RANTING ANDY – This week’s missive is my favorite yet, as I reveal to the world NEARLY ALL of the Gold Cartel’s illegal tricks to separate you from your money, and more importantly to keep the investing public as far as possible from the Precious Metals sector.
Sometimes it seems like the powers that be are in full control of your life, and your destiny, and thus that the evil monsters in Washington and on Wall Street will always be able to manipulate the world to their benefit.
But not so, as the end game of the “Age of Fiat” is approaching rapidly. The dollar is not just on life support, but now requires a team of EMT’s attending to it 24/7 with increases doses of adrenaline and shock treatments. If anyone has seen the 1980s movie Spaceballs, the Fed’s money printing (along with the ECB, BOJ, BOE, etc.) has gone past light speed, past ridiculous speed, past ludicrous speed, and finally, into PLAID (see clip below).
And if you want to see what I’m talking about graphically, check out this week’s chart of the U.S. Monetary Base, as prepared by the Federal Reserve Bank of St. Louis. This chart depicts money supply growth that is REPORTED to the public, but not the hundreds of billions, perhaps TRILLIONS, NOT REPORTED by the Fed. The money printing orgy is getting more intense each day, and again. DOES NOT INCLUDE perhaps trillions of printing press dollars that you never are told about, such as what goes into manipulating financial markets each day, including stocks, bonds, commodities, currencies, and, of course, the BIG KAHUNA of manipulation, PRECIOUS METALS.
As you digest the astronomic, hyperbolic growth of the U.S. money supply since “Ground Zero” of the U.S. economic collapse in late 2008, consider that not only has EVERY ECONOMIC STATISTIC declined dramatically since that time (in most of the Western world), but they have collectively taken a significant turn for the worse in recent months. All the money printing was able to accomplish (coupled with equally exponential growth in government spending and entitlements) were temporary blips upward in economic statistics at the expense of dramatically higher debt and inflation.
But now that the stimulus has run through the economy, including QE1, QE2, the $8,000 home buyers credit, “cash for clunkers”, the bailouts of General Motors, General Electric, AIG, Fannie Mae/Freddie Mac, and essentially all of Wall Street, we are left with more than $100 trillion of debt (on plus off balance sheet), no manufacturing base, and soaring commodity prices with no hope of significant reversals.
The debt explosion, on a worldwide basis, is rapidly approaching Big Bang status, when all the band aids, crutches, and propaganda no longer work. At that time, which is approaching at light speed, NOTHING that Washington, Wall Street, London, the IMF, or any other corrupt organization say or do will prevent the fiat system from collapsing against ITEMS OF REAL VALUE, such as GOLD, SILVER, and other commodities.
At that point, if you have not PROTECTED YOURSELF from hyperinflation, it will be too late, and I assure you it will not be ‘in five years’, or ‘ten years’, etc., as some of the supposed believers in our way of thinking will try to convince you. There are plenty of those people out there, whom I’ve been warning you about in recent rants, people like George Soros who people mistakenly believe is on their side, when in fact their only goal is to get rich at your expense.
By the way, strange timing that Jim Sinclair, perhaps the most knowledgeable person about gold on the planet, sent the below commentary out as I was writing this paragraph. He could not have stated the current condition of the U.S. any better than I, or anyone else.
Anyhow, this RANT is about how the evil CARTEL tries to influence people, seeking to misdirect your anger, fear, and greed, in essence depending on mankind’s basic emotions to do them in. In this article, I specify what they do in the PRECIOUS METALS market, to make you think it is “unsafe”, “volatile”, and “risky”, when in fact it is not.
The lost decade of the 2000s will be remembered for the internet bubble, 9/11, Enron/Worldcom, the real estate bubble, the global financial meltdown, zero interest rates, sovereign debt crises, and endless wars. These events (excluding 9/11) are all linked by Federal Reserve money printing, which has accelerated exponentially in its final stage of collapse (and you ain’t seen nothing yet!).
During the past decade, you have been told endlessly by the “Ministry of Truth” that things are recovering or on the verge of recovery, or flat out that things are fine. Politicians, “analysts”, the media, and supposed “VIPs” essentially all spout the same thing, partly from ignorance but partly to play on the human emotion of hope. In tough times, everyone wants to believe things will get better, even if they know in their hearts that the odds are slim. So they are happy to believe the talking heads, despite the fact that most are speaking selfishly, “talking their own book”, so to speak.
We have also been told at every turn that gold is BAD, SPECULATIVE, a BARBAROUS RELIC, the ANTI-DOLLAR, and, by intimation, UNPATRIOTIC to own. But somehow gold and silver have outperformed all other investments during this decade, while the dollar has dramatically declined in value (against both other currencies and real items), debt and inflation have soared, and the U.S.’s standing in the world has irreparably declined.
