Butler: J'Accuse - Market Rigging in the Wheat Market, and in Silver

 

"What is truth? said jesting Pilate, and would not stay for an answer."

Francis Bacon

This is an excerpt from a much long article posted by Ted Butler at SilverSeek here.

I read Ted's columns each week at his subscription site.  I am glad that he was kind enough to make this one public.

There was little mention in the media of the case against Kraft, which was caught rigging the wheat market.   The parallels with other instances of market rigging are noted by Ted, and he asks the obvious question, 'Why the selective enforcement of the laws?'

Indeed.  It may have quite a bit to do with the credibility trap.  Once bureaucrats and politicians get involved in dirty dealings, their co-conspirators have often used the threat of disclosure to take them along for a much longer ride.  And it is easy to rationalize official silence in the face of injustice for the sake of careers.  And then leave office and take a high paying sinecure with the very industry that they had been paid to oversee.

 

When the precious metals markets dislocate, or 'blow up' in the vernacular, the economists and other very serious hypocrites will say that no one could have seen it coming.   Or blame it on some unrelated scapegoat.  Or crazy misguided goldbugs.   The same way they tried to blame the financial collapse following the housing bubble on the government and homeowners.  No one can see anything in this kleptocracy.

 

And they are right.  You can't see anything coming when you keep averting your gaze and closing your eyes to it.

 

An Unavoidable Comparison

Theodore Butler

April 7, 2015

"Importantly, the Commission’s case against Kraft most likely came as a result of a complaint from a disgruntled insider who was damaged by Kraft’s futures market activity and not as a result of widespread complaints or damage to the public. To my knowledge, this was not a case publicly discussed prior to the charges being filed. Compare that to silver, where many thousands of market participants and observers have petitioned the agency for years about the manipulation by JPMorgan and where investors and silver producers have been and are being damaged by artificially depressed silver prices.

The unmistakable conclusion is that this agency is bought and paid for or otherwise not acting in the public’s best interest. For a federal agency, I don’t think there is a more serious allegation.

So the real question is why the selective prosecution of the law? Why is the CFTC going after Kraft on a complicated case with an alleged payoff that looks like chump change (around $5 million total profit to Kraft), when public data indicate JPMorgan shorts the silver market whenever prices rise to cap and drive prices lower in order to profit on those short sales and accumulate silver at unfairly low prices; with JPM’s cumulative illicit take running into the hundreds of millions if not billions of dollars?

I can see the agency going after Kraft, but I can’t see any legitimate reason for it not to go after JPMorgan for the far more egregious silver activities the bank is involved in. Worse, why won’t the agency explain why the public data doesn’t point to JPMorgan doing what I allege the bank is doing? Can the Commission refute that JPMorgan has been the big concentrated short seller in COMEX silver futures since acquiring Bear Stearns in early 2008 and has been accumulating physical silver while remaining short COMEX futures for the past four years? That’s the key, no one - not the CFTC, not JPMorgan, not the CME – can offer a reasonable explanation for JPM’s control and manipulation of the silver market and what has transpired these past seven years...

The problem with selective enforcement of the law is that it undermines and makes a mockery of the whole system. It is a betrayal of the highest order. Yes, I’m fairly sure that the free pass to JPMorgan to allow it to continue the silver manipulation was given by Treasury and Federal Reserve officials to preserve market order and was considered to be to the public’s benefit. But look at what it has morphed into seven years later – a market more distorted than ever before and in which JPMorgan has amassed the largest hoard of silver in history."

NAV Premiums of Certain Precious Metal Trusts and Funds

There has been quite a bit of silver bullion activity in imports to Turkey as noted here.

Otherwise the action at the bucket shop on the Hudson has been the same old same old.

Premiums are dampened as usual.

Turkish Silver Imports Surge to Record High In March - Of Dirhams and Drachmas

 

 

Imports of silver bullion into Turkey surged to the highest level since at least 1999 in March.

 

There was no similar surge in gold.   So this seems to be particular to silver.

I do not wish to make too much of it, unless we see this trend continue. 

And if so, then thoughts of silver dirhams or drachmas may begin to come to mind.

 

Charts are from data wrangler Nick Laird at Sharelynx.com.

 

 

 

 

Decisions: Life and Death on Wall Street

 

"The U.S. went off the gold standard in August 1971. With no benchmark, central banks could print money and debase currencies. That opened the door for huge bailouts after big banks screwed up in a big way. Taxpayers—not incompetent bankers—paid the price."

Janet Tavakoli, Decisions: Life and Death on Wall Street

I have just started reading a new book by Janet Tavakoli called Decisions:  Life and Death on Wall Street. 

 

There is also a paperback version of it here.  It is available in the US, UK and most of continental Europe, but oddly not Canada, Australia or India.

