Price Silver MoveAs we continue to witness orchestrated take-downs in the paper price of silver, the real market rigging is taking place in another industry.  After the price of silver fell 5% in a twenty-four hour period of time, precious metals investors are once again concerned about the future outlook of the shiny metal.
If psychology is the key to market trading, the Fed and its member banks have done an excellent job destroying market sentiment in silver currently.  I say currently, because “ALL” fiat currencies and Ponzi schemes collapse.  There are no exceptions.
Precious metals investors need to understand that in order for this Grand Derivatives Ponzi Scheme to continue, the price of gold and silver have to be controlled to keep the masses from waking upTo keep the public purchasing worthless 401k’s, IRA’s, bonds, most equities, pension plans, CD’s and etc, the OUT OF SITE, OUT OF MIND TACTIC is used by the Fed, U.S. Treasury and member banks.
When the price of gold and silver move up too high, this puts a kink in the fiat monetary authorities game plan.  The Fed and banks have no use for a public that is WELL INFORMED AND AWAKE As long as Americans continue to behave and purchase the crap the U.S. Treasury and banks sell them… everything is fine.

From The SRSRocco Report:

Controlling precious metal sentiment, controls the price rise of these two monetary metals.  Low gold and silver prices keeps the public’s faith placed firmly in the regime of irredeemable currency — the U.S. Dollar.

If we take a look at the intraday silver chart, we can see a huge $1.00 swing from the high ($19.95) Wednesday, to a low ($18.93) Thursday:

Price Silver Move

Several of the well-know precious metal day traders such as Dan Norcini, don’t believe that gold and silver markets are rigged.  Norcini made this comment in his blog on the subject of precious metal manipulation by a top German regulator:

When the German authorities prove that Deutsche Bank was also DOWNWARDLY manipulating the price of all those commodities which make up the various commodity indices out there, then you will have a convert here. Until then, this has nothing to do with the price of gold unless of course you are willing to boldly proclaim that DB is the culprit behind the fall in the price of corn and wheat and sugar and coffee and gasoline, and on and on and on. Take a look at the GSCI, an index which I regularly post here to try to teach folks how to READ SENTIMENT in regards to the broader key markets – it has been steadily falling for some time now. Why would gold be moving higher if the general price of commodities has been moving lower over that same period , especially over the last year? Gold was moving lower because WEstern investors did not want to own it and tie up precious investment capital in a NON PERFORMING asset, not while there was so much money to made in Equities!

While I respect Dan Norcini as he was once associated with Jim Sinclair’s site for many years (no longer), I totally disagree with him on the theory of “Precious Investment Capital.”  Dan believes gold is a non-performing asset because there is “so much money to be made in equities.”

Dan may trade gold, but does he understand what the term “money” really means?  He states that investors can make a lot of money in equities.  I gather he meant to say, “fiat currency.”  Because there is a big difference between money and fiat currency.

If you don’t know the difference between money (gold-silver) and fiat currency (U.S. dollars and all the increasingly worthless paper currencies in the world), I suggest you watch the series, Hidden Secrets of Money at GoldSilver.com.  If you only have time for one of the five videos, then watch the first one for sure.

The problem with Dan Norcini’s paper market trading analysis is that it becomes meaningless the day the United States Government finally announces a banking holiday with a planned dollar devaluation.  At that point in time, all the successfully acquired digits in one’s trading account are subject to huge losses when the dollar is devalued say… 30-50% overnight.

Trading digits and making fiat currency gains are not a long-term viable market strategy.

Getting back to subject at hand… while silver enjoyed volatile 5% trading range, copper managed to move a boring 1.2%:

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Copper Falls

This chart is only showing the price movement for copper today (Jan 30, 2014).  As we can see copper only fell $0.02 (0.6%) compared to silver’s decline of $0.53 (2.7%) for the trading day.  Copper fell a little more than $0.04 (1.2%) from its peak yesterday, while silver investors were lucky enough to enjoy a huge $1.00 swing (5%).

I gather the market felt that silver would suffer much worse than copper after the Fed announced an additional $10 billion taper.  I am being sarcastic here.  There is no way to figure out these markets today when they are totally rigged.

Where The Real Market Rigging Is Taking Place

While I believe there is manipulation taking place on the gold and silver paper exchanges, the real rigging is taking place in the Interest Rate Swap and Forex Markets.