By the way, since the beginning of 2000 the vaunted Dow Jones Industrial Average, supposedly the symbol of American economic strength, is up a whopping 13%, while gold has risen 429%, silver 634%, and the HUI index 746%a, all while gold and silver have been suppressed by the Gold Cartel and the Dow been propped up by the President’s Working Group on Capital Markets, or PPT (http://www.gata.org/node/4276_! Oh yeah, and don’t forget the “survivor bias of the Dow, which is only up at all because several of America’s “top companies” were taken out of the index due to bankruptcy or bailout. Has anyone heard of Citigroup, General Motors, or AIG?
Moreover, as the “dollar index” has declined 37% since then, that means the Dow’s REAL return over the past eleven years is actually a NEGATIVE 30%, or worse if you include C, GM, and AIG. But don’t ask me, just look at the Continuous Commodity Index (CCI), which has since increased by 222% over this period!
GOLD is the barometer of financial equity buried in the psyche of all men, with 5,000 years of memories and experiences embedded in their DNA. Thousands of cultures have come and gone, and thousands of currencies, but only gold (and silver) have stood the test of time. And every self-aware person on earth knows that it represents stability, the antithesis of the stock market, the bond market, and, in today’s world, the dollar. That is why it has been suppressed for the past century, via gold standards (with set prices such as $35/oz), “gold pools”, nationalization, futures markets, ETFs like GLD, derivatives, surreptitious leasing, IMF sanctioned-double counting of gold reserves, prevention of audits, late night paper takedowns (like last month’s SUNDAY NIGHT PAPER SILVER MASSACRE), and, of course, PROPAGANDA.
I have been involved in the Precious Metals markets every day, every minute, and every second for the past nine years, so I know EXACTLY what “they” do to foster the perception that gold and silver are not good investments. Not only am I observant, but MOTIVATED – by greed, by fear, and, altruism. When the fiat system goes, which will be much sooner than most people think, there will be no time left to prepare for hyperinflation, and my hope is that as many of you as possible take the care to PROTECT YOURSELF, and do it NOW. That is why I have been writing all these years, period.
As for whether or not hyperinflation is a real phenomenon, just ask the people in:
- Belarus, last week – http://www.businessweek.com/ap/financialnews/D9NEI5BO1.htm
- Vietnam, February 2011 – http://www.blogs.investors.com/capitalhill/index.php/home/35-politicsinvesting/2426-vietnam-etf-plunges-on-currency-devaluation
- Venezuela, January 2011- http://online.wsj.com/article/SB126305109903923235.html
- Iceland, January 2009 – http://fauxcapitalist.com/2009/01/25/icelands-currency-goes-south/
And some more high profile cases, such as:
- Argentina, 2002 – http://news.bbc.co.uk/2/hi/business/1749484.stm
- Mexico in 1994 – http://www.sjsu.edu/faculty/watkins/mexico95.htm
- Zimbabwe, over the past decade – http://www.newzimbabwe.com/pages/inflation30.12879.html
And, of course:
- Weimar Germany, 1923 – http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
….and think about how the people in Greece are about to feel when they are kicked out of the Euro Zone (imminent), causing hyperinflation of the Greek Drachma, or the Irish, who will suffer a similar fate shortly thereafter, followed by the Portuguese and even the Spanish and Italians, all of whom, unlike the U.S., do not have the ability to print a reserve currency to bail them out of their debts.
But pretty soon the U.S. won’t be able to do that either, and the fall from grace will be as tragic as it was predictable:
http://www.youtube.com/watch?v=2N8gJSMoOJc (excellent video!)
As usual, the preamble to my main point has gone further than expected, but a career’s worth of experiences explode in my mind when I write these missives, exacerbated by a sense of URGENCY to help as many people as possible to prepare themselves for what’s to come shortly.
And the main point is, as described in the title, the SECRETS of how the Cartel works in its attempt to suppress gold and silver and steal from the public (and other governments, by the way).
When manipulating a market, the most valuable tool one has is the ability to generate FEAR in the hearts of its participants. The FEAR of a sudden collapse will ALWAYS cause man to go into self-preservation mode, and god knows they have been successful at doing this in the gold and silver market. “Gold Army” members, such as myself, have been forced to experience the ignonomy of repeated episodes of PM collapse, particularly the Cartel’s crowning achievement in late 2008, when it used every illegal trick in its book to cause gold and silver prices to collapse during the global financial meltdown.
But FEAR NOT, they will NEVER, EVER, EVER be able to do this again to REAL, PHYSICAL gold and silver prices!
In an earlier RANT, I gave statistics showing how, in the first quarter of 2011, the HUI gold miners index experienced an intraday decline of, on average, more than 3% on MORE THAN HALF OF ALL TRADING DAYS, despite the fact that, during that period of time, gold was UP 8% and silver 22%. In fact, during the first five months of 2011 alone (starting with the typical early January attack to prevent money managers from going overweight precious metals), we have already seen THREE major collapses of the Precious Metals market, despite the fact that,
A: PM fundamentals have never been stronger
B: Commodity markets have been very strong, and
C: The Dow has risen steadily despite an unending string of powerfully negative news
I have been watching this sector for a long time, but never have I seen anything close to the level of manipulation I see today. However, the PHYSICAL gold and silver markets are the Cartel’s Achilles Heel, and will ultimately (likely later this year) be their downfall. That is why they have upped the ante in the PAPER manipulation world, including increased naked shorting of mining stocks and ETFs (such as GLD and SLV), a dramatic increase in market control utilizing high frequency computers (“GOVERNMENT COMPUTERS”), and increased “volatility” in the PM sector to scare people off.
