Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

[Adeptus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Here's a link to the Financial Sense Newshour. Go to Saturday, April 10, 2010 for this interview.

That was exceptionally illuminating! Thanks xPAT!

[BuckarooBanzai]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

I notice that Hudson advocates using property tax rather than income or sales or various other taxes. This seems to be in the tradition of Henry George.

I like the idea of a "single tax" (not that there's any chance the current VAT or other such proposals will remove the income tax), but I don't see why the Fair Tax (sales tax with prebate to counter the regressive bias) wouldn't be just as good.

Can you ask Hudson why he prefers property tax over sales tax (with prebate)?

Check the iTulip archives, there is plenty of stuff that Hudson has written posted here, and EJ has interviewed Hudson at least once before IIRC. From what I remember, Hudson believes that property taxes are necessary to transfer wealth away from evil rentiers, for the good of society. Hmmmmm. Hudson uses a lot of Marxist code-words, which makes sense because if you bother to peel back the surface, he's seems to be a thinly-reconstructed Marxist. Which, unfortunately, cripples his credibility substantially.

[Spartacus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

All you need about Hudson (or anyone, actually) is one label, then you don't need to read or think about the content of his words

hahahahahahahahaha. I slay myself.

I notice that Hudson advocates using property tax rather than income or sales or various other taxes. This seems to be in the tradition of Henry George.

I like the idea of a "single tax" (not that there's any chance the current VAT or other such proposals will remove the income tax), but I don't see why the Fair Tax (sales tax with prebate to counter the regressive bias) wouldn't be just as good.

Can you ask Hudson why he prefers property tax over sales tax (with prebate)?

[BuckarooBanzai]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

The remaining assertion that banks are manipulating gold and silver to manipulate the dollar makes no sense. The exchange rate value of the dollar can be manipulated by setting gold prices and was back when the dollar was backed by gold. This was the primary mechanism of dollar devaluation by FDR in 1933. But the US is not on a gold standard. If it's on any commodity-based standard, the dollar is on an oil standard. Oil prices have a profound impact on the US economy because the US imports hundreds of billions of dollars of oil. The impact of rising prices in dollars is inflationary. Deflating the dollar against oil was the primary mechanism of reflation in early 2009. Gold and silver prices reflect the dollar exchange rate, not the other way around.

EJ you are right on when you say that the dollar is on an oil standard. The switch from gold to oil was cleverly made by the Nixon administration, working with the Saudis. But it is MUCH more difficult to back a currency with a commodity that gets consumed (oil), rather than with a commodity that persists (gold). Now you have a money supply that can vary as a function of multiple inputs (production and consumption) and furthermore, oil in particular has some very peculiar factors affecting its production function (cartel inefficiencies, widely varying production cost regimes, geopolitics, etc). Thus, gold has remained in the picture as an influencer, if not a determinant, on the dollar-- an influencer whose meaningfulness, I would postulate, has varied over the last 30 years in inverse to how effectively the oil backing is being managed. Otherwise how can you explain the Federal Reserve's publicly stated interest in the price of gold, as expressed by many Fed Governors and Chairmen over the years? (one example here: http://goldnews.bullionvault.com/gol...rice_100120062)

Fundamentally, our global fiat economy has turned into a game of managing appearances, and the price of gold (and silver, to a secondary extent) is one of the appearances that must be managed. Rightly or wrongly, it seems to me that a big part of GATA's mission is to attack the general issue that our financial system is a charade. Like getting into a swordfight with a fog bank, this is an almost pointless endeavor, but you can't blame them for getting worked up about it, and they certainly attract much needed attention to the fundamental problem. But thank heavens for people like Ted Butler, who is actually trying to unplug one of the fog machines.

[ThePythonicCow]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

All you need about Hudson (or anyone, actually) is one label, then you don't need to read or think about the content of his words

hahahahahahahahaha. I slay myself.

I don't recall labeling Hudson with a single label. Were you responding to BuckarooBanzai's "Marxist" label, but quoting my reply instead of his?

[ThePythonicCow]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Fundamentally, our global fiat economy has turned into a game of managing appearances,

Bingo !

[Adeptus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Here's a link to the Financial Sense Newshour. Go to Saturday, April 10, 2010 for this interview.

And now for ZeroHedge's rebuttle to this interview.

He does raise a couple of good points.

