gun forcedIt was all over the news last week, both mainstream and gold sites.  Barclays was caught manipulating the gold price. They were fined £26M, and forced to pay a client who was damaged by their action. The trader who worked for Barclays, Daniel Plunkett, was also fined and banned from working in the financial sector. Here is a link to an article at the Financial Times.
Is the Barclays scandal the long awaited smoking gun-  incontrovertible proof that the gold market is indeed manipulated?

the endIt certainly started out as central bank manipulation, doing everything possible to cover their theft and resulting deficiency of replaceable physical gold.   Almost all of their unauthorized reselling or hypothecating went unnoticed or without any ability to stop the activity.
China had a lot of its gold stored in the United States that was stolen in the 1990s.  She has since become the world-leading economic powerhouse and is now in a position to force the Rothschild elites to make good  on the theft, which they are doing.
China wants to see the price of gold at the current low levels as she continues to buy up as much of the [not so readily] available supply.  The central bank manipulation continues as a means of protecting the last vestiges of the soon-to-fail petro-dollar, and soon-to-fail as the world’s reserve currency upon which almost global trade is based. The Chinese are willing to see gold stagnate at current levels as a better bargain during the final stages of their accumulation.
It works for both sides for totally different reasons.

gold vaultFirst the Bundesbank, now the Austrians? 
The National Bank of Austria is demanding a full audit of Austria’s 150 tonnes of gold reserves on deposit in London at the Bank of England- 80% of the nations total gold reserves, after succumbing to pressure from the Austrian public.
In a public statement, Ewald Nowotny, Governor of the National Bank of Austria stated: “I acknowledge the request. Any grocery store is obliged to do inventory once a year.  It is the only way of getting rid of these unreasonable allegations”. 

JP MorganSales people said they were told to refer to “short-term capital” instead of loans and “money factors” instead of interest rates. Eight of them said they talked business owners into applying by saying they’d offer a good rate after reviewing bank statements.
World Business Lenders charged most people 125 percent annualized interest rates on six-month loans regardless of their situation, five former employees said. The borrowers often put up cars, houses or even livestock worth at least twice as much as the loan. About one in five were going bust as of last year, two people with knowledge of the matter said. One said that 9 percent of the loans made this year have already defaulted.
The sweet spot is someone who can limp along well enough for six months but probably isn’t going to be around much longer.  They’re in the business of helping these businesses fail.”

As usual, the Fed is subsidizing the rich and leaving everyone else hanging out to dry.

cashIn response to our account of the mysterious large rise in Belgium’s Treasury purchases , it was suggested that the transaction would show up on the Fed’s balance sheet. However, the Fed is under no obligation to show the transaction.
The $141.2 billion in Treasuries purchased into the Belgium account represents 3.2% of the total current size of the Fed’s balance sheet.   The Fed is a private corporation and is therefore not beholden to GAAP accounting standards.
However even with GAAP standards applied, a corporation does not have to itemize and disclose the details of any event that represents less than 5% of its assets. In other words, the Fed can easily bury a 3% transaction in its financial statements.

UntitledTuesday, a whopping 4,307 contracts hit the Comex instantaneously at 8:20 a.m.
To put that size in context, at 8:00 a.m. (EST) the CME was showing a total of 45,000 contracts had traded from 6 p.m. the previous the evening until 8:00 a.m. Tuesday morning.  That’s an average of 54 contracts per minute over the 14 hour period. All of a sudden someone decides they need to sell 4,307 contracts all at once?
The “art of selling” a big position when you need to sell involves hiding the size of the position from the market and feeding your position into the market over time as the liquidity lets you do it without giving away what you are trying to do.
The Fed’s “art of war” on gold involves dumping large quantities of gold contracts, often at times when it wants to make a statement.
The real question is, why has the Fed all of a sudden become very blatant about its intent to wage a war on gold?

Gold manipulationGood evening and welcome to the business magazine Makro.  For many people, the purchase of gold represents a safe reserve for bad times.  No wonder that, at the height of the financial crisis savers were queuing up at gold dealers. Throughout history, gold has served as a promise of reliability and stability. 
But today there are considerable doubts as to whether that promise remains valid, because an examination of gold prices reveals machinations fit for a financial thriller.
Gold is the opponent of debt based moneys, i.e. currencies, and in particular the US Dollar. Therefore, the US Federal Reserve has an interest in a weak gold price, and the US government protects the manipulation of the gold price by the private banks.
For years, the US Federal Reserve has served as the lender of last resort. Gold must be weak if a loss of confidence in the US Dollar is to be averted.   It has been difficult to prove that this is a rigged game with a stacked deck, but if the gold market manipulations are indeed encouraged in addition to being condoned, that would explain why oversight bodies have thus far turned a blind eye to it, despite years of massive conspicuous activities in the futures markets, as with the gold fixing in London.