If we look at the chart below, we can see that Interest Rate Contracts consist of 81% of the total notional amount held by U.S. Banks:

OCCs Q3 2013 Derivative Report

According the OCC – Office of the Comptroller of Currency Q3 2013 Report, 93% of the total notional value held by these top U.S. banks were in Interest Rate and Foreign Exchange Contracts.  The third largest piece of the pie were Credit Derivatives at 5.4%, followed by Equity Contracts at 0.9% and then commodities, which come in last at a measly 0.6%.

This next table provides detail on how these five asset classes are broken down (I say asset classes… but in all reality, the majority are liabilities):

OCCs Q3 2013 Derivative Report 2

 

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The top U.S. Banks currently hold $195 trillion in Interest Rate Contracts and $28 trillion in Forex Contracts for a total of $223 trillion.  Contrast this to commodities, including gold and silver, which only amount to $1.2 trillion.

Not too long ago, gold was used as the major asset class in banks for balance of trade settlement.  However, today these banks spend all day long trading one worthless financial paper contract for another.  As the system becomes weaker, the notional value of these financial products inflate to insane levels.

Basically, Interest Rate Contracts control the overall market interest rate.  To get a better idea on how the Interest Rate Swap market works, please read my article, THE BIG QUESTION: Where is the Price of Silver Headed in 2014.

You will also notice that the Interest Rate Contracts and Swaps represent the majority of trading activity by the banks in Q3 2013.  The banks total notional value of their Interest Rate Contracts increased $7.1 trillion while the commodities/other category increased $13 billion.

Here we can see that the banks are controlling the market because their Interest Rate & Forex Contracts outweigh their commodity asset holdings (including gold and silver), by a factor of 163 to 1 ($195 trillion vs. $1.2 trillion).  This is where the real market rigging is taking place.

Precious metals investors need to understand that in order for this Grand Derivatives Ponzi Scheme to continue, the price of gold and silver have to be controlled to keep the masses from waking up.  To keep the public purchasing worthless 401k’s, IRA’s, bonds, most equities, pension plans, CD’s and etc, the OUT OF SITE, OUT OF MIND TACTIC is used by the Fed, U.S. Treasury and member banks.

When the price of gold and silver move up too high, this puts a kink in the fiat monetary authorities game plan.  The Fed and banks have no use for a public that is WELL INFORMED AND AWAKE.  As long as Americans continue to behave and purchase the crap the U.S. Treasury and banks sell them… everything is fine.

I would like to conclude this article by reminding the reader that investors lost $18 billion (estimated by court appointed trustee) in the Bernie Madoff Ponzi Scheme.  According to Wikipedia:

Madoff said he began the Ponzi scheme in the early 1990s. However, federal investigators believe the fraud began as early as the mid-1980s[17] and may have begun as far back as the 1970s.

Putting it into perspective…. Ponzi schemes can last a long time.  Investors who are acquiring paper wealth by trading digits in a fiat monetary system, time is not on your side.

I plan on releasing the U.S. & GLOBAL COLLAPSE REPORT in February.  The report will provide detailed information and data on what will be the biggest economic collapse in history.  In the past, mankind always had the ability to recover and rebuild after suffering from a World War or economic calamity.

Unfortunately, this time will be different…..

You can follow the SRSrocco Report on Twitter:

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  1. Steve  Do I detect a little stridency in your tone.  Hmmm?
    It’s becomes clearer day by day that in the desperate need of governments and central banks to maintain their control, they must also maintain a strict control  of gold and silver prices. That is the one and only investment that holds real and substantive gains aside from the fact that precious metals completely repudiate the FIAT debt paradigm we live in.
    People are seeing the truth of what is becoming their low lot in life–lower incomes, higher taxes, living from paycheck to paycheck (75%), increased health care costs, lack of opportunity and an increasing police state. The MSM propaganda is not getting as much traction as it did even a year ago.
    They know that most markets are not to be trusted. The banks are increasingly untrustworthy.  IMO the people are casting about for an alternative investment vehicle.  They are not going to invest wholeheartedly into precious metals because the prices have been down down down for nearly 3 years. That disinfo has been successful to date Only the exuberant stackers stay the course. We will be right for the right reasons but not just yet
    They are not in the stock market. Bonds yield nada.  The retirement plans are trapped in glue with modest yields than can’t be tapped for decades.  So the public grows poorer with low yields, high inflation, dropping wages, lower opportunties.  These situations have the same resonance as the 1970s. 
    If that decade repeats in the 2010s, we will see a rush to precious metals if for no other reason that the public finds no suitable alternative to their decreasing stack of FIAT. They might actually try investing in real money Wouldn’t that be novel?

