June 27, 2017
of this series presented readers with a grim reality: we no longer have
markets. The trading exchanges which masquerade as markets fall far short of
being legitimate markets, in many key respects.
The precise means by which our once-legitimate markets have
been destroyed is a topic which will be fully explained over the next, two
installments. For now, it will suffice to say that we can easily prove that we
no longer have markets.
All legitimate markets produce price discovery: the
equilibrium point between buyers and sellers where supply meets demand. Our
corrupted pseudo-markets no longer produce price discovery. The best example of
this is the silver market.
There has been no price discovery in the silver market for at
least 30 years
. For at least the last three decades, the silver market has
been in a permanent supply deficit. This is not even supposed to be possible.
Thirty consecutive years of this market
coming into balance (i.e. proper price discovery).
Regular readers and astute investors can answer that
. The extreme/permanent manipulation of the silver market now
traces back roughly 100 years, well-documented in Charles Savoie’s
, The Silver Stealers.
The ruling oligarchs of that era (the
) didn’t merely want to attack the silver market. They wanted to
destroy it. They hatched a diabolical plan. They ordered their lackeys who
ruled (what was at that time) the British Empire to loot all of the silver from
India following the conclusion of World War I.
Indian troops would only agree to fight for the British if
paid in silver (i.e. real money). Thus by the end of WW I, a large portion of
the world’s stockpile of silver had been funneled into India. The oligarchs
ordered that silver to be confiscated (stolen).
Once the British government had control of this stockpile,
it was ordered to dump much of that silver onto the global market. This
occurred in 1924, causing the price of silver to take a nose-dive. At that
time, China’s economy was on a silver monetary system. When the oligarchs
dumped vast quantities of silver onto the market and caused the price of silver
to plummet, this wrecked China’s economy.
Thus in the mid-1920’s we had the oligarchs first loot
India’s economy and then crash China’s economy: the economies of the world’s
two most-populous nations. As Savoie observes in
The Silver Stealers, this was the real cause of The Great
Depression: simultaneously torpedoing two of the world’s largest economies.
The fact that the Great Depression didn’t hit the West until
the end of the 1920’s was merely a reflection of the much slower pace of
economic events at that time in history. The idea that a stock market crash in
a market in which only a tiny number of people were invested could cause a
global economic depression is a nice
fairy-tale – but with no substance in reality.
This was part of a much larger (and more fiendish) plan to
discredit silver as a precious metal, and thus devalue it in the mind of the
average person. To do this, the oligarchs invented a propaganda strategy.
As our economies industrialized, the value of silver in
numerous economic applications became quickly apparent. In both chemical and
metallurgical terms, silver is humanity’s most-versatile metal.
It was (and is) still used as money. It was (and is) still
used in jewelry, where silver is actually a more brilliant metal than gold. Now
it was also being used in a plethora of industries. In other words, silver had
more precious. Its
price/value should have risen.
But not according to the propaganda which the oligarchs
instructed their toads in the Corporate media to produce. According to these
uninformed mouthpieces, silver was now merely “an industrial metal”. In the
perverse realm of anti-silver propaganda, the fact that silver was even
more useful supposedly made it less
It never made any sense. It never needed to. The oligarchs
never intended to suppress the price of silver with lies alone. They also had the
The silver market has (by far) the largest short position of
any market on the planet. The bankers claim they need this gigantic short
position to “hedge” the price of silver.
In proportionate terms, the short
in the silver market is roughly 5000% larger than the short position in our ultra-volatile crude
oil market. There is no possible (legitimate) explanation for this discrepancy.
Making this gigantic short position even more obviously
criminal, roughly ¾ of this short position is permanently maintained by just four
Big Banks. That is clearly illegal.
In 1980; the Hunt Brothers were charged and convicted with
“cornering the silver market” (on the long side). At the time of their
conviction they controlled less than 20% of existing inventories.
