Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19
Where is the Top for Natural Gas? - 7th Nov 19
Why Fractional Shares Don’t Make Sense - 7th Nov 19
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think - 7th Nov 19
China’s path from World’s Factory to World Market - 7th Nov 19
Where Is That Confounded Recession? - 7th Nov 19
FREE eBook - The Investment Strategy that could change your future - 7th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

The Great Precious Metals Managed Retreat

Commodities / Gold and Silver 2012 Nov 06, 2012 - 02:13 AM GMT

By: Dr_Jeff_Lewis

Commodities

Best Financial Markets Analysis ArticleMany observers, notably GATA, have characterized the more than decade long run up in the precious metals markets as a managed retreat orchestrated by the big bullion banks.

These banks typically profit by using their large transaction size and deep pockets when the market is vulnerable to induce substantial price variations, often by triggering stop loss orders placed by short term speculators.


Price Suppression More a Reality Than a Theory

Perhaps one of the more popular criticisms of price suppression theories is that if the silver and/or gold markets were so managed in this way by the bullion banks, why have their prices risen so steadily over time?

First of all, this critique is weak because even largest corporate banks would have a hard time holding back the long term flow of investment funds into the precious metals markets. They may be able to trigger short term fluctuations, but the long term trend will overcome those variations.

On the other hand, if the real mover and shaker behind the bullion banks’ notable precious metal selling activities and consistent large short positions is actually a central bank or another official agency suppressing the price in order to prevent rampant inflation due to a devaluing paper currency, then that makes a lot more sense.

Such an entity can print effectively unlimited amounts of dollars to pay for its losses, and it would never be forced to deliver physical metal it did not have because they would generally be trading futures on the short side. Since the seller of a futures contract controls physical delivery, they can simply opt not to deliver and cash settle instead.

Other Financial Scams Exist, so Why Not Price Suppression?

Furthermore, it is interesting to note in the age of the LIBOR scandal, FASB mark to market rule changes, HFT programs front running retail investors, MF Global’s dramatic demise, and Bernie Madoff’s outrageous Ponzi scheme, that it continues to be taboo to even entertain the idea that the precious metals markets could actually be managed.

Of course, the acceptance of price suppression in silver and gold futures as a reality, or even as a likely possibility, will immediately call into question the real value of every other commodity also denominated in U.S. Dollars.

Basically, if inflation can be controlled in this way by manipulating futures markets, this strategy is probably being employed throughout the commodity markets to artificially prop up the intrinsically worthless Dollar and manage inflation.

Do Politics Underlie Price Suppression?

If price suppression is in fact an unspoken public policy, then it really becomes a political issue, which may be the hidden factor here influencing price discovery and value. Certainly it is not a stretch to consider fiscal overspending occurring in the name of political agendas. Such a policy would also be facilitated by historically loose monetary policy and may have given rise to the ever-intensifying economic cycles that the world is now experiencing.

Already, regulators have been ‘captured’ as the game starts to become more exposed, which is consistent with the seemingly managed nature of the price suppression system.

In this scenario, the regulators are be left with the ability to make announcements and speeches only, and they have been further compromised as the financial system crumbles, where the impetus to exert political influence has become especially acute as the State is running out or has run out of the means with which to impose its financial power on its own people.

Participants Increasingly Aware of Price Suppression

Although many market participants would still not dare to imagine that ultimate eventuality actually happening, keen observers are increasingly witnessing that process occurring in its early stages.

The market also seems to be progressively reaching the point where 'everyone knows' that the price of silver, gold and just about every other commodity is being politically managed to the point where underlying fair value across the board has become remarkably distorted.

Furthermore, it is no coincidence that this price suppression theory fits the facts so well, despite the sheer complexity of the manipulative methods employed and the instruments traded in what has essentially become a black hole of shadowy derivatives markets.

Ignorance need not be conscious, so there’s no need to turn a blind eye to an issue just because very few people actually understand what is going on all over the world today as fiat currencies gradually make a managed retreat to their true value - zero.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2012 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules