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BookmarkInformed precious metals investors are well aware of the tremendous “squeeze” placed upon gold demand in India, via the draconian suppression of imports. Regular readers of my work understand that this gold-squeeze was, in fact, instigated by the One Bank – through placing enormous pressure on India’s government.
This economic blackmail took the form of attacking India’s currency, the rupee, in global currency markets, and driving its value to record-lows, until the government of India capitulated. With the globalrigging of currency markets (by these same Banksters) now being fully-exposed; this is nothing more than “business as usual” for the One Bank.
But as readers are frequently reminded, actions have consequences. When the supply of gold to the world’s largest precious metals market (and most-astute precious metals investors) was severely restricted; Indians switched to silver – and in a big way.
Even by June of this year, the Indian stampede into silver was already apparent. As noted in a previous commentary; it was at that time that the One Bank was maximizing its efforts at Indian gold-suppression (resulting in a total ban on imports) because monthly Indian gold imports had exploded to an annualized rate of around 2,000 tonnes/year.
In the silver market meanwhile, by the end of May; India had already imported over 2,400 tonnes of silver to meet surging demand, versus 1,900 tonnes in all of 2012. By the end of October, India’s total silver imports amounted to over 4,600 tonnes. Barring a complete collapse; 2013 silver imports in India will hit an all-time high – eclipsing the previous high-water mark of 5,048 tonnes, set back in 2008.
Astute silver investors will recall that in 2008 the price of silver had also been “crashed” roughly 60% below previous highs. However, back then India’s silver imports dropped off abruptly after that. Total silver imports in 2009 and 2010 combined amounted to significantly less than the 5,000+ tonnes imported in 2008.
But note that in 2009 and 2010 the price of silver was rising dramatically, roughly tripling in price during those two years, and at that time there were no restrictions of any kind on India’s gold market. Actions have consequences.
Having driven Indian precious metals investors from gold into silver; how can the One Bank cool-off the red-hot Indian silver market (again)? It could allow the current price of silver to triple, and remove all restrictions on Indian gold imports.
One thing it cannot do is play the same currency-blackmail game which it used to force India’s government to halt all gold imports. To understand the reasoning here requires briefly reviewing how/why the One Bank was successful with its currency-blackmail in attacking the gold market.
The phony rationale behind the One Bank’s relentless assault on the rupee was that when Indians were swapping their paper currency for gold currency (in massive quantities) that this was creating a “currency deficit” in India. Obviously it’s no more possible to have a “currency deficit” when one swaps one currency for another than it is to have a “fruit deficit” if one swaps apples for oranges.
Understand that the same bankers (minions of the One Bank) who lied to the world and claimed that India’s gold imports were creating a “current account deficit” are the same bankers whose own monetary rules have always treated gold as money. India’s (supposed) current-account deficit is a lie; the attacks on the rupee were (are) a criminal fraud – yet another one of the One Bank’s financial mega-crimes.
Why can’t the One Bank employ precisely the same criminal strategy to force India to stop importing silver? Because having already manipulated the price of silver to an absurd low; even at “record levels”, the dollar-value of Indian silver imports this year is trivial in comparison to its (previous) level of gold imports.
This point was recently noted by another writer; John Rubino:
…The value of silver imports in 2012 was $1.8 billion, whereas gold imports cost $52 billion. Even record shipments of silver are therefore unlikely to put any strain on the trade deficit, in contrast to the impact of gold which is [was] India’s second-biggest import item after oil.
In fact, this is a significant understatement, in part because the gold numbers which Mr. Rubino used to make his point were at a level far below where they had spiked to when (as previously noted) at one point India was importing gold this year at the annualized rate of 2,000 tonnes/year.
Some better numbers will illustrate this. Given the current, criminal 60:1 price ratio between gold and silver; Indian silver imports would have to rise to a level of 12,000 tonnes per month (120,000 tonnes per year) to reach an equivalent dollar-value to its previous level of gold imports.
Put another way; Indian silver-imports would have to spike to a level well over 1,000% more than current, record levels before its silver imports would match the previous level of gold imports. There isn’t that much silver available in the entire world. So India’s silver imports will have to “break the bank” before there would be an equivalent pretext to manipulate India’s currency as done with respect to its gold imports.
Speaking of “breaking the bank”; this is an opportune time to dispel some mythology which was popular not too long ago among precious metals investors. In the naïve “take down JPMorgan” campaign (spearheaded by Max Keiser), it was asserted that if precious metals investors simply bought enough silver that we could bankrupt this malevolent financial entity.
Even at the time; I refused to buy into this jingoism. My reasoning was two-fold. First of all; I was extremely dubious that any such campaign ever would/could be allowed to succeed. However; simply attempting to do so would allow the Banksters to portray themselves as “victims”; and to depict silver investors as a bunch of “crazy terrorists” trying to “bring down the U.S. financial system” (through using their tool, the Corporate Media).