With the criminalized short position in the silver market,
four “Hunt Brothers”: four
Big Banks which are
allowed to operate and maintain totally illegal short positions in the silver
Making this obvious crime even more outrageous, this short
position came into existence with the price of silver at
a 600-year low. The criminal Big Banks claim their gigantic/illegal
short position represents “hedging”.
The question: with the price of silver still near its
600-year low (in real dollars) what are they hedging
against? A 700-year low? Maybe another new-and-incredibly valuable
use for silver will be devised and so its price will go
Legitimate regulators could not possibly fail to see the
obvious, systemic criminality in this market. We have no legitimate regulators.
The pseudo-regulator of the silver market is the infamous Commodity Futures
The CFTC claimed to “probe” this ultra-criminalized market,
for five full years. Its findings? Not the slightest indication of any
wrongdoing. See-no-evil, hear-no-evil, speak-no-evil.
Four Big Banks permanently operate illegal short positions
which cannot possibly have the slightest market justification. This leads to
the silver/gold price ratio. Silver and gold occur naturally in the Earth’s
crust at a ratio of approximately 17:1. For over 4,000 years; the price ratio
reflected this supply ratio – averaging 15:1.
Today, silver is more valuable than ever. With the
destruction of silver stockpiles, the above-ground supply ratio of silver to
gold is no more than 6:1 (most commentators believe it is much lower). Yet the
current price ratio is approximately 75:1. Absolutely perverse. Absolutely criminal.
Much of this is already familiar to regular readers. Today,
however, the One Bank is no longer interested in perverting (and thus
destroying) merely some of our markets. It wants to pervert, destroy, and
all of our markets.
Its tool for this ultimate financial evil – in the 21st
century? Technology. Specifically, it uses automated trading algorithms, so
called “HFT trading”. Just as the One
Bank’s financial crimes in the silver market could not possibly be more
obvious, its systemic crimes using these computer programs are equally obvious.
What is an algorithm? It is a relatively simple computer
program which processes data and kicks out a result: in this case, market
prices. Here is where the obvious crime enters the picture.
If you control the data that enters the algorithm you control
. If you control the data entering these market-operating algorithms, you control the prices in all markets.
The One Bank controls all data.
It controls our puppet governments. It instructs them on how
to manipulate all of their woefully fraudulent economic statistics in order to
feed the market manipulation of the One Bank’s
It controls the Corporate media. The mainsteam media is just
one of the One Bank’s many tentacles, part of the
40% of the
under its control. This mouthpiece reinforces the fraud/lies
produced by our governments and bolsters the Master Trading Algorithm.
For many readers, this will seem too fantastic to believe: a
single entity manipulating all of our (pretend) “markets” simultaneously. This
leads back to a statement from the beginning of Part I.
What is a market?
There are a number of ingredients in any definition. However, first and
foremost, a market is a forum for
human commerce – person-to-person
buying/selling of merchandise and services. By this definition alone, we
clearly no longer have markets, on any national or international scale.
Humans trading with humans. This is one of the most
fundamental components in any definition of a market. We no longer have humans
trading with humans. In our criminalized pseudo-markets, roughly 75% of all
trading is now algorithm trading. It’s not humans trading with humans. It is
computers trading with computers – and the computers are all
processing the same propaganda (data) manufactured by the One Bank.
What is one of the most elementary clichés of computer
technology? Garbage in; garbage out. The One Bank feeds its perverted lies into
its Master Trading Algorithm, and this is how the vast majority of all trading
That’s not a market. What the lying bankers, puppet
politicians, and mindless media mouthpieces call “markets” no longer have the
slightest resemblance to real markets. What we have instead is a 24/7
computerized price-rigging operation.
This Master Trading Algorithm manipulates our commodity
markets. It manipulates our stock markets. It manipulates our currency markets.
It manipulates our debt markets. Or, at least, what we used to call “markets”.
Everything is rigged.
That sounds like the accusation of some delusional
conspiracy nut. Until we discover it is all true.
Some readers will still not be convinced that we no longer
have markets and that “everything is rigged”. That leads to Part III: the
Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.
The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.