Are Markets Manipulated All the Time?
QUESTION: Mr. Armstrong; Some people say you will not admit markets are manipulated all the time. Yet you stood up and had all the evidence that would have damned the whole lot of the New York bankers for manipulating markets. This is very confusing how you can be against them in public yet people claim you refuse to admit the markets are manipulated all the time between the central banks and the New York bankers. Can you shed any light on this paradox?
ANSWER: I am a student of markets. I do not make up bullshit. I am of the school of Adam Smith – assume nothing – prove everything. Claiming markets are manipulated all the time is impossible. Marx tried that with communism and the free markets still won. This claim is merely a cop-out for admitting someone does not understand how markets function. Sure the banks manipulate markets individually. They cannot and do not do this systemically. Even in LIBOR they rig the game to make consistent profits but that does not mean they are capable of manipulating the entire trend. Even the central banks can control short-term rates within a trend but not long-term. This is why they then buy in long-term paper trying to INFLUENCE the long-term – they cannot dictate the price or trend. They have no direct power over markets. They can suppress the short-term like communism but the free markets will blow them out of the water when the Sovereign Debt Crisis hits. Why people put out this bullshit is amazing for if it was true then why buy gold at all for the system cannot ever collapse if it is all perfectly manipulated. This is just total gibberish from people who have ZERO experience inside the markets or behind the curtain. I had more than half the equivalent of the US National Debt under contract for advisory. I think I saw things no analysts has ever dreamed of no less understood. These people make up stuff to hide their inexperience – plain and simple. The banks told the government I manipulated the world economy BECAUSE they lost every time from Orange County, Solomon’s manipulation of US Treasury Auctions to the DOT.COM bubble and the 2007 Real Estate crisis. They ALWAYS blow up every time and run to government to get bailed out. How is this someone who manipulates the markets everyday? They should never fail if true.
You get mislead people swearing gold will rally to $10,000-$30,000 any day and when it falls out of bed they blame manipulation for being wrong. If the markets are manipulated ever day, then why trade against the trend using theories that purport the world will collapse any day? This is the real paradox to me. How can you say buy gold and when you are wrong you do not admit the mistake but blame manipulation? If it is manipulated then why tell people to buy something that can never rise?
We always tracked manipulations. I knew ABSOLUTELY every single one they did. We monitored the manipulations very carefully. The various manipulators hated my guts just like the goldbugs who will not listen. They tried to get me to join them figuring that when they lost it was because I had more followers than they did and therein started the allegation of manipulating the world economy that I had to defend against a subpoena from the CFTC demanding I turn over all names of clients worldwide so they could prove I was more powerful that the banks they protect. I defeated them in court. My lawyer at the time Chris Lovel stood up and told the judge even if I did manipulate the world, where was the law that said I could not no less how was it the domain of the CFTC?
I have written that written publicly that first PhiBro silver manipulation took place in 1993. They client was Warren Buffet. The CFTC went to PhiBro demanding to know who they were buying silver for. They refused to give up Buffet’s name. The CFTC would have thrown anyone else in jail and out of business. They are owned by the big players and corrupt as hell right to the core. The CFTC simply said ok, no name, then exist the trade.
They desperately tried to get me to join the second silver manipulation with Buffet. I have written stating publicly that PhiBro’s brokers walked across the COMEX pit and showed my floor brokers Buffet’s orders and told me to join. They knew I would never trust these people for how would I know I was not the patsy to buy and they would use a another seller. I would never join them. Hence, PhiBro showed me the orders to convince me to join.
I then reported to our clients “they are back” knowing it was Buffet and PhiBro for a second time. They all got pissed-off at me even though I never mentioned names. The buying of silver was done in London. Therefore, they moved silver out of COMEX warehouses in USA and shipped to London to pretend there was a shortage to justify the manipulation. The Wall Street Journal assisted in the rally.
