On the heels of continued speculation about exactly what “customers” JP Morgan is referring to that it trades for in allegedly manipulated markets, today 40-year veteran, Robert Fitzwilson, put together another tremendous piece. Fitzwilson, who is founder of The Portola Group, discusses what JP Morgan, the Fed, the U.S. Treasury and even China may really be up to and what all of this means for major markets, including gold and silver.
September 23 (King World News) – “The Poker End Game – JP Morgan, The Fed, US Treasury, China & Gold”
We recently wrote about the board game called Clue in which participants solve a crime by identifying the perpetrator, the place and the weapon used. Recent revelations in the world of finance in the past week have made it a bit clearer as to the likely forces behind the curtain who are perpetrating what has to be the biggest financial crime in human history….
The first thing we learned is that there apparently has been no criminal manipulation of markets. It turns out that the perpetrators, the legal system and the enforcement mechanisms have decreed that the manipulation of markets is completely legal relying upon legislation enacted in the 1930s. That is quite a disturbing surprise for the majority of investors who have been told that attempting to corner and manipulate markets would not be tolerated, and would also result in severe financial penalties as well as incarceration. Apparently this is the case for everyone except central planners. It is just official policy. As they say, “nothing to see here, keep moving”.
In the case of J.P. Morgan, they have said that they are simply executing the orders of the customers when accused of cornering/manipulating the precious metals markets. There has also been speculation that the “customer” to which they are referring is the U.S. government/ Federal Reserve. There has also been speculation that the Chinese have had a hand in the suppression of gold and silver prices.
It crossed our minds that the real customer is not only the Fed and the U.S. Treasury, but also the Chinese. It has been surmised that the Chinese have had two objectives with their massive acquisition of gold. The first is diversification away from their massive accumulations of paper currencies, specifically the dollar. The other speculation is that the Chinese would like to take over the mantle of the world’s reserve currency in the form of a gold-backed Yuan. Both are no doubt true.
Connecting the dots to create a plausible explanation for what we are witnessing, let us assume that China is one of the customers to which J.P. Morgan is referring. The U.S. might be allowing China to suppress gold and silver prices in exchange for a deal not to disgorge their huge holdings of Treasuries on the open market. J.P. Morgan could very well be telling the truth, just not the truth that most people believe.
China also floods the paper gold and silver markets with huge quantities of contracts which neither the Comex or J.P. Morgan will question. At these artificially low prices, China is able to vacuum up existing stocks of physical gold from the GLD and other repositories, in order to add to the tons acquired from their own domestic mining…..
Read the entire article at KING WORLD NEWS