Gold price manipulation is spelled out to CFTC

[bart]

Re: Gold price manipulation is spelled out to CFTC

let's not neglect our own bart's analysis Gold price manipulation/control proof

The gold trading record of the ECB, since 1999

*chart*

to me correlation is NOT evidence of 'manipulation'. of course ecb sales are going to impact the price. manipulation means intent, and it's not clear to me that intent has been proven either by bart's analysis or the one presented here. the assumption seems to be that gov't wants gold to be cheaper. but why? doesn't more expensive gold improve their balance sheets?

As you know I'm very much in the manipulation as opposed to the control or smoothing camp, but am not adamant about it and even have a link to a causation vs. correlation view in the article, my basic point being that correlation is always there when causation is isolated. I'm also in no way, shape or form trying to say that Central Bank or ECB sales or leasing cover the entire picture - they and it don't.

But there's real live evidence, including your point about why they're selling, and those are my real point. Call it manipulation or call it control or even call it smoothing... but its there. Just that it virtually unquestionably exists is a red flag in my book, at the very least.

also, it bothers me about the gold manipulation crew that gold has moved up and down with silver... is it a gold/silver manipulation scheme then? why? silver was demonetized long before gold. gov't could not care less about the price of silver.

Silver is a precious metal, often referred to as the "poor man's gold". It also has many centuries of use as a monetary metal and store of value, even though it was officially demonetized in the US in the late 1800s. In the sense that it is a precious metal, it also exposes via its price and price gains that inflation is very alive and well to the broad populace, although gold has most of the press and attention.

And since it does indeed track with gold (although with much higher volatility), manipulating gold almost automatically affects the silver price... so governments don't have to care much about it.

There is much evidence that the silver market is manipulated, including (but far from limited to) lease rate games and futures. For example, silver is the only futures market where the commercials (in theory, actual producers but also big bank trading desks) have never been net on the long side since records started being kept by the CFTC in 1986. Every other commodity except silver has had commercials with a net long position, including gold. As a counterpoint, why is that? (neener, neener ;) )

[LargoWinch]

Re: Gold price manipulation is spelled out to CFTC

to me correlation is NOT evidence of 'manipulation'. of course ecb sales are going to impact the price. manipulation means intent, and it's not clear to me that intent has been proven either by bart's analysis or the one presented here. the assumption seems to be that gov't wants gold to be cheaper. but why?

Metal, I am not convinced that the price of gold is being manipulated.

However, it is clear to me that governments and CBs have a strong vested interest in keeping the price of monetary metals low for the simple reason as to protect their fiat system, which they benefit greatly.

I also think they understand that unlike real estate and paper assets, physical bullion can easily be used for tax evasion (warning: this is not a recommendation): especially the inflation tax.

Also, why is gold subject to a much higher "collectibles" tax instead of the lower gain on capital tax? and why are real estate gains tax free (up to $500K in the US, but unlimited here in Canada)? Could it be because $500K in gold does not generate any municipal tax revenues, while real estate does?

[raja]

Re: Gold price manipulation is spelled out to CFTC

The guys you consider dim-wits, holding the dumb real physical and strategic assets (Uranium metal included) will be on top of that event, while the rest, caught up in the starry eyed equities end of the resource markets, periodically get shredded.

Lukester, I'd like to ask your opinion about something . . . .

Under what scenarios do you think investment in GLD is unsafe. As I understand it, shares are held in the form of insured physical gold in a vault, so barring a direct nuke hit, what would have to occur for an investment in GLD to be less safe than physical gold?

Second question, do you consider there to be any risk from GLD holdings in a large brokerage house? (I use Ameritrade.) I'm assuming that a brokerage company only holds the shares, and are not allowed to do any investment of their own, so can't fail due to a collapse of the market . . . so investors shares would be safe.
Is this correct?

Thanks for your feedback

[Guest]

Re: Gold price manipulation is spelled out to CFTC

Chris and Raja -

Uranium can be held in a holding company, very similar to the way Central Fund of Canada warehouses gold and silver - via the URANIUM PARTICIPATION CORP. which is dedicated solely to that custodial purpose. They warehouse real uranium, keeping you entirely outside of the stock markets correlation. This is not a fund of exploration / production company shares.

