It’s enough that the mainstream financial media seems hell-bent of bashing
gold. (Of course, silver gets hardly a mention). But GATA’s Chris Powell has
been on a tirade of late, picking apart the lower hanging fruit of these
theories and misplaced assumptions, if not outright desperate attempts to
rationalize technically driven market prices.
The following is answer to a gold insider is a must read.
Powell tells it best, though I think it’s fair to add a few questions to
the ones he poses for Mr. Moriarty – which I’ve included below – if anyone
were inclined to apply the same misunderstanding about silver price
discovery.
No, Bob Moriarty, we don't want to live with market rigging
To hear 321Gold.com's Bob Moriarty tell it, GATA has conquered the
world and now has more influence on the markets than the central banks we
long have been clamoring against.
For in his commentary today, "Capitulation in Gold" --
http://321gold.com/editorials/moriarty/moriarty072715.html
-- Moriarty writes:
"Speaking of GATA, they have done billions of dollars of damage
to investors. Somehow they convinced tens of thousands of people that when
gold went from $252 to $1,923 it was being suppressed, and like the gold
derivatives time bomb, gold was going to explode one day soon. If someone was
manipulating gold from $252 to $1,923, it wasn't down. Actually if you bought
lumber or soybeans and they made the same percentage move as gold did from
1999 to 2011 and you didn't sell, it's because you are too stupid to
recognize the difference between an investment and a religion."
Yet throughout gold's price rise, the gold market was subject to
frequent interventions, most instigated by central banks, that panicked
retail longs and allowed the bullion banks, agents of the central banks, to
cover their short positions and begin the market-rigging cycle all over
again, slowing gold's restoration as a competitive currency. That's not so
hard to understand.
As for the investment and religion businesses, Moriarty is in the
former but GATA is in neither.
Moriarty continues: "On Sunday night a week ago someone slammed
gold when it was at $1,130 and dropped it to $1,080 in seconds. Billions of
dollars that nervous investors had put in stop-loss orders on their long
positions were wiped out in that time frame. It was deliberate and designed
to steal from investors. It is called 'running the stops' and every guy who
was ever a commodity broker or stockbroker understands what happened. It's
perfectly legal. All those guys who claim to believe that manipulation is the
most important issue in investing should have had buy orders well below the
November low in gold because that was really predictable."
But if it was "really predictable," where was Moriarty's
commentary predicting it? Indeed, where was the commentary of other
experienced market analysts predicting it? To the contrary, much commentary
following the attack on gold actually found it extraordinary because of the
sheer volume and suddenness of short sales, which implied central bank
involvement. Such involvement was quickly suspected even by analysts who have
never shown any interest in the possibility of surreptitious central bank
intervention in the gold market.
As for "perfectly legal," British authorities have arrested
a guy who trades S&P futures from the basement of his parents' home
outside London, accusing him of causing the May 2010 "flash crash"
in the equity markets. The trader has been charged with one count of wire
fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation,
and one count of "spoofing," and the "perfectly legal" defense
does not seem to have worked for him.
But it does work for governments, which have fully authorized
themselves to trade all markets in secret. That's what the U.S. Exchange
Stabilization Fund is about --
http://www.treasury.gov/resource-center/international/ESF/Pages/esf-inde...
-- and presumably that is why CME Group, operator of the major futures
exchanges in the United States, provides discounts to central banks and
governments for their surreptitious trading on CME Group exchanges:
http://www.gata.org/node/14385
http://www.gata.org/node/14411
Of course "perfectly legal" does not mean perfectly fair.
For should investors in countries purporting to have free markets have to be
trading in ignorance against government agencies that are authorized to
create infinite money?
Moriarty continues: "I doubt if any of the 'manipulation-conspiracy'
people actually care about making money."
That's a good point, though at least in regard to GATA it is not the
accusation Moriarty intends. In fact GATA is a nonprofit, federally
tax-exempt civil rights and educational organization based in the United
States that seeks to expose market manipulation and restore free markets,
particularly in the monetary metals. Of course as individuals we'd all like
to make money but you can't do that as a nonprofit, federally tax-exempt
organization. You do that as an individual or as a business.
Moriarty continues: "Gold shares have been on the block for the
last six months. If you were smart enough to buy them, you will be just fine.
Sure, some are going to disappear, but while the 'manipulation-conspiracy'
people are whining about how terrible it is for a financial product to be
manipulated, you are going to own a lot of 10-20-baggers from here."
So there's Moriarty's real grievance with GATA: By warning investors
about the rigging of the monetary metals markets and the challenges they
face, GATA is getting in the way of his touting the stocks in which he has
invested, like the touting contained in the paragraphs immediately preceding
his criticism of GATA today.
Moriarty concludes: "All financial markets are manipulated. Live
with it."
This observation by Moriarty is actually progress, since, when GATA
began, he and others like him denied any manipulation of the monetary metals
markets at all. Now that market manipulation is so obvious that anyone who denies
it risks losing all credibility, the former deniers can only try to minimize
it.
As for "living with" market manipulation, Moriarty is
welcome to do so, and maybe he'll grant others the right not to.
In the meantime, no analysis of the gold market is worth anything if
it fails to address four questions:
-- Are central banks in the gold market surreptitiously or not?
-- If central banks are in the gold market surreptitiously, is it just
for fun
-- for example, to see which central bank's trading desk can make the
most money by cheating the most investors -- or is it for policy purposes?
-- If central banks are in the gold market for policy purposes, are
these the traditional purposes of defeating a potentially competitive world
reserve currency, or have these purposes expanded?
-- If central banks, creators of infinite money, are surreptitiously
trading a market, how can it be considered a market at all, and how can any
country or the world ever enjoy a market economy again?
GATA urges Moriarty and all others who claim to analyze the gold
market to answer these questions. Documentation responsive to those questions
is available here:
http://www.gata.org/node/14839
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
***
Given that central banks don’t own any silver and have not for decades,
the questions might be a bit different:
Are the big banks active and dominate in the commercial category of COMEX
futures market?
If so, how did they get there and where are the real users and producers?
Why are these non-producing and non-consuming futures traders allowed to
hold unlimited positions?
Do these same big bank commercial traders actually broker the trades of
the other categories of traders, like those of the managed money
category?
Do these big banks also have perfect trading records? How is that
possible?
Do they have access to the fastest trading channels to enabling them to
front run trades? And spoof trade?
Do 4 or less of these large big bank commercial traders maintain
positioning concentrations that would make the Hunt brothers blush?
Are those positions, by definition, manipulative and illegal on their own
- whether “hedged” or not?
And wouldn’t the losses from those supposed hedges (in a market that
has been falling for four years) effect the perfect trading record?
Do they profit from directing the technically driven behavior of the
speculators?
Do they often (recently) stop out, or take possession of physical metal
for their own accounts.
Are they not giant nodal points - and share holders of the Federal
Reserve?
Those who refuse to ask questions, deny or, oppose the idea that market
are manipulated reveal a more sinister agenda, promoting a disservice that
feed upon the notion that a system of gambling detached from real world
fundamentals is sustainable for the long, intermediate, and potentially very
short term.
http://www.silver-coin-investor.com/
