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Can't manipulate Treasuries market? But that's the point of rigging gold!

Section: Daily Dispatches

9:14p ET Wednesday, March 24, 2010

Dear Friend of GATA and Gold:

Our friend P.B. writes:

"Best of luck to GATA at the CFTC hearing tomorrow. What a long, strange trip it's been.

"Meanwhile, it looks like even Dow Theory Letters publisher Richard Russell now thinks that the equity markets can be manipulated, as shown by his explanation of the market close last Friday. Russell clearly has had enough, if only out of frustration at finishing his commentary before the close, with the market down, and then watching the market finish up at the last minute, contrary to what he wrote. That'll learn them not to get between an ink-stained wretch and his deadline.

"Russell is back today asserting that the trillion-dollar Treasury market can't be manipulated. Ha! That old wise guy Archimedes said, 'Give me a lever and a place to stand and I can move the world.' GATA has been shouting for years that gold (and silver), aka constitutional money, are just such levers and places to stand, so today's break in the 10-year note may portend some planned bashing of the metals to dissuade the public.

"Keep up the good work."

Dispatch continues below.


Prophecy Resource Corp. Appoints Rob McEwen to Advisory Board

Prophecy Resource Corp. (TSX.V: PCY, OTC: PCYRF) is pleased to announce the appointment of Rob McEwen to the company's Advisory Board. McEwen is a leading Canadian mining industry entrepreneur. He is the chairman and CEO of U.S. Gold Corp. and Minera Andes Inc. McEwen was the founder and former chairman and CEO of Goldcorp Inc., whose Red Lake Mine in northwestern Ontario, Canada, is considered to be the richest gold mine in the world. During his tenure at Goldcorp, McEwen transformed the company from a collection of small companies into a mining powerhouse, growing its market capitalization from $50 million to approximately $8 billion.

For Prophecy Resource Corp.'s complete statement:

P.B., the great Russell was 10 years behind GATA in acknowledging gold market manipulation -- GATA itself was three or four years late, or 30 or 40 or 65 years late, depending on which particular intervention you want to start with -- so maybe Russell will be 10 years late about Treasuries as well. For every major market is now constantly intervened in more or less surreptitiously by the Federal Reserve and the Treasury Department.

Can't manipulate the Treasuries market? Ha! Manipulating the Treasuries market always has been the main objective of the gold price suppression scheme. That's what Harvard Professor Lawrence H. Summers' academic study in the June 1988 edition of the Journal of Political Economy, "Gibson's Paradox and the Gold Standard," was largely about. See Reg Howe's analysis of the study here --

-- and the study itself here:

In that study Summers and his co-author, Robert B. Barsky, an economics professor at the University of Michigan, discerned the inverse relationship between real interest rates and the price of gold and suggested that controlling gold prices could be a method of controlling interest rates.

Can't manipulate the Treasuries market? Surely Russell, a longtime gold advocate and critic of excessive growth in the money supply, should know better. For the world now is plainly in the Age of Infinite Money, with billions if not trillions conjured into existence every week -- and not only that, but conjured into existence and distributed and mobilized by governments on a patronage basis in secret.

Only that explains the hysterical opposition of the Federal Reserve and its acolytes and stooges in government and the big financial houses to legislation to audit the agency. Disclosure of the disposition and purposes of infinite money would shock and outrage the world and reveal the tyranny that has been imposed upon it.

With infinite money, any market can be manipulated. Indeed, infinite money is infinitely bigger than the Treasuries market. With infinite money now at the command of government, there aren't any markets anymore, just interventions.

Gold is the great vulnerability of the rig. It is the escape from the whole system. Alan Greenspan proclaimed that in 1966 in his famous essay, "Gold and Economic Freedom":

Once installed as chairman of the Fed, Greenspan knew exactly how to lock the exit doors.

Even as central bank gold reserves available for dishoarding and price suppression are declining, the Fed and the Treasury retain the advantage of an indifferent and incurious financial press, which includes even some gold-friendly writers like Russell. The financial press reports respectfully and without question even the most blatant inanities from government agencies, like the International Monetary Fund's incessant announcements that it will sell gold to raise money to help poor countries.

In just one day last summer the IMF conjured $250 billion into existence by creating that much in Special Drawing Rights:

By contrast, the IMF's supposed sale of 212 tonnes of gold last year raised only $7 billion, or a mere 3 percent of the money raised in one day of mere conjuring:

If the IMF really wanted to help poor countries, it could just conjure the money for them too; it wouldn't have to sell gold, or threaten to. The same goes for individual governments, which also can do all the money conjuring they want. Except in extremis, as in wartime, embargo, or bankruptcy, official gold sales are undertaken for only one purpose: to suppress the price of a currency that competes with government currencies and helps determine interest rates and the price of government bonds.

Can't manipulate the Treasuries market? Well, Russell's blindness may be more forgivable, since he has made a long career as a technical analyst of markets, and the pervasive market intervention has just made his work meaningless. Today technical analysts in markets are little better than astrologers. What they analyze has less and less connection to what they presume to predict.

Being in another declining business, the newspaper business, I can sympathize with Russell even as I can't quite excuse him. For if you think economics is so poorly understood now, when the Fed and the National Education Association are through, nobody in America will even be able to read.

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

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