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Friday, July 13, 2012

Is the gold market manipulated?



We know for a fact that Libor has been wantonly manipulated for years by a cabal of Big Banks.

We know for a fact that by manipulating Libor the Big Banks manipulate the price of hundreds of trillions of dollars of debt derivatives.

We know for a fact that the US government sponsored Working Group on Financial Markets (otherwise know as the Plunge Protection Team) exists specifically to manipulate the Stock Market.

We know for a fact that the Fed openly manipulates the Bond Market with well publicized programs with cute names such as Operation Twist.

These massive markets are clearly manipulated every day.

But what about the tiny gold market?  Somehow many commentators still can't believe that gold is manipulated.

Over at 321gold, the site's owner - a tireless junior gold stock shill - has put forth the argument we hear over and over to "debunk" the idea of gold manipulation.  "If gold is manipulated how come it's risen from $300 to $1600?"

This is like asking: "If the sun is so hot how come it's only 100 degrees in the summer.  Why not 110?  or 1000? 

It's a nonsense argument.  Utterly meaningless.  There's obviously no way of knowing how a given number would change if events unfolded in an entirely different manner in some alternate universe.

Let's consider what do know about this Universe:

A) There are obviously many ways to profit from market manipulation. 

B)  And there are obviously many ways for large players in the markets (banks and central banks) to manipulate the markets.

The only relevant question then is: Given the opportunity to profit from manipulation - in an environment where manipulation is clearly possible, and in environment where there are virtually no negative repercussions - why wouldn't manipulation exist?




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