Dear Friend of GATA and Gold:
How will financial news organizations and gold and silver market analysts explain tonight's smashing of monetary metals prices in the futures market?
Of course it hardly matters how they will explain it, since nearly all gold and silver market analysis is merely clumsy rationalization. A decline in the metals can be attributed to almost anything -- speculation that the Federal Reserve may raise interest rates by a tenth of a percent from 0.25 percent two years from now; that the U.S. economy is strengthening; that unemployment is up, or down; that sentiment is increasing that inflation is "transitory," as if the dollar hasn't lost most of its value since the Fed was created in 1913; that it rained in Chicago or was sunny in New York; and so on.
What has yet to be offered by mainstream financial news organizations and market analysts as an explanation for gold's sharp declines is central bank intervention in the market, though every month GATA's dogged consultant Robert Lambourne documents that intervention via the monthly statements of account discreetly posted by the gold broker for the major central banks, the Bank for International Settlements, as he did again just the other day:
Mainstream financial journalism and market analysts have yet to try to ascertain exactly who has been doing the sort of not-for-profit selling that was unleashed again tonight. ZeroHedge quickly estimated that some entity dumped about $4 billion in paper gold in illiquid conditions as soon as the market opened tonight:
The dumping was assuredly not done by thousands of retail investors who decided in unison this weekend that, the world's money supply having doubled in the last year or so, real interest rates having gone negative by several percent, and inflation soaring even by government's own grossly fudged figures, monetary metals are ... trash.
So who has $4 billion in cash or credit to dispose this way?
Actual journalism might begin with phone calls to the BIS in Basel and the New York Fed's trading desk, and, following the refusals to answer any critical questions, continue with phone calls to the major gold and silver mining companies and the World Gold Council to ask if their suspicions finally had been aroused. And when all parties refused to comment, actual journalism would publish the questions and detail the refusals to answer.
Actual journalism might continue by reviewing the long history of central bank gold intervention and suppression policy conveniently compiled by GATA here:
But financial journalism is not the only culprit here. Gold and silver investors themselves are culprits too insofar as they have not pushed the mining companies in which they are invested to pursue the market manipulation issue. With precious few exceptions, the industry is notable mainly for its cowardice and for mining its investors more than the metals themselves.
Yes, such complaints from GATA are getting old. As Lee Strasberg's Hyman Roth reminds Al Pacino's Michael Corleone in "The Godfather, Part II," "This is the business we've chosen," rotten as it may be:
But we haven't been shaken out yet and we won't be shaken out tonight. Besides, an intervention as obvious and desperate as tonight's is bound to get the attention of a few financial journalists and mining company executives and disturb the consciences of some others. It may provoke wonder and suspicion among other market participants as the corruption and insanity of the world financial system deepen -- and when the interventions no longer can be ignored and denied, they will fail, and a new era will begin.
GATA can't make anyone care about that corruption and insanity. GATA can only document them and try to show people why they should care.
Tonight is another reason, and a pretty big one. So let us try to be glad of it.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.