Phony 'Analysis' Can't Hide Metals Manipulation

NEW YORK (Bullion Bulls Canada) -- It is very hard to resist the urge to label members of the mainstream media "parrots" when time after time we see them unanimously regurgitating the exact, same drivel -- no matter how vacuous or absurd the pseudo-reasoning on display.

We observe this sad truth again and again in precious metals markets, with the recent pullback in prices being a classic example. Today was a down day for commodities -- all of them -- as the propaganda machine decreed that with a slowing global economy that they were "too risky."

The simple fact that we see the entire commodities complex moving in lock-step on most days is conclusive proof by itself of the rampant manipulation of commodities markets in general and precious metals markets in particular. Each individual commodity market is composed of two sets of parameters: "global" parameters (applicable to most/all commodities), and the individual parameters particular to each commodity -- separately.

In honest/legitimate markets (i.e. throughout market history), on the vast majority of days, commodities trade based on their individual fundamentals, as it is the exception rather than the rule for global parameters to overwhelm individual parameters in any particular market. We know when commodities are trading based upon their own fundamentals, because they move in different directions and with differing amplitudes.

Conversely, days when global parameters dominate all the individual parameters are quite rare, and generally reflect either some dramatic development or overwhelming trend. We know which days global parameters are dominant in our markets, because all the commodities move in both the same direction and with similar amplitudes.

Here is where the lies/idiocy of the mainstream media and the manipulation of markets by the banking cabal are clearly exposed. What we now see in markets (month to month) is that in somewhere between 75% and 90% of all trading sessions, global parameters are dominating individual parameters.

There are only two possible explanations for this phenomenon in our markets. Either our markets are being mass-manipulated, or we live in a world where on 75% to 90% of the days our "news" (of the day) is dominated by a dramatic development or overwhelming trend.

For the sake of the skeptics, let's first assume that our markets are not manipulated and that we live in a world dominated (nearly every day) by extreme news. Where does this get us?

First of all, we need to see evidence of these "extreme" economic phenomena. What does the empirical data tell us? Pushing prices down, we see a very gradual, incremental slowing of the global economy (if we believe the data presented). Pushing prices up, we have just had both Europe and the U.S. announce infinite/unlimited money-printing -- in the context of economies with permanent, near-zero interest rates.

Our (cyclical) economies slow down and speed up all of the time. There can be no possible justification for the (small) incremental changes in global economic growth to suddenly and totally dominate commodities -- across the board -- nearly every day. In other words, it's impossible to manufacture a valid reason for commodities prices to decline en masse. Period.

On the other side of the coin, we see a dramatically different story. Permanent near-zero interest rates are literally the most extreme/most reckless monetary policy possible for a central bank . . . with the sole exception being unlimited (infinite) money-printing. With the economies of the U.S. and Europe we are now getting both forms of monetary insanity simultaneously.

In other words, given this unprecedented action by Western central banks (literally) flooding the world with their fiat paper, it would not be surprising or contrary to fundamentals to see commodities prices moving up every day. This reflects the fact that as an elementary tautology both the dollar and the euro are now obviously worthless.

As I noted in a prior commentary, as a matter of simple arithmetic any "good" brought into existence at zero cost and in infinite quantities must be worthless. Were this not the case, any actor in our markets could simply obtain an infinite quantity of this (worthless) good and trade it for all the world's assets. It would be a real-life example of "Jack and the Beanstalk" -- where people surrendered valuable goods for "magic beans."

With the Federal Reserve announcing "open-ended" (i.e. unlimited) money-printing solely to purchase vast quantities of Wall Street's worst financial feces, accompanying its 0% interest rate; the U.S. dollar must be worthless. The only difference with the euro now that the European Union has announced "unlimited" money-printing to buy-up worthless European bonds is that with European interest rates around 1% the euro is merely "practically worthless."

What this means is that price action in markets (on a daily basis) is now conclusive empirical evidence of rampant manipulation. What makes this fraudulent scenario absurd as well as criminal is that the tool of this manipulation is the proverbial "open secret": automated trading algorithms.

"High frequency trading" (the euphemism behind which these manipulative algorithms hide) could never possibly be justified in legitimate markets. The minor savings they provide in trading costs (for a handful of bankers) could never be a reason to allow the brute-force application of these computer programs (with massive sums of money behind them) when the only possible result could be mass-manipulation.

Again we have conclusive, empirical proof of the malignant, manipulative force of these algorithms: the sudden emergence of "flash crashes" -- where the entire market herd charges in the same direction (like lemmings) with the inevitable result being some catastrophic imbalance emerging in trading.

Do the corrupt regulators of our markets seize upon this obvious evidence to outlaw these manipulative programs? Of course not. Instead, they install cyber "circuit-breakers" in our trading systems -- so that we only have mini flash-crashes (again and again and again).

This brings us back to the mainstream media, and their dishonest or incompetent reporting on commodity markets in general and precious metals markets in particular. What "reason" have we been given for today's pullback in prices? Gold and silver are supposedly "risk assets" and today the manipulative trading algorithms are leading all "risk assets" lower.

The problem is that gold -- and silver -- are the quintessential opposites of risk assets. As we speak, the world's central banks are swapping their own paper for gold at the fastest rate in history. Meanwhile, Western central banks (the only bankers not openly buying gold) have recently declared that once again gold is the safest category of financial asset.

With central bankers being the "experts" to whom both the media and our governments look to for advice on "risk" in financial markets, it is these experts themselves who have decreed gold to be the world's lowest-risk financial asset. Thus on any "risk-off" days gold prices would have to rise, or the entire current market paradigm becomes nothing but blatant fraud.

In order for our markets to be consistent/honest, gold prices (at the least) would have to move higher on all risk-off days -- as central bank gold-buying increases as they dump their (worthless) fiat paper for eternal gold at an even faster rate.

Alert readers will note that when the media parrots spout their "reasons" for the mass-movements of commodities markets, these reasons never contain more than a sentence or two of explanation. This is because (as we see here) any in-depth analysis of the pseudo-fundamentals asserted by the mainstream propaganda machine immediately collapse into assorted absurdities/self-contradictions.

There is only one dominant trend today in the global economy: the monetary insanity of Western bankers. It must drive all prices (literally) to infinity as this paper collapses to its true value: zero. The current manipulation of markets only ensures that the speed of this collapse will be even more sudden and dramatic when it occurs.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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