The Emperor's New Clothes

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How can any market be invested in with any confidence when the market makers themselves don't participate in price discovery?


Would you invest in a Pig in a Poke?

The Federal Reserve Has No Integrity

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal.


Any pretense of a free market system for gold trade, hedging or futures has been a joke since 1980. It's sad there are so many market pundits that fail to recognize this all important fact.


To my mind it's very much like your car mechanic refusing to recognize that your car's motor requires an air supply. A car mechanic without that basic knowledge is about as useless as teats on a boar.


I was an industrial physical gold hedger on COMEX for several years in the 1970's. The beginning of price manipulation was obvious to all participants in the markets back then. It was surprising but there was no way the fact was denied by anyone that understood the market.


Perhaps it would be wise to require today's financial newsletter writers and advisers to actually participate in the the markets they comment on. You know - put their money where their mouth is. Nothing like a real world spanking by the market to bring the reality of a manipulated market home.


My solution to all this deception is to simply buy physical gold. If you "own" paper gold certificates, ETFs or a futures position I strongly suggest you consider obtaining a broader education in the paper gold market. It couldn't hurt to know more about the market you are in and it might just save you from a much harder lesson down the line.


Please don't take this as financial advice. Do your own due diligence and prosper. 



Geowizard likes this

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Good advice!


My concern is that the process of quantitative easing initiated by the Fed may have backfired. The intended consequence was that the markets would thrive through insertion of stimulus into the banking sector. That makes sense on the surface because it gives banks more capital to lend as well as provides the necessary cash on hand to back existing loans. So, now a few major banks are having problems with the stress test and last week the Fed decided to lower the bar on the stress tests.


The backfire that occurred and perhaps the backfire was part of the calculation is that investment bankers used the money for investment in the stock market. That makes the stock market look good in an otherwise depressed (recessionary) economy. The backfire is that now, the stock market is supported indirectly (possibly directly) by the Fed. I can see where the IMF would go along with this process, because it really is and has been an economic emergency that requires extraordinary practices to avoid a world-wide financial collapse.


Note: The "Volcker Rule" prohibits Commercial Banks from participating in "Investment Banking". The Volcker Rule was passed January 21, 2010. So, now, one must ask, what has changed? Rules changes that were designed to protect banks and investors have opened the door to permit equally risky investment by the Federal Reserve?


"Dodd-Frank" gave power to FDIC and other agencies to make "loans", lend money under supervision of the SEC. All of these agencies are in the "Ball game" including commodities manipulation. 


All the Fed has to do is stay in the game and keep juggling! :)


- Geowizard

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Another thought;


The US Government has been in the business of controlling commodities for a long time.


Farm subsidies and conversely paying farmers to not produce - that combined with government automobile fleet purchasing! :)


Ever wonder who paid for those Deluxe Forest Service one ton diesel 4x4's? Well, of course, you and I did! But... those aren't the ordinary 4x4 either. These are the "loaded" versions. The US Government has been involved in manipulation of the tuna fishing industry. Tuna Fishers were driven out of business and their boats sold for scrap in order for imported tuna to compete with domestic fishing. 


Think gold isn't manipulated?


Through the EPA and the Dept. of the interior, Mining and metals production as well as the Beef industry are manipulated.


The Forest products industry went down the tubes years ago. Spotted Owl? No... EPA, Environmentalism (a government tool for manipulation of commodities).


The steel industry? Industry that produces dirty air is bad! Copper smelters? There's one in Trail British Columbia, Canada. Smelters operate in Mexico where they comply with Mexican governmental control (manipulation). Mexico is catching on to the environmental protection tools available and using them to control commodities.


- Geowizard

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Yah, I saw some Washington politician slamming General motors for not giving up some paperwork that made GM look bad.


I thought, Washington politicians are experts at scandal coverup. Washington hides more secrets than private industry ever thought of.   

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