I say “volatility” facetiously, as the volatility is only to the downside. As I will discuss shortly, all rapid action is ALWAYS to the downside, which takes a lot of mental strength (and capital) to survive. And not only does this action scare off most investors, but even large institutions as well, particularly those not aware of the manipulation behind the curtain. My friend Mike Krieger posted a fabulous article last week depicting the volatility in the PM sector, as compared to the S&P 500 which is NEVER allowed any downside volatility anymore, in graphic form.
By the way, the heightened attacks on PM stocks, ETFs, and futures prices commenced on November 9th, 2010, when silver first surged to nearly $30/oz.. I know the charts below are hard to interpret, but if you look back at early November, you’ll see when silver shot up from $24 to nearly $30 in the space of a week, with the HUI simultaneously rocketing from 490 to 590 along with it. There was a panic to buy silver mining stocks during that brief period, with nearly every one experiencing the kind of explosive surge that I have been waiting for in recent years, and the only way they slowed that surge down was via, yep you guessed it, a series of CME MARGIN HIKES, the first of which occurred INTRADAY (with, I’m sure, advanced notice to JP Morgan and the like so they could steal your money).
Look at what stocks from Silver Wheaton to Silvercorp to First Majestic to Great Panther to ECU Silver did during that period, ALL on RECORD VOLUMES by the way, and then look at their lethargic performances since. And mind you, since that time I have observed no more than a few hours of exciting upside action in the PM shares, despite gold and silver’s amazing recent performances.
Oh yeah, since silver spiked to $30 that fateful day in November 2010 (and gold to $1,430), it has risen another 27% to $38, or 67% at its $50 peak before the SUNDAY NIGHT PAPER SILVER MASSACRE three weeks ago (and don’t forget to tag on the 15%+ premiums that the PHYSICAL market receives versus the PAPER market. Moreover, gold has risen another 7% to $1,536 (10% at its high of $1,575), and even the Dow has risen, despite an unending string of horrific news, by 9%. Amazing how the HUI index has DECLINED by 7%, huh?
Yes, the aforementioned GOVERNMENT COMPUTERS turned up their algorithmic programs to hyperspeed levels in November 2010, to the point that, like a malignant cancer, you can see them destroying the bowels of the market on a minute by minute basis, as the DESPERATION to keep investors out of Precious Metals has reached unprecedented proportions, the so called “calm before the storm”, in my view. They will ultimately lose completely and utterly in their attempts to keep gold out of the hands of investors (on a worldwide basis), PARTICULARLY the PHYSICAL MARKET, where real shortages threaten to accelerate the imminent end game at any minute.
And now, without further ado, I present to you a dirty laundry list of the most obvious, blatantly used GOLD CARTEL ILLEGAL TRICKS to scare investors out of the sector, many of which are telegraphed to each other via quite obvious means (Google “Andrew McGuire, Whistleblower”).
1. THE 3 AM EST GOLD/SILVER SLAM – For those of you who read Bill Murphy’s GATA website (www.lemetropole.org), you’ll note that Bill often refers to Cartel “Plan A”, which is to slam the gold price in the thinnest time of the global trading period, usually centered around 3 AM EST. However, I am going to take credit for that discovery, as it was me who, back in roughly 2004, noted that for some reason, gold prices tended to fall sharply at 3 AM EST an inordinate amount of times.
As you can see below, the key New York (COMEX) and London (LME) exchanges are closed during that period, with only the thin Hong Kong exchange open and, of course, the 24/7 electronic markets, which at 3 AM EST are as thin as humanly possible.
Over the last seven years, GATA followers have watched the 3 AM shenanigans literally hundreds of times, such as what we see below from Thursday’s trading. This is a typical example of how gold traded higher for the entire Asian trading session, only to rapidly collapse at 3 AM EST for no apparent reason. These computer trades have been used for a the past decade to destroy building overnight momentum in the gold market, just as the PPT makes sure that Dow and S&P futures are marked up in the wee, thinly hours to set a positive tone for the next day’s trading, PARTICULARLY after down days.
You too can watch this action, at www.kitco.com, in the charts section. Just don’t buy any gold or silver from them, as many of us suspect that they, too, are part of the Cartel.
One of the most amazing, and for the most part unknown, statistics about the now eleven year old gold bull market, is that, ON AVERAGE, the gold prices is DOWN in NY COMEX paper trading! Yes, gold has risen from $250 to $1,550, but ONLY in Asian markets thanks to the blinding manipulation seen in London and New York (more on that below).
