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The questions that deniers of monetary metals market rigging won't answer

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October 8, 2017 - 8:47pm

Dear Friend of GATA and Gold:

Newsletter writer Steve Saville of The Speculative Investor, who long has denied that manipulation of the monetary metals markets means much over the long term, has seized on the recent essay by Keith Weiner of Monetary Metals as the conclusive refutation of silver market analyst Ted Butler's longstanding complaint that JPMorganChase has been rigging the silver market.

Weiner's analysis, headlined "Thoughtful Disagreement with Ted Butler" and posted here --

https://monetary-metals.com/thoughtful-disagreement-with-ted-butler/

-- argued that JPMorganChase is doing ordinary arbitrage in the silver market, exploiting spreads between buy and sell prices.

Saville, in commentary headlined "A Silver Price-Suppression Theory Gets Debunked," cheers Weiner's essay and goes on to remark: "Entering a debate with someone who is incapable of being swayed by evidence that invalidates their position is a waste of time and energy, so these days I devote no commentary space and minimal blog space to debunking the manipulation-centric gold and silver articles that regularly appear."

But when has Saville himself ever addressed evidence of manipulation of the gold and silver markets? Of course if he can't address the evidence, he himself can't be swayed by it.

Of course none of the manipulation deniers ever do address the evidence. Weiner's technical competence is no refutation of manipulation, for even if JPMorganChase is just doing arbitrage in silver, for whom is the investment house doing the arbitrage?

The bank's former chief of commodity operations, Blythe Masters, said on CNBC five years ago that the investment house had no position of its own in silver and was trading only for clients:

https://www.youtube.com/watch?v=gc9Me4qFZYo

So might those clients include governments and central banks, entities with essentially infinite resources? The question is compelling because filings with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission by CME Group, operator of the major futures exchanges in the United States, assert that governments and central banks are among the clients of the exchanges and that the exchanges give them special volume trading discounts for trading all futures contracts on the exchanges, not just financial futures contracts:

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

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

Do Weiner and Saville know that JPMorganChase is not trading silver futures for governments and central banks?

Do Weiner and Saville know that governments and central banks are not trading gold and gold derivatives largely surreptitiously? If they think they know, they're wrong, for the Bank for International Settlements admits that it operates as a broker in gold and gold derivatives for its member central banks:

http://www.bis.org/banking/finserv.htm

Indeed, in 2005 the director of the BIS' monetary and economic department, William R. White, told a conference at BIS headquarters in Basle, Switzerland,that a primary purpose of international central bank cooperation is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful":

http://www.gata.org/node/4279

The BIS even advertises that its services to its member central banks include surreptitious interventions in the gold market:

http://www.gata.org/node/11012

Anyone who wants to engage in honest discussion of gold and silver market manipulation needs to address a few simple questions:

1) Are governments and central banks active in the monetary metals markets or not?

2) Are the documents asserting that activity genuine or forgeries?

3) If governments and central banks are active in the monetary metals markets, is it just for fun or is it for policy purposes?

4) If this activity is for policy purposes, do those purposes involve the traditional objectives of defeating an independent world currency that competes with government currencies and interferes with government control of interest rates, objectives documented at length by GATA here?:

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

Of course if largely surreptitious intervention in the monetary metals markets by central banks and governments is ever acknowledged, technical analysis of those markets loses meaning, which may explain why technical analysts avoid the questions above.

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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