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Kitco analyst denies market manipulation but fails to address even one record of it

Section: Daily Dispatches

11:18p ET Thursday, April 30, 2020

Dear Friend of GATA and Gold:

For 20 years GATA has been striving, against the opposition of mainstream financial news organizations, to prove a truism -- that governments manipulate markets, often surreptitiously, especially the monetary metals markets and the gold market particularly. Now that governments are doing more manipulation openly, buying huge amounts of nearly every sort of asset to reflate prices, maybe our adversaries will try to construe that as repudiation of our work.

... Dispatch continues below ...


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But it has been a long time since we have seen a denial of market manipulation as sweeping as what was offered today by Kitco's market analyst, Todd "Bubba" Horwitz. In his commetary headlined "Gold And Silver Manipulation Opinions -- Who Cares?" --

-- Horwitz writes:

"For years it has been thought that there is manipulation in the metals market. The conspiracy theorists are once again out in force spewing their ignorance about markets being manipulated. All markets need a buyer and a seller to complete a trade; how can that process be manipulated? Price discovery is another component of a trade. That is where a buyer and seller meet; where is the manipulation?"

Where is the manipulation? A few examples come mind, as when governments acting through intermediary brokers flood a futures market with sell orders to panic weak-handed longs into selling and then cover on lower prices. Or when governments sell futures into a rally to slow it down and cash-settle the contracts as necessary, governments being able to create and deploy infinite money in secret. Or when government brokers just trade among themselves to create the illusion of market trading.

This stuff is no mere "conspiracy theory." It is longstanding government policy and practice amply documented.

But apparently Horwitz has never heard of the Central Bank Incentive Program of the CME Group, which operates the major futures markets in the United States. Under the program governments and central banks get discounts for surreptitiously trading futures. The Central Bank Incentive Program is acknowledged on the CME Group's internet site and in filings with the U.S. Commodity Futures Trading Commission:

Why are governments and central banks surreptitiously trading futures if not to manipulate markets? Governments and central banks don't need to earn money, since they just create it. But they need to prevent markets from exposing and embarrassing them.

Horwitz also does not seem to have heard of the Bank for International Settlements, the central bank of the central banks and their primary gold broker. The footnotes of the monthly statements of account of the BIS, analyzed by GATA consultant Robert Lambourne, disclose gold trading every month. The BIS won't say whom this trading in done for and for what objectives:

But at a conference at BIS headquarters in Basel, Switzerland, in 2005, the head of the BIS monetary and economic department, William R. White, did explain it. A major purpose of international central bank cooperation, White said, 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":

That's no mere "conspiracy theory." That's conspiracy fact.

Indeed, the BIS actually advertises to potential central bank members that its services include secret interventions in the gold market. Here's a slide from a PowerPoint presentation the bank made to prospective central bank members at BIS headquarters in Basel in June 2008:

When government agents get together in secret to formulate and implement a course of action, that's the very definition of conspiracy. The BIS' board of directors meets in secret every month in Basel and it is not to make sure that the gold market is free of manipulation by governments. Horwitz should ask to attend one of those meetings. When he was refused, would he begin to wonder what was going on inside?

More explanation of gold market intervention policy was provided by a secret report by the staff of the International Monetary Fund in March 1999, which confirmed that central banks conceal their gold swaps and leases to facilitate their secret interventions in the gold and currency markets:

That report isn't conspiracy theory. It's more conspiracy fact.

Perhaps most timely in this respect is the refusal of the CFTC to answer, even when asked by a member of Congress, whether the commission has jurisdiction over manipulative futures trading by the U.S. government or its agents and whether the commission is aware of futures trading by the U.S. government or its agents or by other governments:

The answer to the latter question should be obvious, since CME Group has reported its Central Bank Incentive Program to the commission. But the commission refuses to acknowledge even what is in its own files.

GATA has so much more documentation constituting conspiracy fact. Most illuminating is the transcript of a meeting in U.S. Secretary of State Henry Kissinger's office in April 1974 in which an assistant explains to Kissinger why the United States must continue to push gold out of the world financial system. The transcript remains on the internet site of the State Department's historian:

Horwitz asked today: "Where is the manipulation?"

It is all around him if only he will look. But to deny manipulation while refusing to look, refusing to address even one of the many documents of manipulation, isn't market analysis. It is disinformation.

That is, Horwitz means to deceive, as Kitco does by publishing his disinformation. Fortunately they're not very clever about it, but even so they are abusing the newcomers to the sector, who are easier to cheat when they don't know what's really going on -- don't know that gold is the secret knowledge of the financial universe and that the gold market is where all the world's marbles are at stake. It's no place to be ignorant.

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

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