2. THE NY PREMARKET GOLD/SILVER FADE (7:00 AM – 8:20 AM EST) – It’s bad enough that the 3 AM slam saps out all the energy of the typical Asian price rise, but EVERY MINUTE of every day must also be under control to prevent an uncontrolled price rise, which could easily turn into a mania if left unchecked for even an hour. One of the more demoralizing things to watch is how they make sure that the early morning NY hours are under tight wraps, minute to minute.
I’m talking about roughly 7:00 AM to 8:20 AM EST, when enough traders are awake in NY to move the electronic trading and/or GLD/SLV prices materially. I am typically in the gym at this time of day (I’m here in Colorado, so it’s 5:00 AM to 6:20 AM for me), and I can tell you with no exaggeration that, on 95% of all trading days, the gold price I see on the CNBC screen when I walk into the gym is the HIGH PRINT for my workout.
No matter what the news, or how many times it attempts to rise, nearly every day it fades, fades, fades during this period, dampening sentiment as we had into the world’s most active gold trading period. Heck, just look at the chart above of the past three days.
On the 25th, you can see that at 6 AM EST (which also coincides with the closing of Hong Kong trading), it was one of gold’s better premarket days, attempting to actually rise a buck or two before abruptly changing course at around 7 AM and then, of course, falling further when the COMEX opened at 8:20 (see below).
On the 26th, gold fell roughly $7 while a ran on the Stairclimber, not for any reason other than the Cartel wanted it so.
And even on the 27th, when gold actually rose $15 by day’s end, the Cartel still controlled the price in those hours, ensuring that gold fell a buck or two.
And one new trick I wanted to add to this section, which involves a recently created Cartel algorithm (as in, roughly six months ago) in which the price of gold at this time of day is tightly controlled by further manipulations in the price of WTI Crude Oil.
As many of you may have noticed, the premium of Brent Crude prices over WTI Crude has ballooned to essentially an all-time high in the past year. Much debate was made about the reason for this phenomenon, and it seems the consensus is that, just like nearly everything else American, WTI (West Texas Intermediate) crude oil futures have lost their influence over the actual global price of oil, even more insulting to America given that North Sea oil produciton is in a state of MASSIVE decline.
Anyhow, what I have consistently observed while at the gym over the past year is that, essentially EVERY DAY, the WTI oil price will have some kind of sharp tumble, ranging anywhere from $0.50/bbl to $1.00+/bbl. It doesn’t matter if the price is up sharply or down sharply to start with, or if there is any kind of “news” to account for it; irrespective, there is ALWAYS some type of WTI oil price correction, and when it occurs, the gold price ALWAYS falls sharply, nearly ALWAYS by a higher percentage than oil itself. Moreover, often the WTI drop is NOT mirrored by Brent Crude, making this manipulation that much more obvious. And furthermore, that sharp WTI oil price drop is nearly always followed by a recovery, often to a higher level than when the correction started, but I would wager that 90% of the time the gold price does not similarly recover.
For as long as I have been following the PM market, the Cartel has actively tried to tie gold’s price moves to whatever was falling that day (whether it was the Dow, the Euro, oil prices, or base metals), and this is just an advanced version of this practice, utilizing computer algorithms to enable computers to do the work for them.
But more on those algorithms later on…
3. THE NY COMEX OPEN GOLD/SILVER SLAM (8:20 AM EST) – Of all the Cartel felonies in the PM market, this is the most obvious to even the casual investor. The New York COMEX, known to many as the CRIMEX, opens dutifully at 8:20 AM EST with its primary mission of suppressing the prices of PAPER gold and silver. This timing works out wonderfully for the Cartel, as they have 70 minutes to work over gold and silver prices with naked shorting of futures contracts before the NYSE opens. On 95%+ of days, the opening smash of PAPER gold and silver has the duel effect of dampening sentiment toward PM mining stocks, particularly because the opening hour of trading (often referred to as “amateur hour”) is when the largest percentage of stock trading typically occurs.
In fact, GATA contributor extraordinaire James McShirley has exhaustively researched COMEX gold trading action for years, including the following amazing statistics about the year 2010. When reading these statistics, keep in mind that the AM Fix, in which PHYSICAL pricing is executed in London, occurs at 5:30 AM EST, in other words BEFORE the NY COMEX opens, while the PM fix occurs at 10:00 AM EST, after the COMEX has been open for 1 hour and 40 minutes.
Total trading days: 254
Trading days PM fix over 2% higher than AM fix 0
Trading days PM fix over 1% higher than AM fix 2
Trading days PM fix either lower, or not higher than $5 211
So let’s get this straight, gold was up 24% in 2010, more than essentially any asset class on earth (except silver, which was up a whopping 61%), yet the PM fix NEVER was 2% higher than the AM fix, and was only more than 1% higher on TWO TRADING DAYS all year????? Again, what this means is that in the first hour and 40 minutes of COMEX trading, from 8:20 AM to 10:00 AM EST, which as I noted above is when the highest proportion of trading occurs, the BEST PERFORMING ASSET CLASS on earth only traded more than 1% higher on TWO OCCASIONS all year!
