Defeating the Cartel... With Profit, Part 2
Commodities / Gold & Silver 2009 Jun 24, 2009 - 04:25 PM GMTBy: DeepCaster_LLC
The Gold Report newsletter today interviewed Sprott Asset Management's chief investment strategist, John Embry…
"If you look at the short positions that the commercials, that is the bullion banks -- which are the agents of the U.S. government -- are running, it's a complete fraud," Embry says. "Because they couldn't possibly deliver on their paper promises if they were called by the people on the other side of the trade. The gold isn't there to deliver."
That is, the world's gold is, to put it politely, grossly oversubscribed…
GATA,” The paper gold marketer is afraid to look in the vault” June 13, 2009
We Precious Metals, Honest Money, and Honest Government Partisans have made significant Progress toward defeating The Cartel since Deepcaster published “Defeating The Cartel…with Profit” – I, just over two years ago. (See “Defeating the Cartel... With Profit”, 03/28/2008 in the ‘Articles by Deepcaster’ cache at www.deepcaster.com) But we still have a considerable way to go.
While the Guidelines for Profit and Protection offered in that article are still as Good as Gold today, as we have progressed in the last two years we have learned, (and occasionally reemphasized) more about defeating The Cartel and Profiting while doing it.
Thus we offer the following new, (and a few reemphasized) Guidelines and Observations useful for Defeating The Cartel with Profit.
[For those readers newly introduced to topic, there is clear and convincing evidence that a Fed-led Cartel* of key Central Bankers and Favored Financial Institutions regularly overtly and covertly manipulate Precious Metals, Equities and Strategic Commodities prices much to the detriment of Investors/Citizens around the world.]
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*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Key Central Bankers and favored financial institutions to read Deepcaster’s December, 2008 Letter containing a summary overview of Overt and Covert Intervention entitled “A Strategy for Profiting from the Cartel’s Dark Interventions & Evolving Techniques” and Deepcaster’s July, 2008 Letter entitled “Market Intervention, Data Manipulation - - Increasing Risks, The Cartel End Game, and Latest Forecast” at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.”
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- The Cartel is still Potent but not omnipotent.
Those Precious Metals Partisans (including Deepcaster) who would like to see The Cartel defeated should not allow Desire to obscure Reality.
Although, thanks to GATA, Rep. Ron Paul and many others, The Cartel is under increasing pressure, it is also by no means defeated. That is, it is not likely to be defeated any week soon, though the large open interest already in the August, 2009 Gold Contract could indicate an interesting Summer if a significant number of these folks decide to take delivery and personal possession of Physical Gold.
Consider that, although the Fundamentals for Gold have rarely been more Bullish, it is still below its all-time high and still suffers from periodic Cartel Takedowns. [The Cartel’s Motivation for these Takedowns is clear. To maintain its power and profit The Cartel must prevent increasing legitimacy for Gold and Silver as The Ultimate Stores and Measures of Value lest their Fiat Currencies and Treasury Securities be further delegitimized.]
We thus ask those who argue that The Cartel has “lost control” of the Gold price, the following question: if The Cartel had “lost control” given Gold’s ragingly bullish fundamentals, would not Gold have already attained, and even surpassed, its all time inflation–adjusted high, which would be about $2,300/oz?
Indeed, recent evidence strongly indicates that The Cartel is using U.S. Taxpayer – provided TARP funds to sell paper Gold to suppress its price! Outrageous!
Nonetheless, employing the Strategy set forth in “Defeating The Cartel with Profit – I (03/28/2008 in the ‘Articles by Deepcaster’ cache at www.deepcaster.com) makes it possible to achieve considerable insulation from Cartel Takedowns of the Precious Metals, plus Profit and an increasing core position of Gold and Silver, along the way.
That said, The Cartel is under increasing pressure. While their market rigging operation is still potent, the politicians are starting to increase the heat in response to justifiable public Outrage over the Mega-Bank Bailouts. Thus…
- The Justifiable Outrage at multi-hundred billion dollar Bailouts of the Mega-Banks (certain of which are members of The Cartel’s Inner Circle) has Generated Political Action.
A Majority of the U.S. House of Representatives has already signed on to Ron Paul’s (excellent, if one may say so) ‘Audit The Fed’ bill (H.R. 1207) and a companion bill (S. 604) has been introduced in the Senate, where it will have tougher going. Of course, the sell-outs have introduced watered down versions to take the heat off. Rep. Paul has also commendably introduced an “Abolish The Fed’ bill, which is gaining increasing support.
And a House Committee has finally had the guts to issue a Subpoena to The private for-profit Fed to produce documents and emails relating to the AIG matter. AIG was used as a funnel to channel billions of U.S. Taxpayer provided Funds to the Mega-Banks (e.g. $11.9 billion to Goldman Sachs) (See “Opportunities & Threats in Derivatives Shocker”, 5/29/09 in the ‘Articles by Deepcaster’ cache at www.deepcaster.com), some of whom are likely shareholders of the private for-profit Fed.
