Hi Guys!
I have no love for the Cartel, and cannot wait for the day when a few of the big shorts go bankrupt, and the ringleaders go to jail. If it happens this month I will celebrate like a rockstar. I just do not see it happening anytime soon. And it irks me that so few people, even those who claim to watch the markets closely, will even consider the possibility that things are crooked. Instead the very painting of the tape that is fundamental to manipulation is also pointed out as the normal functioning of our markets.
As for the Chinese, I picked that as an example of a nation accumulating gold and therefore a beneficiary of the manipulation. For all I know, it is Chinese interests that are responsible for the manipulation. They want cheap gold and are buying out mining companies, so what better strategy then to pay out cash in futures contracts to suppress the price, and then buy up the bullion and the companies with big deposits on the cheap. The money lost in the paper trading is a loss leader that is easily recovered in the hard assets they can buy at the back end. I think there is a case to made there too.
Regardless of who is active to create these conditions, the fact remains that fair and free markets demand active regulatory oversight to eliminate any chance that big players can take advantage of the smaller players. And that is not happening, and the very fact that it has been taken out of the story is just one more bit of evidence pointing to government policy as a direct and participating factor in the manipulation. China or no China, our goddamn regulators are supposed to enforce the rules to ensure none of this crap goes on in OUR markets.
This will not end well. It is not in the best interest of our markets to have a big manipulation scheme blow up. It does nothing for the integrity of our system to have this exposed and probably also expose the direct participation at very high levels of our economic leadership gang, corrupt to the core. It does nothing for the health of our mining sector to starve smaller companies on the vine, impairing the exploration and development of the projects that we need for the next round of production.
I am in complete agreement that the mining companies will have to find the resolve and leadership to cooperate and take on the crooks themselves. But what will this achieve? Most juniors are hanging by a financial thread and unable to commit even a small amount of money towards underwriting a legal challenge. And in the end the perps will claim they were acting on behalf of government, as the Blanchard case demonstrated. We are just going to have to take the medicine and wait for the crooks to run out of bullion to continue the scam. That may not be much longer.
cheers!
mike