With regard to Gold or Silver in the ETF's, Raja it's a matter of "taste". Some people just don't like these companies as vehicles for their bullion. However the bottom line for me is: Gold ETF's = OK. Silver ETF's = NOT OK. If you have more than a trivial amount of silver holdings, take delivery of them and do not leave them even in "segregated" accounts anywhere.

The silver market (ratio of real bullion to paper silver traded) is definitely not on the up-and-up, and even some highly reputable custodians, such as the Perth Mint in Australia, now have accumulated an extensive history of direct and explicit client reports of very long and fishy delays in delivering any silver from pooled accounts to segregated accounts. And when it comes to actually picking up the silver in person, it is occasionally "not available" even after six or eight weeks notice.

If that is not enough to alert you to some issues with this "safe storage", nothing will be. This is the broad hint evident also elsewhere in the markets, that the silver bullion availability is a "little bit special" as an issue, and therefore the silver bullion story is little understood by the general public. No paper silver, ever. Take delivery, enjoy the fact that it's impossibly bulky - that is precisely because it is so darned cheap!

The one thing about paper precious metals that some of us don't like Raja, is that they become exceedingly tempting to trade in and out of like a stock share - when they've had a big run and they are plummeting in a really nasty correction, LOTS OF PEOPLE SELL, when they should instead sit tight. You think this won't trick you, but it does tend to do that to a lot of owners of the paper share.

The paper certificates seem really convenient to you? Well, they just possibly "too convenient". I think there is an exceedingly high percentage of bullion buyers who sell after one or two price run-ups because they think they are "taking profits" and it's so easy to buy and sell and buy, they'll just be clever and trade the moves. That's going to be the wrong way to play bullion ownership in the next few years.

I don't see gold spiking and collapsing. I see it spiking and then becoming adopted as part of a new monetary anchor. If it does do that, you may well have a problem with all that "pooled paper gold" you bought, because lots of people bought gold the convenient way you did, and gold will suddenly be very much sought when it's being bandied about as a monetary anchor again - and you may just find that not a whole lot of entities will be willing sellers of the deliverable stuff any more, at least for a while. And don't forget, if we get into that environment, that it will be monetarily a highly unstable environment.

You can smile at these concerns now, but if we get to a point where inflation is gapping up into the double digits in dozens of countries worldwide, the paper owners may suddenly start feeling a trifle uneasy that they can actually get delivery of what they think they own in gold. For silver, I think that event is "high probability" at some point. The simplest answer to your question is this: you buy precious metals because they are no-one's promise to pay. If so, why are you buying them in the form of a certificate, which is someone's promise to deliver them to you?

[LargoWinch]

Re: Gold price manipulation is spelled out to CFTC

I don't see gold spiking and collapsing. I see it spiking and then becoming adopted as part of a new monetary anchor.

Strong words Luke (notice no mentions about Fred's acronym).

The only thing, like yourself, I strongly believe that if one should buy gold, the ONLY way to do so, is to buy the physical thing. Simple, take possession and store the frikin thing NOW.

The only problem, is that if gold is $5,000 / tr.oy you might not like what is going on around you... but "hey" you will be the only one able to buy bread and ammo for your familly. Not bad.

Again, for your your eyes only!

http://www.youtube.com/watch?v=8ErYR...eature=related

= The Largo

[GeraldRiggs]

Re: Gold price manipulation is spelled out to CFTC

@Phirang

can you tellme some names of these "junior base metal stocks" you mention? I've been interested in researching a few of these. Thanks.....>

[raja]

Re: Gold price manipulation is spelled out to CFTC

I don't see gold spiking and collapsing. I see it spiking and then becoming adopted as part of a new monetary anchor. If it does do that, you may well have a problem with all that "pooled paper gold" you bought, because lots of people bought gold the convenient way you did, and gold will suddenly be very much sought when it's being bandied about as a monetary anchor again - and you may just find that not a whole lot of entities will be willing sellers of the deliverable stuff any more, at least for a while. And don't forget, if we get into that environment, that it will be monetarily a highly unstable environment.

