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A few respectables wake up a little as others still hang back

Section: Daily Dispatches

4:50p ET Tuesday, April 16, 2013

Dear Friend of GATA and Gold:

Painful as the recent smash in the monetary metals is, at least it has aroused suspicions among a few respectables and know-it-alls.

One of them, Dennis Gartman of The Gartman Letter, writes today:

"Concerning gold, let's note firstly something sent to us by our old friend John Brimelow, who had a most interesting piece in his commentary this morning regarding the violence of the recent price changes. He noted a piece written by Russell Rhoads, CFA of the CBOE Option Institute, who wrote the following:

"'Friday was a 4.88 standard deviation move in the price of gold. For simplicity's sake let's call it a five standard deviation move. Statistically we get a five standard deviation move approximately once every 4,776 years. So we should not expect another move like this out of the price of gold until May 17, 6789. ... Currently the two-day price change in GLD is 16.65, which can be converted to just over eight standard deviations. I wanted to share what this comes to, but the table I use only goes up to seven standard deviations. Let's just say the sun is expected to burn out first.'"


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Gartman continues: "We shall confidently say that we will never, ever see a day such as we saw yesterday in the gold market in our lifetime again. It will not happen. The sun will indeed burn out before we see anything such as that again. Nor shall we ever want to see anything such as that again. We can reasonably deal with deviations from the norm of 2 or 3 or perhaps even 4, but 8+ standard deviations is beyond our ken or that of anyone else anywhere. Yesterday's price action will go down in history as an aberration of truly historic proportions.

"We judge the violence of the market's movements by the numbers of requests for interviews made of us, for the correlation between high numbers of such requests is nearly 1:1 with peaks and valleys of various markets. A large number of requests made of us is four or five a day; a truly large number is eight. Yesterday we had 12, and we've agreed to give several more today that we could not fit into our schedule yesterday. This befits an 8+ standard deviation day."

Ah, yes, "an aberration of truly historic proportions" -- but while central banks are the biggest gold traders, that aberration was still not large enough to prompt Gartman to put a question to a central bank or two. Yes, in that respect as well the sun will burn out first.

Nick Barisheff of Bullion Management Group in Toronto does much better than Gartman and much better than we've noted Barisheff himself doing before. In his commentary "The Gold Takedown," Barisheff favorably cites Jim Sinclair, Paul Craig Roberts, and others regularly interviewed by King World News who complain of central bank-inspired market rigging:

But Barisheff steps back a bit, writing, "As with all things central bank-related, we can only speculate and conjecture."

Actually, of course, central banks being part of governments, one can do far more than just speculate. One can complain to one's elected officials and the financial news media and even bring lawsuits to extract information about market rigging and clarify central bank activity, as GATA has done --

-- and as we would do again if sufficient resources were made available to us:

In commentary headlined "The Price Smash -- Who, What, How, and Why?," posted at SilverSeek, silver market rigging whistleblower Ted Butler blames the crash on JPMorganChase, the other big commercial traders that dominate the futures markets, their high-frequency trading, and the negligence of the U.S. Commodity Futures Trading Commission:

That is, Butler still can't seem to grasp that the CFTC has been neutered precisely because the rigging of the monetary metals markets is and always has been a U.S. government operation. That's what the U.S. Exchange Stabilization Fund is for -- rigging the monetary metals markets and other strategic markets is more or less the law, hiding in plain sight:

Some respectables, like the Tocqueville Fund's John Hathaway, remain especially discouraging in their steady refusal to acknowledge or draw the necessary conclusions from the obvious. Hathaway's market letter yesterday --

-- manages to cite "a cleverly orchestrated bear raid" that dumped 12 percent more gold than annual mine production and was likely "driven by naked short selling." But while Hathaway seems to have provided a pretty good description of market manipulation by an entity or entities with access to infinite capital, he happily accepts it. "Market panics often present great opportunity," Hathaway writes. "We believe that the current selloff in gold and gold mining shares provides a very inexpensive call option on the possibility that the next few years may not turn out to be as rosy as widely anticipated."

Having experienced in just a few days a 20 percent decline in the value of their investment, will shareholders in the Tocqueville Gold Fund (who include your secretary/treasurer) be quite as thrilled as Hathaway seems to be about another great buying opportunity? Or might those of them who are not getting any younger be entitled to resent not only the market rigging that has expropriated them but also their fund management's indifference to it?

Indeed, while a friend late this afternoon lamented another decline in one of the gold mining indexes despite today's rise in the gold price, he had to be asked: Why should anyone invest in an industry most of which will do nothing to defend itself against even a "five standard deviation" attack?

For example, has anybody heard from the World Gold Council in the last couple of weeks, or does the World Gold Council exist only to make sure that there never is a World Gold Council?

How about the biggest gold miners -- Barrick, Newmont, Goldcorp, and such?

Or the great mining entrepreneurs who have made fortunes in the last few decades -- Lassonde, McEwen, Giustra, Friedland, and so forth?

All those people have the resources and have been solicited by GATA to join the campaign against market rigging, quite in vain.

Why among the mining entrepreneurs must Sinclair and Eric Sprott do all the work for the cause?

Something could be done with as little as a million dollars -- not just more information-extracting lawsuits here and abroad but also lawsuits seeking injunctions against market rigging and organized clamor in and against the financial news media. Of course not every undertaking would be successful, but at least things could be made uncomfortable for the enemies of free and transparent markets and democracy.

Of course GATA's constituency is not flush with capital right now. But those whose lights and Internet service are still on or who still have some postage stamps left could always try giving a metaphorical kick in the pants to those who should be representing them but aren't.

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

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