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Published on Gold Anti-Trust Action Committee (http://www.gata.org)

The questions that deniers of monetary metals market rigging won't answer

By cpowell
Created 2017-10-09 01:11

9:27p ET Sunday, October 8, 2017

Dear Friend of GATA and Gold:

Newsletter writer Steve Saville of The Speculative Investor, who long has denied that manipulation of the monetary metals markets means much, has seized on the recent essay by Keith Weiner of Monetary Metals as the conclusive refutation of silver market analyst Ted Butler's longstanding complaint that JPMorganChase has been rigging the silver market.

Weiner's analysis, headlined "Thoughtful Disagreement with Ted Butler" and posted here --

https://monetary-metals.com/thoughtful-disagreement-with-ted-butler/ [1]

-- argued that JPMorganChase is undertaking only ordinary arbitrage in the silver market, exploiting spreads between bid and ask prices.

... Dispatch continues below ...



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Saville, in commentary headlined "A Silver Price-Suppression Theory Gets Debunked" --

http://tsi-blog.com/2017/10/a-silver-price-suppression-theory-gets-debun... [3]

-- cheers Weiner's essay and goes on to remark: "Entering a debate with someone who is incapable of being swayed by evidence that invalidates his position is a waste of time and energy, so these days I devote no commentary space and minimal blog space to debunking the manipulation-centric gold and silver articles that regularly appear."

But when has Saville himself ever addressed evidence of manipulation of the gold and silver markets? Of course if he declines to address the evidence, he too can't be swayed by it.

The manipulation deniers never address the evidence.

Weiner's technical analysis is no refutation of silver market manipulation, for even if JPMorganChase is just doing arbitrage in silver, a judgment on manipulation would require knowing for whom the investment house was doing the arbitrage.

JPMorganChase's former chief of commodity operations, Blythe Masters, said on CNBC five years ago that the investment house had no position of its own in silver and was trading only for clients:

https://www.youtube.com/watch?v=gc9Me4qFZYo [4]

So might those clients include governments and central banks, entities with nearly infinite resources sufficient to nullify markets?

The question is compelling because filings with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission by CME Group, operator of the major futures exchanges in the United States, assert that governments and central banks are clients of the exchanges and that the exchanges give them special volume trading discounts for trading all futures contracts, not just financial futures contracts:

http://www.gata.org/node/14385 [5]

http://www.gata.org/node/14411 [6]

Do Weiner and Saville know that JPMorganChase is not trading silver futures for governments and central banks?

Do Weiner and Saville know that governments and central banks are not trading gold and gold derivatives surreptitiously?

If Weiner and Savillete think they know, they're wrong, for the Bank for International Settlements admits that it operates as a broker in gold and gold derivatives for its member central banks:

http://www.bis.org/banking/finserv.htm [7]

Indeed, in 2005 the director of the BIS' monetary and economic department, William R. White, told a conference at BIS headquarters in Basle, Switzerland, that a primary purpose of international central bank cooperation is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful":

http://www.gata.org/node/4279 [8]

The BIS even advertises that its services to its member central banks include surreptitious interventions in the gold market:

http://www.gata.org/node/11012 [9]

Anyone who wants to engage in honest argument about gold and silver market manipulation needs to address a few simple questions:

1) Are governments and central banks active in the monetary metals markets or not?

2) Are the documents asserting such activity genuine or forgeries?

3) If governments and central banks are active in the monetary metals markets, is it just for fun or is it for policy purposes?

4) If such activity by governments and central banks is for policy purposes, do those purposes involve the traditional objectives of defeating an independent world currency that competes with government currencies and interferes with government control of interest rates, objectives documented at length by GATA here?:

http://www.gata.org/node/14839 [10]

Of course if largely surreptitious intervention in the monetary metals markets by central banks and governments is ever acknowledged, technical analysis of those markets is meaningless, which may explain why technical analysts like Weiner and Saville avoid the crucial questions and just sneer at those who raise them.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org [11]

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Source URL:
http://www.gata.org/node/17707