Since that time, with the exposure of the existence of the One Bank in my commentaries; the notion of “taking down” JPMorgan (and/or any other of the Western mega-banks) has been revealed as utterly absurd. JPMorgan is, in fact, nothing more than one, tiny tentacle of this gigantic Monopoly.
As pointed out in my most-recent commentary; the One Bank now has access to approximately $100 trillion in free money – every year. “Taking down” JPMorgan (or any other Tentacle) through buying precious metals is no more possible than “taking down” the Great Wall of China, by firing a squirt-gun at it.
Actions will always have consequences. As the One Bank plays its game of precious metals whack-a-mole; each time it “solves one problem” with its financial sledge-hammer, it creates a new one. At the same time; we will never will be free of this eternal “plague” in precious metals markets until we rid ourselves of this Financial Plague entirely.
With our governments and (supposed) regulators wholly corrupt – bought-off with a tiny portion of the One Bank’s annual mountains of free money – there is no hope of the current financial (or political) System ever being redeemed or legitimized as long as the One Bank exists.
At present, as precious metals investors; our best hope is that some sort of Decoupling will occur in the precious metals sector. Markets would divide into the (totally fraudulent) “paper bullion” markets, where practically no real metal would ever trade; and (what would most-likely be) illegal Blackmarkets for bullion.
With our governments now mere “stooges” for this Crime Syndicate; in our Matrix-reality, we would become the criminals – through doing nothing more protecting ourselves by exchanging our fraudulent (and soon worthless) paper currencies for the world’s oldest Safe Havens.
We can protect ourselves, somewhat, individually, by accumulating gold and/or silver, and (simultaneously) ridding ourselves of the One Bank’s corrupt paper. If we’re driven out of gold; it can only be with the consequence of driving us into silver (and vice versa). But collectively; we will never be anything but “moles” dodging a sledge-hammer until the One Bank ceases to exist.
When the world’s largest commodity futures “regulator” releases the results of a five-year probe; one expects to see a detailed, thorough, and well-reasoned analysis. What we see instead is a pathetic exercise in pseudo-logic – which could have been written in its entirety in a single afternoon. “Shallow” cannot begin to describe the lack of depth in this probe.
Indeed, one would not even attempt such a vacuous non-response to the question/issue of silver manipulation unless they were absolutely certain that their findings would not be questioned in the slightest – as poking holes in this drivel is proverbial “child’s play.” Thus in releasing such a farcical probe, this directly implies a totally corrupt (Corporate) media – one which only parrots, never questions.
Fortunately the CFTC has been kind of enough to place all of its pseudo-reasoning in bullet-point form, saving readers precious minutes of their lives which they would have otherwise wasted in going through its drivel line-by-line in order to expose this Big Lie. This makes the task of analysis simple: list these bogus arguments, expose the gigantic, unstated assumption (and omitted facts) upon which these “reasons” are based – and then translate them back into the Real World.
1) Silver cash and futures prices have risen dramatically between 2005 and 2007, with silver outperforming the gold, platinum and palladium markets, suggesting that silver futures prices are not depressed relative to other metals prices.
2) NYMEX silver futures prices tend to track closely the price of physical silver.
3) Concentration levels for the top four short futures traders in the silver market are comparable to those observed in the gold and copper futures markets, and generally are lower than the levels seen in the platinum and palladium futures markets.
4) The composition of the traders comprising the top four short futures traders, in terms of net positions, change over time. These traders represent a diverse group, and their futures positions are driven by an even more diverse group of customers.
5) There is no observable relationship between short-futures-trader concentration levels and silver prices.
6) There is a slightly positive relationship between the total net position of the large short futures traders and silver prices; this suggests that larger short futures positions are associated with higher, not lower prices.
All of this report is totally and completely predicated upon one, single assumption, with the exception of arguments (2), (3) and (4), which (because of their specific nature) are also based upon separate, false assumptions and missing facts.
The huge assumption upon which the entire CFTC report rests is that the silver market was “normal” at the time it commenced its sham-analysis, a market with supply and demand in balance, and prices in equilibrium. We know that this is an assumption in all of the CFTC’s reasoning, because never once does it attempt to address how its analysis would differ if onedid not assume a market in perfect balance.
In fact, at the time the CFTC commenced its examination of the silver market; the silver market represented the most-tortured, perverted commodity market in the history of human commerce: prices near multi-century lows, inventories totally collapsed, near-complete genocide in the silver mining industry.
These fundamentals are so extreme that no “regulator” could possibly fail to be aware of them. Indeed, the CFTC deliberately, cynically chose the absolute lowest point of this multi-century silver trough as the “norm” upon which it bases its entire pseudo-analysis.