And by the way, anyone that tracks commodity trading knows that ALL the major base metals (copper, nickel, zinc, aluminum, lead), as well as crude oil and ALL other commodities (agricultural, lumber, etc.), REGULARLY have 2%+ days, and I’m not talking about 2.1%, but 4%, 6%, 8%!
All one has to do is turn on CNBC (but for god sakes, keep the volume off!) and watch the gold price at the top of the screen (or GLD and SLV scrolling across the bottom) at 8:20 am EST, and you’ll see what I mean. In fact, the Cartel (and piggyback traders) have recently started to front run the COMEX open by shorting GLD and SLV at 8:00-8:20 am EST, so often the weakness starts just before the open at 8:20 am. It almost seems that CNBC is complicit in this scheme, as for some reason 99% of the time that “Gold” shows up at the top of the screen it immediately ticks down (not kidding, check it out yourself)!
Moreover, as you all know, the most important U.S. economic releases (or fudged versions thereof) are released at 8:30 am EST, just ten minutes after the COMEX open. Thus, the opening PM smash typically sets the tone going into those releases, most importantly the employment report, PPI, CPI, and jobless claims numbers. Consequently, uninformed (and unobservant) market participants are brainwashed into believing that early gold and silver weakness suggests a “PM unfriendly” report is coming (as if that ever happens), which of course is reinforced more by Cartel naked shorting of gold and silver the second those reports are released.
But more on that trick later….
4. THE LONDON P.M. FIX GOLD/SILVER SMASH (10:00 AM EST) – As noted above, the conclusion of global PHYSICAL trading of gold and silver occurs at 10:00 EST, when the London PM fix occurs. At this point, all that’s left trading worldwide is the CRIMEX futures market and the equally criminal GLD and SLV ETF’s. In other words, it is the time when the cats go away, so the mice play, and I would bet the price of gold declines at or around this time (give or take a few minutes) on roughly 75% of ALL trading days.
And once again, very little research is required, as the chart below of the last three trading days tells the whole story yet again (same chart as the one earlier in this piece). BTW, for readers who are not GATA subscribers (which I highly recommend!), Bill Murphy calls the 10:00 AM smash “Plan B”.
On May 25th, after much effort fighting through Cartel tricks 1, 2, and 3 (notice the unending choppiness, representing unrelenting Cartel naked shorting), gold reached its highest level of the trading day at the PM fix time of 10:00 am. As you can see, however, the gold price fell $3 at exactly 10:00 am, a pretty remarkable technical event given how hard it had just worked to hit new highs (again, SHORT-TERM TECHNICAL CHARTS ARE USELESS IN THE RIGGED PM MARKET).
On May 26th, let’s have a look-see as to what happened. Ah, what a shock; following a steady three-hour rise, gold suddenly plunged $10 at exactly 10:00 am for no apparent reason – case closed.
And finally, on May 27th, a day when gold was amidst a sharp rise all day, the Cartel managed to stop cold a sharp multi-hour advance at exactly 10:00 am, although the force of buying eventually forced them into alternative capping actions, to be discussed later.
Before I end this segment, I want to focus once more on the last trading day (this is too easy), Friday, May 27th. Ultimately, Friday ended the day with gold up $15 (I gauge a trading day by the action of GLD, as it represents gold’s performance during the NYSE trading day). However, despite this strong performance – all the more so as it violated a lesser Cartel trick of attacking gold late in afternoons before weekends and holidays (great for demoralization), the gold price was suppressed the entire way up, with three of the four Cartel tricks noted above working as a charm up until the PM fix at 10:00 AM EST.
But I haven’t even gotten to my favorite of the four time-based smashes yet (not even including the SUNDAY NIGHT attacks, such as the not notorious one on Sunday, April 30th). And that is….
5. THE NEVER- FAILING 12:00 PM EST END OF DAY CAPPING – This is one of the most damaging of all the Cartel tricks, but doesn’t get as much attention in because it usual is a CAP, rather than the SMASHES that are more regular at 3:00 AM EST, 8:20 AM EST, and 10:00 AM EST. But it is extremely integral to the Cartel strategy of never allowing material gains in the PM sector, particularly late in the day because that might engender late edition media attention and, more importantly, follow-up buying in Asia.
The COMEX closes for the day at 11:30 AM EST, and after a brief trading break starts trading again in a purely electronic session. Hence the 12:00 PM start point of Bill Murphy’s “Plan C.”
And once again, all you need to do is look at the last three trading days for perfect evidence!
On May 25th, a PERFECT EXAMPLE of the 12:00 capping, although in this case it actually did turn out to be a smash. Again, notice how much work gold put in before finally breaking out AFTER the 10:00 AM EST capping. Yet, lo and behold, at exactly 12:00 pm the price suddenly plunged $7 for no reason, in this case serving the dual role of breaking gold’s momentum and maintaining the $1,530 hard ceiling that the Cartel had been protecting maniacally for the past week (no less than a dozen rises by gold were stopped cold there, including nine in this three-day chart alone before it was finally broken late on Friday). That “hard ceiling” trick is yet another game played by the Cartel, but that’s for another RANT.
