Gold - This is the bottom line: The gold futures mkt is one of the smallest volume mkts in the world. Yet the short position in gold, via derivatives, is the largest (or 2nd largest after interest rates) in the world. Read that again. Tiny mkt, massive shorts. Shorts total $36bil from reporting banks only. Adding others, the total is easily $50bil. Thermonuclear explosion will result if the gold cartel/monopoly lose control of this mkt. That's why they desperately hammer every rally in gold. They dare not let it rise even for a day lest it attract traders, gold advocates, chartists, funds, & those who understand monetary systemic structure. The shorts are trapped.
Til now they were happy to be trapped as it was easy money. Now they see they can't cover, as that would not only start the price going, but also panic other colluders to begin covering. Their loss would be immense. Such action would see gold rise by $50 a day. So, they twist arms. They have friends in high places. In fact, the high places are part of the cartel. It's a standoff for the moment. The cartel is running short of bullion to feed the buyer appetite that keeps the pressure on. They have blackmailed most small nations who had a bit of gold, to sell it or lend it to them. One potential: A billionaire in Hong Kong or China decides he wants to make a trillion dollar killing.
So he starts to buy gold futures in size, plus some gold bullion. That would trigger the cartel into covering. Their cheating would be exposed & gold would rise & resume its essential role as thermometer for the world's monetary system. The current manipulation is not just for profit, but also for survival of the Unfittest. "This mkt has the ability to fire out of a hole like an ICBM missile." (Thanks to Jim Sinclair for that simile. Jim is one of the few who understand the mechanics of the gold scene. He went from mkt trader & maker to goldmine owner. Jim & I go back 33yrs, were virtual partners in the 70's. Jim is featured in the Dec 10 Forbes.) So, I hope U see where we are with gold. It's a true gold war, a war for survival by the cheaters (a gold Mafia) vs we freedom fighters who want a free/honest mkt for gold, & want gold to again be the measuring stick of monetary system health. As a literary giant said "If U have to choose between a govt ruled by men or one by gold, with all due respect, gentlemen, choose gold."
Re the Boston gold-fixing court case. Of course, the judge isn't ruling at this stage on who may be fixing the price. He rules first on whether there is a basis in law for the case, & if a citizen is entitled to take the US govt, bullion banks, the BIS, NY Fed, & Greenspan to court, for breaking anti-trust & other laws, or, are they immune from legal action? Are they above/beyond the law? The press, of course, is not allowed by their puppet masters to run a story on this historic case. Not a word in NYTimes, CNN, LATimes, the Economist, etc, all those people who tell U how wonderful they are because they cover all significant news. That is a lie. To publicize just the charges would be/is big news, & enough to rattle mkts bigtime! So, U can only read of this case via a few newsletters & Net services, the only ones not intimidated by advertisers, govt lapdogs, press barons & bank Mafiosi.
So, what happened in Boston Federal court on Nov 5? In reality, this case was (in the words of J.Taylor) "Reg Howe vs All the Money in the World." There were 2 1/2 hours of oral arguments. 2 minor counts were dismissed. The judge took the bulk of the case back to chambers for drafting a written decision on the plaintiffs' motions to dismiss. This could take wks or mos. The key result: the judge did not throw the case out, as AllTheMoneyInTheWorld were smugly sure he would. Reg Howe sat alone at the plaintiff table. At the defense table were 9 top legal eagles representing BIS, GoldmanSachs, Deutsche Bank, JP Morgan/Chase, Citigroup, USTreasury, FedReserve, NY Fed. In the gallery, more such lawyers, all who (reports Chris Powell of GATA) "seemed to be smirking over their having had to come all this way just to confront a mere pro-se (solo) litigant.
"But they seemed to be smirking less when it was over." Ironically, notes Chris Powell, "A govt lawyer asserted govt's right to trade in gold in a way that affected its price. Thus he seemed to claim the right to do exactly what the lawsuit complains of, without actually admitting this was happening. Howe said any govt gold trading cannot constitutionally aim to fix/affect the price, & certainly not surreptitiously. At day's end, the courtroom cleared & Howe was left alone at the counsel table packing his briefcases. It reminded me of the film To Kill a Mockingbird when Gregory Peck as a quiet heroic defense lawyer did the same thing, seemingly alone & yet not alone but watched by the oppressed people in the gallery with awe, admiration & respect for standing up against the most hateful & vicious power."
But at least we gold advocates had ONE day in court, a day when AllTheMoneyInTheWorld was, for a moment, in danger of having to answer for their sins. And they may yet. ooA major sin was committed by the press by ignoring it. ooIf the judge denies Howe's request for the discovery process, the world will be denied a chance to learn the truth of price fixing in currency, interest rate & gold mkts most thought were free. Mkts have been deprived of any standards of value, for the benefit of certain insiders.
As I write, the press is blaring news of 2 cartels being punished by govts for fixing prices. 1. Sotheby's CEO may be jailed for rigging prices with Christie's. 2. Mega fines are being assessed against 13 Euro pharmaceutical companies "involved in a 9-yr conspiracy to fix the price of vitamins." Yet, govt anti- trust depts won't act against the gold cartel, whose price rigging is affecting many mkts & the entire monetary system. This is selective justice. It's because too many VIP's, in govt & out, are involved.
Harry Schultz
http://www.hsletter.com
HSLmentor@racsa.co.cr
Tel +32 (for Belgium) 16 533 684 -- Fax +32 16 535 777
Postal address: HSL, PO Box 622, CH-1001 Lausanne, Switzerland
28 December 2001