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Love of technical analysis blinds fund manager to evidence of market manipulation

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March 14, 2017 - 4:29pm

Dear Friend of GATA and Gold:

Keith Weiner of gold fund management company Monetary Metals in Scottsdale, Arizona, is scoffing again at complaints of market manipulation, this time involving the silver market particularly.

In his commentary Sunday, "Why Did Silver Fall?" --

https://monetary-metals.com/why-did-silver-fall-report-12-mar-2017/

-- Weiner writes: "With no need of evidence -- indeed, with no evidence -- one can assert this" -- that is, market manipulation -- "and not be questioned in the gold and silver communities. We have recently come across a term normally used to describe leftists and social justice warriors, 'virtue signaling.' One piously declares that one supports the cause, one speaks truth to power, one sticks it to The Man -- well, you get the idea. The concept of 'virtue signaling' seems equally appropriate to those who sing the chorus on every price drop, 'manipulation.'"

GATA may be glad if Weiner finds the gold and silver communities overwhelmingly convinced of its years of work, though of course this convincing does not yet seem to have succeeded with gold and silver mining companies themselves. But we can't be glad that Weiner himself maintains that there is no evidence of this market manipulation -- that, to the contrary, he believes, as other technical analysts do, that gold and silver prices are the products of his technical analysis and mathematical formulas.

Documentation of the longstanding Western government policy of gold price suppression, much of it culled from both public and secret government archives, has been compiled by GATA here --

http://www.gata.org/node/14839

-- and Weiner is welcome to rebut even one item, though he writes as if he has never heard even of Deutsche Bank's recent confession to gold and silver market manipulation and the bank's incrimination of other investment banks:

http://www.gata.org/node/16964

http://www.gata.org/node/16986

"No evidence"? Deutsche Bank has just agreed to pay nearly $100 million in damages precisely because there is overwhelming evidence -- that is, proof.

GATA concedes that documentation of government involvement in manipulation of the silver market is far less extensive than the documentation for gold. And yet Weiner must be trying hard to avert his eyes from the recent official filings by CME Group, operator of the major U.S. futures exchanges, with the U.S. Securities and Exchange Commission and U.S. Commodity Futures Trading Commission, filings discovered and publicized in 2014 by Eric Scott Hunsader of the market data firm Nanex in Winnetka, Illinois. The filings showed that governments and central banks secretly trade all U.S. futures markets on CME Group exchanges and even receive volume discounts for their trading:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

Of course those filings don't disclose government and central bank trading in silver futures particularly. But they refute Weiner's claim of "no evidence."

Also refuting that claim is the heavy involvement in the silver market of JPMorganChase. While the company has said that in silver it only executes trades for clients and has no interest of its own in whether silver prices rise or fall --

http://www.gata.org/node/11216

-- the company also long has been a primary dealer in U.S. government securities and an intimate agent of the U.S. government in many other important respects. So it is entirely possible that JPMorganChase's clients in silver (and gold) include governments and central banks, just as CME Group's clients do.

Further, of course, JPMorganChase is also custodian of the silver purportedly held by the largest silver exchange-traded fund, SLV. In serving as custodian, can the firm always be indifferent to the interests of its far bigger client, the U.S. government, interests that presumably include not letting monetary metals be perceived as money superior to the money issued by the U.S. government?

For that matter, will Weiner reveal whether Monetary Metals directs any of its metal business to JPMorganChase? If, as Weiner writes, the gold and silver communities are so convinced of manipulation of the monetary metals markets, some of his firm's own clients might like to know.

Last year at the Mining Investment Asia conference in Singapore your secretary/treasurer questioned Weiner and his new associate, Bron Suchecki, formerly of the Perth Mint, about central bank involvement in the gold market. If your secretary/treasurer's memory of that exchange is accurate, Weiner and Suchecki acknowledged that central banks are involved in the gold market through gold leasing.

So does Weiner really not remember Federal Reserve Chairman Alan Greenspan's explanation of gold leasing in his testimony to Congress in July 1998?:

https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

Greenspan said: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over the counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

That is, even Greenspan acknowledged officially that the purpose of gold leasing by central banks is to keep the gold price down.

Less well known but perhaps just as incriminating were the remarks to the London Bullion Market Association meeting in Rome in September 2013 by the Banque de France's director of market operations, Alexandre Gautier. The French central bank, Gautier revealed, trades gold for its own account "nearly on a daily basis" and is "active in the gold market for central banks and official institutions":

http://www.gata.org/node/13373

Maybe Weiner thinks that this trading is just for fun and has no policy purposes. But "no evidence"?

One must be blindly in love with one's technical analysis and mathematical formulas to overlook all this stuff and tell people it doesn't exist.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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About Chris Powell / Secretary/Treasurer, GATA

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial

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