The charts below express these points in unequivocal terms:
By 2005, prices had barely crept off of the bottom of their 600-year low (in real dollars). Inventories were at an absolute low (up to that point in time), having collapsed by 90% between 1990 and 2005. Damage to the silver mining sector was at its absolute zenith: miners were still crippled by the 600-year low in price, and had not (yet) begun to benefit in any substantial way from prices creeping slightly off of that bottom.
Obviously the devastation wrought in the silver sector prior to this period of analysis could not possibly be a naturally-occurring event in any hard commodity market, as the simultaneous (and sustained) collapse in silver prices and silver inventories is an economically perverse event. Those with even the most-elementary exposure to economics understand that collapsing inventories always imply rising prices (as that good becomes “scarce”). Conversely, falling prices directly imply large and/or rising inventories – a good in “over-abundance”.
One cannot rebut the elementary principles of economics, nor overwhelming (and extreme) empirical evidence. The period prior to 2005 marked a period of sustained, obvious, ultra-extreme manipulation of the silver market, where more than 90% of all its producers were driven into bankruptcy.
Viewed from the correct perspective, it then becomes simple to boil-down this CFTC report to what it really represents: viewing the current period of extreme manipulation in the silver market through the ‘lens’ of even more-extreme past manipulation – while pretending that this more-extreme manipulation represented “normalcy”.
If someone standing under the sun in the Sahara Desert steps into the shade, they may tell you that “it’s cool in the shade.” But anyone looking at the nearest thermometer will see the objective, obvious truth. In releasing this sham-analysis, the CFTC has “proven” nothing – except that it refuses to look at the thermometer.
See no Evil, hear no Evil, speak no Evil. Viewed through the prism of reality, we can now dispense with these silly arguments, one-by-one.
1) “Silver cash and futures prices have risen dramatically…” Yes, push the price of anything down to a 600-year low and it will rise dramatically. Had the price been pushed to a thousand-year low it would have risen even more dramatically – despite the extreme post-2005 manipulation of the silver market. All the CFTC has “proven” here is that no manipulation can permanently suppress the price of any physical asset.
2) “NYMEX silver futures prices tend to track closely the price of physical silver.” Pure cynicism. Former Goldman Sachs banker Jeffrey Christian disclosed in testimony at a CFTC hearing that the bankers’ paper-bullion markets are (at least) one hundred times larger than the real, “physical” markets. The physical market is absolutely and totally a Hostage Market; where a fraudulently-inflated (paper) Tail flagrantly and continuously “wags” the (relatively miniscule) Dog.
For the CFTC to pretend differently, despite its own recorded (and uncontradicted) testimony which proves that the paper market rules the physical market is “proof” of nothing except the CFTC’s own, endemic corruption. See no Evil, hear no Evil, speak no Evil.
3) “Concentration levels…are lower than…in the platinum and palladium futures markets.” Laughable. This merely duplicates the false-reasoning upon which the whole report is based. The CFTC plucks out the only two commodities in the world with even more-extreme (criminal?) short-positions – and depicts them as the “norm” upon which to base comparison.
Notably the myopic CFTC avoided comparing the “concentration” in the silver market with concentration in oil market, where (in relative terms) that concentration is less than 1/50th as large. Also notably absent from this myopic analysis is the fact that the “concentration” of these Four, Largest Traders (on the short side) averages-out to being as large as the Hunt Brothers’ long position – when they were successfully prosecuted for illegal over-concentration in the silver market (i.e. “cornering the market”).
The implied “moral of the story” from this CFTC decision? If you have one “Hunt Brothers” on the long side it’s a crime; but if you have four “Hunt Brothers” on the short side, it’s “business as usual” – and the Criminals can continue their crimes indefinitely, unimpeded by (CFTC) “regulation”. See no evil, hear no evil, speak no evil.
4) “The composition” of the Four Criminals changes over time, and they “are a diverse group”. Even more laughable.
As was explained in a recent commentary; compelling and comprehensive research by a trio of Swiss Researchers has concluded that there is, in fact, only One Bank in the world – a “super-entity” which by itself controls 40% of the global economy. The Four Criminals in the silver market are merely four tendrils of the One Bank.
Claiming that the subsidiaries of this one, banking monopoly are “diverse” is more-absurd still.
These Subsidiaries are regularly caught colluding to manipulate markets; with their past-and-continuing manipulation of the $500-trillion “LIBOR”-based debt market being their largest (revealed) Crime to date. Proving the corruption of our entire (One Bank-ruled) financial system; these fraud-tainted “LIBOR” contracts continue to be enforced – in direct violation of every principle of contract law, and the Rule of Law itself.
There isn’t enough space available here to also discuss how these same banks serially collude to “launder” money from the global drug cartels (on an ongoing basis), and were recently caught colluding in gangster-like warehouse fraud (also in metals markets). See no Evil, here no Evil, speak no Evil.
