Friday, January 31, 2014

Why The Fed Is Tapering And Manipulating The Gold Market.

When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain. - Napoleon
I co-authored another article with Dr. Paul Craig Roberts about the extreme and illegal manipulation of the gold market by the Federal Reserve and why the Fed is manipulating the gold market.  The key point in this is that for every US$ the price of gold rises, it takes away power from the U.S. Government.

Be patient if the article is slow to load - it seems to be getting swamped with hits from all over the world:

The Fed Taper and Gold Market Manipulation

He who controls the gold makes the rules.  Have a great weekend and Go Broncos!


  1. On Death and Derivatives

    One place to start is to note that JP Morgan Chase had, at the end of 2012, a mind boggling, but only silver medal, $69.5 Trillion with a ‘T’ gross notional Deriviatives exposure . While the gold medal for exposure to Derivative risk goes to …Deutsche Bank, with $72.8 or €55.6 Trillion Gross Notional Exposure. Gross Notional means this is the face value of all the derivative deals it has signed. Which the bank would be very quick to tell you would Net Out to far, far less. Netting Out, for those of you who do not know just means that a bet/contract in one direction is considered to balance or cancel out a similar sized bet/contract betting the other way. But as I wrote in Propaganda War – Risk Weighted Lies and further in Propaganda Wars – Balance Sheet Instabilities ,

    …this sort of cancelling out is fine on paper but in reality is more akin to people trying to swap sides in a rowing boat.

    Both of the men who killed themselves were intimately concerned with judging and safeguarding their bank from risk.

    1. How about the third banker who judged himself today?


    3. A Rash of Deaths and a Missing Reporter – With Ties to Wall Street Investigations

      By Pam Martens: February 3, 2014

      Magee’s parents, Bill and Nell Magee, are not buying the official story according to press reports and are planning to travel from the United States to London to get at the truth. One of their key issues, which should also trouble the police, is how an employee obtains access to the rooftop of one of the mostly highly secure buildings in London.

      Nell Magee was quoted in the London Evening Standard saying her son was “a happy person who was happy with his life.” His friends are equally mystified, stating he was in a happy, long-term relationship with a girlfriend.

      JPMorgan is under the same global investigation for potential involvement in rigging foreign exchange rates as is Deutsche Bank. The firm is also said to be under an investigation by the U.S. Senate’s Permanent Subcommittee on Investigations for its involvement in potential misconduct in physical commodities markets in the U.S. and London.

      One day after Magee’s death, on Wednesday, January 29, 2014, 50-year old Michael (Mike) Dueker, the Chief Economist at Russell Investments, is said to have died from a 50-foot fall from a highway ramp down an embankment in Washington state. Again, suicide is being presented by media as the likely cause. (Do people holding Ph.D.s really attempt suicide by jumping 50 feet?)

  2. May The Farce Be With You – Janet Yellen Compares Bernanke to Obi-Wan Kenobi

    Not from The Onion, but from the Wall Street Journal we learn that:

    Officials held a series of ceremonies honoring Mr. Bernanke in the past few days. At a dinner Tuesday evening among senior officials, Ms. Yellen likened Mr. Bernanke to Obi-Wan Kenobi, the wise, experienced Jedi Knight mentor to his protégé Luke Skywalker in "Star Wars" movies. She jokingly imagined Mr. Bernanke advising her to trust in the Fed's statement of objectives, a document that lays out its goals for inflation and jobs, according to someone familiar with the event.

    Mr. Bernanke received a standing ovation from Fed officials at the FOMC meeting in its boardroom earlier Tuesday. And he was toasted Thursday by hundreds of Fed staff packed into an atrium at the Fed's Eccles Building, where they were served peanuts, popcorn and crackerjacks in honor of Mr. Bernanke's love of baseball.

    Kill. Me.


