Written by Jeff Nielson
If there was one element of surprise in the latest take-down in the silver market by the bullion-banks it was that they dredged-up the corpse of Osama Bin Laden as another “tool” for their manipulation. Indeed, the most likely reason for the absurdity of “burying him at sea” was to make sure no one saw the body (skeleton?) – and the weeks or months (or years?) of decay while the U.S. government waited for the ideal propaganda window for the announcement.
It is clearly a sign of either the importance which the banksters place in capping the silver market or their vulnerability/desperation that the bankers (and the U.S. government which serves them) could not think of a better ‘use’ for Bin Laden’s corpse than to manipulate the silver market.
The fact that this ambush was launched at this particular time isn’t in any way surprising. Rather, it would have been an enormous surprise if they had not made such an attempt. The parameters are very straightforward. The $50/oz mark is the last “resistance” remaining in the silver market – the final ‘line in the sand’ to breach, to mark the defeat of the bullion-banks.
Of course $50/oz (the approximate “top” from the 1980 spike) is not really “resistance”. The $50-bill which purchased an ounce of silver in 1980 was worth well over double the anemic value of a $50 Bernanke-bill today. Thus, in real dollars (which is what we must use for markets to make sense), the current price-barrier is of little significance – other than the psychological significance of this large, round number.
Putting aside the actual parameters, in the phony world of the bankers’ fiat-paper, the $50/oz mark is of enormous importance to them, because it is the last time that their manipulation operations will be aided by any technical “resistance”. The reason that this current attack is as extreme as the banksters could possibly conjure up is that they are desperate to create the appearance of a “crash” as silver approached the $50/oz mark.
This isn’t relevant so much for the current rally in silver as it is for the next rally. What the bankers want to do is generate the illusion that there was a violent, negative reaction as silver neared $50. The reason for this is to manipulate the ‘T/A jockeys’ – traders who aren’t capable of understanding the fundamentals of markets, so they resort to simple gambling, based upon the “technical indicators” they rely upon to “handicap” stocks and other bets.
As I’ve pointed out many times in the past, “technical analysis” is 100% meaningless in manipulated markets. All technical analysis is based on a very long list of assumptions, starting with “free and open markets”. If any one of the assumptions is violated, the technical analysis has zero validity. These facts are of little importance however to the gamblers who call themselves traders. Indeed, the “professionals” who play the horses also have their own “systems” at the track which they use for their own “technical analysis” – and consider their wagers to be equally “scientific”.
Obviously, these idiot-traders are the easiest segment of the market to manipulate, as all you have to do is create a phony chart to impress them, and they will dutifully respond like Pavlov’s Dogs. Thus the banksters want to convince the traders that $50/oz is the “Mount Everest” of the silver market – a near-impossible peak to scale.
The reality (as veteran metals guru Jim Sinclair likes to observe) is that at each of these major technical/psychological thresholds it typically takes three attempts for the longs to overrun the bankster defenses – and permanently leave another price level in the rear-view mirror. This means that what is happening presently has nothing to do with any “top” in the market, or even with any “seasons” in this market.
Certainly the bullion-banks want to pretend that there are still seasons in the precious metals sector. However, the reality is that precious metals demand is now driven nearly 100% by the insane money-printing (and currency-dilution) of Western bankers, primarily “Helicopter” Ben Bernanke. Since the bankers never give their printing presses any rest, this means there is no longer ever a time when gold or silver should remain stable – let alone retreat in price.
This is why the bullion-banks pulled out “all the stops” for this ambush, including enlisting the support of the corrupt operators of the Comex exchange – the CME Group. This private corporation is supposed to manage these commodity markets in an equitable manner, and to maintain stability in these markets. The CME Group always does exactly the opposite.
Its status as a servant of the bullion banks is beyond question, and its latest escapades prove that. Raising the margin requirements on contracts (which is equivalent to reducing leverage in the sector) is a move which is intended to “put the brakes” on a particular commodity market where “excessive speculation” (i.e. leverage) is perceived to exist. There is nothing improper about making such a move, assuming it is motivated by a valid objective.
Here we can see – on both a short-term and long-term analysis – that the CME Group’s motivations are entirely invalid (and illegal). As was the case with the last major ambush in the silver market (“Shock and Awe in Precious Metals”), in this latest operation the CME Group didn’t simply make one hike in margin requirements to knock the props out from under traders, but rather two margin-increases, back-to-back. In doing so, the CME Group has demonstrated its nefarious intentions beyond any doubt.
Obviously, when this “regulator” of the U.S. futures market applies the brakes to a particular commodity, the immediate presumption is that the price of that commodity was rising rapidly. And so it was with silver when the first hike in margin requirements occurred. Indeed, silver was spiraling upward at one of its fastest paces yet when the CME Group made that announcement. Even here we see the obvious “fingerprints” of the banksters.
If you want to really try to create a “top” in a market (and then hopefully engineer a major pull-back) any statistician will tell you that this is easier to do if that top is a sharp spike rather than a gradual rise. Thus, just as they did back in the fall, the banksters briefly ceased their attempts to restrain the advance of silver for a few days – and likely even jumped into the market on the long side.
Note that with silver still grossly undervalued by any rational measure that this market will always surge higher whenever those manipulative pressures are removed. This makes going “long” in the market a totally risk-free trade for the bankers – since they know when the next “pull-back” will occur in this market, since they are the ones who create it.
This means that any child could conduct one of these manipulation operations, since there is absolutely no expertise required. First JP Morgan briefly (but sharply) reduced its short position – with that move alone putting significant upward pressure on the price of silver. Then JP Morgan would (briefly) open a large “long” position, putting further upward pressure on the price.
At this point the bullion-bankers rush over to the CME Group, and over cocktails they tell the “administrators” of this rigged market that “speculation has gotten out of control” (nudge, nudge, wink, wink). Being obedient servants, the CME Group immediately hikes the margin requirements for traders. Up until now, while this manipulation is all entirely illegal, there are no obvious indications of illegitimate conduct.
However, the career criminals who operate these markets are nothing if not brazen. This is why a mere two trading days after its last margin requirement hike, the CME Group announced a second increase – just as it had done in the fall. And just as it was the last time they did it, when the CME Group announced the second raise in margin requirements, the price of silver was falling.
This cannot be over-emphasized. Obviously it is utterly impossible for massive amounts of margin/leverage to have entered this market in just two trading sessions. Thus the only, possible valid basis for raising margin requirements again would be entirely on the basis of price action – i.e. a sharply rising price. Instead, the price of silver was falling, making the illegitimate nature of this entire operation crystal clear to any not wearing “blinders”.
We can also demonstrate the illegitimate nature of the CME Groups actions by viewing them over the longer term. As I noted earlier, raising margin requirements acts like “the brakes” for commodity markets. However, unlike any mechanical braking device, raising margin requirements can only be done once. As you raise the amount of funds which any/all traders must post with each contract from 20% to 30% to 40%, this progression can never be repeated. Thus, in frequently and rabidly raising margin requirements for the silver sector (totally out of proportion to any other market), the CME Group is using-up its “brakes” for this market.
What happens when margin requirements reach 100%? The CME Group will have no means of any kind to restrain this market further. This means that all of these hikes in margin requirements (while silver remains far below any fair-market value) are illegitimate on a collective basis, because rather than “adding stability” to this market, the reckless managers of the Crimex exchange are wearing-out their “brakes” – much like the corrupt and intellectually bankrupt Federal Reserve has done in slashing interest rates to zero...
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http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=18630:the-new-operation-in-the-silver-market&catid=49:silver-commentary&Itemid=130
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