Nanex in Winnetka, Illinois, who publicized, through the Zero Hedge Internet site, documents recently filed with the U.S. government, two of them with the Commodity Futures Trading Commission and one with the Securities and Exchange Commission.

... Dispatch continues below ...

The first document is a letter to the CFTC, dated January 29 this year, from CME Group, the operator of the major futures exchanges in the United States, and signed by CME Group's managing director and chief regulatory counsel, Christopher Bowen:

http://www.gata.org/files/CMEGlobexCentralBankIncentiveProgram.pdf

The letter notifies the CFTC of changes to CME Group's discount trading program for central banks. That is, the letter reveals that central banks are getting discounts for trading all futures on CME Group's exchanges, including the New York Commodity Exchange, the major mechanism for "price discovery" in the monetary metals.

The CME Group letter argues that letting central banks trade in futures is beneficial because it adds "liquidity" to the markets. But of course "liquidity" here might as well mean the ocean. Anyone trading against the ocean will drown.

The second document is another letter from CME Group's Bowen to the CFTC, dated August 28 this year, disclosing that CME Group is enacting rules against certain trading practices that are considered abusive and unfair, specifically "spoofing" and "quote stuffing," the abrupt placing and withdrawal of huge volumes of phony orders to mislead traders about prices:

http://www.gata.org/files/CMEGroupManipulativePractices-08-28-2014.pdf

The letter's implication is that such manipulative trading practices have been common on CME Group exchanges.

The third document is the CME Group's annual report to the Securities and Exchange Commission, its 10-k report:

http://www.gata.org/files/CMEGroup-10K-03-03-2014.pdf

CME Group's 10-k report reveals on Page 9: "Our customer base includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers, governments, and central banks."

That central banks and governments are trading both surreptitiously and comprehensively in U.S. futures markets is a transformative development. Since central banks can create and deploy infinite money, this trading means that there are probably no markets anymore in anything, mainly just government interventions. It means that democratic capitalism has been quietly overthrown by a totalitarian coup and that the world has lost the great engine of its economic and democratic progress, free markets -- without even being aware of the loss.

And yet what has been disclosed by these documents filed by the CME Group is only what was asserted 14 years ago in an essay written by the British economist Peter Warburton, an essay he titled "The Debasement of World Currency: It Is Inflation But Not As We Know It":

http://www.gata.org/node/8303

* * *

"What we see at present," Warburton wrote, "is a battle between the central banks and the collapse of the financial system fought on two fronts.

"On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur.

"On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities, or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value not only of the U.S. dollar but of all fiat currencies.

"Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

"The central banks have found the battle on the second front much easier to fight than the first. Last November [November 2000] I estimated the size of the gross stock of global debt instruments at $90 trillion as of mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably no more than $200 billion, using derivatives.

"Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world's large investment banks have overtraded their capital so flagrantly that if the central banks were to lose the fight on the first front, the stock of the investment banks would be worthless.

"Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices."

* * *

That is, as the saying goes, the futures markets are not manipulated; the futures markets are the manipulation.

As Warburton noted, if a commodity has a futures market, the price of that commodity likely is being manipulated, and probably suppressed, by surreptitious trading by central banks and their agents. As a result most market prices now are probably mere illusions, holograms created in large part in the trading rooms of central banks, like the trading room at the Federal Reserve Bank of New York.

But overwhelming as the power to create and deploy infinite money surreptitiously through central banks is, it is not the decisive power of governments. No, the decisive power of governments is the power to stifle or intimidate news organizations. For if people are ever informed that a market is rigged, they won't participate in it and the rigging will lose its usefulness.

For 15 years GATA has done a fair job documenting the manipulation of markets by central banks and their agents. But publicizing that manipulation has been part of GATA's work as well, and in that respect we have not succeeded much. We can get on television in Asia and Russia but we strain for the occasional citation by Western news organizations.

We have sent the recent CME Group documents to most major financial news organizations and to many financial letter writers, and as far as we can determine, not one has posed any question about them to the authorities or written or broadcast anything about them.

As with GATA's other documentation, no one disputes these documents either. They simply cannot be acknowledged. They give the game away.

Maybe that will change on Saturday, when this conference will have the remarkable opportunity of questioning Alan Greenspan, who was chairman of the Federal Reserve for more than 17 years, from August 1987 to January 2006. If Greenspan is in a mood to be candid, we may learn a lot without having to interrogate him as a prosecutor would. If Greenspan is not in a mood to be candid, extracting anything useful from him will be tedious, requiring his interrogators to be very specific and to brandish documentation.

Of course I suspect that Greenspan may not care to be candid. So let me suggest a few very specific and detailed questions for him.

Question 1: Mr. Greenspan, in your testimony to Congress in July 1998, in which you urged Congress not to legislate regulation of derivatives --

http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

-- you said: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

Did you mean that gold lending by central banks was intended to suppress or control gold's price -- that Congress didn't have to worry about someone cornering the gold market because central banks already had it cornered? With their many years of selling, lending, and swapping of gold, have central banks been underwriting the bullion banking business because it is a mechanism by which governments control the gold price?