On May 26th, a two-hour, $10 rally in gold was stopped cold just minutes after 12:00 pm, once again representing gold’s high trade of the day.
On May 27th, when gold finally broke above the $1,530 hard cap, amazingly the price rise was suddenly stopped cold at exactly 12:00 pm, representing, for the third straight day, gold’s high price of the day! Moreover, given the import of gold shattering the $1,530 ceiling at the end of a Friday, no less before a holiday weekend, the Cartel was particularly aggressive in pulling out all its entire arsenal at 12:00 PM, including a nonsensical smash of silver that simply defied the odds (see below).
Incredibly, after trading in a narrow range between $37.80 and $38.20 all day (and can you see the 8:20 and 10:00 hits?), silver suddenly plunged by NEARLY $0.60 at EXACTLY 12:00 PM EST.
Yes readers, THAT is the lengths the Cartel will go to in order to suppress enthusiasm in the PM sector – and I haven’t even gotten into what they do with the PM miners!
6. EVENT-TIMED PM SMASHES – Ah, so much fun writing this piece, as I get to recall so many fond memories of losing money! But this is one of my favorites, as it essentially has a 100% chance of success.
Yes, we all know that in this 24/7 world of newsflow, there is always something “important” being released, which on hopelessly pathetic networks like CNBC (with its plummeting ratings) will always necessitate writing “Breaking News” on the bottom of the screen. Most of this “news” is not news at all, but in the world of the Gold Cartel, nearly anything can, and will, be spun as “gold negative” if you coincide its release with an immediate, sharp drop in gold prices.
Sometimes the news is economic, such as the unemployment report (their all-time favorite gold smash time), the ADP employment report (LOL), jobless claims numbers, GDP, or, my favorites, those stupid NAPM and Purchasing Management diffusion indices. And sometimes it’s an “economic event” such as a G-7 meeting, a monthly Fed interest rate decision (their second favorite gold smash time), a speech by Bernanke, Obama, or essentially anyone from the Fed, a rate decision by the ECB or the BOE, or, if bonds happen to be weak (not allowed anymore due to accelerated QE), a rigged T-Bond auction.
Anyhow, there’s always something of import being released, and you can count on the Cartel to be there to hit gold every time, or in some cases a day or two beforehand if they know something particularly “gold friendly” is to be released, like a very bad employment or inflation report. Actually, some of the biggest gold/silver hits have been reserved for the day or two (or even hour or two) before Fed meetings are concluded, as the Cartel knows full well that Bernanke and Co. will continue with their Zero Interest Rate Policy (ZIRP) forever.
7. GOLD or SILVER or PM STOCKS – Yes, I know, the title of this trick is a bit ambiguous, but after such a long missive I need to keep readers’ mind’s sharp. What this trick entails is making sure that we NEVER see gold, silver, AND the PM stocks all act well SIMULTANEOUSLY. In other words, if one of the three is acting “too well”, perhaps due to particularly strong demand flows that day, they just double their efforts to make sure at least one of the other two does not.
In fact, the only day in recent memory that gold, silver, and the PM stocks ALL acted well was on April 27th, right after Bernanke’s press conference when he stated that the Fed intended to continue printing money aggressively. Of course, in the days leading up to that announcement, including the HOURS leading up to it, the sector was under tremendous pressure to try and keep PMs down in front of this no-brainer news announcement. On that day, for example, the HUI was down 7 points going into the announcement, but ended up 11. Of course, without the early smash, it would have likely been up closer to 20 points for the day, which is a no-no for the Cartel, as it could potentially create too much excitement and media attention.
While on this topic, does anyone remember the day that QE1 was announced, on November 25th, 2008? I know I do, as it represented one of the most blatant Cartel capping exercises ever. This announcement, at the end of a regular Fed meeting, had to be the most telegraphed, obvious conclusion they had ever made, and obviously extremely gold bullish. So it was pretty shocking to see, THAT MORNING, JUST HOURS BEFORE THE ANNOUNCEMENT, gold down 2%, silver 5%, and the HUI 5%. After the announcement, all those losses were recouped, but no GAINS were made, so the propaganda could be put out that the announcement was not inflationary.
And how about March 18, 2009, when the Fed announced an “extension of QE1”, another no-brainer given that we were smack in the middle of the global meltdown? Ah yes, THAT MORNING, LESS THAN AN HOUR BEFORE THE ANNOUNCEMENT, gold was down 4% (Wow!), silver 7% (double Wow!), and the HUI 5%, yet managed to end the day up 1% (gold), 1% (silver),and 9% (HUI), respectively.
In other words, do you see how they presaged an extremely PM bullish event with massive smashes of gold, silver, and the HUI in order to mute the net effect of the subsequent surge? And how despite the sharp gains in the HUI that day, the overall gains for gold and silver were not large enough to warrant media attention? No matter that THAT DAY represented the bottoms for gold, silver and the HUI for the entire year, which got ZERO media coverage, as long as they accomplished their goal of preventing the short-term thinking media from making the connection between the announcement and surging gold and silver prices.