Caption Contest 1A recent Chairman of that private corporation in control of the finances – perhaps even, the destiny – of the USA for the past 100 years, famously referred to the yellow metal as “a barbarous relic”.   Although this Ph’d prophet of policy-managed markets has hardly been a fount of wisdom in the course of his career… in this case he stumbled upon a truth.
Yes. Bernake got it right!  Gold has all the attributes of  a primitive thing – and as such belongs in essence to a different cycle in humankinds’ journey. In fact, it’s the very primitive nature of gold [& silver] which renders it a potentially deadly kryptonite to the modern financialized world.

fedCentral banks are the officially assigned agents of sovereign governments for the ongoing business of demonetizing whatever currency is in circulation, or in the possession of the people.  The business is to reduce the value of circulated money by increasing it’s quantity covertly, and the newly issued money is then used for the governments unstated purpose. The Central Banker, the government, and colleagues receive large amounts of the new money first, before prices rise as a result of it’s creation, enabling a never ending secondary business of the purchasing of assets prior to inflationary rises in their prices. The secondary highly profitable business, being a legal practice with some similarities to insider trading, is never discussed.
Of course, this means that by design, longer term this causes the value of the money in circulation to trend towards a value of zero.

Bernanke taperIs the Fed “tapering”?  Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014?  Apparently not if foreign holders of Treasuries are unloading them.
From November 2013 through January 2014, Belgium with a GDP of $480 billion purchased $141.2 billion of US Treasury bonds.
 
 Did Belgium’s central bank print $141.2 billion worth of euros in order to make the purchase?  No, Belgium is a member of the euro system, and its central bank cannot increase the money supply.
So where did the $141.2 billion come from?
There is only one source. The money came from the US Federal Reserve, and the purchase was laundered through Belgium in order to hide the fact that actual Federal Reserve bond purchases from November through January 
were $112 billion per month, necessitated by the actions of an unknown country or countries who dumped $104 billion in Treasuries in a single week. 


GeithnerBut it is now clear that Geithner never believed his own talking points. To him, too-big-to-fail and the so-called moral hazard, or safety net, that it would create can’t really ever be fully taken away. During his lecture to Summers’s class, one student asked a question about “resolution authority,” a provision of the reform laws that is supposed to let the government wind down a complex financial institution without creating a domino effect. The question prompted Geithner onto a tangent about too-big-to-fail. “Does it still exist?” he said. “Yeah, of course it does.” Ending too-big-to-fail was “like Moby-Dick for economists or regulators. It’s not just quixotic, it’s misguided.”  - From The New York Times Magazine article, What Timothy Geithner Really Thinks

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GLDTFMetalsReport’s T. Ferguson joins the show this week to discuss: 

  • The Vaults Are NEARLY EMPTY- why claims of a physical gold shortage is not stacker hysteria, but rather the COLD HARD TRUTH!
  • PM Sentiment sucks by design: Cartel fears Western investment demand with vaults vastly depleted- vigorously capping any and all price rallies
  • Big picture outlook:  Summer stock market decline & tapering halt
  • Doc sees the first signs of renewed PHYSICAL SILVER SHORTAGE- 90% silver premiums leap as supply dries-up

The SD Weekly Metals & Markets With The Doc, Eric Dubin, & T. Ferguson is below!

yellenJanet Yellen inherently understands that the U.S. is a corrupt, shameful oligarchy, but as head of the institution most responsible for this transformation, she simply cannot tell the truth.
It is incredible that things have fallen so far that a U.S. Senator felt compelled to ask such a question, and even worse that such a powerful official couldn’t vehemently and decisively deny the claim.

20121003_grant_0The Interest Rate Observer’s Jim Grant, one of our personal favorite critics of the Fed, was back at it this week on CNBC, blasting Janet Yellen and the Fed’s long-held doctrines as “Heresies!“. 
Regarding Yellen’s claims that the US economy is improving, Grant eloquently pointed out that she “did not touch on the moral quandary that low interest rates introduce into our country - grandmothers, grandfathers, savers are figuratively on their hand and knees and rooting around in bushes and between sofa seats for lose change on which to sustain themselves.”
Well said Jim, will said.  
Grant’s full MUST WATCH interview is below: 

fiscal cliffJim Rickards joined FoxBusiness for an excellent interview regarding Janet Yellen’s first months as Fed Chairwoman. Rickards informed the MSM viewers that The Fed has tapered into weakness, and explains why counter to what the BL(B)S report would have one believe, the labor force is falling off a cliff. 
Perhaps Rickards tunes into the SD Metals & Markets, as he informs Diedra that he expects the Fed to end the taper by July, and increase asset purchases by 2014- something we have been predicting for over 6 months. 
Rickards full interview is below: