Today's Gold Smackdown Portrayed on a June Futures Chart, 5 Minute Intervals

Why would the government turn a blind eye to this?

Well, in addition to allowing your cronies to make boatloads of money by gaming the markets, there is a not so subtle message wrapped within this chart from the financial engineers of the current banking system.  This is all a part of the currency wars.

"One of the central facts about modern America is that everything is political; on the right, in particular, people choose their views about everything, from environmental science to gun safety, to suit their political prejudices. And the remarkable recent rise of “goldbuggism,” in the teeth of all the evidence, shows that this politicization can influence investments as well as voting.

What do I mean by goldbuggism? Not the notion that buying gold sometimes makes sense. Gold has been a very good investment since the early 2000s, and it’s probably not all bubble. One way to think about this is that gold is like a very long-term bond that’s protected from inflation; and actual long-term inflation-protected bonds have also seen big price increases, reflecting a general perception that there aren’t enough alternative good investments.

No, being a goldbug means asserting that gold offers unique security in troubled times; it also means asserting that all would be well if we abolished the Federal Reserve and returned to the good old gold standard, in which the value of the dollar was fixed in terms of gold and that was that. And both forms of goldbuggism soared after 2008."

Paul Krugman, Lust for Gold

You see, gold is not an investment decision, it is a 'lust.'  And since it does what Mr. Krugman does not wish it to do, it is irrational, and something from his evil adversaries on the right. 

There is nothing quite so cheaply formed as this type of toss off piece from an establishment economist in defense of the status quo. 

This is the common thread I see amongst financial engineers and theoreticians.  The weakness in their theories and models always seems to turn to the brute force of financial market repression when their schemes get into trouble, based on some inherent weakness or false assumption that makes them unstable.  That certainly is the picture in Europe. 

Here is a piece I wrote some time ago about the 38 Year Cycle in Monetary History

Here is a detailed picture of the gold trading on the Comex today. You can look at it and judge for yourself.

There was no news to provoke this kind of a massive sell off in a quiet market and on heavy volume. 

This is just shock and awe in the currency wars.  And everyday people are collateral damage.  And there are always those who will beat the drums, on cue. 

Elizabeth Warren: How the Regulators Are Protecting the Banks From Disclosure of Fraud

"Fraudus est celare fraudem." 
The concealment of fraud is a fraud.

Take a careful listen to Senator Elizabeth Warren pulling out the truth from Daniel P. Stipano, Deputy Chief Counsel, Comptroller of the Currency, and Richard Ashton, Deputy General Counsel, Federal Reserve.

"You have made a decision to protect the banks but not to help the families who were illegally foreclosed on. Families get pennies on the dollar for being the victims of illegal activities. And you know of cases where the banks broke the laws, but you are not going to tell the homeowners.

People want to know that their regulators are watching out for the American public, not the banks."

Senator Elizabeth Warren

Other people are doing a much better job of covering this than I am, notably Yves Smith at Naked Capitalism, and I regularly include their links on my site.

It is a shame and a scandal that is representative of what is wrong with the current structure of the economy and the markets, the regulatory capture that favors insiders and special financial interests over basic law and justice for the public.

And I think it is a failure of the liberal agenda that calls blindly for stimulus, but at best pays lip service to significant reform.  As for those who call for austerity without reform, they are at best useful for the one percent, and of harm to most everyone else. 

The genuine reformers are found on both the right and the left, and might best be called progressives.  Unfortunately they are a group without a party or a portfolio these days, except for a few shining lights like Warren and Sanders.  From what I hear the situation in the UK and Canada is equally as bleak.  Oligarchies abound elsewhere.  As for Europe, it is just a mess of conflicting interests that one might strain to call a governing body of the most powerful special interests and their outside supporters.

Net Asset Value Premiums of Certain Precious Metal Funds and Trusts - Part II

I normally don't post this twice in one day, but I do wish to document this price action for future reference.

Heavy selling in paper has triggered a water fall decline that is seriously testing some very long term lows today, going back to gold's original ascent out of the cup and handle.

The selling in the related sectors such as the miners has been particularly brutal. As one of the paid pundits said today, 'They are clearing out the casual allocators.'

This is Street talk for skinning the little guy and the non-insider, the average, frightened investor.

Intraday gold tagged 1491.

I have gone back and marked the current chart with past support and resistance figures. Those are indicated on a segment of a chart from 2011 included below. The current chart will come out at the regular time.

Watch silver for an indication of a subsidence in selling.

Don't even ask, because I will not tell you when to sell or to buy. At most I may occasionally give some indication of what I am thinking.

And today I am thinking that this is a major test of the bull market by some very determined hedge funds and bullion banks who are overpowering the real physical markets. And they are doing so almost fearlessly because they know that the punishments, if any, are a minimal share of the profits.  And they most likely have the approval of the Anglo-American banking establishment. 

If you believe that the monied interests will only apply their financial repression to the weak, the disabled, the elderly, the poor, and immigrants you are kidding yourself, and falling for the oldest ruse in the book.

If you wish to do something, support the efforts for reforming the financial system.

Michael Hudson: Obama's Cat Food Social Security Budget Strategy and Stealth Tax Increases

What some of the 'conservatives' have figured out is that 'chained CPI' is also a threat to those who rely on incomes.

The chained CPI would also apply to the income tax brackets, to adjust for 'inflation creep.'

By seriously understating inflation, the chained CPI would also result in steady, hidden tax increases on non-privileged income by allowing inflation to push income levels higher without adjusting tax brackets.

Remember how the AMT was originally pitched as a way of forcing the wealthy to pay taxes despite loopholes, and instead became a snare for the middle class?

It's a win-win for the crony capitalists and liberal statists.  Because in corporatism the state is the corporation and the corporation is the state.  And it takes care of its own.

Less money for the elderly, and more income taxes from their working children.  And the government can mask their inflation while continuing to deliver wheelbarrows of money to the Wall Street banks and their friends, while providing a blind eye to their tax loopholes and havens.

The oligarchs maintain a tight control on any investment opportunities and returns, driving savings where they like using the power of their exchanges and the Federal Reserve. And it is easy to game when you are included in a stream of privileged information and dark pools of trading.