Adeptus

[Spartacus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Listening to Puplava/JC I had a couple of the same reactions as TD

And I've been thinking the same things JC says every time I read Butler; JC is a far, FAR better foil to Butler than Fekete & Szabo.

Talk about schizophrenic ....

And now for ZeroHedge's rebuttle to this interview.

Adeptus

More of a disagreeing rant than a rebuttal.

[ThePythonicCow]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

And now for ZeroHedge's rebuttle to this interview.

He does raise a couple of good points.

Adeptus

Thanks for linking that. Good read.

My money is mostly with Tyler on this one. I'll grant that perhaps this is not a pure, classic reserve ratio leveraging, such as when a bullion bank issues certificates for ten (or a hundred) times as much gold as its reserves.

Rather this looks to be a fine example of "modern" derivative and contract leveraging, spread across multiple counter-parties in a more complex fashion. Bank A (or G or M) claims not to be naked short because they have some (unauditable) contract with Party B to receive some product in the "near" future that Party C will be able to have Party D refine into good delivery product ... or some such. The variations seem (deliberately) endless.

This works until it doesn't. One might have thought that we would have learned a lesson in the last couple of years that such schemes can blow up really good.

When the SHTF, and (1) one of the parties fails, (2) the government of another party confiscates their product, and (3) a government of the third party declares war on a government of the fourth party, then not only will we see who was swimming naked, but we will also see that the flimsy excuse for a proper covering that some others were wearing gets washed away in the rip tide.

The only answer that works is to understand (and have history confirm that understanding) both (1) what risks you face with your holdings, including both physical security and counter-party risks, and (2) what failures the future will impose on those risks. Who or what are you depending on, and will they or it fail?

Minimize and diversify your risks, and be mentally prepared to have to fall back to Plan B or C when Plan A turns to muck.

[Pascal]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

I'm also with Tyler on this.

There is something troubling about a paper market controlling the price for the physical market when the paper (of whatever form) is 100:1 to the physical. It allows the big banks, the governments, or whoever has the most money to move the price up or down irrespective of fundamentals. Since the banks seldom have to deliver the goods there is little restraint on manipulation. Such manipulation, to the extent it may occur, is done at the expense of smaller investors, producing companies, and the often very poor countries where the metals are mined.

CFTC position limits are supposed to prevent this type of manipulation. The big banks have been able to get around the size of position rules by claiming that they are "hedgers" who have long positions in the physical. Based in part on Christian's garbled original testimony and his attempt to fix it, it appears likely that the banks do not have the physical. Therefore they should not be deemed "commercials" who are exempt from position limits.

If they can prove that they have either physical or an over the counter contract that will deliver physical to them within an appropriate time, then fine, they can short up to that amount on the Comex. If not, then position limits should be enforced. The failure of the CFTC up to now appears to be that they have not verified that the bullion banks in fact have physical or contracts that will deliver physical.

Christian is almost comical in his defense of the banks and is really a bit of a troglodyte himself. I think he does confirm, BTW, that the LBMA is largely paper.

I also find it interesting that he is all for position limits on the longs.

Hopefully the CFTC will begin properly enforcing position limits on the purported "commercials" as a result of the current hearings and investigation. I do agree with xPat and with Butler that the communications to the CFTC need to focus exclusively on the COMEX concentrated shorts issue. The LBMA for now is probably an unwelcome distraction that the opposition can use to distract, delay and divert proper CFTC enforcement.

[santafe2]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

There is something troubling about a paper market controlling the price for the physical market when the paper (of whatever form) is 100:1 to the physical.

Your premise is incorrect. The paper market was created to take advantage of the long term physical market. If you are correct about this market and it's 100:1, so what? Is gold currently over valued? I don't think so. If you disagree, put a fair value on gold and wait for it to return to that value before you buy. There are no conspirators smarter than the general group of folks on iTulip. We almost never agree on everything but the BS gets eliminated quickly and I think the manipulation of the gold market is complete BS.

[Pascal]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Sorry, but I believe you are wrong. We will probably see eventually.

[cakins]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

NY Post tells the story!


