12. Juli 2012

Special Report Gold 2012 – "In Gold We Trust"



Ronald Stöferle’s 6th annual – "In GOLD we TRUST" report, covering the following highlights:


The foundation for new all-time-highs is in place. As far as sentiment is concerned, we definitely see no euphoria with respect to gold. Skepticism, fear, and panic are never the final stop of a bull market. In the short run, seasonality seems to argue in favor of a continued sideways movement, but from August onwards gold should enter its seasonally best phase. USD 2,000 is our next 12M price target. We believe that the parabolic trend phase is still ahead of us, and that our long-term price target of USD 2,300/ounce could be on the conservative side.


The study is covering the following topics:


·         Central bank’s monetary inflation supports progressive remonetisation of gold

·         Inflation ≠ rising prices: confusing terminology with grave consequences

·         The chronology of a hyperinflation – Explanation based on Peter Bernholz’

          “Monetary Regimes and Inflation”

·         Gold in an environment of a deflationary loss of confidence

·         The biggest misconception with regard to gold

·         High stock-to-flow ratio is the most important characteristic of gold

·         The advantages of a gold standard

·         Financial repression: the alleged magic formula

·         Why gold remains (dirt) cheap in India and China

·         Excursus on Interventionism – It is a fine line between manipulation and intervention

·         On the search for a “fair value” for Gold

·         Possible price targets for gold

·         Why gold is (still) no bubble

·         Gold improves portfolio characteristics The renaissance of gold in traditional finance

·         Why is gold such a highly emotional topic? Cognitive dissonance and normalcy bias

           as possible explanation

·         Challenges for the gold miners: Peak Gold and increasing resource nationalism

·         Gold shares (still) with historically low valuations



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  1. Le Patron
    16. Juli 2012, 16:33 | #1

    Dear friends,

    MIDAS Note: Saturday Commentary And Tonight’s Early Gold/Silver Market Action

    As you know, I spent some time on Saturday with a MIDAS commentary titled:

    “NY Times: Penn State, LIBOR Scandal, The Fed, JP Morgan …
    and GATA”

    I have sent an abbreviated version of that commentary, focusing on the key GATA points to the press … such as the New York Times, Salon.com, The Washington Post, Matt Taibbi of Rolling Stone Magazine, etc., to alert them to one of the greatest financial market scandals in history. As has been the case for the last 13 years, no one has responded as of yet. I will keep trying until a Woodward or Bernstein has enough guts to do so.

    In the meantime, I am sending you what I sent them in case some of you would like to take the initiative to assist GATA by sending the copy to anyone in the financial press who you think might have some gumption and wants a story of a lifetime. (The NY Times front page and some other material will not take here, but you can copy it from The James Joyce Table, as it does take in regular email.)

    Meanwhile, during the past week, I have put up in advance on a daily basis what I thought The Gold Cartel would based on their signals they send out to other traders, a la what Andrew Maguire told the CFTC over two years ago. Those of you who are paying attention know how ridiculous it is that these signals are working, like day after day. YOU HAVE TO BE KIDDING ME!

    This is from the closing MIDAS commentary on Friday:

    “The horrendous action of the gold/silver shares suggests The Gold Cartel has signaled they will take down the gold and silver prices on Monday. I challenge these low lifes to prove me wrong and allow gold and silver to put in some healthy moves to the upside on Monday, and then have decent gains be sustained.”

    Well, so far in early Asian trading, gold is down $6 and silver is off 15 cents from their Friday Comex closes. This is REVOLTING! Will you help GATA win the day for all those who believe in free markets AND to expose these crooks?

    This is what I sent the press:

    With one financial market scandal after another making itself known, the time is right to alert the investment world of the manipulation of the gold and silver markets and what it will mean to them down the road. I am sending this your way hoping it would be of interest to your followers.
    All the best, Bill

    July 14 – Gold $1591.60 – Silver $27.34

    NY Times: Penn State, LIBOR Scandal, The Fed, JP Morgan ? and GATA

    I strolled over to the Highland Park Soda Fountain (100 years in business) this morning to sit on a counter stool and have a waffle from one of those old fashioned grills of so long ago. A customer left a New York Times on the counter, so I leisurely grabbed it and was immediately struck by the front page:

    The three lead stories were on the Penn State child abuse scandal, the growing LIBOR scandal which now involves the Fed, and the growing controversy about JP Morgan and its activities…

