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Gold Market Rigging Is Just Part of Central Banking’s Comprehensive Rigging and Deception

Today's edition of The King Report, the outstanding daily financial letter written by Bill King of M. Ramsey King Securities in Burr Ridge, Illinois, is excerpted below, reminding readers that surreptitious manipulation of the markets by the U.S. government extends far beyond gold -- that it is and long has been comprehensive.

For example, who has ever seen a mainstream financial news organization, financial letter writer, or gold market analyst (outside of GATA) pursuing the bombshell that was buried in a Bloomberg report from July 31 last year about the prosecution of the JPMorganChase gold traders for manipulating the monetary metals markets? The Bloomberg report was headlined "From Profits to Pay, JPMorgan’s Gold Secrets Spill Out in Court" --

-- and GATA called your attention to it when it was published:

The report's very last paragraph reads: "Another set of important clients were central banks, which trade gold for their reserves and are among the biggest players in the bullion market. At least 10 central banks held their metal in vaults run by JPMorgan in 2010, according to documents disclosed in court."

Even Bloomberg itself does not seem to have pursued this detail -- that central banks do far more with their gold reserves than let them sit in their own vaults as emergency cash; that they also store gold reserves with JPMorgan, the biggest bullion bank, because they are actively trading the monetary metal, intervening in the gold market surreptitiously to influence currency exchange rates and asset prices, as Bank for International Settlements executive William R. White admitted they do in 2005: 

Manipulation of the gold market is bad enough. Indeed, it is crucial to the manipulation of other markets insofar as the price of gold powerfully influences interest rates and the price of everything else. If allowed to trade freely, gold would expose the falsity of manipulated prices.

But even worse is that even in nominally democratic countries the basic underlying purpose of modern central banking is deception.

The power of governments and central banks to create and allocate infinite money and thus control the prices of all capital, labor, goods, and services in the world is a huge power. But it is not their greatest power. Their greatest power is conferred upon them by the failure of financial news organizations to challenge them and expose their deception.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

From The King Report
M. Ramsey King Securities Inc., Burr Ridge Illinois
Wednesday, November 8, 2023

The New York Fed is in charge of "managing" the markets. The Wall Street Journal reported 25 years ago that then-head of the New York Fed trading desk, Peter Fisher, spends time on the phone with Wall Street traders, swapping information and rumors.

Do you discuss information and rumors with the New York Fed’s trading desk?

Fisher used to be a top official at the New York Federal Reserve Bank, where he was the liaison with Wall Street firms. One extremely naive feature article on Fisher in the Wall Street Journal in November 1998 explained that Fisher back then was "the Fed's eyes and ears on the inner workings of stock, bond, and currency markets and is given a wide degree of latitude about deciding when certain events pose broader risks." (Bill Clinton was president at the time.)

The piece itself was seen as the government's signal to Wall Street that -- in the middle of all that irrational exuberance -- someone was keeping an eye out for problems and was empowered to do something to remedy the situation. Fisher was the fixer.


New York Post, July 10, 2003: "Wall Street Is Not Happy at Losing Fisher the Fixer":

"'Mr. Fisher swaps intelligence and rumors with traders and dealers from his office in the Fed's 10th floor executive suite that overlooks the trading floor he runs,'” the Journal story said.  A very odd piece of information for the Fed to leak. Its officials aren't supposed to interact with traders and 'swap' intelligence. Isn't that the same thing as inside information?..."

During Clinton’s presidency, with Bob Rubin running the Treasury, there were beaucoup allegations of U.S.-inspired manipulation in the markets. This is when "impact trading" became ubiquitous. It got so bad that when someone started to drive a futures contract higher, pit traders would scream, "Bobby, Bobby!"


After Rubin schooled Bill Clinton on the importance of the bond market for the U.S. economy and his presidency and re-election, Clinton's chief strategist, James Carville, famously stated: "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would want to come back as the bond market. You can intimidate everybody."

From "Frontline" on PBS in 2000:

Bob Rubin: "When we met with the president-elect (Clinton) on January 7, what we said was that if we have fiscal discipline and we bring the deficit down, that is obviously contractionary. That'll reduce the rate of growth.

"On the other hand, if interest rates go down as a result, then that will stimulate growth, and we thought that the beneficial effect of lower interest rates would outweigh the contractionary impact of the deficit reduction.

"We also said to the president-elect that there were two critical reactions in all of this. One would be the bond market. This program would not work unless it was credible with the bond market, and therefore it had to be real and had to be seen as real. And, secondly, it was obviously very important what the Fed would do. But there was absolutely no explicit or implicit agreement. ... We talked about how the Fed would react. But there was neither an explicit nor an implicit agreement with the chairman. ..."


Decades ago we asked an ex-Fed employee how the Fed manages markets without leaving an incriminating paper trail. We were told that -- and this is the example that was used -- "if Ottawa calls the U.S. Treasury and complains about the level of the Canadian dollar, the Treasury calls the New York Fed and tells it to boost the loonie. The New York Fed calls friendly dealers and tells them to buy the Loonie up to X level.

When I asked how the Fed indemnifies dealers for losses, the response was illuminating. "There is no indemnification. There cannot be a paper trail. However, someday a New York Fed trader will tell friendly dealers that it wouldn't be wise to be short X currency."

The quid pro quo is information. ...

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