  3. Another great article Dave! Tell me, does rum go well on Sundays with Orange Crush?

    1. LOL. Maybe light rum. Orange and Blue jello shots

  4. Along with a few others, this is one of my daily reading stops for ideas and information. The "system" is so blatantly corrupted and riddled with fraud it cant do anything but implode. The statement in the title of this blog is so important and thus one must ask what direction will it go. Will we see the Dow at 2500 and an 80% reduction in home prices with $10,000.00 oz gold? Or, see paper assets remain where they are at and see $50,000 oz gold? Either way, if your gold is not in your hands when this mess finally goes boom you don't own it. There is also a statement on another great blog that states, We all know where we have been, lets see where are we going? Think long and hard about that. On another note, I hope Manning and his receiver's make Sherman look like the jackass that he is.

  5. Dave, great job on the article with Craig Roberts. Maybe this is a simplistic comment, but keep in mind that the Fed has admitted to lying in the past, so they could announce next month a complete end to QE but in reality doing it covertly. So my point is, I personally don't care about the taper news since all Fed news is now suspect to me, I just care about ending the Fed.

    Good luck for your Broncos on Sunday! My Texans turned to jelly this year. Maybe better luck next for us next year, but I'm not holding my breath.

  6. Off-topic...
    Denver 19, Seattle 14

    1. how the heck does Denver get 19? I think 31-10

  7. Bill Holter had a good article a few days ago on brotherjohnf saying there is a current bank run on real money - gold.

  8. Off the topic. Dave, is Frank Veneroso dead already? He hasn't written any essays for GATA for several years.

    1. He's still alive. He puts out a report from time to time. I got ahold of one about a year ago. He said he thinks the leg of the gold is going start and be bigger than the last leg because of the growing shortage of physical.

  9. The Jackass 29th day after speech debuting MyRA does a breakdown of how he expects the bagholders (pension plans, first fed workers then others) to be corraled into requiring a portion of their plans to be quota'd with a rising % of toxic depreciating paper, issued by the megabushel out of thin air.
    he says there's $1.5T in USA in 401K & Keogh plans alone, & another few T in corporate managed PPs.

  10. Wal-Mart has trimmed its trading outlook for this year, citing a range of one-off costs including the closure of some stores in China. The world's largest retailer said profits were likely to be at, or below, the lower end of financial forecasts.

    Specifically, earnings for the current financial quarter, ending this month, would also be at, or below, forecasts.The restructuring moves undertaken by Wal-Mart included the closure of 50 stores in Brazil and China. Also, the cost of ending some franchise agreements in India would higher than previously anticipated, Wal-Mart said in a statement.

    Bad weather in the US, which closed several stores, contributed significantly to poorer trading in the past few weeks. Cuts in food stamp benefits provided by the US government also weighed on sales.

    Wal-Mart is due to report its full-year results on 20 February. Shares in the company fell 1% in early trading on Wall Street, although that was not out of step with the wider market. But Wal-Mart's warning undermines how retailers are struggling. There has been disappointing news on profits and job cuts recently from other chains, including Best Buy, Sears, and JC Penney.

    Also on Friday, toymaker Mattel reported weak sales, sending its shares down 10% at the start of trading.

  11. U.S. to jail Japanese auto execs over price-fixingCrime Feb. 01, 2014 - 03:06PM


    Two former top executives of Japanese auto parts supplier Diamond Electric will be imprisoned for more than a year in the United States for price fixing, the Justice Department said Friday.

    Shigehiko Ikenaga and Tatsuo Ikenaga, respectively the former president and vice president of the Osaka-based company, agreed to plead guilty to participating in a “global conspiracy” to fix prices of ignition coils installed in cars for the US market, the department said.

    The conspiracy, spanning at least from 2003 to 2010, saw various manufacturers rigging bids and fixing prices for ignition cols sold to Ford, Toyota, and Subaru.

    Felony charges were filed in the U.S. District Court in Detroit against the two on Friday as part of the plea agreement.

    Shigehiko Ikenaga will serve 16 months in prison while his brother Tatsuo will serve 13 months. Both agreed to pay criminal fines of $5,000 each.

    The two executives are the sons of company founder Shigeji Ikenaga, who died in 2012.

    Diamond Electric itself pleaded guilty to charges in the price-fixing probe last September, and was fined $19 million.

    The charges and sentences are part of a long-term, wide-ranging probe into price fixing by mainly Japanese auto parts makers that has led to charges against 24 companies and 28 individuals.

