Peter Brimelow: Market manipulation mutterings intensify


By Peter Brimelow
Thursday, May 5, 2011

NEW YORK -- Manipulation mutterings are spreading, and that's ominous.

Recently I noted that longtime gold bug Richard Russell of Dow Theory Letters finally converted to the thesis that gold's price is subject to manipulation by a Wall Street-Washington alliance. Russell seems to be brooding about this insight. In reply to a correspondent who asked about the possibility of an FDR-type confiscation of gold, he said the following:

"I've thought about this at length, and I've arrived at what I believe to be the correct answer. The answer is: No, the government will definitely not call in the gold. The simple reason is that a tremendous amount of gold is held in very powerful hands. The SPDR Gold Trust ETF (GLD) and gold bullion are held by pension funds, university endowment funds, large powerful hedge funds, corporate reserves, and state treasuries."

This strikes me as an odd answer. Were the people who owned gold in 1933 really so much less powerful? But it's indicative of Russell's current thinking.

... Dispatch continues below ...


Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

This idea of manipulation seems to be spreading beyond the lunatic fringe, where many investment letters dwell (often profitably). Thus the respected institutional service The Gartman Letter wrote early Wednesday morning:

"Here in the U.S., we have seen example of 'tape painting' before, where the market's important indexes have hardly moved but where the broader markets have weakened materially, but yesterday's action was the 'painty-est' of all. The Dow finished the day essentially unchanged but the advance-decline line was horrid. The Nasdaq was weak; the S&P finished five points lower. The public heard the national news last night, which tends to report the Dow, and [concluded] things were steady. They were not. [They] were weak, and they are weakening again this morning."

(In fact, the Dow Jones Industrial Average (DOW:DJIA) finished Wednesday down 84 points amid general dismay.)

Dennis Slothower of Stealth Stocks Daily Alert has always been shockingly explicit about manipulation in the markets. On Wednesday night Slothower wrote: "The iShares Silver Trust ETF (SLV) fell another $2.31 today. I can't stress enough how investors were set up here. ... Remember what the media present as the most obvious thing to do is really what J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. want you, the public, to do. And last month crushing the dollar and forcing investors to buy gold and silver at the top of the market gave the primary dealers plenty of liquidity to sell their gold and silver positions into the top of the cycle."

Slothower's cynicism extends to commodities: "Crude oil is starting to look very toppy. The economy is beginning to break here and crude oil is beginning to look ready to roll over as energy speculators will dump this bubble and hunt for another one.

"The Fed has played out its hand with this quantitative-easing program and is about to bring the economy to ruin again. We have a government that believes it is their right to pillage and plunder us. The name of the game is delusion (false economy), diversion (OBL), and the division (or plunder) of your wealth.

"If you are holding gold, or any investment, for that matter, you now need to have an exit strategy, should that day come. I will repeat that: You need to have an exit stragegy!

"I think investors need to be prepared that the next couple of quarters are going to see a repeat of what happened in 2008, which will cause huge asset-allocation shifts.

"I don't think this bull market has much longer to live."

That's really alarming. Slothower has been arguably too cautious recently, but he was one of the handful of advisers who dodged the Crash of 2008.

Slothower's bottom line: "We are 10% invested (short position in InterOil Corp. (IOC) and 90% cash/money markets."

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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit: