July 23 - Gold $312.30 down $11 - Silver $5.86 down 15 cents
Gold Cartel Panic / Morgan, Citibank Trashed / Morgan Tapioca?
What a day! Rumors were flying. As I am preparing for my CSPAN interview tomorrow, this will be down and dirty.
Market manipulation was blatant as could be today, for all the world to see. With our money center banks near collapse, the dollar ( 107. 08, up 1.95) soared and gold was trashed. Meanwhile, The Working Group on Financial Markets supported the Dow all day long to do what they could from keeping J.P. Morgan Chase from blowing up.
A hedge fund manager told me if Morgan closed below $20, they were history due to certain capital markets. By buying the Dow futures, the PPT encouraged arbitrage buying of Morgan as part of the basket of Dow stocks. Amazingly, J.P. Morgan Chase closed at $20.08, down $4.44.
The financial desk of a major firm reported: “massive over-the-counter derivative problems.”
From a highly respected Café member:
Just received word from a very trusted source in Toronto that BofA is in big derivatives trouble and has quietly gone to the Fed for a bailout.
Pls let me know if you hear anything.
I went into my branch last week and they were falling all over themselves to be of service to me. They seemed almost afraid of a run and I thought so at the time.
Mike
The Gold Cartel is desperate. They are falling apart. Once gold flies, they are tapioca. They know it and we know it. That is why gold was creamed by the crooks in New York and Washington.
A report on the gold action:
“see gold today? hearing the fed is selling…”
Dear Mr. Murphy, the above line was sent to me by a friend at JPMorgan... Thank you, Trey
The cabal kicked off the gold selling. Goldman Sachs sold until they hit massive stops. Goldman’s probe set off fund sell stops and they puked.
Don’t you love our free markets in America. Isn’t great how the bullion banks are allowed to operate their criminal enterprises at our expense. As I have said before, there are no better people than Americans, but we are no longer a great country. No free press, rigged financial markets. We are second rate and that has to change.
The John Brimelow Report:
Indian ex duty premiums: AM $2.01, PM $ $1.57, with world gold at $320.40 and $319.80. Below legal import level, but of course sharply higher (by some $3) than yesterday. The rupee made another 18 week high today. Reports have been heard that serious Indian demand materialized when gold collapsed – by over $7 – during NY’s lunch hour today. These premiums suggest this information is highly plausible.
Although gold was steadily pressured against a background of a rising dollar from the start of Asian trading this morning, Tocom open interest actually edged up a little, by the equivalent of 202 Comex contracts, on moderate volume equal to 25,954 comex lots. (Comex traded 40,737 contracts yesterday and open interest there rose 3,528 lots: a good deal of it surely shorting). While bullion sales from various points was reported early today, Tocom does not seem to have been an important source.
Where the highly influential and abrupt dollar buying came from is obviously a key question. There seems to have been some Central Bank action – Reuters reports Korean dollar sales as a fact, and there were stories of Japanese and even German harrumphing. Most commentators are at pains to find some fundamental
cause, such as US foreign equity sales repatriation, but, as a Japanese trader is quoted as remarking on Reuters, this type of dollar strength after the ’87 meltdown proved fleeting.
A day on which the equities of two major US banks drop almost 20% on rafter –rattling stories of derivative wrong- doing, and the Chairman of the Senate Finance Committee is reported to be trying to protect Robert Rubin from having to submit to potentially devastating interrogation concerning his role in recent financial scandals (See would not seem the most obvious one in which to launch one of the most powerful bear raids of modern times on gold. Yet it happened. Comex is estimated to have traded a huge 88,000 contracts, including 21,000 on the break between noon and 1 PM, and an enormous 33,000 in the final half hour, preventing any rally. Either number would have made a respectable days’ volume in the recent past. This follows steady selling since Monday morning, and notable softness by the
ever- prescient gold equities, recently cited with unprecedented frequency as causing, rather than anticipating gold price weakness.
Obviously it is time to recall the key contribution to logic of William of Ockham. Ockham’s razor states that the simplest explanation of natural phenomenon is
generally the best.
Those friends of gold who prefer more specifically economic comfort will find solace in Bernard Connolly’s latest assessment:
“Yet, for the US viewed in isolation, we remain firmly of the view that substantial real depreciation of the dollar is necessary…
We remain equally firmly of the view that euroland and Japan could not stand the appreciation of theircurrencies that would be required for this real dollar depreciation to take place through nominal exchange rate movements. How do things get resolved? Through euroland/Japanese inflation? Ultimately, a big Japanese inflation is inevitable, but in the context of even bigger yen depreciation. Euroland? There, too,…. there is a high probability of inflation down the road. But in neither case can one see the kind of euroland/Japanese inflation without currency depreciation that would be needed from the US point of view. So…. Greenspan has to keep puffing up the housing market, with the consequent risk of US inflation.”
JB
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