  12. Excellent article on Triffin Dillemma on dollarcollapse under the inflation topic. It is a must read for those who visit this site and are interested in the big picture....

  13. This can kicking can go on for years and already has.The latest trick to be once again used is the competing of currencies. By forcing many different world currencies down the U.S. dollar is propped up to help keep such a pathetic economy forging ahead , all the while allowing the master thieves to continue draining the middle class of all of their assets and riches.
    Will the middle class ever wake up to this clear and present Bernie Madoff type crime,
    and worse ? Most likely when it's too late!

    1. ...and for that matter it's already too late ! Consider most of the middle class petrified wood.


    "The current period is particularly difficult to analyse. Central bank liquidity injections have hardly any historical equivalent and act insidiously like morphine; the stock exchanges move inversely proportional to countries health; finance and derivatives are completely out of control; the West and the US in particular are trying to hide their disastrous situation through benchmark signals which no longer say anything (like the unemployment numbers)… We have already analysed this “statistical fog”: the old world’s compasses are broken.

    Markets bottle-fed by the Fed and not wanting to abandon the Dollar paradigm as long as there is any blood left to suck is largely responsible for this blindness. But just as the frog in boiling water doesn’t feel the temperature rise until it’s too late, having broken the thermometer is certainly convenient for maintaining the illusion but raises a suicidal trend: if the exit is already difficult to find in broad daylight, it will be impossible in the dark."

    Don't agree with their views about the eurozone but they have some good stuff to say.

  15. Looks to me that the skunk Bennie left a loaded bear trap in Eccles for Old Yeller to step in.

    Anyone else see a blazingly clear $USB 20-year high right here--in 1994, rates hit the low= $USB high right at 1994.09, which was also a sec high off the 1993 100 double-top. What followed was the worst year for bonds in a generation, $USB went from 96 to 75! Rates $TYX went from 7- 8.25% in 9 months.
    same thing right near early 1974.

    Happy New Year
    Of the horse of course

    1. The year of the horse or the year of the whores?

    2. If Horus had his way, that would be the mane event Marcus.
      Instead of a rollicking halftime show for the Superb Owl, the Roman calendar year has begun by showing that packs of wild horses in media, politics, finance, etc., contain Dark horses, White horses, Trojan horses.
      Horses of a different color.
      All while the main herd is too busy beating a dead horse.
      It won't be easy for anyone to change horses in midstream. Going back to the horse and buggy is not an option.
      So anyone in tow with the presiding high rolling, fast buck horse thieves, will be bucked off, stampeded off a cliff, or put out to pasture.

  17. Law Doesn’t End Revolving Door on Capitol Hill

    “The rules are very arbitrary. Honestly, they don’t make sense to me.”

    Dee Buchanan, a Republican who earned more than $170,000 during his last year as a senior aide to Representative Jeb Hensarling, Republican of Texas, benefited from a different exemption.

    After departing Capitol Hill in fall 2012, Mr. Buchanan started a job with Ogilvy Government Relations. The firm’s website boasts that Mr. Buchanan — who quickly registered to lobby for the American Bankers Association and the CME Group, one of the world’s largest futures exchanges — was “the ‘go-to guy’ for the new House Financial Services Committee chairman,” Mr. Hensarling.

    Despite the close ties, Mr. Buchanan was free to immediately lobby most members of Mr. Hensarling’s committee. Mr. Buchanan’s one-year ban did not apply to the committee at large because his government paycheck had come from the House Republican Conference, a leadership arm of the party that Mr. Hensarling led in 2011 and 2012. As such, Mr. Buchanan was restricted from lobbying only Mr. Hensarling and a few other committee members who also belonged to leadership.

    Democratic aides have made similar moves.

    John Hughes, the lobbyist now representing JPMorgan Chase and Bloomberg L.P., last held a job on Capitol Hill as a senior adviser to Representative Steny Hoyer of Maryland, the No. 2 Democrat in the House. As an aide to Mr. Hoyer, Mr. Hughes’s job in part was to be the contact person with the House Financial Services Committee, where he worked as the top lawyer during the 2008 financial crisis.