In light of all the foregoing, The Obama Administration’s Plan to make The private for-profit Fed The Systemic Risk Regulator would have disastrous consequences for Investor/Citizens around the world! See Deepcaster’s “The Fox Wants More Of Our Chickens” (04/04/2008) and “Coping with the Superpower-Cartel Threat!” (01/30/2009) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.
An Honest Audit of the private for-profit Fed would likely result in its demise, and thus mortally wound The Cartel – All those who are outraged should contact your Senators and Representatives. Enough said.
- In the meantime, The Cartel continues its Takedown Actions (using select Primary Dealers as vehicles) as the $21.30 Friday, June 12 Takedown of August Gold to close at $940.70 manifests.
- The Cartel likes to run “Under the Radar” since a wider knowledge of its Market Rigging operation is not in its interest.
One of its main techniques is to Use and/or Create Technical Patterns to get Investors and Traders Offsides.
As we write (June 19) Gold has created a beautiful Reverse Head and Shoulders pattern with an upside target of about $1,300/oz. It will be most interesting to see whether, on its next up move, Gold will hit $1,300, or whether, as in times past, The Cartel will use that TA pattern to lure in Precious Metals longs, only to savage them with a Takedown. Deepcaster has issued a Forecast for Gold and Silver Price Movements available in the ‘Alerts Cache’ at www.deepcaster.com.
- Perhaps to inflict maximum financial pain, The Cartel has a habit of making Major Moves around Option Expiration time. Thus heightened awareness and caution is the watchword as these Expirys approach.
- One must also consider the increasingly important and Controversial issue of whether Major Gold and Silver Exchange Traded Funds (ETFs) actually have the Gold and Silver they say they do. It has been alleged that certain ones do not, and that, therefore these “have nots” are mainly vehicles used by The Cartel to further its Manipulation Regime.
For example, if these certain ETFs have not the Precious Metals they say they do, they thus de facto siphon off money from Investors who think they are buying Real Physical Gold and Silver.
We do not claim any particular knowledge of these ETF’s or whether they actually have, or do not have, physical possession of all the Metal they claim.
Rather, we simply suggest that Investors consider whether these ETF’s have a rigorous and reliable mechanism for auditing their supposed holdings and fully disclosing their findings to the public, or, at least, to Investors who invest in them. Insist on seeing their most recent audit results before investing.
In this regard, the GLD and SLV ETFs and the Perth Mint bear examining very closely.
- Monitoring “Communications Policies”, to use Chairman Bernanke's term, seems to us more important than ever.
Why oh why do the Major Media outlets black out the increasingly convincing findings of GATA, for example, unless they are complicit in a cover-up of The Cartel’s Market Rigging Operation?
- And why do Official Sources continue to issue Bogus Statistics when the Real ones are easily available. Shadowstats.com makes a convincing case that Consumer Price Inflation is still a 7% annualized (May 15, 2009 report), M3 is still at about 7% (June 12, 2009 report), that Real Unemployment is about 20% (June 5, 2009 report), and U.S. GDP is a negative 5% (May 29, 2009 report).
- Follow the Money. The Profit Potential (or Reality?) of Market Manipulation is Truly Staggering. Deepcaster recently noted, for example, that, according to the Central Bankers’ Bank itself – the Bank for International Settlements – unnamed Major Financial Institutions increased the Market Value of their OTC Derivatives by $13 Trillion (yes Trillion) in the six months from June to December, 2008, when Trillions were being lost in the Fall, 2008 Crash of the Equities Markets (See “Opportunities & Threats in Derivatives Shocker” 05/29/2009 in the ‘Articles by Deepcaster’ cache at www.deepcaster.com).
- Deepcaster’s Strategy, laid out in “Defeating the Cartel... With Profit” 03/28/2008 has shown potential to protect against Cartel Takedowns (specifically, for Gold and Silver) and in so doing enabling profit, whether Gold and Silver are rising or falling.
- The Interventional Regime is as active and broad-based as ever, as is most recently summarized in Deepcaster’s December, 2008 Letter available in the “Latest Letter” cache at www.deepcaster.com.
- If, at the Interim bottom of Cartel Takedowns, Investors wish to increase their position of Gold and Silver, they should by all means do it by buying the Physical Metal – either coins or bullion – and taking personal possession of it!
Here is a nice phrase for fraud: The world's gold may be "grossly oversubscribed."
Does anyone recall the 1970s Black Watch Farms Angus scandal? Lots of investors thought they owned a cow critter. Came as a shock when more than 100% of each animal was owned by several people. That is "oversubscribed." - A Deepcaster Reader
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