Lukester, thanks for your reply.

Could you please elaborate on the above? Thanks.

[Guest]

Re: Gold price manipulation is spelled out to CFTC

Raja - I've got to go to the gym,( to stave off middle age!). But virtually all the reading you can do on the implications of the collapse of the world's first and only global experiment with all-fiat money should be sufficient. You only need to synthesis your most plausible conclusions - translates as 'common sense conclusions'. We tend to forget, but there has never before in history been an experiment in all fiat paper money worldwide, with the governance of the determinant senior issue of that fiat paper relegated to a single central bank who could freely modify it's quantities.

Do you really think the new fiat system that replaces it won't need to be anchored to something after this pile of paper finally shrivels to a has-been as a store of value? I submit that one needs no great insight to conclude that gold will have at least some part to play in the resolution. Resource depletion comes a close second - although a lot of people seem to have difficulty wrapping their minds around the notion that resources really can diminish fairly abruptly, particularly when faced with the "runaway" portion of a population explosion.

Sounds merely banal to boserve this confluence of issues, but that does not make it any less true.

[c1ue]

Re: Gold price manipulation is spelled out to CFTC

Just keep in mind that a gold standard doesn't mean squat in terms of 'stability':

Even though the US was on a gold standard up until 1945, you'll note there were plenty of bank panics nonetheless - plus the Great Depression:

[hide] v • d • e Banking Panics in the United States Panic of 1797 · Panic of 1819 · Panic of 1825 · Panic of 1837 · Panic of 1847 · Panic of 1857 · Panic of 1866 · Panic of 1873 · Panic of 1884 · Panic of 1890 · Panic of 1893 · Panic of 1896 · Panic of 1901 · Panic of 1907 · Panic of 1910-1911

From http://en.wikipedia.org/wiki/Panic_of_1907

So why then will a return to the gold standard necessarily fix anything?

[Guest]

Re: Gold price manipulation is spelled out to CFTC

The only representation in the post your are responding to above is that it would be one logical component of a new anchor set of asset classes backing whatever currency system replaces the single USD. No representation was made as to it's "stabilizing the economy from future crashes", or anything else. I would venture to guess however, that in most or all of the crashes you cite, ownership of a little gold was not exactly a toxic component among one's assets. It simply meant you were liquid and had ready cash to buy any distressed other assets during or after that crash. Pretty straightforward.

Wanna sell me that silver barbell you've been lugging around for a decade? I will gladly pay you some b0nars for it C1ue. How many b0nars do you want for it?

[c1ue]

Re: Gold price manipulation is spelled out to CFTC

Stability is not governed by the 'hardness' of the currency.

Stability comes from stable people - and we've not hit that development plateau yet, and perhaps never will.

If gold does become part of official currency again, it will be purely a PR move.

In fact, it can be argued that the 1945 to 2008 (thus far) fiat money era has been a much longer and more stable period that the US saw at any time in its history.

Sure, a crash is coming to end it, but at least there were 60+ years of stability rather than the 10 or 15 prior to the establishment of the Fed.

The point I stress is that systems fail due to people's greed - whether it is the federal government, the Fed, Congress, speculators, bankers, or the shoeshine boys with their nickels.

As for the doorstop - I've long since traded it in for the vending monopoly in one public transit center in Russia.

Instead of 1000 oz. of Ag, I will net 100K rubles/month starting in 2 months.

I did have to retain an extra set of phone books though.

[Guest]

Re: Gold price manipulation is spelled out to CFTC

Well C1ue, you are certainly to be congratulated for your business coup, although the hauteur with which you voice this dims one's enthusiasm on your behalf somewhat. If cannot be lost on you that not all of us have the opportunity to go to FSU and negotiate such deals, wherein "the right people's votes" can be purchased to "expedite" the project? If you tried that in the US (and the US were your domicile when you were trying this) you'd be employing a business strategy not exactly endorsed by most business schools. :rolleyes:

So in effect what you are putting on the table for my admiration is the extent to which you are able to move to other countries where a few well chosen "monetary endorsements" provide a straightforward path to such rapidly profitable business startups. It's all good C1ue - I have zero moralising baggage about that, or pretty much anything - I am merely left bemused by the constant undercurrent of (almost abjectly) blind fury I detect in your comments in my general direction. Perhaps there are a few "corns" or "ingrown toenails" in your personality which I've tread on over the past year or so of discussions?

