Sept. 22 (Bloomberg) -- Todd Horwitz, author and founder at Averagejoeoptions.com, and Bloomberg’s Olivia Sterns and Joe Deaux, examine the silver trade and the factors that could drive the price higher. They speak in today’s “Futures in Focus” on “In The Loop.”
Tuesday, September 23, 2014
The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds.
The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light.
Generally, on the other side of the trade the buyers of contracts are large hedge funds and other speculators, who use the contracts to speculate on the direction of the gold price. The hedge funds and speculators have no interest in acquiring physical gold and settle their bets in cash, which makes it possible for the bullion banks to sell claims to gold that they cannot back with physical metal. Contracts sold without underlying gold to back them are called “uncovered contracts” or “naked shorts.” It is illegal to engage in naked shorting in the stock and bond markets, but it is permitted in the gold futures market.
The fact that the price of gold is determined in a futures market in which paper claims to gold are traded merely to speculate on price means that the Fed and its bank agents can suppress the price of gold even though demand for physical gold is rising. If there were strict requirements that gold shorts could not be naked and had to be backed by the seller’s possession of physical gold represented by the futures contract, the Federal Reserve and its agents would be unable to control the price of gold, and the gold price would be much higher than it is now.
Gold price manipulation is used when demand for delivery of gold bullion begins to put upward pressure on the price of gold and hedge funds speculate on the rising price of gold by purchasing large quantities of Comex futures contracts (paper gold). This speculation accelerates the upward move in the price of gold. The TF Metals Report provides a good description of this illegal manipulation of the gold market:
“Over a period of 10 weeks to begin the year, the Comex bullion banks were able to limit the rally to only 15% by supplying the “market” with 95,000 brand new naked short contracts. That’s 9.5MM ounces of make-believe paper gold or about 295 metric tonnes.
“Over a period of just 5 weeks in June and July, the Comex bullion banks were able to limit the rally to only 7% by supplying the “market” with 79,000 brand new naked short contracts. That’s 7.9MM ounces of make-believe paper gold or about 246 metric tonnes.” http://www.tfmetalsreport.com/comment/429940 
In previous columns, we have documented the heavy short-selling into light trading periods.
See for example: http://www.paulcraigroberts.org/2014/07/16/insider-trading-financial-terrorism-comex/ .
The bullion banks do not have nearly enough gold in their possession to make deliveries to the buyers if the buyers decide to stand for delivery per the terms of the paper gold contract. The reason this scheme works is because the majority of the buyers of the contracts are speculators, not gold purchasers, and never demand delivery of the gold. Instead, they settle the contracts in cash. They are looking for short-term trading profits, not for a gold hedge against currency inflation. If a majority of the longs (the purchasers of the contracts) required delivery of the gold, the regulators would not tolerate the extent to which gold is shorted with uncovered contracts.
In our opinion, the manipulation is illegal, because it is insider trading. The bullion banks that short the gold market are clearing members of the Comex/NYMEX/CME. In that role, the bullion banks have access to the computer system used to clear and settle trades, which means that the bullion banks have access to all the trading positions, including those of the hedge funds. When the hedge funds are in the deepest, the bullion banks dump naked shorts on the Comex, driving down the futures price, which triggers selling from stop-loss orders and margin calls that drive the price down further. Then the bullion banks buy the contracts at a lower price than they sold and pocket the difference, simultaneously serving the Fed by protecting the dollar from the Fed’s loose monetary policy by lowering the gold price and preventing the concern that a rising gold price would bring to the dollar.
Since mid-July, nearly every night in the US the price of gold remains steady or drifts higher. This is when the eastern hemisphere markets are open and the market players are busy buying physical gold for which delivery is mandatory. But as regular as clockwork, following the close of the Asian markets, the London and New York paper gold markets open, and the price of gold is immediately taken lower as paper gold contracts flood into the market setting a negative tone for the day’s trading.
Gold serves as a warning for aware people that financial and economic trouble are brewing. For instance, from the period of time just before the tech bubble collapsed (January 2000) until just before the collapse of Bear Stearns triggered the Great Financial Crisis (March 2008), gold rose in value from $250 to $1020 per ounce, or just over 400%. Moreover, in the period since the Great Financial Collapse, gold has risen 61% despite claims that the financial system was repaired. It was up as much as 225% (September 2011) before the Fed began the systematic take-down and containment of gold in order to protect the dollar from the massive creation of new dollars required by Quantitative Easing.
