Living With Rigged Markets

Its enough that the mainstream financial media seems hell-bent of bashing
gold. (Of course, silver gets hardly a mention). But GATAs Chris Powell
has been on a tirade of late, picking apart the lower hanging fruit of these
theories and misplaced assumptions, if not outright desperate attempts to
rationalize technically driven market prices.
The following is answer to a gold insider is a must read.
Powell tells it best, though I think its fair to add a few questions to the ones
he poses for Mr. Moriarty which Ive included below if anyone were
inclined to apply the same misunderstanding about silver price discovery.
No, Bob Moriarty, we don't want to live with market rigging
To hear 321Gold.com's Bob Moriarty tell it, GATA has conquered the world
and now has more influence on the markets than the central banks we
long have been clamoring against.
For in his commentary today, "Capitulation in Gold" -http://321gold.com/editorials/moriarty/moriarty072715.html
-- Moriarty writes:
"Speaking of GATA, they have done billions of dollars of damage to
investors. Somehow they convinced tens of thousands of people that when
gold went from $252 to $1,923 it was being suppressed, and like the gold
derivatives time bomb, gold was going to explode one day soon. If
someone was manipulating gold from $252 to $1,923, it wasn't down.
Actually if you bought lumber or soybeans and they made the same
percentage move as gold did from 1999 to 2011 and you didn't sell, it's
because you are too stupid to recognize the difference between an
investment and a religion."
Yet throughout gold's price rise, the gold market was subject to frequent
interventions, most instigated by central banks, that panicked retail longs
and allowed the bullion banks, agents of the central banks, to cover their
short positions and begin the market-rigging cycle all over again, slowing

gold's restoration as a competitive currency. That's not so hard to

understand.
As for the investment and religion businesses, Moriarty is in the former but
GATA is in neither.
Moriarty continues: "On Sunday night a week ago someone slammed gold
when it was at $1,130 and dropped it to $1,080 in seconds. Billions of
dollars that nervous investors had put in stop-loss orders on their long
positions were wiped out in that time frame. It was deliberate and designed
to steal from investors. It is called 'running the stops' and every guy who
was ever a commodity broker or stockbroker understands what happened.
It's perfectly legal. All those guys who claim to believe that manipulation is
the most important issue in investing should have had buy orders well
below the November low in gold because that was really predictable."
But if it was "really predictable," where was Moriarty's commentary
predicting it? Indeed, where was the commentary of other experienced
market analysts predicting it? To the contrary, much commentary following
the attack on gold actually found it extraordinary because of the sheer
volume and suddenness of short sales, which implied central bank
involvement. Such involvement was quickly suspected even by analysts
who have never shown any interest in the possibility of surreptitious central
bank intervention in the gold market.
As for "perfectly legal," British authorities have arrested a guy who trades
S&P futures from the basement of his parents' home outside London,
accusing him of causing the May 2010 "flash crash" in the equity markets.
The trader has been charged with one count of wire fraud, 10 counts of
commodities fraud, 10 counts of commodities manipulation, and one count
of "spoofing," and the "perfectly legal" defense does not seem to have
worked for him.
But it does work for governments, which have fully authorized themselves
to trade all markets in secret. That's what the U.S. Exchange Stabilization
Fund is about -http://www.treasury.gov/resource-center/international/ESF/Pages/esfinde...
-- and presumably that is why CME Group, operator of the major futures
exchanges in the United States, provides discounts to central banks and
governments for their surreptitious trading on CME Group exchanges:

http://www.gata.org/node/14385
http://www.gata.org/node/14411
Of course "perfectly legal" does not mean perfectly fair. For should
investors in countries purporting to have free markets have to be trading in
ignorance against government agencies that are authorized to create
infinite money?
Moriarty continues: "I doubt if any of the 'manipulation-conspiracy' people
actually care about making money."
That's a good point, though at least in regard to GATA it is not the
accusation Moriarty intends. In fact GATA is a nonprofit, federally taxexempt civil rights and educational organization based in the United States
that seeks to expose market manipulation and restore free markets,
particularly in the monetary metals. Of course as individuals we'd all like to
make money but you can't do that as a nonprofit, federally tax-exempt
organization. You do that as an individual or as a business.
Moriarty continues: "Gold shares have been on the block for the last six
months. If you were smart enough to buy them, you will be just fine. Sure,
some are going to disappear, but while the 'manipulation-conspiracy'
people are whining about how terrible it is for a financial product to be
manipulated, you are going to own a lot of 10-20-baggers from here."
So there's Moriarty's real grievance with GATA: By warning investors about
the rigging of the monetary metals markets and the challenges they face,
GATA is getting in the way of his touting the stocks in which he has
invested, like the touting contained in the paragraphs immediately
preceding his criticism of GATA today.
Moriarty concludes: "All financial markets are manipulated. Live with it."
This observation by Moriarty is actually progress, since, when GATA
began, he and others like him denied any manipulation of the monetary
metals markets at all. Now that market manipulation is so obvious that
anyone who denies it risks losing all credibility, the former deniers can only
try to minimize it.
As for "living with" market manipulation, Moriarty is welcome to do so, and
maybe he'll grant others the right not to.

In the meantime, no analysis of the gold market is worth anything if it fails

to address four questions:
-- Are central banks in the gold market surreptitiously or not?
-- If central banks are in the gold market surreptitiously, is it just for fun -for example, to see which central bank's trading desk can make the most
money by cheating the most investors -- or is it for policy purposes?
-- If central banks are in the gold market for policy purposes, are these the
traditional purposes of defeating a potentially competitive world reserve
currency, or have these purposes expanded?
-- If central banks, creators of infinite money, are surreptitiously trading a
market, how can it be considered a market at all, and how can any country
or the world ever enjoy a market economy again?
GATA urges Moriarty and all others who claim to analyze the gold market
to answer these questions. Documentation responsive to those questions
is available here:
http://www.gata.org/node/14839
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
***
Given that central banks dont own any silver and have not for decades,
the questions might be a bit different:
Are the big banks active and dominate in the commercial category of
COMEX futures market?
If so, how did they get there and where are the real users and producers?
Why are these non-producing and non-consuming futures traders allowed
to hold unlimited positions?
Do these same big bank commercial traders actually broker the trades of
the other categories of traders, like those of the managed money

category?
Do these big banks also have perfect trading records? How is that
possible?
Do they have access to the fastest trading channels to enabling them to
front run trades? And spoof trade?
Do 4 or less of these large big bank commercial traders maintain
positioning concentrations that would make the Hunt brothers blush?
Are those positions, by definition, manipulative and illegal on their own whether hedged or not?
And wouldnt the losses from those supposed hedges (in a market that has
been falling for four years) effect the perfect trading record?
Do they profit from directing the technically driven behavior of the
speculators?
Do they often (recently) stop out, or take possession of physical metal for
their own accounts.
Are they not giant nodal points - and share holders of the Federal
Reserve?
Those who refuse to ask questions, deny or, oppose the idea that market
are manipulated reveal a more sinister agenda, promoting a disservice that
feed upon the notion that a system of gambling detached from real world
fundamentals is sustainable for the long, intermediate, and potentially very
short term.

For more articles and commentary like this - to explore and find some piece
of mind in the space between actual price discovery and the reality of the
macro-financial state of things - visit us at
http://www.Silver-Coin-Investor.com