    Paterno Won Sweeter Deal Even as Scandal Played Out
    By JO BECKER 2:30 AM ET

    The same month that the former Penn State football coach Joe Paterno testified before a grand jury about Jerry Sandusky, he began negotiating with his superiors to amend his contract.
    ? Abuse Scandal Inquiry Damns Paterno and Penn State
    Findings Stun Even Paterno’s Ardent Supporters


    New York Fed Was Aware of False Reporting on Rates

    The Federal Reserve Bank of New York conferred with regulators about the problems and recommended reforms, but it failed to stop the illegal activity, which persisted through 2009.
    http://www.nytimes.com/interactive/2012/07/10/business/dealbook/20120710-bank-scandal-documents.htmlLibor Documents


    New Fraud Inquiry as Trading Loss Mounts at JPMorgan


    JPMorgan Chase disclosed on Friday that losses on its botched credit bet could climb to more than $7 billion and that the bank’s traders may have intentionally tried to obscure the full extent of the red ink on the disastrous trades.


    In terms of public perception all three scandals are shocking (outside of what Penn State coach Joe Paterno and his University allowed to occur, none of it surprised us on Planet GATA) and they have surfaced in rapid fire succession. The collective magnitude of it all is astounding…

    *There was no coach more revered in America than Penn State?s Joe Paterno. He was regarded as the epitome of what a college coach was supposed to be. On a one to ten scale, he was the 10+. Not only was coach Paterno the winningest coach in football history during his 61 year career, he won with the proper respect for academics. His players actually got an education at Penn State.

    Contrast Penn State’s legacy on the gridiron with that of basketball giant, Kentucky. Two years ago, they won the NCAA championship, beating my alma mater Cornell in the quarter finalys along the way. Five of their players, including a number of freshman, were drafted in the first round and left school. This year they won that same championship and six players were drafted in the first round and have left school too. No offense to our Kentucky CafĂ© members, but it is a totally different culture, or was supposed to be.

    That is what is so horrifying. Penn State was supposed to be different, and they sure are. Even the fellow who wrote two books on Paterno says he has now gone from “St. Joe” to the devil in very short order.

    *The Barclays LIBOR scandal is all about market manipulation and obfuscation, which includes a number of banks, including some of those manipulating the gold and silver markets. These banks CONSPIRED to rig this key interest rate. It has caused enough of a furor that even some on CNBC are laughing about how conspiracies are the name of the game these days … and those revealing conspiracies seem to be right, at least some of them are.

    It is even more scandalous that the Fed has known about the manipulation all along and just turned a blind eye. This is an important revelation because the Fed is at the heart of the gold/silver price suppression scheme.

    Certainly this scandal ought to shut up those who have claimed over the years that if gold and silver were manipulated, a whistleblower would have stepped forward. Well, guess what, the LIBOR scandal is far more grandiose, with way more participants involved, and NO whistleblower stepped forward. As in Thursday’s latest revelations about Penn State’s internal investigation, It was Barclays (various Board members) who spent tens of millions also investigating themselves that is causing this attention, per the NY Times article.

    *As far as JP Morgan goes, GATA has been all over their market manipulation maneuvers since our inception in January 1999. There is an enormous class action suit against them for manipulating the silver price and the CFTC has been investigating their role in the price suppression scheme for nearly four years now.

    JP Morgan is the Fed’s bank. The Fed is the backbone of our economic system. They are certainly involved with various bullion banks in the manipulation of the gold and silver markets. It doesn?t take an Einstein to see how incestuous this all is.

    So, why do this Midas? Two reasons…

    1. I refer to last Saturday’s commentary up at The Matisse Table?
    It Won?t Be Too Long Before The Gold/Silver Market Manipulation Scandal Goes Mainstream … BIG TIME!

    http://www.lemetropolecafe.com/matisse_table.cfm?pid=10094For the three stories mentioned above to saturate the upper half of the New York Times on the front page is quite remarkable. We are talking about three major scandals concocted by three of the most highly regarded of institutions.

    The point is if these scandals, and CONSPIRACIES, are now fact, it is no stretch to look at all that GATA has put together since our day one and come to the conclusion that we have been right all along. It is all there, put down in writing, for anyone to investigate and expose.

    Besides, there has been a whistleblower re the silver price manipulation scheme: Andrew Maguire. Andrew was in constant contact with the CFTC for months, sending them emails of what JP Morgan was going to do in advance, and then they did it. Since the CFTC would not allow Andrew to make an appearance before its special hearing on March 25, 2010, he sent his material to GATA’s Adrian Douglas and me, and we found a way to put it in front of the CFTC and then handed the emails to the press (Reuters, etc.), which never even bothered to mention GATA in its coverage. For those of you who would like to review what went on that day, or if it is new to you, I have included the material in the Appendix below.