The US economy and financial system are in worse condition than the Fed and Treasury claim and the financial media reports. Both public and private debt burdens are high. Corporations are borrowing from banks in order to buy back their own stocks. This leaves corporations with new debt but without income streams from new investments with which to service the debt. Retail stores are in trouble, including dollar store chains. The housing market is showing signs of renewed downturn. The September 16 release of the 2013 Income and Poverty report shows that real median household income has declined to the level in 1994 two decades ago and is actually lower than in the late 1960s and early 1970s. The combination of high debt and decline in real income means that there is no engine to drive the economy.
In the 21st century, US debt and money creation has not been matched by an increase in real goods and services. The implication of this mismatch is inflation. Without the price-rigging by the bullion banks, gold and silver would be reflecting these inflation expectations.
The dollar is also in trouble because its role as world reserve currency is threatened by the abuse of this role in order to gain financial hegemony over others and to punish with sanctions those countries that do not comply with the goals of US foreign policy. The Wolfowitz Doctrine, which is the basis of US foreign policy, says that it is imperative for Washington to prevent the rise of other countries, such as Russia and China, that can limit the exercise of US power.
Sanctions and the threat of sanctions encourage other countries to leave the dollar payments system and to abandon the petrodollar. The BRICS (Brazil, Russia, India, China, South Africa) have formed to do precisely that. Russia and China have arranged a massive long-term energy deal that avoids use of the US dollar. Both countries are settling their trade accounts with each other in their own currencies, and this practice is spreading. China is considering a gold-backed yuan, which would make the Chinese currency highly desirable as a reserve asset. It is possible that the Fed’s attack on gold is also aimed at making Chinese and Russian gold accumulation less supportive of their currencies. A currency linked to a falling gold price is not the same as a currency linked to a rising gold price.
It is unclear whether the new Chinese gold exchange in Shanghai will displace the London and New York futures markets. Naked short-selling is not permitted in the Chinese gold exchange. The world could end up with two gold futures markets: one based on assessments of reality, and the other based on gambling and price-rigging.
The future will also determine whether the role of reserve currency has been overtaken by time. The US dollar took that role in the aftermath of World War II, a time when the US had the only industrial economy that had not been destroyed in the war. A stable means of settling international accounts was needed. Today there are many economies that have tradable currencies, and accounts can be settled between countries in their own currencies. There is no longer a need for a single reserve currency. As this realization spreads, pressure on the dollar’s value will intensify.
For a period the Federal Reserve can support the dollar’s exchange value by pressuring Japan and the European Central Bank to print their currencies with which to support the dollar with purchases in the foreign exchange market. Other countries, such as Switzerland, will print their own currencies so as not to endanger their exports by a rise in the dollar price of their exports. But eventually the large US trade deficits produced by offshoring the production of goods and services sold into US markets and the collapse of the middle class and tax base caused by jobs offshoring will destroy the value of the US dollar.
When that day arrives, US living standards, already endangered, will plummet. American power will have been destroyed by corporate greed and the Fed’s policy of sacrificing the US economy in order to save four or five mega-banks, whose former executives control the Fed, the US Treasury, and the federal financial regulatory agencies.
URL to article: http://www.paulcraigroberts.org/2014/09/22/rigged-gold-price-distorts-perception-economic-reality-paul-craig-roberts-dave-kranzler/
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The tragedy of September 11, 2001, goes far beyond the deaths of those who died in the towers and the deaths of firefighters and first responders who succumbed to illnesses caused by inhalation of toxic dust. For thirteen years a new generation of Americans has been born into the 9/11 myth that has been used to create the American warfare/police state.
The corrupt Bush and Obama regimes used 9/11 to kill, maim, dispossess and displace millions of Muslims in seven countries, none of whom had anything whatsoever to do with 9/11.
A generation of Americans has been born into distain and distrust of Muslims.
A generation of Americans has been born into a police state in which privacy and constitutional protections no longer exist.
A generation of Americans has been born into continuous warfare while needs of citizens go unmet.
