You are here

Dennis Gartman goes for a black helicopter ride

Section: Daily Dispatches

Sprott's researchers connect the dots;
Report suggests U.S. market manipulation is for real

By Peter Brimelow
CBSMarketWatch.com
Friday, September 9, 2005

http://www.marketwatch.com/news/story.asp?guid=%7B4D6EA397%2D1A92%
2D4662%2DB157%2D13B33B17A4A7%7D&siteid=mktw&dist=

NEW YORK -- A legendary bear may have turned bullish, sort of. But he
and the authors of a remarkable new report still harbor suspicions
about market manipulation -- something that could end very badly for
investors.

Dow Theory Letters' Richard Russell was artfully qualifying his
sudden bullishness on Thursday night. He's just suggesting
that "those willing to speculate" should buy Spyders, the S&P 500
tracking stock And it may not work. (Russell played the 2003 bounce
this way too.)

Russell's also making bullish noises on gold. And his comment that
really got my attention late Thursday was this:

"You can be sure that the central banks don't want to see an upside
breakout in gold. ... The primary trend of gold is bullish, however,
and the primary trend is stronger than all the central banks in the
world taken together. When gold's time comes, gold will brush by the
manipulations of the central banks and their friends, the gold banks."

This suspicion of covert market manipulation by governments in
alliance with favored private-sector firms has been voiced with
increasing frequency by Russell and other letters.

Indeed, several letters muttered about suspicious late-day rallies as
detailed in our June 27, 2002, column. Of course, it's too wild an
idea for most of the mainstream media.

But now two respected figures in the Canadian investment industry,
John Embry and Andrew Hepburn of Toronto's Sprott Asset Management,
have published a report, "Move Over, Adam Smith: The Visible Hand of
Uncle Sam."

It pieces together from published sources evidence that points to the
existence of the long-rumored "Plunge Protection Team," an informal
group of U.S. government agencies, stock exchanges, and large Wall
Street firms. (The report's downloadable from the firm's Web site:

http://www.sprott.com/pdf/pressrelease/TheVisibleHand.pdf

For starters, the Sprott reports quotes former Clinton adviser George
Stephanopoulos apparently confirming the group's existence and
revealing that the Federal Reserve directed large banks to prop up
currency markets in the wake of the Long-Term Capital Management
crisis in 1998.

The last episode Sprott thinks it has definitely traced was before
the U.S. invasion of Iraq in March 2003. A U.S.-Japanese agreement to
intervene to prevent any financial crisis during the war was
announced by a Japanese official, perhaps because the government
intervention in markets is openly admitted in Japan. The U.S. never
acknowledged such an accord.

Sprott doesn't necessarily oppose government intervention in
principle -- the apparent interventions after 9/11 or the 1987 crash,
for instance -- but says such intervention requires "the most
stringent safeguards and transparency."

Instead, Sprott asserts that "what apparently started as a stopgap
measure may have morphed into a serious moral hazard situation, with
market manipulation an endemic feature of the U.S. stock market."

All this raises two problems. First, possible corruption. As Sprott
puts it:

"There can be no doubt that the firms responsible for implementing
government interventions enjoy an enviable position unavailable to
other investors. Whether they have been indemnified against potential
losses or simply made privy to government policy, the major Wall
Street firms evidently responsible for preventing plunges no longer
must compete on anywhere near a level playing field."

Second, there's the matter of ultimate breakdown. Says Sprott:

"Displaying markedly low volatility, the Dow hovers comfortably above
the 10,000 mark. Yet with severe trade and budget deficits, rising
interest rates, and stubbornly high oil prices, the reasons to be
bearish on U.S. equities are numerous.

"Strangely, the market has an uncanny ability to maintain its footing
when serious declines threaten. ... This curious trading activity is
suspicious to say the least."

If that's right, economic reality may eventually intrude and, as
Russell says, "brush by" the manipulators -- and the investors misled
by them.

----------------------------------------------------

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

To unsubscribe, send an e-mail to:

gata-unsubscribe@yahoogroups.com

----------------------------------------------------

RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS

Free sites:

http://www.jsmineset.com

http://www.cbs.marketwatch.com

http://www.mineweb.com/

http://www.gold-eagle.com/

http://www.kitco.com/

http://www.usagold.com/

http://www.usagold.com/amk/usagoldmarketupdate.html

http://www.GoldSeek.com/

http://www.GoldReview.com/

http://www.capitalupdates.com/

http://www.DailyReckoning.com

http://www.goldenbar.com/

http://www.silver-investor.com

http://www.thebulliondesk.com/

http://www.sharelynx.com/

http://www.mininglife.com/

http://www.financialsense.com

http://www.goldensextant.com

http://www.goldismoney.info/index.html

http://www.howestreet.com

http://www.depression2.tv

http://www.moneyfiles.org/

http://www.howestreet.com

http://www.minersmanual.com/minernews.html

http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html

http://www.goldcolony.com

http://www.miningstocks.com

http://www.mineralstox.com

http://www.freemarketnews.com

http://www.321gold.com

http://www.SilverSeek.com

http://www.investmentrarities.com

http://www.kereport.com
(Korelin Business Report -- audio)

http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)

http://www.resourceinvestor.com

http://www.miningmx.com

http://www.prudentbear.com

http://www.dollarcollapse.com

http://www.kitcocasey.com

http://000999.forumactif.com

http://www.golddrivers.com/

http://www.goldpennystocks.com/

Subscription sites:

http://www.lemetropolecafe.com/

http://www.goldinsider.com/

http://www.hsletter.com

http://www.interventionalanalysis.com

http://www.investmentindicators.com/

Eagle Ranch discussion site:

http://os2eagle.net/checksum.htm

Ted Butler silver commentary archive:

http://www.investmentrarities.com/

----------------------------------------------------

COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS

Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com

Centennial Precious Metals
3033 East First Ave., Suite 807
Denver, Colorado 80206
1-800-869-5115
http://www.USAGOLD.com
Michael Kosares, Proprietor
cpm@usagold.com

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
http://www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net

El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net

Gold & Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
Ireland
+353 1 2315260/6
Fax: +353 1 2315202
http://www.goldinvestments.org
info@gold.ie

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com

Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
http://www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com

Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
http://www.discountsilverclub.com

Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel

Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com

Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
www.buysilvernow.com

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com

The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066

----------------------------------------------------

HOW TO HELP GATA

If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.

By check:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA

By credit card (MasterCard, Visa, and
Discover) over the Internet:

http://www.gata.org/creditcard.html

By GoldMoney:

http://www.GoldMoney.com
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L

Donors of $1,000 or more will, upon request,
be sent a print of Alain Despert's colorful
painting symbolizing our cause, titled GATA.

Donors of $200 or more will receive copies
of "The ABCs of Gold Investing" by Michael
Kosares, proprietor of Centennial Precious
Metals in Denver, Colorado, and "The Coming
Collapse of the Dollar" by James Turk and
John Rubino.

GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.