The manipulators with steering the buffet buying in London to avoid the 1993 problem with the CFTC. This is why AIG trading arm also set up in London. Buying silver in London justified moving it from the NY COMEX and this allowed them to get the manipulation going. COMEX supplies were reported in isolation. Moving the silver to London created the false image of a shortage to justify thye higher prices. The Wall Street Journal was used to plant the story. On September 30th 1997 the stories played headlines – “Silver Prices Hit Six-Month High On Steadily Declining Reserves, By PALLAVI GOGOI AP-Dow Jones News Service Updated Sept. 30, 1997 12:01 a.m. ET NEW YORK — Silver futures surged to a six-month high at the Comex division of the New York Mercantile Exchange, a move analysts said was triggered by steadily declining warehouse stocks. The rally was boosted by preplaced purchase orders around the $5-per-ounce level…” This was the news created for the manipulation that was constantly played out in the newspapers. The Wall Street Journal again reported on November 17, 1997, “Silver Futures Prices Leap On Hints of Tight Supplies”, and again on December 4, 1997 the Wall Street Journal from London reported “Silver Surges on Strength In Supply-Demand Status By NEIL BEHRMANN Special to The Wall Street Journal Updated Dec. 5, 1997 12:01 a.m. ET LONDON — Gold may be in the doghouse, but silver is soaring like a bird”. The reporting of shortages continued to fuel the rally. The Wall Street Journal reported again December 24, 1997 for the manipulators “Silver Futures Advance As Inventories Plunge”
The interesting point is the manipulators know that if the rally the metals, the retail goldbugs rush in and buy. They then routinely turn around and sell to them at the top and the markets crash. This standard procedure and the goldbugs buy the high every single time.
The “cluib” was pissed-off that I would not join and warned they were back manipulating silver. The got a journalist from the Wall Street Journal to try to discredit me. They told him I was short silver and trying to talk it down. The journalist accused me of this nonsense and we argued on the phone. It got quite heated and frankly I was not retail so could care less what they printed. My clients were the real deal who all knew the truth about journalism. In fact, they did not ever want me to give interviews about market forecasting to the press for their view was hey – we pay for that info.
Nevertheless, the journalist kept arrogantly taunting me and said if silver was being manipulated, then give him the name so I said fine, go ahead, let me see you print it, knowing he never would. The name I gave him was Warren Buffett. He laughed. Told me everyone knew Buffett did not trade commodities I told him that was how much he knew.
The Wall Street Journal published the article. The London newspapers were fed stories by the “Club” that I was now the largest silver trader in the world. This became all a joke to me. It demonstrated how bad the press really was. They were the pawns of the manipulators and probably didn’t even know it.
The mistake made by the “Club” by turning out the press against me, was they actually created such a worldwide story that silver was being manipulated the CFTC was forced to call me – it was public now and they had no choice. They knew I was not the source of the manipulation. Even the CFTC could look at positions and knew I was not the biggest player in silver. The CFTC then asked me, where was the manipulation taking place? I told them it was in London, out of their jurisdiction. The CFTC told me that they could pick up the phone and investigate London. I told them that they had to make that clear decision. I hung up. Never did I expect that they would really do anything. Yet, they never asked me who because the question was jurisdiction.
A few hours later, my phone rang. It was a good source in London who also was helping to monitor the “Club” actions. He told me that the Bank of England had called an immediate meeting of all silver brokers in London in the morning. I was shocked. The CFTC had made the call. But then again, I had given them no names so perhaps in their mind, this was fair game.
Within the hour, Warren Buffett made a press announcement. He admitted he had purchased $1 billion worth of silver, in London . He denied he was “manipulating” the market. Claimed the silver was a long – term investment. Everyone was shocked that Buffett was suddenly exposed as a commodity trader after all. The very next day the Wall Street Journal called me. The writer asked – “How did you know?” I told him it was my job to know! Silver thereafter declined and made new lows going into 1999. So much for Buffet’s long-term investment since he sold out.
When one trader from New York joined our firm, he called Goldman Sachs to ask about us. He has publicly stated on the record that their response was they had butted head with me many times but I usually won.
Exposing the silver manipulation trying to turn the press against me was a huge mistake. The CFTC would have never called the Bank of England just because I reported the manipulation to our clients. That was private. Exposing the issue in the press forced them to respond. My brokers on the floor were Emerald Trading. I routinely traded AGAINST the manipulators and defeated them many times. Just as the goldbugs do not like me, neither do the manipulators and it far too often seemed to coincide when they were trying to goose the markets UP – not down. Contrary to the bullshit, they need people to BUY the metals to create a pool of longs to bury. They are NOT interested in forcing a metal down to compel people to sell. That is not very profitable for they want the emotional traders who buy highs. Of course the goldbugs will say I am wrong but have never been in the same circles and some of them I question if they are not the people paid on the side by the manipulators.
