The Plunge Protection Team, The Fed And The Investor Costs

The “Plunge Protection Team” is the colloquial name for the Working Group on Financial Markets (WGFM). The Working Group was established by the executive order of President Reagan in 1988, in the aftermath of the stock market plunge of October, 1987.

The group reports to the President, and the official members of the group include the Secretary of the Treasury, the chairman of the Federal Reserve, the chairman of the SEC, and the chairman of the CFTC. In other words, the group members are the four most powerful financial officials in the United States. In practice, the committee can be composed of senior aides and officials that have been designated by those top officials.

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JPMorgan Chase Trader Pleads Guilty to Gold Manipulation

By Clint Siegnr -Re-Blogged From Money Metals

Gold and silver investors got a rare bit of good news on the enforcement front last week.

Manipulation

A trader from JPMorgan Chase pled guilty to rigging the precious metals futures markets.

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Silver Prospects

By Ted Butler – Re-Blogged From http://www.Silver-Phoenix500.com

Here’s a recent interview I did with Jim Cook, President of Investment Rarities, Inc., for whom I’ve consulted for more than 17 years (where did the time go?). It’s gotten to the point where about the only interviews I do are with Cook, but that’s not due to our long relationship. Rather, it’s because he comes prepared and wastes no words, making my role easy. With Cook, it’s always about getting to the heart of the matter, with the least amount of fluff as required.

Cook: Are you disappointed with the recent price action in silver?

Butler: Of course, I thought we might finally be breaking out.

Cook: What happened?

Butler: It’s the same old story.  As I outlined previously, we were setup for a strong rally at the recent lows, but whether the rally was of the now-typical $2 to $3 variety or the big one was based upon whether JPMorgan added aggressively to COMEX silver short positions. JPMorgan, once again, stopped the silver rally cold by adding massive amounts of short contracts, just as they have on every silver rally over the past ten years.

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Record Gold/Silver Shorting

By Adam Hamilton – Re-Bloged From http://www.ZealLLC.com

The miserable summer for precious metals grinds on, with both gold and silver limping along near major lows.  Such dismal price action has exacerbated the extreme bearishness long plaguing this sector, sparking even more capitulation.  But this incredible weakness will be short-lived, as it was driven by American futures speculators’ record short selling.  That will soon reverse into guaranteed, proportional buying.

In all markets including precious metals, price is rightfully considered the most-important fundamental signal.  Prevailing price levels are set by free-market buying and selling until supply and demand meet.  And gold and silver prices are exceptionally weak, with these despised precious metals slumping down to challenge major new 5.2-year and 5.4-year lows this week.  So their fundamentals must be bearish, right?

The only fundamental factors that can drive prices near major secular lows are too much supply, too little demand, or some combination of the two.  And if the gold and silver markets are as oversupplied as their prices indicate, they’re likely to keep drifting lower indefinitely.  This popular bearish thesis is universally believed today, with virtually no dissent.  There aren’t many contrarians left to combat this overpowering groupthink.

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Commodity Merry-Go-Round

cropped-bob-shapiro.jpg   By Bob Shapiro

Insider Trading is illegal in the United States. For those who are new to the concept, if you know market affecting information before it is generally available to the public, that’s insider trading.

If you know a company is about to report surprisingly lousy (or great) earnings, and you trade ahead of the information being released, that’s insider trading. If you trade on a crop report before the report is

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