Bob Moriarty says market manipulation is 'perfectly legal'; is he practicing it too?


10:31p ET Wednesday, February 12, 2014

Dear Friend of GATA and Gold:

Market manipulation is a fact of life and nothing to be concerned about because it provides no trading signals,'s Bob Moriarty told Al Korelin's Korelin Economics Report in a nine-minute interview yesterday, criticizing GATA particularly for complaining about market manipulation:

It was good for Moriarty to come out so far beyond his usual empty sneers and to attempt some argument that can be rebutted.

"People with deep pockets have the ability to manipulate the markets," Moriarty said. "It's perfectly legal."

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Actually, in the United States and other developed countries it's not perfectly legal. While the definition of market manipulation is not always clear, in the United States anti-trust law, securities law, and commodity trading law all seek to forbid market manipulation, as do the regulations of the Federal Trade Commission, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. Prohibited mechanisms of market manipulation include concentration of market share, trading on insider information, and dissemination of false information:

Yes, as Moriarty said, market manipulation happens every day. But it happens every day not because it is legal but rather because the rules against it are seldom vigorously enforced.

"Soybeans, natural gas, wheat, gold, silver -- they're all manipulated," Moriarty said, and surely at various times all of them are. But are all of them being manipulated surreptitiously by central banks, GATA's main complaint?

Even Moriarty may acknowledge that central banks, including the Federal Reserve, long have been engaging in gold swaps:

And as the March 1999 secret staff report of the International Monetary Fund confirmed, gold swaps are a primary mechanism of market manipulation:

But has Moriarty discovered evidence that central banks have been engaging in soybean, natural gas, and wheat swaps?

Moriarty continued: "GATA bragged for years, 'We held a conference up in the Yukon and we moved the price of gold up,' and they were bragging about their ability to manipulate the market."

But if GATA's conference in the Yukon, held in August 2005, boosted the gold price, it did so only by making certain accurate information available to the whole world at the same time. Nothing like that is covered by any definition of market manipulation.

"When someone tells you that something is manipulated, or gold is manipulated," Moriarty said, "he's telling you a half truth," since all markets are manipulated.

But GATA long has acknowledged that market manipulation is unfortunately common. There will always be private parties trying to take unfair advantage in markets. What especially bothers GATA is the role of government in the manipulation of the monetary metals markets, because this is not only a great deception, cheating many people and countries, but also a grab for absolute power in the world, the power to control the value of all capital, labor, goods, and services.

Interviewed by Korelin, Moriarty dismissed complaints of gold market manipulation because, he said, such complaints provide no trading signals and no help in making money.

Maybe so, but while the people in GATA would like to make money as much as anyone else, making money is not GATA's objective as a nonprofit civil rights and educational organization. GATA's objective is to liberate the gold market, because liberating the gold market is the prerequisite for liberating all markets and achieving democracy and individual liberty throughout the world.

Moriarty's Internet site sells advertising to publicly traded companies and he frequently writes commentaries touting their prospects. If he really thinks that market manipulation is perfectly legal, he might do well to discuss it with a good lawyer. For it would be just like the U.S. government to go after him while leaving its own agent in the markets, JPMorganChase & Co., free to follow Moriarty's reading of the law.

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

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