I note a general humorlessness in your address, and having just this evening had my posts likened to "penguin vomit" elsewhere, I note again your tendency to release these small gusts of poisonous gas in my general direction fairly often. It must be your inability to find much humor in our discourse - it seems you find little spontaneous humor pretty much anywhere. Congratulations on having found a "pragmatic shortcut" through the normal thicket of vending machine market arbitrage - by going to Russia to do it. I can imagine a cohort of hapless commuters now roped into buying all of C1ue's cigarettes, mini-vodka bottles, candy bars and condoms. Very reliable.

How is your Stateside business doing meantime, taking care of the elderly infirm? Altogether, a string of business ventures that know how to home in on the soft underbelly of capitalism quite adroitly!

[LargoWinch]

Re: Gold price manipulation is spelled out to CFTC

I agree that under the gold standard the system is not more "stable" as people will always get caught up in manias.

However, the gold standard does provide a huge and extremely desirable avantage in my view over fiat and that is fairness.

Under fiat, losses are socialized via inflation, while under gold, it is the institution (bank, government or other) committing the errors who pays. Worst still, inflation is not only a type of taxation, it is the most repugnant of all type of taxation.

The question is, why are the people not in the streets right now demanding a "gold standard" or similar is beyond me. I guess since everyone is so endebted, they are happy to have their debt inflated away?

[c1ue]

Re: Gold price manipulation is spelled out to CFTC

How is your Stateside business doing meantime, taking care of the elderly infirm? Altogether, a string of business ventures that know how to home in on the soft underbelly of capitalism quite adroitly!

The stateside business is ramping up on schedule. I am seeing inflation affect worker's willingness to travel due to gas prices, but simultaneously am seeing increasing unemployment driving labor supply up.

I'm not pushing for lower wages though as my business is focused on the upper end and I hope to build a loyal worker base rather than squeeze out the short term greater profit.

As for the penguin vomit - you'll note that it is still nutritious. Just that I wouldn't eat it.

Under fiat, losses are socialized via inflation, while under gold, it is the institution (bank, government or other) committing the errors who pays. Worst still, inflation is not only a type of taxation, it is the most repugnant of all type of taxation.

LW,

We're suffering under inflation now, and it is easy to believe that inflation and fiat currency is the greater of two evils (other being deflation/hard currency).

On the other hand, society in the hard currency era was very different than today.

Sure, there was negative inflation.

But money was even more concentrated in the hands of the elite then.

The difference between the Roaring '20s and the Roaring 2000s is that previously it was about 5% of the population; this time it was a much larger percentage - likely 25% or so.

So perhaps if you're in the 5%, then hard currency is great.

The bank panics listed previously were tough on the speculators and elite, but conversely the regular people were very little affected. Part of that was that most people were cash poor but productive - farmers and small businessmen using only their own capital a la Chris Coles.

But another part of that was that by being excluded from the money system, most people were only affected indirectly by such goings on. Even then, eventually the financial types still managed to produce a stock market bubble culminating in the Great Depression.

I'm a not wealthy 5%, however.

I have some money, but I'm not wealthy by most standards in the area I live in and in this country - though I would be a somewhat big fish in most other parts of the US.

My preference is that the system not be skewed to the advantage of the greedy and unscrupulous, but then I am the true cynic - otherwise known as the disappointed idealist.

[bart]

Re: Gold price manipulation is spelled out to CFTC

Worst still, inflation is not only a type of taxation, it is the most repugnant of all type of taxation.

Indeed... but I urge caution on the implication that inflation, especially in the later stages, does not hammer governments too.
Cui bono (who benefits) very much applies.