Monday 12th November 2018

Resource Clips


Who’s doing what, and why?

Four banks manipulate six commodities to manage other markets, says Ed Steer

by Greg Klein

Probably the most facile way to dismiss a conspiracy theorist is to label the person “a conspiracy theorist.” Conventional thinking gives the term negative connotations, even though history and current events have an inconvenient tendency to reveal conspiracies in action. Ed Steer’s interest in bullion manipulation started with the Hunt brothers’ 1970s silver conspiracy. Having spent decades watching the machinations of others, the newsletter writer and Gold Anti-Trust Action Committee board member adamantly declares that “there are no markets, just interventions.”

Four banks manipulate six commodities to manage other markets, says Ed Steer

Ed Steer speaks at the International Mining
Investment Conference, held in
Vancouver on May 15 and 16.

Drawing on the work of GATA and analyst Ted Butler, Steer believes precious metals “have been managed actively” in the COMEX futures market since 1973. Price suppression supports “the paper game they’re playing in the stock and bond markets,” a game that’s continued since the U.S. dropped the gold standard in 1971, he argues.

“We’ve had a complete blow-up of paper assets because of unlimited money printing. They don’t want that showing up in the commodities market because the moment that it does, all the paper’s going to rush out of Wall Street, the bond market, the Dow and every other index, and into gold and silver in particular and commodities in general. And that’s not what they want to happen.”

If those two metals merit suppression, so do platinum and palladium. “You couldn’t have a $3,000 or $4,000 platinum price while gold’s sitting at $1,200,” he states. “People would start asking questions.”

Not just bullion but, more recently, copper and crude too. “If you can control the prices of those six, you can pretty well control the prices of other commodities, whether they’re wheat, oats, sugar, lumber or whatever. There will be circumstances of course when supply-demand factors in some commodities will cause a run-up in prices. But overall, they keep those six commodities under price control and, when they do that, they can control everything else.”

Who are they? He attributes special prominence to JPMorgan Chase. “They’re the biggest players in all four precious metals, and they’re also in the crude oil market to a certain extent. It’s JPMorgan Chase, HSBC USA, Scotiabank here in Canada, and most likely Citigroup, but JPMorgan is by far the ringleader. There may be some investment houses involved as well like Morgan Stanley and I think Goldman Sachs, which is now a bank. So it’s the Wall Street paperhangers, four or five of them versus everybody else. There’s also lots of foreign banks involved, maybe up to 30, but their positions are very, very minor compared to the big traders that control almost 50% of the COMEX futures market in gold right now.

Four banks manipulate six commodities to manage other markets, says Ed Steer

“This is total collusion. They all buy at the same time, they all sell at the same time…. There’s no free market in any of this.”

Now, with the gold-silver ratio sometimes surpassing 80 to one, Steer blames this extraordinary divergence on the same tactics.

“JPMorgan has taken silver down from $49 in 2011 all the way to $16 or $17, and they’ve held it there. If the gold-silver ratio were even close to normal it would be around 25 or 30 to one. Of course that would be double or triple the silver price that we have today, and even that doesn’t fully take into account supply and demand. As far as I’m concerned the silver price should be well over $100 an ounce by now and the ratio should be about 20 to one.”

Oil presents another example. “It’s up over 30% since the middle of December. The gold price has done basically nothing. That’s not what normally happens. When oil prices rise, it’s a sign that commodity prices will rise and of course gold and silver are normally the leading indicators. The metals aren’t being allowed to function as leading indicators because they’re trying to get the oil price up without affecting gold and silver prices—and they’ve done an awesome job of that.”

It doesn’t make any difference how many bombs fall on Syria, Iraq or Iran, or what the supply-demand situation is. It all depends on what’s happening in the COMEX futures market.

External forces play little or no role, he maintains. “It doesn’t make any difference how many bombs fall on Syria, Iraq or Iran, or what the supply-demand situation is. It all depends on what’s happening in the COMEX futures market.”

He does concede, however, “If things got really extreme, if downtown Tehran disappeared under a mushroom cloud, that would probably move the markets.”

But sometime in the foreseeable future, those in control will have to let bullion rise, he adds. “It’s very hard to defend this price right now. Demand is exceeding supply, certainly in gold. They’re going to have to increase the prices in both gold and silver, but whether they’ll allow prices to run free remains to be seen. They might just allow gold to rally $300 or $400 or so, and up to $50 in silver, and hold the prices at that new level. But they’re going to have to let it go sooner or later and I think the day is coming sooner.”

That would mean the two metals do offer a safe haven after all. “I think this COMEX futures paper game is going to end pretty soon and those who were already positioned are going to reap substantial rewards. It’s better to be a year or two early rather than five minutes or two days late.”

Ed Steer speaks at the International Mining Investment Conference, held in Vancouver from May 15 to 16. For a 25% admission discount click here and enter the code RESOURCECLIPS.

Read about conference speakers Jayant Bhandari and Simon Moores.

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