Thanks to Bill Murphy and the Gold Anti-Trust Action (GATA) committee, the
slimy, market-manipulating goings-on in the short-selling of gold futures and
silver futures to suppress their prices at the US Commodities Futures Trading
Commission have pretty well been exposed, and about time, too.
Tyler Durden at zerohedge.com calls it "one of the largest frauds in commodity
markets history", to which I can only add "I can't think of one bigger!"
although I admit that I am not up-to-speed on the history of frauds in the
commodities markets, nor am I up-to-speed on anything, now that I mention it,
which probably explains why I am such a failure, but which is another sad story
for another time.
And you would have to be as stupid as my boss thinks I am, and
my family thinks I am, and all the neighbors think I am, if it didn't occur to
you that a long-term suppression of prices is, using a metaphor I read
somewhere, like holding a ping-pong ball underwater, which is going to zoom up
when the suppression stops, and that ping-pong ball could shoot up out of the
water and hit you in the eye, and you will say, "Ouch! Me peepers!" which will
be bad, not because you should have said, "Me peeper!" because only one eye was
hit, but because you won't be able to see the explosive move in gold and silver
after waiting for it so long, unless, of course, you were holding TWO ping pong
balls underwater, expanding the metaphor to whole new dimensions.
Oops! I seem to have gotten off on a tangent. Sorry! But apparently there is
also some consternation about the gold exchange traded funds (ETFs) and whether
or not the gold is really there, mostly because of all those disclaimers and
"nothing is my fault" stipulations in the prospectus, which, if you take a look
at your brokerage agreement or any financial agreement, has all the same fine
print.
Gary Tanashian of biiwii.com sums it up by writing, "There is a lot of
controversy stirring up with regard to what could be the largest fraud in
history, as gold available for delivery to people who think they actually own
metal through paper intermediaries is being exposed as being only as safe as
the entities that guarantee its delivery - in other words, not safe at all."
And, given the latitude that the Federal Reserve, the banks, the International
Monetary Fund and all the other banks have given themselves, it's amazing that
ETFs are as conservative as they are!
I mean, for instance, the IMF and the Fed agree that they can lease out their
gold, even to the point of delivering the bullion to somebody so that there is
nothing left but an empty vault, but yet still count it on the books as being
all there and unencumbered! Hahaha!
But the obvious fraud of selling silver short at 100-to-1, or more, is not lost
on Jason Hommel of silverstockreport.com, who notes that "the entire world's
annual production of silver, at about 600 million oz., at $17/oz., is barely
$10 billion, which is a mere 1/20th of the amount owed in these bullion
accounts, which are dominated by JPMorgan", which he says total to an amazing
and outrageous $203 billion.
The actual figures, of the what I am calling The Big Silver Futures Scam, are,
according to Mr Hommel, that these market insiders sold-short futures for "12
billion ounces of silver, which is 24 times world annual production, and
perhaps 100 to 160 times the actual supply of physical silver held in London
for delivery against such accounts, which may be as little as 75 million ounces
or less."
I knew that none of this would make an impact on the ordinary people of the
world who are united in nothing except wanting me to shut up about the Federal
Reserve creating so much excess money and credit and how they are morons for
not buying gold, silver and oil, of which this futures thing is just a tiny
part.
But perhaps a snappy tune would help! I don't know why I didn't think of this
before!
Calling upon my Mogambo Musical Ability (MMA), I quickly came up with this
toe-tapper about the foolishness of people who own paper promises of silver
instead of buying physical bullion:
Ya gotcher paper in your hand.
You think that you're so hot.
You think that you got some silver,
But paper's all you got. Chump!
Richard Daughty is
general partner and COO for Smith Consultant Group, serving the financial and
medical communities, and the editor of The Mogambo Guru economic newsletter -
an avocational exercise to heap disrespect on those who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2010, The Daily Reckoning.)
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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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