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Tag Archives: Libor

  • Insider
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    Using Gold to Protect Yourself In Advance of the Greatest Wealth Transfer of Our Lifetime

    A how-to guide
    by Chris Martenson

    Friday, April 4, 2014, 1:44 PM

    28

    Executive Summary

    • The case for gold's manipulated price, and how that can be used to work to your advantage
    • Calculating the "floor" beneath which gold will likely not fall
    • The coming Great Wealth Transfer, which almost certainly will occur in our lifetime
    • How much to invest in gold
    • How to invest in gold
    • Exit strategies: when will it make sense to sell your holdings? And what should you exchange them for?

    If you have not yet read The Screaming Fundamentals For Owning Gold, available free to all readers, please click here to read it first.

    Market Manipulation

    Before we can address the idea of storing some of your wealth in gold (and/or silver) we have to visit the topic of market manipulation. As many of you are aware this is an area of exceptional controversy, although I am not entirely sure why given the distressing laundry list of recently proven, and often grotesquely brazen, market manipulations performed by big banks in many other market areas.

    Big banks have been proven or alleged to have manipulated energy markets, LIBOR, currency markets, the global oil market, and aluminum, among other things and all of these transgressions happened after they got caught engaging in forgery and fraud during the mortgage swindles of 2005 to 2007.

    On one side of the manipulation debate, we might place the Gold Anti-Trust Action (GATA) organization alleging constant official manipulation to suppress the price of both gold and silver, and on the other we might place Jeff Christian, managing director of the metals research firm CPM, whose position is that all price movements can be explained by ordinary market forces.

    I happen to be somewhere in between those views as I think both legitimate and illegitimate forces are part of the landscape. But I am heavily tilted towards market manipulation as the explanation for why gold (and silver) tend to move downwards violently from time to time and why the prices for each are not higher than they currently are.

    The SEC has a clear definition of market manipulation and I’ve reproduced it here but swapped out the words ‘security’ and ‘stock’ with ‘gold’ to make it that much clearer:

    Manipulation

    Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for gold. Manipulation can involve a number of techniques to affect the supply of, or demand for, gold. They include: spreading false or misleading information about gold; improperly limiting [or expanding] the supply of gold; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for gold. Those who engage in manipulation are subject to various civil and criminal sanctions.

    (Source)

    I also added the two words "or expanding" because that condition also applies to commodities. 

    How likely is it that some firms have been trading in gold in such a way as to create a false, rigged, or deceptive picture of gold (and silver) prices?  It’s all but proven in a court of law, but don't hold your breath waiting for that final proof, as the US court system has vigorously defended banks from such lawsuits for decades. 

    I also happen to believe that gold is officially suppressed in price because it's what I would do if I were at the helm of the Fed and cared only for bolstering confidence in the dollar specifically, and fiat currencies generally, making the stock market a more attractive alternative, and also lending credence to political and monetary decisions (for the record, I am merely placing myself in the mind of the enemy here). Given that set of mandates, I would order up some hefty gold suppression because gold has a very bad habit of casting a bright light on rotten monetary and fiscal policy. 

    Suppressing the price of gold just makes so much sense that I would consider it a form of derelict strategic weakness if the Fed et al. were not doing it.

    One of the more important times to suppress the price of gold would be when…

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  • Insider
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    Off the Cuff: Vacuum of Leadership

    Where have all the Churchills gone?
    by Adam Taggart

    Thursday, December 5, 2013, 7:21 AM

    18

    In this week's Off the Cuff podcast, Chris and Mish discuss:

    • Raising taxes until morale improves
      • Europe's misguided approach to its woes
    • Tough medicine for underfunded pensions
      • Detroit bankruptcy may be a key precedent
    • Manipulation & fraud
      • Two things the TBTF banks get away with
    • Vacuum of leadership
      • A defining crisis of our time
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  • Daily Digest
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    Daily Digest 7/15 – Oil May Determine South Sudan’s Future, UK Charges 2 Brokers In Libor Inquiry

    by DailyDigest

    Monday, July 15, 2013, 4:57 PM

    3
    • Precious Metals Stocks: The Most Undervalued Asset Class
    • China Wealth Eludes Investors as Stocks Earn 1%
    • What Sweden Can Tell Us About Obamacare
    • It’s Amazing to Be a Working Mom in France—Unless You Want a Job
    • Britain Charges 2 Former Brokers in Libor Inquiry
    • Oil May Determine South Sudan's Future
    • Climate change is a bigger threat to the Tour de France than doping

