UK Will Send Traders Rigging The Markets To Jail. Will It Include Gold Manipulation And Naked Short Selling?

  

  We have a small victory for the common sense in the UK today. BBC reports "Osborne pledges criminal action against banks and traders":

"More action to tackle wrongdoing in the financial sector will be unveiled by Chancellor George Osborne on Thursday.

The measures will include making the manipulation of the foreign currency markets by banks a criminal offence. In a keynote speech he will promise to target "the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them". 

There has been increasing concern about whether the multi-trillion pound foreign exchange market was rigged. In his annual Mansion House speech, Mr Osborne will pledge the extension of legislation used to clean up after the Libor interest rate-fixing scandal. BBC."

  And the very important piece for us here:

As well as bringing the forex currency market under this legislation, it will be extended to those who trade in commodities, and also to the fixed income market, where the most common type of products traded are bonds. BBC."

  Will we have at least some justice for our beloved Gold now as well?

I Vote To End Gold Manipulation: FSA Fines Barclays For Manipulation Of Gold Price - Join Me.

 "Manipulation cannot lasts forever even if the very powerful forces are behind it. You already know that I am not talking here just about one trader, one bank or even one country. We are talking here about the highest levels of power involved in this masquerade.

 Why Gold is so important for everyone, not just for the super wealthy who can afford to put it aside for the rainy day? Gold is the most important indicator of the rate at which FIAT money are losing its value - its real purchasing power. If you can manipulate it - you can pretend that everything is fine and DOW and S&P 500 will beat All-Time-High every month as we have now. But just look below at your childhood McDonalds Menu - something is not so right, isn't it?

  My personal vote is nothing, but if I am not alone it will be finished one day. Please donate your tweet for the good cause and share this post if you want to change it as well.

TNR Gold: Shotgun Gold Project - Why Do We Need New Gold Deposits?

  "This picture above is stronger than thousand words written by the FED's hired academics and even Austrian School of Economics - it cuts through the verbal mist to the bone of Inflation definition and what it really means. It means that your FIAT money are losing it purchasing power. It happens every day, day by the day. How much you can see from the McDonald's menu from 70s. 

  And below is the chart representing "Strong US Dollar Policy" in action implemented by FED from the day of its inception in 1913. Some people even think that Federal Reserve is as Federal as Federal Express, but we will not go that road today. Read more."

  It is the very important first step on the cracking down on the illegal activities in the market place. How resolute will be authorities now? Will they start with the rehypothecation for which London is really famous as virtually having no limits for leverage - after the ongoing scandal with the missing collateral in China? 

"In my personal opinion, we are witnessing the same game of rehypothecation as it is happening with FED, BIS, Investment Banks and Gold. This, actually missing metal as collateral, will be the very bullish set up for the commodities markets. After initial selling due to the margin calls and unwinding of Paper Positions in the market, Mr Market will realise that all these metal accounted for the supply and demand picture is NOT there. Industrial demand will stay in place, but Supply which was supposed to be hoarded in the warehouses is missing: the collateral was used a few times for the different transactions. Read more."

  Will we have the catalyst for Gold and Silver price now Eric Sprott was talking about in his The Chinese Gold Vortex?

"Manipulation

The topic of gold price manipulation seems to be making its way into the mainstream. Regulators in Germany made the first foray into gold manipulation with their investigations of the London Bullion Market Association (LBMA) now infamous Gold Fixing.⁶  

Now, we hear that the CME Group (which owns the COMEX, where paper gold trades) has been sued by three traders for allegedly selling order information to HFTs ahead of the broader market.⁷ 

Simultaneously, academic studies have found evidence of manipulation in the gold market and a consultancy (Fideres) even claims that “global gold prices may have been manipulated 50% of the time between January 2010 and December 2013”.⁸ 

We have long suspected manipulation, but it is now clear to us that both the physical and paper bullion markets have been tampered with for quite some time, to the advantage of those that are naturally short gold (i.e. the bullion banks and other gold dealers). With the increasing amount of scrutiny from the public, academia, regulators and now lawyers, manipulators should have a progressively more difficult time preventing gold from reaching fair value. Sufiy."

  Will the legislation be extended to cover the all important illegal Naked Short Selling?

"Manipulation is rampant in all markets: HFT Flash Boys, LIBOR, FOREX, Pensions, Energy ... Gold. Some of the former conspiracy theories are going in the court rooms now, others are still waiting for their time. But nothing could be compared with naked shorting and manipulations in the illiquid junior mining stocks. Dirty tactics are used all over the market like the banging the juniors into the close, suppressing the prices during the accumulation. You can get the idea from the reports made by Jim Puplava  on Financial Sense and the summary: Naked Short Selling: The Problem. Read more."

