In the same category

If the law won't stop market rigging, what can we do?

IMG Auteur
Published : October 20th, 2012
1258 words - Reading time : 3 - 5 minutes
( 5 votes, 4.8/5 ) , 3 commentaries
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...
Category : Gold and Silver





GATA's friend and researcher R.M. writes today from Europe:

"If the U.S. judiciary deemed protection of the nation's currency or similar national interests (such as stable financial markets and oil prices) as justification not to prosecute a cartel's war against gold by federal authorities, foreign governments, and their agents, could anti-trust law ever be brought to bear against such activity in our lifetimes?

"What I'm asking essentially is: What is the Achilles' heel of gold market collusion that would provoke enforcement in a compromised judicial system?"

I have replied to R.M. as follows.

As I read the Gold Reserve Act of 1934 as amended, it authorizes the U.S. government to trade secretly not just in the gold market but in any market:

The Gold Reserve Act describes its objective as "an orderly system of exchange rates." Any administration almost certainly would construe that objective as an exemption from anti-trust law and I doubt that any court would have the nerve to disagree.

This question came up more or less during the first lawsuit against gold market manipulation, the lawsuit brought by Reginald Howe with GATA's support in U.S. District Court in Boston in 2001 against the Bank for International Settlements, the U.S. Federal Reserve and Treasury Department, and various bullion banks. For the details of that lawsuit, see the entry for "Gold Price Fixing Case" at Howe's Internet site here:

There was only one public proceeding in that case, held in Boston on November 5, 2001, on the defendants' motion for dismissal via "summary judgment." "Summary judgment" is a determination by the court that even if everything in the plaintiff's complaint is true, there is no remedy at law and nothing for the court to do about it. I attended that hearing. While I had to sit in the back of the courtoorm and the acoustics were not good, I heard an assistant U.S. attorney assert that the government, without admitting that it was doing what Howe complained of, very much claimed the power to do it. See my report on the hearing as posted at GATA's old Internet site here:

The government lawyer's assertion in support of "summary judgment" against Howe was pretty much a confession and perhaps the great success of the lawsuit. The government lawyer's assertion outlined the whole scheme.

After all, the United States was essentially on a gold standard through 1968 and the collapse of the London Gold Pool and then through 1971 when President Nixon discontinued gold redemption of dollars held by foreign governments, and by definition a gold standard is government's rigging of the gold price. Nobody suggested back then that such market rigging was illegal. Howe argued that since the U.S. government had formally unfixed the gold price in 1971, free-market law had to be construed to have taken over.

Since the judge granted "summary judgment" to the defendants on a jurisdictional issue -- Howe's supposed lack of standing to sue in the first place, a dodge by the court -- the issue of authority for market rigging was never settled.

But the U.S. Treasury Department acknowledged to GATA in 2005 that it claims comprehensive market-rigging power under the Trading with the Enemy Act of 1917 and the International Emergency Economic Powers Act of 1977, under which, upon a proclamation of an emergency by the president, the Treasury Department would consider itself authorized to seize or freeze not just gold and silver and gold- and silver-related assets but and and all financial assets. See GATA's correspondence with the Treasury Department in the "Confiscation" section of our Internet site here:

Given the totalitarian scope of the U.S. government's claim to power, I long have believed that the way to defeat the government's market rigging is simply to expose it to enough participants in the rigged markets. That's why GATA sued the Federal Reserve for gold information in 2009 and beat the Fed in U.S. District Court for the District of Columbia last year, extracting some very compromising information:

And it's why we will bring another freedom-of-information lawsuit against the Fed, the U.S. Treasury Department, and the U.S. State Department as soon as our finances allow:

For people won't trade in markets they understand to be rigged. When people realize how and why the major gold markets are rigged and almost always have been rigged, they'll go outside those markets to get their gold -- taking delivery of their metal and moving it outside the banking system, as Jim Sinclair and others on our side long have urged. Such removal of gold from the banking system is exactly what caused the collapse of the London Gold Pool, a fully public operation, in March 1968 --

-- and such removal of gold from the banking system will be, I think, what collapses the current London Gold Pool, a largely surreptitious operation, which GATA board member Adrian Douglas has exposed so well:

I suspect that some Sunday evening before the Tokyo markets open there will be an announcement from a secret conference of central bankers -- maybe held at BIS headquarters in Basel, Switzerland, or in Frankfurt, Singapore, or Washington again (where the Washington Agreement on Gold was devised, even though the United States was not a signatory) -- about new currency exchange rates. These new exchange rates likely will include a price that the participating central banks henceforth will pay for gold -- a much higher price than today's.

