Monday, April 21, 2014

Central Planners are Manipulating Markets

Look at what happened to gold over the last several days: On the way up to $1390, ‘black-box’ funds were buying (and covering short positions) and the gold open interest exploded. Who was selling into this rising price? It was the gold manipulators. They were following government instructions, and sold as the gold price climbed higher, and kept selling as evidenced by the rise in Comex open interest.

The manipulators could sell without regard to risk because they are backed by essentially unlimited government money. Their selling onslaught was enough to turn the market lower, forcing the funds to sell their long positions. The market manipulators bought what the funds were selling as the gold price dropped. So the manipulators covered their shorts with a profit while the funds took a loss. The huge drop in Comex open interest corroborates this outcome.

It means that the central planners, through their market manipulations, have sucked out most of the customer money originally invested in these funds, causing many of these black-box traders to close down their funds and return to their investors what money was left after losses.

The failure of this form of black-box trading was inevitable in a rigged market. I wrote about it in 2004 and 2005, observing how customers of these funds were getting their pockets picked by the market manipulators, who were following the orders of government central planners.

- Source, James Turk via King World News: