- Is Silver Getting Ready To Rip Higher?
by Dave Kranzler, http://investmentresearchdynamics.com/
The big buzz yesterday in the precious metals market was the news that Deutsche Bank has agreed to settle charges for its role in manipulating the London Bullion Marketing Association (LBMA) daily gold/silver price fixings. My view on this, albeit admittedly jaded, is that it is akin to the settlement charges being paid by the big Wall Street banks for their fraudulent behavior in the housing bubble mortgage market. Although Deutsche Bank has agreed to “spill the beans” on other banks, I have yet to hear any mention of JP Morgan, Citibank, Goldman Sachs or any number of other western bullion banks who engage in daily price intervention in the gold and silver futures market on the Comex.
My view on the matter is that until I see otherwise, this is nothing more than a “we took care of the problem, move along there’s nothing else to see here” situation. DB is like a trapped felon who blinked in the game of “Prisoner’s Dilemma” and gave up a couple of names in order to let it continue forward in its endeavor to save itself from collapse. While other indictments may be doled out, I do not see this as an advancement in the effort to reform the trading activity in the gold and silver markets. After all, the banks are manipulating the market on behalf of the western Central Banks and Governments who are highly motivated in their effort prevent a sustained rise in the price of gold from signaling the west’s continued financial and economic deterioration.
While the Deutsche Bank announcement may trigger some celebratory dances in the precious metals community, rest assured that for every bank removed from its gold/silver market manipulation service, they will be replaced by banks “sitting on the bench.” The “reformed” LBMA gold fix process is proof of concept. The prima facie format has been somewhat altered, as have the names involved. But it can be argued that the “reformed” price fix process is perhaps even more permissive of manipulation than the old format.
The more interesting issue in my opinion is whether or not the bullion banks’ ability to keep the price of gold and silver capped with any relative degree of success is fading. History has proved that all forms of market intervention eventually fail. If the intervention in the precious metals market did not ultimately fail, it would be a statistically unique event. I would have the readers recall the fact that the Rothschild family, which founded the London gold fix, withdrew from its involvement and connection to the LMBA, including the twice-daily fix process, in 2004. Something like this happens for a reason…