I have known her as a subject matter expert on derivatives to whom I have turned for knowledge now and then over the years, and always found her to be exceptionally straightforward and helpful.

 

This is a non-fiction story of her travels in the world of finance that asks the question, 'What would you be willing to do for money and power?'   Given the times, it might be more to the point to ask what people would not be willing to do.

 

As usual Janet does not pull her punches.  The description on Amazon is rather intriguing.  

In New York, the Federal Reserve Bank hides damaging information about too-big-too-fail banks from the public eye. A prominent bank CEO seems on the verge of a nervous breakdown.

In Washington D.C., a former Wall Street regulator checks into a hotel using the name of a hedge fund manager for an illicit meeting with a prostitute. In a D.C. suburb, the CFO of a beleaguered mortgage giant chooses a drastic personal end to "relentless pressure".

In a picturesque suburb of Zug, Switzerland, the CFO of a major insurance company decides to end his life. In London, a financier kills himself in a way he once said he never would.

In her new memoir, Janet Tavakoli shines a bright light on the money-driven culture of Wall Street and Washington, and the life and death consequences of our decisions that put profit above all.

"The U.S. went off the gold standard in August 1971. With no benchmark, central banks could print money and debase currencies. That opened the door for huge bailouts after big banks screwed up in a big way. Taxpayers—not incompetent bankers—paid the price.

By [the late 1980’s], the Federal Reserve Bank and large U.S. banks had established a pattern to control the public relations damage each time banks had a major screw-up: accountants and regulators let banks lie about the size of the problem to stall for time; the Federal Reserve blew smoke at the media; finally, the Fed would bail out the banks in a way that most taxpayers would not understand.

Banks didn’t have to get smarter or more competent. The Fed trained the banks that uninformed taxpayers would eat the losses, and fake accounting would let bank officers keep their positions and their money."

If 'rule under law' were more than just a slogan in the United States, men who occupied the senior-most positions in too-big-to-fail banks would have been disgraced, prosecuted, and jailed. But no bank executive was held accountable."

Gold Daily and Silver Weekly Charts - Failing Policies of the Financial Engineers

"The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology."

Michael Parenti

Gold and silver marked time today, digesting their recent gains.

 

But they are also being held to the 'round numbers' of 1200 and 17.   This is perception management.

 

The economic establishment and their Federal Reserve are failing, and badly.  They are frightened, but do not know what to do, and so they keep doing the same things, over and over.

 

Their failures are the direct result of intellectual dishonest and systematic injustice.  The credibility trap has them bound to policy failures that somewhat ironically will bring them down.

 

They have lied so often that one wonders if they can even understand the truth.  They certainly put enough pressure on keeping anyone of note from dissenting against their madness and their lies.

 

The only thing exceptional about the West is their exceptional self-delusion about their own goodness and secure position on the moral high ground of history.    

 

Have a pleasant evening.

 

 

 

SP 500 and NDX Futures Daily Charts - Where's The Recovery™ - Shout and Feel It

 

"We cannot look to the conscience of the world when our own conscience is asleep."

Carl von Ossietzky, German editor of Die Weltbühne, awarded the Nobel Peace Prize in 1935

"It would be no sin if statesmen learned enough of history to realize that no system which implies control of society by privilege seekers has ever ended in any other way than collapse."

William Dodd, historian and US Ambassador to Germany, 1933

There isn't any recovery.  Or at least the false recovery that has been erected is showing great holes through its painted canvas and thin veneer of distorted statistics.

The Fed will still raise interest rates at least once or twice, for 'technical reasons' that have nothing to do with the real economy and everything to do with their own financial engineering practices and the desires of the financiers.

The credibility trap remains a powerful snare for the pampered princes and princesses.  How can they admit what is wrong without endangering their own privileged positions and undermining the 'authority' that they so undeservedly enjoy?

 

And so by example and by continuing reinforcement, lies and deception have become the generally accepted way of doing business in the land of the exceptional.  Exceptionally self-deluded that is.

 

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

Have a pleasant evening.

 

Gold Daily and Silver Weekly Charts - Hey Boparee Bop, Bop Bop Sh'Bop

Gold and silver were bumping their heads pretty hard against overhead resistance after the first hour this morning as Bill Dudley of the NY Fed was out jawboning the stock markets higher as equities were in meltdown mode, threatening to break some key support.

This had the effect of putting a fire under the metals, which were carefully capped at the 2 percent level.

The metals did give some of it back to profit taking in the late afternoon.

This is some rough stuff overhead. Let's see if the metals can push through it.

That big swing in stocks today, off a little jawboning by Goldman's man at the NY Fed, should give you a hint at how disconnected valuations are from anything remotely resembling economic fundamentals.

Keep on truckin'.

Have a pleasant evening.