A generation of Americans has been born into a society in which truth is replaced with the endless repetition of falsehoods.
According to the official story, on September 11, 2001, the vaunted National Security State of the World’s Only Superpower was defeated by a few young Saudi Arabians armed only with box cutters. The American National Security State proved to be totally helpless and was dealt the greatest humiliation ever inflicted on any country claiming to be a power.
That day no aspect of the National Security State worked. Everything failed.
The US Air Force for the first time in its history could not get intercepter jet fighters into the air.
The National Security Council failed.
All sixteen US intelligence agencies failed as did those of America’s NATO and Israeli allies.
Air Traffic Control failed.
Airport Security failed four times at the same moment on the same day. The probability of such a failure is zero.
If such a thing had actually happened, there would have been demands from the White House, from Congress, and from the media for an investigation. Officials would have been held accountable for their failures. Heads would have rolled.
Instead, the White House resisted for one year the 9/11 families’ demands for an investigation. Finally, a collection of politicians was assembled to listen to the government’s account and to write it down. The chairman, vice chairman, and legal counsel of the 9/11 Commission have said that information was withheld from the commission, lies were told to the commission, and that the commission “was set up to fail.” The worst security failure in history resulted in not a single firing. No one was held responsible.
Washington concluded that 9/11 was possible because America lacked a police state.
The PATRIOT Act, which was awaiting the event was quickly passed by the congressional idiots. The Act established executive branch independence of law and the Constitution. The Act and follow-up measures have institutionalized a police state in “the land of the free.”
Osama bin Laden, a CIA asset dying of renal failure, was blamed despite his explicit denial. For the next ten years Osama bin Laden was the bogyman that provided the excuse for Washington to kill countless numbers of Muslims. Then suddenly on May 2, 2011, Obama claimed that US Navy SEALs had killed bin Laden in Pakistan. Eyewitnesses on the scene contradicted the White House’s story. Osama bin Laden became the only human in history to survive renal failure for ten years. There was no dialysis machine in what was said to be bin Laden’s hideaway. The numerous obituaries of bin Laden’s death in December 2001 went down the memory hole. And the SEAL team died a few weeks later in a mysterious helicopter crash in Afghanistan. The thousands of sailors on the aircraft carrier from which bin Laden was said to have been dumped into the Indian Ocean wrote home that no such burial took place.
The fairy tale story of bin Laden’s murder by Seal Team Six served to end the challenge by disappointed Democrats to Obama’s nomination for a second term. It also freed the “war on terror” from the bin Laden constraint. Washington wanted to attack Libya, Syria, and Iran, countries in which bin Laden was known not to have organizations, and the succession of faked bin Laden videos, in which bin Laden grew progressively younger as the fake bin Laden claimed credit for each successive attack, had lost credibility among experts.
Watching the twin towers and WTC 7 come down, it was obvious to me that the buildings were not falling down as a result of structural damage. When it became clear that the White House had blocked an independent investigation of the only three steel skyscrapers in world history to collapse as a result of low temperature office fires, it was apparent that there was a coverup.
After 13 years people at home and abroad find the government’s story less believable.
The case made by independent experts is now so compelling that mainstream media has opened to it. Here is Richard Gage of Architects & Engineers for 9/11 Truth on C-SPAN: https://www.youtube.com/watch?v=3Zbv2SvBEec#t=23 
After years of persistence a group in New York has secured the necessary number of valid signatures to put on the ballot a vote to investigate the cause of the collapse of the three WTC buildings. The official account, if correct, means that existing fire and building codes are insufficient to protect the public and that all other steel high rise structures are subject to the same failure. The group has been clever to frame the issue in terms of public safety and not in terms of 9/11 truth.
New York authorities, of course, continue to oppose the initiative. The question now rests on a judge’s ruling. It is difficult to imagine a judge going against the government in such a major way, but the group will have made the point that the government has no confidence in the truth of its own story.
Over these 13 years, physicists, chemists, architects, engineers, and first responders have provided massive evidence that completely disproves the official account of the failure of the three skyscrapers. The response to experts has been for non-experts to call experts “conspiracy theorists.” In other words, the defenders of the government’s story have no scientific or factual basis on which to stand. So they substitute name-calling.