    Oh yes, for his whistleblowing efforts Andrew and his wife to be were run over in London the very next day following the testimony by a hit and run driver. The driver rammed into two cars getting away and then there was a helicopter chase before they nailed the guy. And, not for nothing, the hearing was televised on the internet, BUT my presentation was blacked out. The ONLY one in which that was the case. You can?t make this up. If this does not end up as some kind of movie down the road, I will be very surprised.

    Andrew spoke impressively in front of our 400 attendees at Gold Rush 2011 last August in London. He received the longest standing ovation I have ever been around.

    Anyway, IMO, as I have said before, when the gold scandal really breaks-which could include gold that is not there in unallocated accounts, depleted central bank gold reserves, missing US gold which is not allowed to be sold except by an Act of Congress and charges of anti-trust violations etc.-it will dwarf all of those stories combined And the reason I say that is because of its worldwide financial market implications. Can you imagine what the dollar would do if it was publicly discovered that say the US only has half the gold in our vaults we claim to have?

    The point is exposes regarding the manipulation of the gold/silver markets are gradually going to find the light of day.

    *And that brings me to the second reason for putting this Midas out today. Surely it is tedious to read about the daily machinations of The Gold Cartel, including JP Morgan. However, by understanding, and staying on top of the daily activity, it will reinforce what monster moves we have coming in the prices of gold, silver and the shares. And that is because of the price suppression efforts of this group, they are sorely undervalued. At some point the price action is going to be explosive, and the exposed Gold Cartel is going to have to back off … just like when they were forced to back off manipulating the silver market in January to the end of April in 2011 when the price of silver soared to nearly $50 per ounce.

    However, this time it is likely the prices of gold and silver could explode and go bonkers overnight. Those not in the game will forfeit windfall profits made in a matter of hours, and it will be very difficult for many investors, especially those who had been in there to pay up. That is just the way human nature works.

    So, if there ever was a time to be all over the gold/silver/share investments, this is it.





    On March 23, 2010 GATA Director Adrian Douglas was contacted by a whistleblower by the name of Andrew Maguire. Mr. Maguire, formerly of Goldman Sachs, is a metals trader in London. He has been told first hand by traders working for JPMorganChase that JPMorganChase manipulates the precious metals markets and they bragged how they make money doing so.

    In November 2009 he contacted the CFTC enforcement division to report this criminal activity. He described in detail the way in which JPM signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals along side JPM. He explained how there are routine market manipulations at the time of option expiry, Non-farm payroll data releases, and Comex contract rollover as well as other adhoc events. On February 3 he gave two days advance warning by email to Mr Eliud Ramirez, a senior investigator of the Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. Then on February 5 as it played out exactly as predicted further emails were sent to Mr. Ramirez in real time while the manipulation was in progress.

    It would not be possible to predict such a market move in advance unless the market was manipulated.

    In an email on that day Mr. Maguire said “It is ‘common knowledge’ here in London amongst the metals traders it is JPM’s intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC allowing by your own definition an illegal concentrated and manipulative position to continue”

    Expiry of the COMEX APRIL call options is today. There was large open interest in strikes from $1100 to $1150 in gold. As always happens month after month HSBC and JPM sell short in large quantities to overwhelm all bids and make unsuspecting option holders lose their money. As predicted in advance by GATA the manipulation started on March 19th when gold was trading at $1126. By last night it traded at $1085.

    This is how much the gold cartel fears the enforcement division. They thumb their noses at you because in over a decade of complaints and 18 months of a silver market manipulation investigation nothing has been done to stop them. And this is why JPM?s cocky and arrogant traders in London are able to brag that they manipulate the market.

    It is an outrage and we are making available the emails from our whistleblower, Andrew Maguire available to the Press wherein he warns in advance of a manipulative event.

    Additionally Mr. Maguire informed us that he has taped recordings of his telephone communications with the CFTC for which we are taking the appropriate legal steps to acquire.


    Andrew Maquire confided in Adrian because the CFTC refused to let him appear at the hearing. I mean how bad is that, especially with how we saw The Gold Cartel brutalize gold this past week? Can you imagine the police getting information about a rapist, who then should be under surveillance, and not doing anything about it when an informer confirms who the rapist is … saying exactly how the rapist will commit a rape in advance .. the rape then occurs, and STILL the police do nothing? Then there is an investigation into the multi-rapes and the police do whatever they can do to squash the inquiries. You have to be kidding me!