  18. In Bed with Wall Street

    The financial meltdown in 2008 triggered nationwide outcry over the lack of regulation and oversight on Wall Street. But how much has changed since then? Larry Doyle argues that Wall Street, politicians, and the regulators themselves have conspired for personal and industry-wide gains while failing to protect investors, consumers, and taxpayers. In In Bed with Wall Street discusses recent scandals, such as the multi-billion dollar trading losses at JP Morgan Chase, the manipulation of interest rates via the LIBOR scandal, and money laundering with North American drug cartels and rogue nations such as Iran.

  19. Mining's Dormant $8 Billion of Private Equity Seen Reviving M&A
    Stronger Interest

    Brookfield Asset Management Inc. (BAM/A), which has about $180 billion in assets under management, is spending more time looking at mining opportunities today than in the past five years, said Peter Gordon, a managing partner in the firm’s private-equity group.

    “I’m hopeful and confident that we’ll be able to transact on one or more,” he said in an interview in Toronto on Jan. 8. “We’re prepared to do anything and be quite creative about the situation.”

    Great Time

    “2014 is a great time to be buying assets,” Paul Gait, a mining analyst at Sanford C. Bernstein Ltd. in London said. “Mining is still unloved.”

    X2 Resources, led byDavis and a team of former Xstrata executives, is seeking to raise at least $3 billion from investors before it starts buying mines, people with knowledge of the plan said last week.

    Davis has so far raised $1 billion from Noble Group, Asia’s largest raw-materials trader, and private-equity fund TPG. X2 is targeting mines already in operation or close to producing, said the people, asking not to be identified because the plans aren’t public. A spokesman for X2 declined to comment.

    Other new mining funds include Toronto-based Waterton Global Resources Management and London-based Greenstone Resources, which was founded last year by former Xstrata executive Mark Sawyer and former JPMorgan banker Michael Haworth.
    Small Firms Warburg Pincus, which has an $11 billion global private equity fund, is looking at assets owned by small mining firms in addition to the unwanted projects of the major companies, said Peter Kukielski, who was appointed executive-in-residence at Warburg Pincus last week to focus on mining investments.

  20. UK Think Tank Proposes Law to Restrict Foreign Oligarch Real Estate Speculation
    by Michael Krieger

    When people ask how there can be no inflation with Central Banks printing so much money, all one has to do is look at what I refer to as "oligarch assets" and you'll see massive inflation. The reason for this is that the only people getting access to the newly created money at 0% interest or through crony deals are oligarchs and well connected figures within the global plutocracy. While there is also plenty of inflation for consumer goods (often times hidden in smaller package sizes and phony components), it is nothing like the tremendous price gains in assets oligarchs covet.

    As most of my readers know by now, one such asset is high-end London real estate. In fact, oligarchs and cronies are scooping up London real estate at such a frantic pace that the regular peasants are being forced out of their own city. Even worse, many of these "investment properties" sit unfurnished and empty, merely another trophy home to top off the oligarch portfolio.

    I've covered this oligarch buying trend on several occasions in the past (it's also happening in the U.S.), and I believe it is only a matter of time before the public because angry enough to put a stop to it. We may be witnessing the start of such a trend at this time with the publication of the report Finding Shelter by think tank Civitas. While this is just a proposal and far from law, I do expect such laws ultimately to be passed globally in various jurisdictions in which the oligarchs are distorting prices and making every day life unaffordable and miserable.

    Some key points from the report are:

    85% of prime London property purchases in 2012 were made with overseas money.
    Problem is not confined to the top end of the market. Over the past two years only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia.
    Two-thirds of homes bought by people from overseas were not purchased for owner-occupation but as investments.

  21. Time of the Vulture: How to Survive the Crisis and Prosper in the Process

    Darryl Schoon gives his thoughts as to how we have seen the end of the beginning of this financial and monetary crisis but how the worst is still to come. However he remains ever optimistic about what will follow. In our discussions with him a few years back he outlined how he has been heavily influenced by inventor and deep thinker Buckminster Fuller. Like Fuller he expects a better world to follow the coming breakdown and collapse. While we hope he is correct, we also plan for the worst. As he recommends, holding physical gold and silver is part of this preparation.