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Archive for May 12th, 2010

Manipulation of precious-metals market under fire

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by Alex Newman
Originally posted 06 May 2010

THE BANKING CARTEL’S MANIPULATION OF SUPPOSEDLY “free” markets is coming under increasing fire as a broad coalition of activists, legislators, and non-profit groups target the Federal Reserve System with lawsuits, investigations, criminal complaints, and federal transparency legislation. Now whistleblowers, and even some government officials, are also taking aim at “irregularities” in the precious-metals market being orchestrated by the banking cartel and its government allies.

In a recent article entitled “Fed Facing Lawsuits, Criminal Complaints Over Market Manipulation,” The New American reported on the central bank’s blatant activities distorting the real-estate and the stock markets, as well as various efforts aimed at discovering details and restoring accountability. But the manipulation of precious-metals prices is just as serious, and equally secretive.
After being denied information about the Fed’s gold-swap agreements under a Freedom of Information Act request, the Gold Anti-Trust Action Committee filed a lawsuit against the central bank in federal court. “[The Fed] came back and said they didn’t have to tell us anything — that they were exempt from telling us and that it was secret information,” GATA Chairman Bill Murphy told The New American in a telephone interview. “So then, we filed a suit in District Court in Washington to compel them to give us the information.” The suit is in progress, and GATA has high hopes about it.

Murphy said his organization wants to find out exactly what the Fed and the Treasury have done with America‘s gold. “It’s the people’s gold, not their gold,” he said. The manipulation of gold prices is very serious and is part of the U.S. “strong dollar policy,” Murphy explained, pointing to the relationship between gold and interest rates.
“By suppressing the gold price, they can keep the dollar stronger than it would be and keep interest rates less than they would have been,” he said, noting that this manipulation played a pivotal role in the current economic meltdown. “What happens is every time gold prices soar, what do you hear? Too much inflation? Crisis? It’s always bad for the Wall Street crowd and the incumbent politicians.… If the gold price had been allowed to trade freely, interest rates wouldn’t have been kept too low for too long,” and the natural warning system would have kicked in.

And indeed, the allegations of gold price suppression seem to have been confirmed by the Fed itself. “Central banks stand ready to lease gold in increasing quantities, should the price of gold rise,” former Fed boss Alan Greenspan told the House Banking Committee in 1998. In other words, if gold prices go up, the Fed will make sure they come back down. Even before Greenspan’s infamous admission, a “confidential” Fed document dated April 5, 1961, available in the Federal Reserve Bank of St. Louis’ archives revealed the central bank’s hand in the metals market. “Monetary authorities in the United States … have maintained the stability (and primacy) of the dollar in the international currency structure by standing ready to buy gold from, and sell it to, foreign monetary authorities who either need or acquire dollars for exchange purposes,” reads the paper, entitled “U.S. Foreign Exchange Operations: Needs and Methods.”

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EU Tumbles Toward Failure?

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From The Daily Bell
Originally posted Tuesday, May 11, 2010

HAS EUROPE DONE THE IMPOSSIBLE AND HELPED ITSELF TO A FREE LUNCH? That’s certainly what it looks like, to judge by the performance of equity, currency and fixed income markets following the EU’s €750 billion rescue plan. A relief rally sent shares rocketing across the world, led by an almost unbelievable 20% surge in European stocks. Rescued government bonds rallied as central banks threw themselves into quantitative easing. And the euro recovered much of the ground it lost when, during the past couple of weeks, investors thought the currency was heading towards extinction. Was Milton Friedman wrong? Or maybe this lunch isn’t really free? The notion that these rescues are costless, which took hold following the wave of fiscal and monetary policy actions put in place following the credit crunch, looked to be fading recently. People started to realize private sector debt was merely being replaced by public sector borrowing, and didn’t like it. Governments might have altered who would have to repay the borrowing and over what period – typically taxpayers or savers and over the long run – but the debt itself didn’t disappear. There’s nothing to suggest Friedman was wrong in the case of this European rescue either. So who’s paying then? – WSJ/Source

Free-Market Analysis:
Eurozone leaders are ready to defend the euro with the equivalent of US$1trillion if necessary. The American Fed and other central banks stand ready to help too. There are several conclusions to be reached from this – and the mainstream and alternative media is generously presenting at least seven scenarios (perhaps our readers can provide more?). Below, we use the article excerpt above as a jumping off point to unpack them for you, explain the significance of each and then choose the most obvious answer to what’s going on. (Is it really that complicated?) Milton Friedman was right (on this point anyway). There IS no free lunch, in our opinion, and those in charge of Europe are not going to get one either.

Of course, just because we believe this exercise yields up the truth about what’s happening in Europe, we are not necessarily in a position to postulate the OUTCOME. We’re not fortune tellers! But we do understand the war between the elite’s dominant social themes and the Internet itself, which is increasingly debunking these themes and making it far more difficult for the elite in the 21st century to manipulate markets and politics than in the 20th century. Anyway … here’s the list. We’re pretty much on board with the second alternative. But let’s take these options one at a time.

1. The power elite has done what is necessary to stabilize the euro-zone.

2. The power elite has done what is necessary to stabilize the euro-zone but it may not work.

3. The euro-apparatchiks have salvaged the EU basically for banks and bank loans at risk.

4. The euro-zone has been destabilized so that further currency consolidation can be achieved.

5. The power elite and the bankers have destabilized the EU to loot its member states.

6. The power elite has struggled mightily to rescue a 50-year-old investment with mixed results.

7. Germany has received, by peaceful means, the empire that its citizens always wanted.

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