Gangster State America
By Paul Craig Roberts
May 14, 2013
Clearing House" -
There are many signs of gangster state America. One is the
collusion between federal authorities and banksters in a
criminal conspiracy to rig the markets for gold and silver.
My explanation that the sudden appearance of an unprecedented
400 ton short sale of gold on the COMEX in April was a
manipulation designed to protect the dollar from the Federal
Reserve’s quantitative easing policy has found acceptance among
gold investors and hedge fund managers.
The sale was a naked short. The seller had no gold to sell.
COMEX reported having gold only equal to about half of the short
sale in its vaults, and not all of that was available for
delivery. No one but the Federal Reserve could have placed such
an order, and the order came from one of the Fed’s bullion
banks, one of the entities “too big to fail.”
Bill Kaye of the Greater Asian Hedge Fund in Hong Kong and Dave
Kranzler of Golden Returns Capital have filled in the details of
how the manipulation worked. Being sophisticated investors of
many years of experience, both Kaye and Kranzler understand that
the financial press runs with the authorized story planted to
serve the agenda that has been put into play.
Institutional investors who have bullion in their portfolio do
not want the expense associated with storing it securely.
Instead, they buy into Exchange Traded Funds (ETF) and hold
their bullion in the form of a paper claim. The largest, the
SPDR Gold Trust or GLD, trades on the New York Stock Exchange.
The trustee and custodian is a bankster, and only other
banksters are able to turn investments into delivery of physical
bullion. Only shares in the amount of 100,000 can be redeemed in
The price of bullion is not set in the physical market where
individuals take delivery of bullion purchases. It is set in the
paper futures market where short selling can drive down the
price even if the demand for physical possession is rising. The
paper gold market is also the market in which people speculate
and leverage their positions, place stop-loss orders, and are
subject to margin calls.
When the enormous naked shorts hit the COMEX, stop-loss orders
were triggered adding to the sales, and margin calls forced more
sales. Investors who were not in on the manipulation lost a lot
The sales of GLD shares are accumulated by the banksters in
100,000 lots and presented to GLD for redemption in gold
acquired at the driven down price.
The short sale is leveraged by the stop-loss triggers and margin
calls, and results in a profit for the banksters who placed the
short sell order. The banksters then profit again as they sell
the released gold into the physical market, especially in Asia,
where demand has been stimulated by the sharp drop in bullion
price and by the loss of confidence in fiat currency. Asian
prices are usually at a higher premium above the spot prices in
Some readers have said “don’t bet against the Federal Reserve;
the manipulation can go on forever.” But can it? As the ETFs
such as GLD are drained of gold, their ability to cover any of
their obligations to investors diminishes. In my opinion, these
ETFs are like a fractional reserve banking system. The claims on
gold exceed the amount of gold in the trusts. When the ETFs are
looted of their gold by the banksters, the gold price will
explode, as the claims on gold will greatly exceed the supply.
Kranzler reports that the current June futures contracts are
12.5 times the amount of deliverable gold. If more than 8
percent of these trades were to demand delivery, COMEX would
default. That such a situation is possible indicates the total
failure of federal financial regulation.
What the Federal Reserve has done in order to maintain its
short-run policy of protecting the “banks too big too fail” is
to make the inevitable reckoning more costly for the US economy.
Another irony is the benefactors of the banksters sale of the
gold leeched from the gold ETFs. Asia is the beneficiary,
especially India and China. The “get out of gold line” of the US
financial press enables China to unload its excess supply of
dollars, accumulated from the offshored US economy, into the
gold market at a suppressed price of gold.
Kranzler points out that not only does the Fed’s manipulation
permit Asia to offload US dollars for gold at low prices, but
the obvious lack of confidence in the dollar that the
manipulation demonstrates has caused wealthy European families
to demand delivery of their gold holdings at bullion banks (the
bullion banks are essentially the “banks too big to fail”).
Kranzler notes that since January 1, more than 400 tons of gold
have been drained from COMEX and gold ETF holdings in order to
satisfy world demand for physical possession of bullion.
Again we see that institutions of the US government are acting
100% against the interests of US citizens. Just who does the US
Craig Roberts was Assistant Secretary of the Treasury for
Economic Policy and associate editor of the Wall Street Journal.
He was columnist for Business Week, Scripps Howard News Service,
and Creators Syndicate. He has had many university appointments.
His internet columns have attracted a worldwide following. His
The Failure of Laissez Faire Capitalism and Economic Dissolution
of the West is now available.
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