Another Smoking Gun of Market Rigging, but Warburton Saw It All Back in 2001

In his profound and prophetic essay 13 years ago, "The Debasement of World Currency: It is Inflation, But Not as We Know It" — the British economist Peter Warburton realized that central banks had abused their unlimited power of money creation and that this had impelled them into comprehensive commodity market rigging and price suppression to save the financial system they had perverted.
"What we see at present," Warburton wrote, "is a battle between the central banks and the collapse of the financial system fought on two fronts."
"On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur."

This post was published at GATA

Gold price suppression needs no whistleblowers; it’s in the open because nobody notices

Over the long Labor Day holiday weekend in the United States GATA's secretary/treasurer Chris Powell sent the following e-mail to many financial journalists and mining company executives in the hope of calling their attention to the latest smoking-gun proof of central bank intervention against the gold market and other markets.
Dear —–:
The Gold Anti-Trust Action Committee is publicizing a document discovered last week on the Internet site of the U.S. Commodity Futures Trading Commission. It suggests that central banks are surreptitiously intervening in all major futures markets operated by CME Group — that is, suggests that all these markets are rigged. This strikes me as a pretty big news story and I've sent it to many major news organizations in the hope of inducing them to pursue it. See what you think. The document and some context for it can be found at GATA's Internet site here:
Of course there were few acknowledgments, but one mining executive did reply cordially, to the effect that 1) conspiracies are hard to keep secret, 2) despite GATA's many years of exposing market manipulation not one disgruntled employee or former spouse or jilted lover has ever come forward to describe how the manipulation works. Until he could see information from someone actually involved in gold price suppression, he wrote, he would remain a skeptic.
Chris Powell replied as follows….

This post was published at GATA

The Credit Gradient

The United States, and every country, is subject to a monetary authority and legal tender laws. Here in the U. S. we have the Federal Reserve, a central bank that plans money and credit. The Fed thought they had perfected their planning (but of course it cannot be perfected). They thought they had ended the boom and bust cycle, and brought us into a brave new era, their so-called great moderation that ended in 2008. All they really did was manage the banking system to the brink of insolvency.
Let’s try a thought experiment. Suppose the monetary central planner attempts to fix the problem of insolvency by massive injections of liquidity. The central bank buys bonds. It dictates rates near zero on the short end of the yield curve, and promises not to raise rates for years to come. What perverse outcome would we expect?
Arbitrageurs see a green light, telling them that they can safely borrow short to buy long bonds. As the price of a bond goes up, the rate of interest goes down – it’s a rigid mathematical inverse. This is how suppression of short-term rates causes suppression of long-term rates.
This poses a problem for investors. Every investor has a minimum yield he must earn in order to meet his goals, such as retirement. When the yield available in government bonds falls, this gives the investor a strong push to other bonds with higher yields. Some Treasury bond owners sell, and go into AAA corporate bonds. This, of course, pushes up bond prices and pushes down the yield. This pushes some AAA corporate investors into AA bonds. And so on.

This post was published at GoldSeek on 29 August 2014.