Not to mention, how do you think Goldman Sachs, JP Morgan and the like all manage to make profits EVERY SINGLE TRADING DAY (something that never occurred until the advent of HFT trading)? Yes, they receive inside information from the government, such as that the HUI will be smashed in the morning before the announcement, providing an excellent trading opportunity when the QE announcement is made. That way, they get to screw you multiple ways each day!
Ah, the internet, which makes it impossible for the Cartel to cover its tracks. Ha ha guys, I can just go back and retrieve the evidence with a few clicks of the mouse.
8. PM Mining Stock ALGORITMS, or better put “GOVERNMENT COMPUTERS” – Those that know me well probably wondered why GOVERNMENT COMPUTERS hadn’t yet shown up prominently in this missive, as I use it all day long to describe the suppressive trading activity in PM mining stocks, particularly since the aforementioned date, November 9th, 2010, when the Gold Cartel almost lost control of the sector and had to step up their manipulative efforts.
In the past six months, the government realized that not only are the debates about High Frequency trading, naked shorting, and failure to deliver past news (not just in PMs, by the way), but that literally NO ONE IN THE INVESTMENT COMMUNITY COULD CARE LESS ANYMORE. I firmly believe there is little left of the “stock market” as we have known it, as most individual investors were wiped out by the internet bubble and the real estate crash, and most hedge funds by the global market meltdown of 2008-09. High Frequency, or “Flash” trading, now makes up roughly 75% of all trading on the NYSE, and is pretty easy to spot.
Stocks dominated by HFT trading typically see thousands of 100 share lots trade all day long, often resulting in little or no movement in the stock. Other characteristics of HFT-dominated stocks are that the size on the ask side is consistently higher than the bid side size, while the stock is prone to sudden nonsensical plunges throughout the day, never offset by sudden sharp gains.
In the case of many PM stocks controlled by these computers, it is very easy to see this occurring, particularly some of the stocks most prone to sudden meltups (and thus most necessary to control), such as the two strongest silver mining stocks I can think of, Silver Wheaton (SLW), the world’s largest silver mining company, and Silvercorp (SVM), likely the low-cost producer.
By the way, if anyone actively watches other major silver stocks such as SSRI, PAAS, HL, and CDE (I don’t), or the major gold stocks like NEM, GG, and ABX, I’d love to hear your thoughts on their respective daily trading patterns, which I suspect are not much different.
These Algorithm trades (or ALGOs, as I term them), are completely computer generated, with the dual purpose of suppressing stock prices and raping investors. There are literally dozens of separate ALGOs tactics set up to screw investors, such as:
Waiting until the first 5-10 minutes of trading to turn on – On nearly all trading days, especially when gold/silver are higher going into the NYSE open (but also when they are lower), the Cartel keeps the ALGO computers off for the first 5-10 minutes of trading, so as to encourage “suckers” to buy at the open thinking “this time it will be different”. Invariably (particularly since November 9, 2010), right after this brief respite you can literally SEE the ALGOs turn on, magically turning these stocks into lead weights that have to fight for each penny higher, but are constantly prone to sudden $0.05-$0.10 drops in a matter of nanoseconds, or even picoseconds (Google “picoseconds”). And I’m not joking, you literally can watch a stock such as SLW fall $0.10+ so quickly that no volume shows up, the bid-ask will literally fall that much in the blink of an eye, and don’t forget the dreaded ARCA market maker that always seems to show up on the sell side if momentum attempts to build. That is why, on a typical gold UP day such as last Friday (end of day, gold +$15.20 and silver +$0.52), many big silver stocks had their high prints of the day in the first half hour of trading (or in SLW’s case, the first five minutes). BTW, notice the 12:00 smash, just as both of these stocks looked ready to blow through the morning’s artificially created resistance levels?
The Dow / HUI x 2, Dow / HUI x ½ ALGO – One of my favorite suppressive techniques, and one that clearly has turned me from plain old Andy into “Ranting Andy.” This technique is akin to what I described earlier about the pre-market oil/gold activity, in which essentially every day the meaningless WTI Crude price has a sharp drop, during which the gold price falls at roughly 2x the rate, followed by a sudden WTI Crude recovery which the gold price rarely ever matches on a one-to-one percentage basis.
The Cartel loves this tool because it enables them to both suppress gold mining stocks and create perception about the correlation between PM stocks and the broad market. Essentially, any time the Dow has even a modest decline (and I’m talking as little as 5-10 points), you will see the HUI index fall by at least twice that percentage roughly 90% of the time. Conversely, when the Dow rises, even when it’s rising sharply, the HUI rarely matches its rise on a 1-to-1 percentage basis, usually significantly underperforming over these short-term period. And it doesn’t matter if gold/silver are up or down on the day, or the Dow for that matter; all that matters is that the HUI is perceived as only able to rise when the Dow rises (“RISK ON”), that it underperforms even during those occurrences, and that it is clearly more “risky” because it falls more sharply when the Dow falls (“RISK OFF”).
