This morning, Jason Burack of Wall St For Main St and I interviewed GATA Chairman, Bill Murphy. Last week’s
announcement that Deutsche Bank seeks to settle lawsuits concerning the
bank’s manipulation of the silver and gold fix is big news. No two ways
about it, this news vindicates GATA’s work. Mainstream media producers,
business television anchors and mainstream journalists no longer have the
“risk-free” option of running with the party line that manipulation only
occurs within the bond, currency and equities markets. Deutsche Bank’s
settlement relegates that journalistic abortion to the dustbin of history.
I say “risk-free” because some of these “powers that be” stenographers
will continue to make the case that there’s no manipulation in the precious
metals market, despite the fact that an ever growing number of people can see
these stenographers for what they are: SHILLS, serving their own
personal interest, and their own careers. But I digress…
It’s important to underscore that the lawsuits against Deutsche Bank
focus on the manipulation of the fix in London. The manipulation of the
fix represents only one of the many tools in the cartel’s manipulation bag of
tricks, and it’s far from the most powerful of the tools the cartel employs.
The workhorse effort is achieved with the use of High Frequency Trading
and the issuance of new contracts to meet periods of rising long interest
(you need only look at what was happening last week for a textbook example,
as Craig Hemke discussed
last Friday). Add on top of these tools the outright dumping of
physical precious metal at strategic junctures and suffice it to say, the
cartel is a long way from being emasculated. There have been a number
of over-the-top headlines in the last couple of days making the case that
this news regarding Deutsche Bank is going to translate into an end to
manipulation. Reality is more nuanced, as Bill Murphy explains.
I see the potential for a “limited hang-out” scenario unfolding.
Deutsche Bank is in precarious financial health, and I believe there’s
a possibility that the bank could be split-up, with “bad assets” segregated
in a “bad bank” holding company, with losses nationalized. If that
scenario were to unfold, it wouldn’t be inconceivable to see the mainstream
media spin precious metals manipulation as reality, but only in the backwater
of the London fix process, and largely the product of Deutsche Bank leading
the effort. If Deutsche Bank morphs into some other entity at some
point, the ability to spin a “limited hang-out” is possible.
Given the way precious metals and miners have been trading for most of
2016, Bill makes the case that there has been a shift in psychology. One need
only look at the way silver traded last week; Bill notes that it’s been years
since we’ve seen back-to-back up days without so much as a cartel-induced
hiccup. The move in silver since the January low is impressive:
