25 May 2013

Ted Butler: Busting the Perfect Crime

Obviously I do not know if the CFTC is going a good job of regulating the metals markets or not.

And that is a big part of the problem. I have little confidence that they are doing a good job of maintaining honest and efficient markets based on what I am seeing in the futures markets almost every day.

For an agency to have an ongoing investigation of manipulation in a global market like silver, with NO offical report having been issued after almost five years, is not up to the expectations that the American people have for its government.

Indeed the silence of the Agency borders on arrogant disregard, given the many, many complaints of the appearance of irregularities it has received.

This is especially true in light of the several recent revelations of egregious market manipulation by the Banks in LIBOR, energy, and derivatives markets. And these are some of the same actors in the alleged silver manipulation.

Here is what Ted Butler has to say about it. And it makes sense to have the GAO review the Agency to reassure people that they are doing their jobs properly, and if there is a problem with oversight from within the Administration itself, whether through aloof indifference, or the undue influence of outside parties.

And if there is some manner of funding problems and manpower, I am sure that the CFTC would like to take its priorities from the people whom it serves and whose confidence is its highest mission, and not the Banks and Exchanges whom they are expected to regulate.

Busting the Perfect Crime
Theodore Butler
May 24, 2013 - 12:23pm

A subscriber recently commented that the Oligarchs who rule Russia only wish they got to run things as efficiently as how JPMorgan and the big banks control our financial markets, particularly in the trading of precious metals. Based upon the last few days, it’s hard to argue with that. On Sunday evening shortly after 6 PM, the price of silver was taken down 10% within a few minutes on an insignificant number of contracts (1600), evoking memories of the infamous 13% ($6) decline on the May 1 Sunday evening of 2011. If the Russian criminals oversaw silver trading and not the CME Group and the CFTC they could not possibly have rigged prices more corruptly.

What makes the silver (and gold) manipulation the perfect crime are a number of elements; short term price control through High Frequency Trading, compliant regulators and the fact that most victims don’t even realize they are being had, as the sellers are mostly just reacting to the deliberately-set lower prices. It’s hard to end an ongoing crime in progress when so many don’t realize it is in progress. Worse, there are still some who profess that there is no manipulation underway. And for the few who do realize what’s really going on, what can you do about it when the regulators are in bed with the manipulators? Perhaps the options are limited, but that’s not the same as non-existent.

In the last paragraph of the January 5 Weekly Review; I made reference to something I was working on that I preferred not to disclose at that time. I’d like to do so now and ask for your assistance. A little over a year ago, a subscriber sent me a constructive suggestion for how to force the CFTC to do their job and end the silver manipulation. Since I had promised myself that I would never leave any stone unturned in the attempt to end the manipulation, I followed Jeff’s suggestion, although I admit to doing so with as close to zero expectation for success as was possible. The suggestion was to complain to the Government Accountability Office (GAO) about the CFTC. I filed a complaint on their web site hotline www.gao.gov and promptly forgot about the matter. After all, over the years I had complained to every government agency possible and never heard back from anyone.

In December, I got a follow up call from the GAO that caught me so much by surprise that I didn’t know why they were calling me at first. They requested additional information (which I provided) and I have had several conference calls with the agency concerning my allegations of malfeasance by the CFTC in matters related to the silver manipulation. It was only after the first phone call from the agency that I took the time to find out what this agency was all about and I suggest you do the same.

I thought I knew it as the General Accounting Office, but the name was changed in 2004. What I also learned was that this was a unique government agency, separate and distinct from all the other federal agencies, including the CFTC. The GAO reports only to Congress and exists to ensure that all the other federal agencies stay on the up and up. In a practical sense, the GAO is the Inspector General of all the federal agencies. As such (and you can verify this on your own), this agency seems tailor-made to investigate why the CFTC won’t do its job when it comes to the silver manipulation...

Read the entire piece, including what you can do today to support the effort to encourage the GAO
in its Congressional oversight of the CFTC here.