Never mind that, before the BIG BANG of PPT/Gold Cartel emergence (the combination of the internet crash and 9/11), the PM sector had essentially no correlation with the Dow for the prior 30 years! Remember, the Cartel motto is “Don’t let history get in the way of what a few manipulated ALGO programs seem to suggest, especially if complicit Wall Street and Washington bigwigs and the lapdog media will perpetuate these myths for you.”
And one final comment on HFT, or “Flash Trading” before I go. This destructor of free markets, which for a brief few months was debated (particularly after the “Flash Crash” last year – see my 5/09/10 article titled “SKYNET” threatens the markets – And this time Arnold can’t save us!”), now apparently is not even discussed anymore, fitting with my early conclusion that no one could care less anymore about market manipulation, as so few bonafide “market participants” remain.
HFT trading now accounts for roughly 75% of ALL NYSE trading, and if you took it away you’d see multi-year lows in trading volume. Again, validating my thesis that most hedge funds and individual investors are long gone from the stock market, replaced by the government, its henchman (Goldman Sachs et al), and a handful of other, vile HFT firms that are akin to parasites sucking the life out of markets (as Matt Taibbi would call them, “Vampire Squid”).
The aforementioned Goldman Sachs, otherwise known as “Government Sachs” due to its widespread and blatant infiltration of the Federal Government, now represents MORE THAN HALF of all HFT trading, by some reports (see link below), and no doubt is responsible for its consistently mega standard deviation trading profits, as well as the accompanying insider trading knowledge that comes with having your people installed as Treasury Secretary, head of the NY Fed, the CFTC, White House Chief of Staff, etc. (and don’t forget that Goldman Sachs was Obama’s #1 private source of campaign contributions). Never mind, by the way, that they too were bailed out in 2009, and are STILL insolvent thanks to the fortuitous change in FASB accounting rules that enables them to value their worthless real estate derivatives arbitrarily.
In other words, GOLDMAN SACHS is the largest stock market participant, by far! Feeling comfortable with that tidbit of information?
http://seekingalpha.com/article/150397-flash-trading-goldman-sachs-front-running-everyone-else (read paragraph 11, starting with “So the NYSE is making a mega fuss….”)
In fact, Goldman even ADMITTED that its HFT software could be used to manipulate the market, and consequently sicked the FEDERAL GOVERNMENT on one of their former traders when he stole the firm’s software (he was subsequently convicted last December, and faces up to 15 years in prison).
http://www.youtube.com/watch?feature=player_embedded&v=H-MGMaaw1s8 (listen to time stamp 3:00 through 4:20)
By the way, make notice in the last article that the aforementioned Goldman Sachs trader left to join an HFT firm started by an “ex-Citadel executive”. I won’t even go into Citadel here, but let’s just say there are more than a few Canadian PM investors that have a beef with how often Citadel shows up all too often on the short side of many gold and silver junior mining stocks.
Oh well, I guess my RANT had to end somewhere, so I guess this is as good a spot as any. There are plenty of more gold Cartel tricks, which have been discussed at length in the past and will be in the future, such as:
Attacking gold, silver, and PM mining stocks before EACH AND EVERY COMEX options day
- Fraudulent COMEX and U.S. Treasury accounting for gold and silver reserves and leases
- Anti- gold/silver propaganda perpetrated by the media
- Solicitation of PM industry insiders to spew lies, such as Jon Nadler of Kitco, Phillip Klapwijk of GFMX, and Jeffrey Christian of the CPM Group.
But I only have so much time in the day, and I’d like to go out and enjoy the Memorial Day holiday!
One more note before I leave for now, by the way. Yesterday, my wife asked me to watch the final episode of Oprah Winfrey, who is ending her run on daytime talk television after 25 years. Like her or not, she gave a very inspiring soliloquy about how all men and women seek validation in life, and that one should strive to find their calling, hopefully a calling that inspires or touches others.
Hopefully my words inspire you to PROTECT YOURSELF from the coming hyperinflation, an inevitability that will occur despite the Powers That Be’s best efforts to convince you otherwise, and it will likely occur much sooner than you think (I cannot see the U.S. avoiding it for even 1-2 years).
Buying stocks is not for everyone, as they can be very risky, especially in a manipulated environment. But buying PHYSICAL gold and silver (NOT GLD AND SLV!) is NOT risky, and will be seen shortly by the entire Western world as such. You WILL NOT lose by buying gold and silver coins, but you WILL lose holding dollars. Of course I believe that when the Cartel is broken by the physical market, PM stocks will soar (and I am positioned as such), but that is not the object of my writings.
Buy gold and silver coins, food, and other life necessities, as they will invariably rise in value. Do not buy American bonds of any kind, including Federal, State, municipal, or corporate, as interest rates WILL go up once QE ends (or possibly sooner).
And be prepared for a more modest standard of living, which will be just fine if you PROTECT YOURSELF NOW!