Such an announcement will signify that the second London Gold Pool has failed just as the first did. The gold for market rigging will have run out and the central banks and their governments will offer a premium to recover it. Maybe their offer will be of the "godfather" sort, an offer people can't refuse, an offer accompanied by the threat of criminal prosecution of gold owners, or accompanied by a punitive "windfall profits" tax. Or maybe the central banks and their governments will just be good sports and admit that they finally lost another round in the gold game and start up a new one.

Whatever the central banks and their governments do, they won't be alerting us in advance -- just their agent bullion banks. But all will be revealed at last, and even the silly Jeff Christians and Jon Nadlers will see it, if they really don't already see it and are just doing their dirty jobs of disinformation.

Given the recent research by Sprott Asset Management's Eric Sprott and David Baker --

-- and GoldMoney's James Turk and Juan Castenada --

-- I think that we just might live to see the day. Then "ye shall know the truth, and the truth shall set you free," and it will be a great day indeed:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Join GATA here:

New Orleans Investment Conference
Wednesday-Saturday, October 24-27, 2012
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:



Data and Statistics for these countries : Singapore | Switzerland | All
Gold and Silver Prices for these countries : Singapore | Switzerland | All
<< Previous article
Rate : Average note :4.8 (5 votes)
>> Next article
Chris Powell is the secretary of the Gold Anti-Trust Action Committee (GATA) which has been organized to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities.
WebsiteSubscribe to his services
Comments closed
  All Favorites Best Rated  
I agree wholeheartedly regarding removal of physical from the banking system. I'm wondering if there is another possible alternative for fighting manipulation within the Comex. Excuse my limited understanding of economics. It seems to me JP Morgan (and therefore the US government's position) is only made possible because of a prevailing movement in one direction. Like wind turbines pointing west in the UK they draw power off the prevailing westerlies. The obvious no brainer meme floating around is that gold can only go up under current conditions. But because JP Morgan have unlimited scope to sell precious metals they don't own they can constantly profit from pushing back against this tidal surge. But if everyone followed their every move. Built up short positions when they built them, and reversed them when they reversed them. Would that not make it no longer worth their while? It seems to me they profit from our anger and willingness to oppose them. It seems by fighting them we are simply playing into their hands. Follow them and the game is up. “The green reed which bends in the wind is stronger than the mighty oak which breaks in a storm.”
Rate :   2  0Rating :   2
It is my belief, because I am not as well read as most readers here on the subject, that when the gold was confiscated by Roosevelt its main purpose was to take control of the economy because electronic money did not exist and what people had in hand was the real thing and the control. People withdrew their gold coin from the banks and kept it at home thus they were in charge. So what had to be done is take their gold from them and substitute fiat FRN's. Then the Fed and the government could be in control. John Browne wrote a good article on the percentages of people who are “under banked” or “unbanked”. A lot of small in hand or at home monies mount up to a lot. The people have the ability to foil the entire confidence game, or the shell game without the pea, if enough understand what real money is and what FRN's are not.
Rate :   1  0Rating :   1
It was thievery, pure and simple. The dollar was devaluated from $ 20.67 to $ 35 a few months later and the Treasury made a handsome profit.
Latest comment posted for this article
It was thievery, pure and simple. The dollar was devaluated from $ 20.67 to $ 35 a few months later and the Treasury made a handsome profit. Read more
SNAFU - 10/22/2012 at 5:16 PM GMT
Top articles
World PM Newsflow