In his profound and prophetic essay 13 years ago, "The Debasement of
World Currency: It is Inflation, But Not as We Know It" --
http://www.gata.org/node/8303
-- the British economist Peter Warburton realized that central banks had
abused their unlimited power of money creation and that this had impelled
them into comprehensive commodity market rigging and price suppression to
save the financial system they had perverted.
"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 I estimated the size of the
gross stock of global debt instruments at $90 trillion for 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.
"Central banks, and particularly the U.S. Federal Reserve, are
deploying their heavy artillery in the battle against a systemic collapse.
This has been their primary concern for at least seven years. Their immediate
objectives are to prevent the private-sector bond market from closing its
doors to new or refinancing borrowers and to forestall a technical break in
the Dow Jones Industrials. Keeping the bond markets open is absolutely vital
at a time when corporate profitability is on the ropes. Keeping the equity
index on an even keel is essential to protect the wealth of the household
sector and to maintain the expectation of future gains.
"For as long as these objectives can be achieved, the value of the
U.S. dollar can also be stabilized in relation to other currencies, despite
the extraordinary imbalances in external trade."
GATA long has collected and published documentation of the central bank
war on the gold front:
http://www.gata.org/taxonomy/term/21
A week ago Eric Scott Hunsader of the market research firm Nanex in
Winnetka, Illinois, disclosed via Zero Hedge a smoking gun from the central
bank front against the commodity, government bond, and equity markets, a
letter from CME Group, operator of futures exchanges including the New York
Commodity Exchange, to the U.S. Commodity Futures Commission, asserting that
the exchanges give discounts to central banks for their trading on all CME
Group futures markets:
http://www.gata.org/node/14385
That central banks are likely trading not just currencies and bonds but
the full range of futures -- that is, that surreptitious central bank
intervention in the markets has become comprehensive -- does not seem
ever to have been reported by the mainstream financial news media. So GATA
brought the CFTC document to the attention of many major financial news
organizations, but not one reported about it or even acknowledged receipt of
the document.
Tonight Zero Hedge discloses another smoking gun -- another filing by CME
Group, this one with the U.S. Securities and Exchange Commission, CME Group's
"10K" statement for 2014. On Page 9 of the statement CME Group
says: "Our customer base includes professional traders, financial
institutions, institutional and individual investors, major corporations,
manufacturers, producers, governments, and central banks."
[Emphasis added.]
The CME Group filing is posted at the company's Internet site here --
http://files.shareholder.com/downloads/CME/34...6375-14-12/1...
-- and for safety's sake at GATA's Internet site here:
http://www.gata.org/files/CMEGroup10K-2014.pdf
GATA will send this smoking gun as well to those financial news
organizations. Maybe someday one of them will dare to commit journalism to
report the biggest story in the world and probably in history -- that there
are no markets anymore, just interventions.
But more likely these disclosures will result only in still more
"financial represssion" by central banks and governments, more
market rigging that is ever more obvious but guaranteed against mass exposure
because of the timidity of the news media. It all has been in plain sight for
a long time, but, like the emperor's new clothes in the fairy tale, it simply
cannot be discussed in polite company.
Ever sardonic, Zero Hedge writes tonight --
http://www.zerohedge.com/news/2014-09-05/w...it-any-longe...
-- "At this point why even pretend there is a 'market'? ... The
'market' ... is whatever central banks say it is. ... If central banks are
going to be rigging the market as they now conclusively are on a daily basis,
perhaps they can disclose ahead of the trading day start to everyone, and not
just to the primary dealers, what the closing S&P 500 price for any given
day is."
That is the catastrophe here apart from the use of inside government
information to benefit the money power at the expense of everyone else: the
loss of free markets and democracy, the great engines of progress and
prosperity. Market rigging is the ugly triumph of the declining stage of civilization,
the corruption of civilization by prosperity amid the general loss of civic
virtue. Market rigging is the sort of thing the Nazi regime did with the
German stock market as defeat neared in World War II --
target="_blank"
http://www.boerse-berlin.com/index.php/..._Berlin/History
-- except the Nazis weren't as clever as our rulers now. They simply set
prices arbitrarily in the open without the cover of futures, other
derivatives, and intermediary brokers.
As Zero Hedge writes, the documentation of comprehensive and surreptitious
market manipulation by central banks is now conclusive. But that doesn't mean
that it will matter. It won't matter if people won't look at it, acknowledge
it, and act on it, and for the time being, at least, the news media and all
major industries and commercial interests won't. They remain in denial.