    Here are the copies of the emails between Andrew Maquire and Eliud Ramirez of the CFTC:

    I sent you a slide of a couple of past examples of just how this will play out…

    1. The news is bad (employment is worse), This will have a bullish effect on gold and silver as the USD weakens and the Precious metals draw bids spiking them higher.This will be sold into within a very short period of time (1-5 mins) with thousands of new short contracts being added overcoming any new bids and spiking the Precious Metals down hard targeting key technical support levels.

    Scenario 2. The news is good ,(employment is better than expected), this will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered again targeting key support levels.

    Both scenarios will spell an attempt by the 2 main short holders to illegally drive the market down and reap very large profits. Locals such as myself will be ‘invited’ on board which will further add downward pressure.

    The question I would expect you might ask is, who is behind the sudden selling and is it the entity/entities holding a concentrated position?

    How is it possible for me to know what will occur days before it will happen? Only if a market is manipulated could this possibly occur.

    I would ask you watch the ‘market depth’ live as this event occurs and tag who instigates the move. This would surly help you to pose questions to the parties involved.

    This kind of ‘not for profit selling’ will end badly and risks the integrity of the comex and OTC markets.

    I am aware that physical buyers in large size are awaiting this event to scoop up as much ‘discounted’ gold and silver as possible. These are sophisticated entities mainly foreign who know how to play the short sellers and turn this paper gold into real delivered physical.

    Given that the OTC market (where a lot of the selling occurs) runs on a fractional reserve basis and is not backed up by 1/1 physical gold, this leveraged short selling where ownership of each ounce of gold has multi claims poses a very large risk.
    I leave this with you, but if you need anything from me that might help you in your investigation I would be pleased to help.

    Kind regards
    Andrew T. Maguire

    Original Message

    From: Andrew Maguire
    To: Ramirez, Eliud
    Sent: Friday, February 05, 2010 2:11 PM
    Subject: Fw: Silver today

    If you get this in a timely manner,with silver at 15.330 post Data I would suggest you look at who is adding short contracts in the Silver contract while gold still rises after NFP data. It is undoubtedly the concentrated short who has ‘walked silver down’ since Wednesday. Putting large blocks in the way of bids. This is clear manipulation as the long holders who have been liquidated are matched by new short selling as Open Interest is rising during the decline.

    There should be no reason for this to be occurring other than controlling silvers rise. There is an intent to drive silver through the 15 level stops before buying them back after flushing out the long holders.


    Original Message

    From: Andrew Maguire
    To: Ramirez, Eliud
    Cc: BChilton@cftc.gov; GGensler@cftc.gov
    Sent: Friday, February 05, 2010 3:37 PM
    Subject: Fw: Silver today

    A final e-mail to confirm the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday.How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview.I have honored my commitment not to publicize our discussions.

    I hope you took note of how and who added the short sales ( I certainly have a copy) and I am certain you will find it is the same concentrated shorts who have been in full control since JPM took over the Bear Stearns position.

    It is ‘common knowledge’ here in London amongst the metals traders it is JPM’s intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits.I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC allowing by your own definition an illegal concentrated and manipulative position to continue.

    Bart, for your part you made reference to it at the energy meeting. Even if the level is in dispute what is not disputed is that it exists. Surly some discussions should have taken place between the parties by now?. Obviously they feel they can act with impunity.

    If I can compile the data then the CFTC should be able to too.
    I would think this is an embarrassment to you as regulators.
    Hoping to get your acknowledgement.

    Kind regards
    Andrew T. Maguire

    Original Message

    From: Andrew Maguire
    To: Ramirez, Eliud
    Sent: Friday, February 05, 2010 7:47 PM
    Subject: Fw: Silver today

    Just logging off here in London. Final note.
    Now that Gold is undergoing short covering please look at market depth right now in silver and evidence the large selling blocks in a thin market being put in the way of silver regaining the technical 15 level which would cause a short covering rally and new longs being instigated. This is resulting in the gold silver ratio being stretched to ridiculous levels.

    I hope this day has given you an example of how silver is ‘managed’ and gives you something more to work with.
    If this was long manipulation in say the energy market the shoe would be on the other foot I suspect.
    Have a good weekend

    From: Andrew Maguire
    Sent: Tuesday, February 09, 2010 8:24 AM
    To: Ramirez, Eliud
    Cc: Gensler, Gary; Chilton, Bart
    Subject: Fw: Silver today

    Dear Mr. Ramirez,
    I hadn’t received any acknowledgement from you regarding the series of e-mail’s sent by me last week warning you of the planned upcoming market manipulation that would occur in silver and gold a full 2 days prior to the Non Farm Payrolls data release.