There have been major manipulations of markets such as rhodium and then there was the manipulation of Platinum. I had recorded tapes and tons of documents on every manipulation. This was all seized by the court and I stood up instructing the court that these tapes Alan Cohen was demanding involved criminal activity on the part of the banks. I had it all for years. Alan Cohen then was made a board member of Goldman Sachs yet still remained as the court appointed person to run Princeton Economics. That is totally illegal and a conflict of interest. Law does not matter in New York City. (see Transcripts below).
To say I will not admit markets are manipulated is absurd. To claim they are always manipulated is impossible. Yet the real paradox is when they rally, they never seem to be manipulated. That is always real. They become manipulated only when they decline.
Not even the central banks can manipulate everything. Sure people try. But not everything. They target one market and go after that. The central banks have been trying to manage the economy to eliminate recessions. They have never succeeded even once. The central bankers know this is a confidence game just as the market manipulators. You NEED the public to move a trend. They cannot do it alone. If they were all-powerful, then Bretton Woods would never have collapsed.
There is a huge difference from a short-term manipulation within the trend like the Buffet silver move, but the market still fell to new lows with all the movement of silver and buying $1 billion in a tiny market. Where is the PROOF of systemic manipulation. It is nonsense.
WEC 2014
Yes the 2014 WEC DVDs are shipping out now.
Government Punishes Savers to Support Debtors – Has Western Society become Fascist?
The entire problem we face going ahead stems from the very idea ofKarl Marx that government is capable of managing the economy either through communism or autocratic-socialism where the state dictates to the economy under the pretense of caring for the people, that has truly become a derivative of fascism where the state comes first. This is even reflected in the conviction rate that has risen from 72% in the 1970s to virtually 99% today eliminating fair trials. We also see it taking shape in the militarization of the police that actually do not protect society, but the state from the people. Police have been converted to IRS agents on wheels to raise money by abusing the people for every possible type of traffic violation. In Princeton, New Jersey, they even have signs in a parking lot “park head in”. If you back into a parking spot you get a ticket. The actor Alec Baldwin was arrested for rising his bicycle against traffic. Who knew you could even be arrested for such a thing. This is autocratic-socialism where the state pretends its abuse of the people is for their benefit when in fact there is always a profit that falls to them like FATCA and the NSA really looking for money – not terrorists.
Savers are being exploited by government under the pretense of managing the economy. You see many retired people back in the work force doing service jobs because they can no longer earn income on their savings for life. Savers receive no return presently on their life savings because Central banks punish savers and subsidize the debtors assuming that borrowing is required for economic growth. This core assumption that government even possesses the mental capabilities to manage the economy is extremely dangerous for it then creates a fascist state where society is supposed to worship the state as all-knowing and caring where its survival takes precedent over the individual. This is reflected in calling Snowden a traitor. How is it possible that someone who exposes illegal activity in government faces life in prison? Such legal positions are only possible in a fascist state where it is not We the People, it is the State Comes First.
This is actually part of the political-economic cycle where the arrogance of the state officials leads them to assume it is their well-being and power that is important and must be defended against the people. The people become the great unwashed and the state rises confusing itself as the embodiment of the nation and country. Thomas Paine pointed this out in his Common Sense. Then too, like Snowden, he was an enemy of the state was to be hanged. Thomas Jefferson was also regarded as a traitor and the king sent an entire army to his house to capture Jefferson and hang him. He was warned and escaped watching the army surround his home from the woods on the hill.