Metal$ are in the pits

Trader blows whistle on gold & silver price manipulation

By MICHAEL GRAY
Last Updated: 4:33 AM, April 11, 2010
Posted: 2:10 AM, April 11, 2010
Comments: 36 | More Print
EXCLUSIVE

There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.
The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.
Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public.
Maguire -- in an exclusive interview with The Post -- explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves.
"JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer," Maguire said.
In the gold pits, Maguire sees HSBC betting against the precious metal's price without having any skin in the game in the form of a naked short.
"HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size," Maguire added.
"No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a company spokesman. HSBC declined to comment.
Also during the CFTC hearing, Jeff Christian, founder of the commodities firm CPM Group, said that the LBMA, the physical delivery market for gold and silver in the UK, has been using leverage, which is another way to depress the price of gold and silver.
Christian said that the LBMA -- the same market Maguire trades in -- has leverage of about 100-1 on the gold bars settled on the exchange. In layman's terms, that means if 100 clients requested their bullion bars be delivered, the exchange could only give one client the precious metal.
The remaining requests would have to be settled for cash equivalent. "That is tantamount to a default on the trade," says Bill Murphy, chairman of the Gold Antitrust Action committee.
Maguire goes further and calls it a fraud: "If you sell something you do not own, then that is fraud."
Back in 2007, Morgan Stanley agreed to settle a $4.4-million lawsuit brought by precious-metal clients, who alleged that Morgan offered to buy gold and silver and store it for the investors, but never purchased any metal and still charged them storage fees.

Morgan Stanley denied the charges at the time, but "settled the case to avoid the cost and distractions of continued litigation," the firm said.
Despite gold's rise each of the last 10 years, Murphy believes the price of gold today would be closer to $2,300 an ounce if the price just moved with inflation.
Maguire believes the price should be even higher given the fear trade that would have sent prices spiking during the financial crisis in 2008-09.
Both precious metals have seen a recent spike since Maguire's e-mails became public. Gold has gained 6.5 percent to close at $1,161.55, while silver has spiked 10 percent to $18.38.
According to the e-mails Maguire sent to CFTC regulators, he was spot-on in his expectations of how the precious metals would trade on release of the January jobs report.
This message is to "confirm that the silver manipulation was a great success and played out exactly to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview," Maguire wrote to a staff investigator after the trading day.
CFTC commissioner Bart Chilton said, "I'm appreciative of the information Mr. Maguire provided and I'm glad it was introduced into the investigation."
High, low silver
The prices of gold and silver have been allegedly suppressed by JPMorgan Chase and HSBC, according to a London whistleblower.
Andrew Maguire, who laid out the banks’ plan in e-mails to the CFTC prior to trading on the Comex on Feb. 5.
1.) From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today
Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb. Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the US dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added.
Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels. Kind regards,
2.) From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? Kind regards,
3.) Andrew T. Maguire
From: Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today Good afternoon, Mr. Maguire, I have received and reviewed your email communications. Thank you so very much for your observations.

Read more: http://www.nypost.com/p/news/busines...#ixzz0l27YrjwA

Read more: http://www.nypost.com/p/news/busines...#ixzz0l27PrZiU

[thisandthat.nowandth]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Possible DOJ investigation of JP Morgan

Purported email from the Dept of Justice Antitrust Division (audio transcription):

"Generally the Commodity Futures Trading Commission investigates these types of market manipulations, however, the suggestion that JP Morgan Chase may be signaling other traders warrants further analysis. The Department of Justice will carefully consider the issues you raised, and you can be assured that if we conclude that silver traders have engaged in anti-competitive conduct, we will take appropriate enforcement action."

King World News: Ted Butler, and analysis by Jim Rickards

C. Powell

[jiimbergin]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

from Jesse - looks like someone in the Dept. of Justice thinks there may have been manipuation

http://jessescrossroadscafe.blogspot...and-civil.html
08 May 2010

NY Post: Feds Launch Criminal and Civil Probes Into JP Morgan’s Silver Trades





Fiat justitia ruat caelum.

Let justice be done, though the heaven's fall.

Gray's Economy
Feds Probe JP Morgan’s Silver Trades
By Michael Gray
Deputy Sunday Business Editor, NY Post

Federal regulators have launched both a criminal and civil investigation against JP Morgan Chase for its trading activity in precious metals market.

The Commodities Futures Trade Commission is looking into civil charges and the Department of Justice’s Antitrust Division are handling the criminal probe, according to sources who did not wish to be identified due to the sensitive nature of the information.

See More information in tomorrow's New York Post Sunday Business section