Gold Manipulation Goes Mainstream
By Staff News & Analysis - April 13, 2010

There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits. The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association. Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public. Maguire — in an exclusive interview with The Post — explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves. "JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer," Maguire said. In the gold pits, Maguire sees HSBC betting against the precious metal's price without having any skin in the game in the form of a naked short. "HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size," Maguire added. "No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a company spokesman. HSBC declined to comment. – NY Post

Dominant Social Theme: Stuff happens, even gold shenanigans.

Free-Market Analysis: Long ago at an international confab, the mainstream press was supposedly thanked by a powerful personage for keeping quiet about various maneuvers leading to world government. But today the mainstream media, led by "conservative" media titan Rupert Murdoch, is fighting furiously to retain its audience and cannot hush up power elite machinations for fear of losing credibility.

Of course, it is the Internet, in our opinion, that has forced this change. From a sociopolitical standpoint, the main importance of the Internet has been to introduce the alternative, free-market media. The blogs and news sites that make up the alternative media in America, alone, number in the thousands. The last time the alternative media blossomed was back in the 1970s, led by libertarian personages such as Harry Brown and Lord William Rees-Mogg. But that was via print. The Internet is electronic and its alternative media are far more ubiquitous.

But because of the Internet, the efflorescence of free-market thinking in the 2000s has been fairly explosive. It could be said that there is no other serious ideology to compete with it (certainly not Keynesianism), and this is a very difficult phenomenon for the power elite to combat. The only way for the elite to keep up with the Internet-based free-market conversation is to move the "goal-posts" down the field in a rush. We've analyzed this phenomenon (along with others) in numerous articles, including this one, as follows:

The monetary elite manipulates social behaviors in part through the Hegelian dialectic – thesis and antithesis. Throughout the 20th century, the monetary elite pretty had much was able to push the conversation (and thus regulation) in the direction it chose. But in the 21st century, thanks largely to the Internet, those who manipulate these dominant social themes for a living have had to scramble. In order to maintain the credibility of their allied media, they have had to allow the media to take far more radically libertarian views than they might have tolerated previously.

The most obvious example of this is Rupert Murdoch. In America, especially, his media properties have become, in places, far more libertarian. Some Fox broadcasters, for instance, have even begun to sound a good deal like American classical liberals – so-called constitutional conservatives. But if you listen carefully to the rhetoric there are some lines that will not usually be crossed, some arguments that may not be made.

These are mostly focused around the military industrial complex and, perhaps, central banking. You will rarely hear – we think – certain of these broadcasters call for a further investigation into what really happened regarding 9/11. And generally those who are involved in this dialectic will not attack the Western military and its wars (or even central banking itself) nearly as vociferously as they will attack "leftist" elements that want to damage the "free market" model.

The point is to continue to keep in control of the conversation as much as possible, while ceding as little ground as possible. … The idea, in this case, is to co-opt free-market rhetoric as much as possible, while discarding the portions of the argument that are unacceptable to the Western power structure.

Many in the contrarian media are convinced that the power elite is firmly in charge of all aspects of the global environment. But the way that mainstream media has scrambled to accommodate the changing rhetoric of the Anglo-American (and European) sociopolitical conversation would indicate that events are moving faster and more powerfully than expected, and that the elite is actually behind the curve.

For a decade, the mainstream media has ignored GATA's disciplined and methodical work in charting gold manipulation. That the New York Post would finally run a story about what's going on is symptomatic of how public opinion is shifting, and how the mainstream media, or some of them, are impelled to keep up. Was the lack of news about the CFTC and metals manipulation becoming too obvious? Apparently the Post brain-trust believed it had to react. (Even though the paper didn't write the story, but pulled it from the AP.)

The difficulty of the decision is illustrated by the timing of the article, two weeks after the fact. And we wonder how much more coverage there will be. Certainly, we're not sure of the ramifications, though we can guess. It will be harder now for those large firms involved to continue whatever manipulations they are apparently pursuing. We would think this would result, sooner or later, in further upward pressure on the price of gold (and silver).

But in any case, as we have pointed out, the Bell's selected investment paradigm is once again at work. GATA is a creature of the Internet and the details of metals manipulation would likely not have come out at all were it not for the 'Net. Not only that, but Murdoch and his NY Post editors, finally, would not have felt it necessary to cover the growing scandal has the Internet's alternative press not been aggressively reporting on it. We've written on the issue, as you can see from examples below:

William Murphy Explains his Testimony at the Recent CFTC Hearing and the Future of Precious Metals Markets

Ted Butler on Market Manipulation, Where the Economy is Headed and Why Silver is a Screaming Buy

The world is changing. In some cases, anyway, the elite is playing catch-up. Their promotions (some of them) are fading and the goalposts are being replanted. Progress once made, has been recalibrated. This is a hopeful sign, in our estimation, for truth and freedom. From an investment standpoint, the dominant social theme at work here is that gold is a "barbaric metal" and one that is not worth buying – and this theme has now come under attack, even by those who would otherwise seek to promote it.

After Thoughts

The truth is that gold is money and fiat currency, meanwhile, is infinitely degradable. Those who made a decision earlier in the decade that the power elite might lose control over the price of gold (thanks to the Internet) seem to be on to something. But as gold and silver go higher, as they probably will, investors will be faced with additional questions over price levels and elite manipulations. Doubtless, elite themes facing increased scrutiny in the 21st century, but that doesn't mean a bet against these promotions will inevitably yield profits. Investments, like promotions, will have to be examined on a case-by-case basis.

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