Question 2: Mr. Greenspan, in recent years right down to the present, have central banks or governments been trading in the gold market and related markets? Are they trading in the gold and related markets now? If so, what has been and is the objective of that trading? Is it to make money, to obtain more gold, or to control gold's price?

Question 3: Mr. Greenspan, did central banks and governments trade in the gold market and related markets when you were chairman of the Federal Reserve? How about any agency of the U.S. government -- not just the Fed but the Treasury Department or any other agency? If there was such trading, what was its objective? Was it to control the gold price because gold is a currency competing or potentially competing with government currencies?

Question 4: Mr. Greenspan, when you were chairman of the Fed you were also, by virtue of that office, a member of the Board of Directors of the Bank for International Settlements. The annual report of the BIS --

http://www.gata.org/node/12717

-- says the BIS "transacts foreign exchange and gold on behalf of its customers, thereby providing access to a large liquidity base in the context of, for example, regular rebalancing of reserve portfolios or major changes in reserve currency allocations. The foreign exchange services of the bank encompass spot transactions in major currencies and Special Drawing Rights as well as swaps, outright forwards, options, and dual currency deposits. In addition, the bank provides gold services such as buying and selling, sight accounts, fixed-term deposits, earmarked accounts, upgrading and refining, and location exchanges."

Additionally, in a presentation to potential central bank members at BIS headquarters in Basel, Switzerland, in June 2008, the BIS advertised, as being among its services to its members, secret interventions in the gold and currency markets:

http://www.gata.org/node/11012

Further, in a speech to a BIS conference in Basel in June 2005, the head of the bank's monetary and economic department, William R. White, said that a primary purpose of international central bank cooperation is "the provision of international credits and joint efforts to influence asset prices -- especially gold and foreign exchange -- in circumstances where this might be thought useful":

http://www.gata.org/node/4279

So: While you were chairman of the Federal Reserve and a member of the BIS board, did the BIS operate in the gold market on behalf of any of its members to influence the gold price, and, if so, exactly how and for what purposes? Were such operations in the gold market public and announced or were they kept secret? If they were kept secret, why?

Question 5: Mr. Greenspan, by virtue of your chairmanship of the Fed, you were also a member of the Board of Governors of the International Monetary Fund. In March 1999, while you were a member of the IMF board, the IMF staff presented the IMF board with a secret report that has been posted on the Internet site of the Gold Anti-Trust Action Committee:

http://www.gata.org/node/12016

The secret IMF staff report said central banks objected to the staff's proposal to require them to make a forthright public accounting of their gold swaps and lending. Such a public accounting would have required central banks to distinguish gold in central bank vaults from gold that had been swapped or loaned by central banks. The secret IMF staff report said central banks objected to such a forthright accounting of their gold reserves out of "a desire to preserve the confidentiality of foreign exchange market intervention for a period, in order to enhance its effectiveness."

While you were Fed chairman and a member of the IMF board, did the IMF intervene secretly in the gold and foreign exchange markets, and, if so, on whose behalf and for what purposes? Did the Fed, U.S. Treasury Department, U.S. State Department, or any other U.S. government agency advocate or concur with any such intervention? Why was such intervention kept secret?

Question 6: Mr. Greenspan, in a letter to the Gold Anti-Trust Action Committee in September 2009 --

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

-- Fed Governor Kevin M. Warsh wrote that the Fed has secret gold swap arrangements with foreign banks. Did the Fed have such arrangements during your chairmanship? If so, with whom were these arrangements undertaken and what were their purposes? And why must these arrangements be kept secret?

Question 7: Mr. Greenspan, during your tenure as Fed chairman, how many markets were the Fed and other U.S. government agencies trading in, directly or through intermediaries? Was such trading by U.S. government agencies for their own accounts or for the accounts of other governments and central banks, or both? And which markets were involved and what was the objective of such trading?

Question 8: Mr. Greenspan, do the Fed or other U.S. government agencies have any connection to the huge interest rate derivative positions that, according to the U.S. comptroller of the currency, are held by JPMorganChase, a primary dealer in U.S. government securities? Are these positions really U.S. government positions or the positions of other governments or central banks, undertaken to defeat market forces on interest rates?

* * *

Of course these questions might be useful for interviewing not just Alan Greenspan but any current or former central banker -- if the world ever gets any financial news organizations willing to put critical questions to central banks.

Instead, of course, while surreptitious central bank intervention in the markets is setting the value of all capital, labor, goods, and services in the world, the first rule of financial journalism is that central banks are never to be questioned about anything important.

In any case GATA aims to continue its work on behalf of free and transparent markets and limited and accountable government. We're a nonprofit educational and civil rights organization recognized as federally tax-exempt by the U.S. Internal Revenue Service, so financial contributions to GATA are federally tax-deductible. We're also close to broke, so we would be especially grateful for any support from you now. Donations can be made through our Internet site, GATA.org.

Thanks for your kind attention.

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