“They then form groups and ask for donations to fight manipulators, whom they pretend are perpetual, when in fact, the entire commodity sector is in crisis, no less the deflation that is destroying the economy.”
Since we have been on the subject lately, conjuring Armstrong in Saville’s post and conjuring GATA from my own recent experience (Thing 1 @ Biiwii & Thing 2 @ NFTRH) I thought this post by Marty was interesting.
His negative tone toward gold manipulation propagandists seems to me to be the result of much input from the hard assed end of the gold bug spectrum. They are like a mafia you know, and they are not open to discussion about opposing views. That is the fatal gold bug flaw… the surety with which they go about their business. That is because after all, uncovering the crimes of the evil manipulative interests IS their business. And business remains good, with lots of customers still buying.
Again, there is manip in all markets. Why is it so publicized and turned into a cottage industry in gold? What about all that oil manip? The Euro is being manip’d right now, today with Draghi talking sweet somethings… in gold the true believers are the marks. I am a believer in gold. But not to the extent that I am going to let this monetary asset – with a particular place in an overall portfolio and an overall life – hurt me. Keep religion, politics and ghost stories out of it!
 In re-reading Armstrong’s quote above I can’t help but wonder if “the deflation that is destroying the economy” (well, it isn’t yet in the US, that must be a projection as exports/manufacturing are the ones suffering as we have shown in breaking down the Payrolls report and finding consumption and services still going great guns under the regime of a strong dollar) is going to be the thing that makes the distortion in this chart finally resolve with negative consequences.
In 2008 we had financial and market manipulation with the employment of ZIRP. Then we had inflationary manipulations 1, 2 and 3 (QE) along the way. But the greatest manip of all was the brilliant, evil genius of Operation Twist, which croaked gold (silver and commodities had already blown out earlier in 2011) and painted Goldilocks right into the macro picture. The Fed’s own word was “sanitize” when it talked about making it look like there was no additional inflation being promoted. They did this by selling short-term T bonds and buying long-term T bonds (i.e. neutering the bond market). Voila! A manipulation so simple as to be child’s play; just sell these bonds and buy those bonds.
But then we realize that the markets are made up of we the many participants (investors, traders, HFT’s, casino patrons, substance abusers and yeh, the algos and black boxes too). We are (mostly) part of nature and nature always seeks to have balance. That is why I so often post the ‘distortions’ chart above. I wonder if the market will slowly come into balance in the form of the deflation – kicked into gear by the Fed’s own Op/Twist 4 years ago – that Marty projects will go on to destroy the economy. Just riffing here…