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  • Daily Digest
    Image by Topato, Flickr Creative Commons

    Daily Digest 6/16 – Nuclear Plants Closing Early, What Sweden Can Tell Us About Obamacare

    by DailyDigest

    Sunday, June 16, 2013, 2:21 PM

    2
    • Even Pessimists Feel Optimistic About the American Economy
    • FX Rates Said to Face Global Regulation in Libor Review
    • Aetna Pulls Out Of California Individual Insurance Market In Response To Obamacare
    • Suddenly, Retiree Nest Eggs Look More Fragile
    • China’s Great Uprooting: Moving 250 Million Into Cities
    • What Sweden Can Tell Us About Obamacare
    • Nuclear Plants, Old and Uncompetitive, Are Closing Earlier Than Expected
    • Elon Musk Conceives New 'Hyperloop' Transportation System: Neither Plane, Train, Boat Nor Car. Is it ET3?

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  • Insider
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    Protecting Your Wealth from Deflation

    And from a broken system run for the benefit of the banks
    by Chris Martenson

    Monday, April 15, 2013, 9:18 PM

    35

    Executive Summary

    • The current gold slam has *nothing* to do with the fundamentals for precious metals, which are very favorable right now
    • How bad would deflation be?
    • Evidence that deflation is arriving
    • Why our current monetary system has become so compromised by the banks
    • How to best protect your wealth from both deflation and the banks

    If you have not yet read Part I: This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks, available free to all readers, please click here to read it first.

    About Those Wealth Transfers

    The biggest news of the recent past is the flow of gold from West to East. 

    (Source)

    With China importing 835 tonnes of gold in 2012 that we know about (and they may well be doing more under the table for official purposes) and also standing as the number one producer of gold, with ~360 tonnes of domestic production, none of which is exported, China is consuming at least 44% of total yearly world gold production.

    Connect that with India importing between 200 and 300 tons per quarter (2011 imports were 967 tonnes, and 2012 was 864 tonnes), and this represents another 33% of total world mine output.  Add in Russia buying more official gold, and you suddenly find that a commanding proportion of the newly mined gold in the world is headed East, where it used to stay largely in the West.

    To be clear, I view gold as money and therefore wealth itself.  Everything else that can be manufactured out of thin air is merely a claim on wealth.  In these terms, the West is slowly but steadily bleeding control of wealth to the East, something I thought our leaders were both aware of and focused on.

    Knowing the lower prices will only exacerbate this West-to-East flow, I therefore thought that the bullion banks and central banks would not have dared push that dynamic any further.   But apparently no, obviously I was wrong, which pains me on several levels.

    Add to this the various things going on in the world today, and I honestly thought we were in the most gold-favorable landscape of my life.

    Consider:

    • Negative real interest rates (powerfully gold- and commodity-friendly throughout history)
    • North Korea threatening nuclear and conventional war
    • Open confiscation of wealth in Europe from bank accounts
    • Japan doubling their monetary base in a brazenly desperate bid to stoke inflation by attacking Japanese trust in their own currency
    • Extremely unfavorable bond yields up and down the yield ladder
    • Continued European stress and discord with the possibility of a Eurozone disintegration

    Taken together, this level of system, sovereign, and institutional uncertainty is about as gold-friendly a situation one could concoct…

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  • Podcast

    David Collum: We’re Headed for a Showdown

    Broken markets and abuse of law have consequences
    by Adam Taggart

    Saturday, December 29, 2012, 7:49 PM

    108

    In the Big Rock Candy Mountains,
    The jails are made of tin.
    And you can walk right out again,
    As soon as you are in.

    — Harry McClintock, Big Rock Candy Mountain (1928)

    Fresh from releasing his exhaustive and excellent Year In Review last week, Dave Collum sits down with Chris to discuss the key developments of 2012 in detail.