  I do not know when the wind of change will reach Canada, particularly, in the suffering Junior Mining market, but I would like to share with you my congratulations to Patrick Byrne CEO of Overstock:

Patrick Byrne @OverstockCEO · May 20

 SEC announces charges against 4 officials at Penson Financial Services for #nakedshortselling violations http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370541860014#.U3uHDyimWgo …

 

Bullish For Metals?! Missing Collateral in China, Follow The Trail of Loans, Copper and Fraud.

  

  As we have discussed before, nothing on my blog represents the investment advice of any kind. I am only sharing my thoughts on the markets, our industries and our companies. It is important to keep the big picture in front of our eyes: not only headlines, but what is actually people with money are doing by using every manufactured opportunity to acquire The Real Assets at the Lower Price:

"China continues its buying spree of copper assets all over the Globe: last month the huge Las Bambas copper project in Peru was bought by Minmetals Group for $5.85 B and now Guandong is bidding for PanAust. Reuters reports on the deal and you can notice how the activity in M&A by Chinese companies is picking up during the "soft market". It is the very important indication of the major bottom in the mining cycle: it is cheaper "to dig" for Copper and Gold on the Stock Exchanges now, when valuations of assets in the ground of listed companies are discounted by the depressed mining markets. Read more."

 And for all its followers as a great contrarian indicator Goldman Sachs came out with the major piece on the risks related to the China's Commodities Unwind Zerohedge: Goldman Explains How Big Is China's Rehypothecation Problem Is (Hint: Very):

"Step 4: Repeat Step 1-Step 3 as many times as possible, during the period of LC (usually 6 months, with range of 3-12 months). This could be 10-30 times over the course of the 6 month LC, with the limitation being the amount of time it takes to clear the paperwork. In this way, the total notional LCs issued over a particular tonne of bonded or inbound copper over the course of a year would be 10-30 times the value of the physical copper involved, depending on the LC duration. ZeroHedge."

  Today Reuters reports: "CITIC Resources warns over China port probe; private metals firm investigated":

"(Reuters) - China is investigating a private metals trading firm over a suspected metal financing scam at Qingdao port, police sources said, as CITIC Resources Holdings Ltd warned that metal it owns at the port may be affected by the probe. Reuters."

  I find it quite interesting that really "Everybody Does It!" Matt Taibi: "Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in "Naked Short Selling":

"It doesn’t happen often, but sometimes God smiles on us. Last week, he smiled on investigative reporters everywhere, when the lawyers for Goldman, Sachs slipped on one whopper of a legal banana peel, inadvertently delivering some of the bank’s darker secrets into the hands of the public.

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks. Rolling Stone."

Market Manipulations, NI 43-101 And How The Honest Person Can Survive In Junior Mining.

"Manipulation is rampant in all markets: HFT Flash Boys, LIBOR, FOREX, Pensions, Energy ... Gold. Some of the former conspiracy theories are going in the court rooms now, others are still waiting for their time. But nothing could be compared with naked shorting and manipulations in the illiquid junior mining stocks. Dirty tactics are used all over the market like the banging the juniors into the close, suppressing the prices during the accumulation. You can get the idea from the reports made by Jim Puplava  on Financial Sense and the summary: Naked Short Selling: The Problem.  Not a lot of people are talking about it - not a lot of us have the voice. And that is the real problem.  Read more."

  In my personal opinion, we are witnessing the same game of the rehypothecation as it is happening with FED, BIS, Investment Banks and Gold. This, actually missing metal as collateral, will be the very bullish set up for the commodities markets. After initial selling due to the margin calls and unwinding of Paper Positions in the market, Mr Market will realise that all these metal accounted for the supply and demand picture is NOT there. Industrial demand will stay in place, but Supply which was supposed to be hoarded in the warehouses is missing: the collateral was used a few times for the different transactions. You can study this subject more with explanation in plane English in the very good podcast I have published yesterday:

Sufiy: Federal Reserve Is As "federal" As Federal Express: Massive Conflict Of Interest In This Private Central Bank.

  "In my personal quest for answers how does the world really work? I came across a lot of conspiracy theories and "tin foil characters", but to my very personal surprise a lot of these theories ... are happen to be true and the real secrets are hidden in the plain sight. I do not talk about any politics here, but in order to have All our Big Picture in place we must consider all options of How To Win Strategy is applied  in The Art Of War, which employs Any Rules of Breaking The Rules. Read more."