Price Manipulation in Gold & Silver and Financial Ethics in Journalism

Price Manipulation in Gold & Silver and Financial Ethics in Journalism

The Wall Street Journal sticks its head above the parapet in reporting this week what has long been recognised within the precious metals industry - Price Manipulation in the Gold and Silver market.  Chris Powell from G.A.T.A. very interestingly preceeds the WSJ piece by a day, in reporting on the reason behind the lack of mainstream media coverage of this issue as a major ethics in journalism shortfall:

"Freedom of the press, the American journalist and essayist A.J. Liebling noted, belongs to those who own one, and in recent decades most Western news organizations have been so conglomerated and corporatized that even if they are not owned outright by the financial establishment, they are owned in outlook and spirit."  (Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. (G.A.T.A.)

Bleyer started exploring the issue of Gold & Silver price manipulation back in 2010 while following the case of Andrew Maguire - a courageous whistleblower who blew the lid off alleged silver price manipulation by bullion banks in 2010. Bleyer's CEO attended the G.A.T.A. conference in London that same year to keep ahead of the situation.  Five years on, Andrew is still speaking out on further developments within the Gold and Silver market, most notably the current large sovereign bids within the physical markets. Click here for his latest.

Then, in May last year, we reported on this piece in The Times, when Barclays was "fined £26 million after it emerged that one of its traders rigged the price of gold to make a multimillion-dollar profit just one day after the bank was fined £290 million for its role in the Libor scandal." 

So the concept of price manipulation as you know, far from surprises us. Rather the lack of reporting does.

Earlier this week Chris Powell from G.A.T.A - an organisation which has been working tirelessly for years to expose the practice of price manipulation in the Gold and Silver market - wrote the following piece, which pulls no punches and cuts to the heart of the issue: financial ethics in journalism.  Here are his main points:

"If you're wondering why mainstream financial news organizations refuse to report the biggest financial news story in history - the rigging of all major markets by Western central banks - another reason has emerged in the last few days with the resignation of the Chief Political writer of the London Telegraph, Peter Oborne.  The Telegraph is a great newspaper with a wide scope, the standard bearer of the British Conservative Party, whose reporting is often cited favourably by G.A.T.A. and frequently has been brave, as when a couple of years ago it exposed the scandal of expense padding by members of Parliament, including Conservative members. But the Telegraph won't touch surreptitious intervention by Western central banks in the gold market any more than any other respectable Western financial news organization will, and departing the Telegraph, Oborne complained that the newspaper had gone soft in its reporting about a big investment bank that is a major advertiser, HSBC."

Powell goes on to expand on the difficulty for those journalists who are aware of what is allegedly going on:  "At least three editors of the Telegraph know all about the Western central bank gold price suppression scheme because your secretary/treasurer has corresponded with them about it for years and a couple of months ago even discussed it with one of them at great length in person in London. This editor was sympathic, found gold price suppression entirely plausbile now that most other markets are acknowledged to have been manipulated - and volunteered that any mainstream financial journalist who put a critical question about anything to any central bank probably would be fired."

Powell's central point is this:  "The huge indebtness of the Telegraph's owners to HSBC is probably not entirely why the newspaper can't report gold market rigging by central banks, but of course that indebtedness can't be encouraging investigative journalism either."  (Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. G.A.T.A)

The day after Powell published his piece on 22 February 2015, the Wall Street Journal reported on 23 February that: "Prosecutors in the Justice Department's antitrust division are scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation. The agencies have made initial requests for information, including a subpoena from the CFTC to HSBC Holdings PLC related to precious metas trading, the bank said in its annual report Monday." 

What I personally find surprising is not that the price fixing in Gold and Silver is alleged to be manipulated. I would expect it to be, with a physical commodity that - in silver at least - has only 1 physical ounce available for every 100 paper ounces traded on the SLV market.  Plus Gold and Silver are the two metals most likely to back up any future currency, as the dollar and euro devalue under continued quantatitive easing. So why wouldn't central banks and sovereign states be allegedly keeping the paper price low, while acquiring as much physical as possible?  I don't have to agree with someone's methodology to see why they might be doing it.  Infact, knowing the unethical strategies of others is an invaluble insight.  As one law tutor used to regularly tell me - "Prepare your own case.  Then prepare your opponent's."

What surprises me is the directness with which Powell discusses the alleged motivation for the lack of journalistic openness about price manipulation. Monetary motivation for a lack of ethics usually hides in the background, couched in more "politically correct" terms, while the majority go on agreeing with the facade because it's far less challenging.

I could not agree more with Powell as he concludes:  "A breach in the blockade will come eventually, through G.A.T.A.'s work or someone else's.  This is all just another case of the phenomenon of human psychology described long ago by the Hans Christian Andersen fairy tale "The Emperor's New Clothes," in which nonsense that is obvious to all continues only because it can't be acknowleged in polite company, as such acknowledgement would show that the leaders of society are as vain and foolish as everyone else." 

As Andrew Maguire discussed in his article above, if sovereign states and central banks are buying physical Gold and Silver, and if as G.A.T.A. report, the physical demand is far stronger than the paper price indicates, all signs point to an extremely elongated buying opportunity for Physical.  

Bleyer currently offer the lowest price on 1kg Silver in the United Kingdom. To find out more please visit our Special Offer page. If you are looking to purchase a particular bar or coin, and in specific numbers, call the Bleyer Team on 01769 618618 as we offer price breaks on larger quantities.

Bleyer also offer the option of holding Gold in a Pension, together with a variety of Storage options from offshore secure facilities to home safes.  If you would like to learn more about buying tax efficiently, our in-house bullion experts can help you to save both on VAT and Capital Gains Tax. Call Bleyer today for bespoke customer care - we take pride in our approachable and well informed business team. 

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