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  • Blog
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    2012 Year in Review

    Free markets, rule of law, and other urban legends
    by David Collum

    Friday, December 21, 2012, 7:34 PM

    14

    Background

    I was just trying to figure it all out.

    ~ Michael Burry, hedge fund manager

    Every December, I write a Year in Review that has now found a home at Chris Martenson’s website PeakProsperity.com.1,2,3 What started as a simple summary intended for a couple dozen people morphed over time into a much more detailed account that accrued over 25,000 clicks last year.4 'Year in Review' is a bit of a misnomer in that it is both a collage of what happened, plus a smattering of issues that are on my radar right now. As to why people care what an organic chemist thinks about investing, economics, monetary policy, and societal moods I can only offer a few thoughts.

    For starters, in 33 years of investing with a decidedly undiversified portfolio, I had only one year in which my total wealth decreased in nominal dollars. For the 13 years beginning 01/01/00—the 13 toughest investing years of the new millennium!—I have been able to compound my personal wealth at an 11% annualized rate. This holds up well against the pros. I am also fairly good at distilling complexity down to simplicity and seem to be a congenital contrarian. I also have been a devout follower of Austrian business cycle theory—i.e., free market economics—since the late 1990s.4

    Each review begins with a highly personalized analysis of my efforts to get through another year of investing followed by a more holistic overview of what is now a 33-year quest for a ramen-soup-free retirement. These details may be instructive for those interested in my approach to investing. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged with enthusiasm. Everything can be found here.5

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  • Blog
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    What to Do When Every Market Is Manipulated

    Hint: cut the strings
    by Chris Martenson

    Wednesday, August 15, 2012, 2:34 PM

    4

    If you don't know who the sucker at the card table, is it's you.

    ~ old gambler's saying

    What do the following have in common?

    LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?

    The answer is that every single thing in that list is an example of market rigging, fraud, or both.

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  • Insider
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    Off the Cuff: It’s Becoming Every Man for Himself

    Hard times reveal the true nature of our leaders
    by Adam Taggart

    Thursday, June 28, 2012, 7:40 PM

    7

    In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris lean into:

    • Signs of fragmentation in Europe
      • Increasingly political leaders jettisoning Eurozone collectivism for what's best for their own country
    • The ticking pension bomb
      • US states, municipalities, and cities face unmeetable obligations
    • Fraud at the core
      • The Barclays LIBOR-fixing scandal shows how manipulated markets really are

    They say that when the going gets tough, you learn what a person's true nature is. If that's so, we're learning that the bloviating European leaders are clueless opportunists with no real love or loyalty for the centralized European vision they've been selling to their populace for over a decade. Similarly, US public pension administrators and public officials are craven liars, still unwilling to admit to pensioners that poor stewardship, bad math, and generationally low interest rates have made it impossible to meet their actuarial commitments. Increasingly — and as epitomized by the recently- fraudulent fixing of the LIBOR market — all players are simply out to secure what they can for themselves before the system breaks.

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  • Blog

    Daily Digest – May 28

    by Davos

    Thursday, May 28, 2009, 2:57 PM

    0
    • U.S. Inflation to Approach Zimbabwe Level, Faber Says (Update2)
    • Airman Ben Comes a Cropper (MachineHead)
    • Are the US and UK Too Spoiled to Accept Austerity?
    • Millionaires Go Missing
    • Case-Shiller: House Prices Tracking More Adverse Scenario (Chart 1 of 2)
    • Case-Shiller: House Prices Tracking More Adverse Scenario (Chart 2 of 2)
    • House Prices: Real Prices, Price-to-Rent, and Price-to-Income
    • Why Interest Rates will go UP
    • PetroChina to Pay $2.2 Billion for Singapore Refining (H/T Doug)
    • Re-defaults
    • Consumers ‘do believe in the green shoot story’ (Video on page)
    • Fall in Libor May Overstate Improvement in Interbank Lending Market
    • AIN’T NO REST FOR THE WICKED (Repost in case you missed it)
    • Towns Rethink Self-Reliance as Finances Worsen

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