    My objective was to give you something in advance to watch,log and follow up in your market manipulation investigation.
    You will note the huge ‘footprints’ left by the 2 concentrated large shorts were obvious and easily identifiable. You have the data.

    The signals I identified ahead of the intended short selling event were clear.

    The ‘live’ action I sent you 41 minutes after the trigger event predicting the next imminent move also played out within minutes and exactly as I outlined it would.

    Surely you must at least be somewhat mystified that a market move could be forecast with such accuracy if it was free trading?
    All you have to do is identify the large seller and IF it is the concentrated short shown in the bank participation report bring them to task for market manipulation.

    I have honored my commitment to assist
    you and keep any information we discuss private, however if you are going to ignore my information I will deem that commitment to have expired.

    All I ask is that you acknowledge receipt of my information, the rest I leave in your good hands.
    Respectfully yours
    Andrew T. Maguire

    Original Message

    From: Ramirez, Eliud
    To: Andrew Maguire
    Sent: Tuesday, February 09, 2010 1:29 PM
    Subject: RE: Silver today

    Good afternoon Mr. Maguire,
    I have received and reviewed your email communications.
    Thank you so very much for your observations.


    As additional proof of how JP Morgan Chase and The Gold Cartel is ripping off the public we handed the press the following, which was sent to Commissioner Bart Chilton last Friday:


    On March 18th, 2010 the following appeared in the Midas Column:

    “This week so far is right out of the cartel playbook. I went back to the week of February 1st when gold recently followed its 2%, 1%, steady, down pattern. This week is practically a carbon copy. As you can see in the first chart the blue line is the 2% cap, the red line is the 1% cap, and the green line is steady to down. In the second chart you see the 4th day- down hard. The inflow of spec longs is first capped at 2%, then managed for a few days until the cartel can attack frustrated longs and get them to bail. Since the script has held true so far I would not be optimistic about tomorrow.”
    (contributed by James McShirley)

    On March 19th, 2010, as predicted the previous day gold was taken down in seconds by purportedly the dumping of 6000 contracts by a single trader.

    Such predictable sell-offs are seen time and time again close to option expiry on the Comex each month and the release of Non-Farm Payroll data. The price is capped at no more than 2% gain, then capped the following day at 1% gain, then held steady and finally hit hard for a waterfall take down.

    Bill Murphy
    Gold Anti-Trust Action Committee Inc.

    I am going to reserve more commentary until later, except to say the control over the press and government appears to be far worse than even I imagined.

    Congrats to Harvey Organ and Adrian Douglas (in support of Harvey) who were SUPERB in their presentations to the CFTC.



  2. LePatron
    23. Juli 2012, 23:40 | #2

    Dear Friend of GATA and Gold (and Silver):

    Silver market analyst Ted Butler writes today that he has come to believe that the U.S. government, while not the instigator of the silver price manipulation scheme, has become a participant in it and that the U.S. Commodity Futures Trading Commission, which has purported to be investigating the silver market for nearly four years, has been neutered by the U.S. Treasury Department, which has given its market-rigging agent, JPMorganChase & Co., immunity from criminal prosecution.

    None of this should be so surprising, as even Butler himself has noted that when the U.S. government demonetized silver in 1965, President Lyndon B. Johnson proclaimed that the government would intervene in the silver market as necessary to keep the price down, presumably by dishoarding from the government’s silver stockpile.

    Signing the demonetization legislation, the president said:

    “Some have asked whether our silver coins will disappear. The answer is very definitely — no. Our present silver coins won’t disappear and they won’t even become rarities. We estimate that there are now 12 billion — I repeat, more than 12 billion — silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins. Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long, long time. If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be and it will be used to keep the price of silver in line with its value.”

    Johnson’s comments have been archived with other presidential documents by the University of California at Santa Barbara here:


    Of course Johnson’s promises about keeping silver coins in circulation and keep silver’s price down were not fulfilled. The government’s silver stockpile was exhausted and U.S. silver coins did indeed disappear from circulation. But the government’s interest in suppressing the price of the monetary metal, suppressing the value of a competitive currency, endures.

    Indeed, like so much in the U.S. government’s gold price suppression scheme, the silver price suppression scheme is largely a matter of official public record rather than mere “conspiracy theory.” But GATA has no idea what it will take to induce mainstream financial journalists to examine the official public record, even as we keep urging them to do so.

    Butler’s commentary is headlined “The War on Silver” and it’s posted at GoldSeek’s companion site, SilverSeek, here:


    CHRIS POWELL, Secretary/Treasurer
    Gold Anti-Trust Action Committee Inc.

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