Even if we go back to the Roman Republic we find Cicero also addresses the “arrogance of officialdom”. This is simply a problem that has plagued human society since the dawn of time. It is the arrogance of government that forgets the PEOPLE are the nation, not politicians and bureaucrats. Consequently, in their blind arrogance, the political powers in Washington would kill Snowden for exposing their corruption. They would love to behead him, but restraint themselves only to pretend they are noble
Obama has seen his polls collapse to 39% favorable. Within that, are simply the ignorant who would vote for a democrat simply because they hate republicans. Of course, there are republicans who also do not understand and just hate democrats just because they exist. TV stations like FOX and MSNBC should be banned and we need the old law returned where the press MUST present a fair and balance view instead of this war of propaganda. For those who do not know the history of the FCC, it was once called the Fairness Doctrine which was a policy of the US Federal Communications Commission (FCC), introduced in 1949, that required the holders of broadcast licenses to present controversial issues of public importance with both sides and to do so in a manner that was honest, equitable and balanced. The FCC eliminated the Doctrine in 1987, and in August 2011 the FCC formally removed the language that implemented the Doctrine. We have been subjected and bombarded with nothing but propaganda ever since. MSNBC and programs like the Ed Show would NEVER have a Republican on orEVER say a kind word about any Republican. This is not press – it is no different from the notorious Pravda (Truth) of the old Soviet Union.
Obama actually had the arrogance to tell the American people as reported on January 17, 2014, that they must give up their civil liberties to secure the existence of the state – that is precisely fascism. Obama said the American NSA and military power worldwide was more important than individual civil rights. Whenever people must surrender rights to support the state that falls in the category of fascism.
One common definition of fascism focuses on three basic concepts:anti-liberalism, anti-communism and anti-conservatism. Its basic tenet is a nationalist authoritarian state with goals of creating a regulated economic structure to transform social relations within a modern, self-determined culture. This is precisely what we have devolved into. We now have a form of political behavior that is marked by obsessive preoccupation with the state’s political power arguing the community is at risk because of terrorism so everyone must now prove who they are to travel right down to taking your shoes off and be exposed to accumulative dangerous radiation all because we are victims of unreasonable fanatic hatred groups and cults. But these hate-groups hate the political image of America created by the arrogance of officialdom.
Our dominance by this new authoritarian-fascist state is a form of radical authoritarian nationalism that some believe only came to prominence in early 20th-century Europe. This concept of European fascism was influenced by national syndicalism that they only attribute to originating in Italy in the immediate aftermath of World War I. This combined more typically right-wing positions with elements of left-wing politics, in opposition to liberalism, Marxism, and traditional conservatism. Although fascism is usually placed on the far right on the traditional left–right spectrum, it is hard to really place it left or right because if your move to the extreme left or right you reach political agreement with minor differences.
The goals of the fascists were not much different from those infecting our society today. The primary goal was to manage the economy and to direct it according to the benefit of the state. This is why savers are being punished today for the benefit of debtors, which includes the state. Keep interest rates suppressed and the state reduces its costs. That is the primary goal intermixed with pumping up the economy so that tax revenues rise. The fascists of Italy sought to unify their nation through an authoritarian state that promoted the mass mobilization of the national community and were characterized by having leadership that initiated a revolutionary political movement aiming to reorganize the nation along principles according to fascist ideology. Fascist movements shared certain common features, including the veneration of the state, a devotion to a strong leader, and an emphasis on ultranationalism and militarism. We are seeing the dominance of the NSA and the militarization of the police that was supposed to be civil. These are all traits that are highly dangerous historically and reflect the arrogance of officialdom.
Fascism typically involves expansion of the state power on every level, which includes war and imperialism that serves as a means to achieve national rejuvenation and veneration. Right now in Ukraine, the people are told the state is at war and that comes first and they will have to wait for political reform. Fascism truly asserts that stronger nations have the right to expand their territory by displacing weaker nations. We are seeing this as a trait in both the USA and the EU not to forget Russia.
Consequently, fascist ideology consistently invokes the primacy of the state. We see this both with Obama’s defense of the NSA and economically with the central banks attempting to “manage” the economy according to the theories of Marx and Keynes that the state possesses the right and capacity to manipulate the economy. They have been unable to prove that ability even once for they are far too corrupt to even manage anything in an unbiased manner.
Unfortunately, governments routinely punish savers to support debtors all for the benefit of the state – not society and certainly not the savers. There are economists who disparage the spread between the rich and the poor without explanation. The “rich” are not getting “richer” from salaries – they make that money through investment. If you do not invest – you obviously cannot make more than a salary.