9/11 was used to fundamentally alter the nature of the US government and its relationship to the American people. Unaccountable executive power has replaced due process and the checks and balances established by the US Constitution. In the name of National Security, executive power knows no restraints. Essentially, Americans today have no rights if the government targets them.
Those Americans born after 9/11 were born into a different country from the rest of us. Having never experienced constitutional government, they will not know what they have lost.
The anthrax attacks of October 2001 have been forgotten, but Professor Graeme MacQueen in The 2001 Anthrax Deception (Clarity Press, 2014) shows that the anthrax attacks played an essential role in setting the stage for the government’s acquisition of unaccountable police state power. Two Democratic Senate committee chairmen, Thomas Daschle and Patrick Leahy, were disturbed by the Bush regime’s overreach for carte blanche power, and were in a position to block the coming police state legislation and the ability of the executive branch alone to take America to war.
Both senators received anthrax letters, as did major news organizations. The TV network news anchors, such as Dan Rather, who compared the collapse of WTC skyscrapers to buildings brought down by controlled demolition, had not yet been fired by Republicans on framed-up charges.
Initially, the anthrax letters, which caused the deaths of some USPS employees, were seen as the second stage of the 9/11 attack. Fear multiplied. The senators and media shut up. Then it was discovered that the anthrax was a unique kind produced only by a US government military facility.
The response to this monkey wrench thrown into the government’s propaganda, was the FBI’s frame-up of a dead man, Bruce Edwards Ivins, who had been employed in the military lab that produced the anthrax and was driven to suicide by the false charges. The dead man’s colleagues did not believe one word of the government’s false story, and nothing in the dead man’s past indicated any motive or instability that would have led him to such a deed.
Initially, the US government tried to frame up Steven Jay Hatfill, but despite the best efforts of the New York Times and Nicholas Kristof the attempt to frame Hatfill failed. Hatfill received $5 million from the US government for the false accusation that ruined his life. So the corrupt US government moved on to Ivins.
Ivins was dead and couldn’t defend himself, but his colleagues did.
The entire episode stinks to high heaven. Justice is something that exists outside the borders of the United States. Never expect to find justice within the United States.
Most Americans are unaware of the extent to which the federal government owns the experts who can contradict its fairy tales. For example, no competent physicist can possibly believe the official story of the destruction of the three WTC buildings. But physics departments in US universities are heavily dependent on federal money. Any physicist who speaks his mind jeopardizes not only his own career but also the career of all of his colleagues. Physicist Steven Jones, who first pointed to the use of thermite in the destruction of the two towers had to agree to having his university buy out his tenure or his university was faced with losing all federal financing.
The same constraints operate in the private sector. High rise architects and structural engineers who express doubts about the official explanation of the collapse of three skyscrapers are viewed by potential clients as Muslim apologists and conspiracy kooks. The clients, of course, have no expert knowledge with which to assess the issue, but they are indoctrinated with ceaseless, endless, repetition that 9/11 was Osama bin Laden’s attack on America. Their indoctrination makes them immune to facts.
The 9/11 lie has persisted for 13 years. Millions of Muslims have paid for this lie with their lives, the destruction of their families, and with their dislocation. Most Americans remain comfortable with the fact that their government has destroyed in whole or part seven countries based on a lie Washington told to cover up an inside job that launched the crazed neoconservatives’ drive for Washington’s World Empire.
See also: http://www.globalresearch.ca/no-airliner-black-boxes-found-at-the-world-trade-center-senior-officials-dispute-official-911-claim/5400891 
URL to article: http://www.paulcraigroberts.org/2014/09/10/911-13-years-paul-craig-roberts/
THE Pentagon says US and partners have begun air strikes in Syria.
A statement from a Pentagon official said the decision to strike was made earlier today and “partner nation forces” were also involved in the action.
“I can confirm that US military and partner nation forces are undertaking military action against ISIL terrorists in Syria using a mix of fighter, bomber and Tomahawk Land Attack Missiles,” a Pentagon official said.
The Arab countries taking part are reportedly Saudi Arabia, United Arab Emirates, Jordan and Qatar.
Video from those on the ground in Raqqa, Syria.
From Step Agency News
So far the Gold price has had a muted reaction
|chart from goldprice.org|