    •                      I know everyone is all wrapped up in price; To me where the rubber meets the road is AVAILABILITY.  Can’t express how pleased I am to have been able to recently add in size, at least size to me, at 2008 prices….even so…it’s not going to be hot in the kitchen till it gets really hard to source Phyzz…..                
                                            
                                              U S MINT Silver Eagle Sales  2014

      January
      4,775,000
      4,775,000

      February
      560,500
      560,500

       

      Total
      5,335,500

  2. I’ll handle the stridency today. I try to respect Trader Dan, but the fact that he not only scoffs at manipulation, but actually mocks it makes me think he is either some blind asshole, or a coward.
     
    I’ve said before that the fact that so many other markets have been proven manipulated by itself lends credence to the metals markets being manipulated. Forget about the many quotes from bankers and politicians saying as much.
     
    Bottom line is that the elite ( made up ostensibly of satanic overlords for whom the most egregious acts are not only acceptable, but sexually gratifying ) have a stranglehold on everything – markets, news – industry. They will stop at nothing to keep it, but it won’t last forever. When the end is ? WHo knows, I just hope it is closer to tomorrow than it is 10 years from now.

    • (Playing Zmans Alter Ego) -
       
      WHAT!! PM’s are NOT manipulated! If they were there would be no PM’s. There are more PM’s around for sale than you can imagine, and IF the prices go up, the stackers will SELL.  THERE WILL ALWAYS BE CHEAP PM’S-
      YOUR DOOMED!
      YOUR DOOMED!
      YOUR DOOMED!
      -Might as well just sell yours now… (waiving a 20.00 fiat bill)
      “You have yet to realize your fiat capabilities…..GIVE YOURSELF TO THE DARK SIDE…”

    • @Shamus001
      LOL,     “and if the prices go up, the stacker will SELL”        
      Some will, but if the prices did go higher, I would expect that most stackers will not sell and might get stuck after the prices come down once again, similiar to 2011 and today.
      “THERE WILL ALWAYS BE CHEAP PM’S”  
      I don’t consider gold at $1260 oz cheap, $250 to $350 oz was cheap.   Gold at $1900 certainly wasn’t cheap.

  3. “The problem with Dan Norcini’s paper market trading analysis is that it becomes meaningless the day the United States Govemn finally announces a banking hoiday with a planned dollar devaluation”
    Well sure this is true, but should Norcini stop analyzing the markets because someday a devaluation MIGHT take place down the road?   Who knows when, maybe 2025?    Maybe longer.  This whole concept of paper trading analysis becoming meaningless is just silly, because one day a devaluation MIGHT occur.
    The fact of the matter is that Norcini trades and lives in the real world,  “Why would gold be moving higher if the general price of commodities has been moving lower over the same period of time…?”     
    This is true, PM’s have never really decoupled from the general commodities market, and will most likely never will, thinking otherwise makes no sense in my opinion.

    • I find it hard to understand the arguments of silver manipulation.  So much of the demand for silver is from people who use silver day after day, year after year, and know they will be using it years in advance.  These people will use the exchanges as hedge and will do so from the long side.  These people are ready to buy (similarly, look waht southwest airlines did with oil last time we saw $35 a barrel).  So these big demand sources are willing buyers and can do so in a very big way, and would make it very difficult for anyone to sell and try to cover profitably.
       
      Gold demand is more hand to mouth, sure you have gold jewelers and the bullion coin/bar producers, but from what i see, my sense is their hedging is short term and designed to cover any price moves from the time they buy physical gold to when they sell their value added product.  This is different than the industrial buying we see in silver both in duration and length of the strip bought.  

      A 5% price swing, do you know what big money and traders see? Opportunity. They want to make 10-20% a year, to make 5% in one day is a wet dream, doesn’t matter if it’s silver or chicken mcnuggets, just show them the voloatility.

  4. CDL  I’m thinking the scene in  the movie Dumb and Dumber comes to mind.  Yes, that scene.
    Charlie   Do you have the portable deep cycle unit that has a compressor, light and charging port for cells phones plus jumper cables. 
    Costco–about $65   good to keep in the truck as all the time  and home based for small charging jobs
     

    • @AGXIIK the one in the video will do cell phones computers and the like also the small Nomad one will also do cell phones.
      The 1250 has three ports for computers and such and three plugs for refrigerator and lights.
      My 100W solar panels have charging cable compatibility.

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