Notice the quote from volker about what mistake they made the last time gold ran, it is in brackets.

Yesterday was the most egregious combined market manipulation of the US stock market and gold market I have seen in 13 years. The reasons for the price of gold to advance and for our market to remain under pressure accelerated, not the opposite. But in our Black is White, White is Black Behavioral Finance world in the US, the markets do the opposite. And because PRICE ACTION MAKES MARKET COMMENTARY, the US financial market press goes with the flow and gives the PPT and Gold Cartel a free pass on their hijinks. And so, on and on we go.

This is not just a rant going nowhere. Our financial markets are not free. Communist China would be proud. These continued operations are gradually leading our country’s financial markets and economy into a disaster gradually, one thought unthinkable many years ago.

As this plays out, the prices of gold and silver will go bonkers as the Orwellians lose all control of their rigging operations. There is no telling where the DOW could end up on the downside. What goes around, comes around.

To give further impetus to this line of market manipulation thought, James Mc…

CME reduces(!) margin in the XAF

Bill,
What does GCZ, SIZ, and XAF have in common? According to the CME all 3 need one side of the trade fiercely protected. In the case of gold and silver it's the shorts that get protection, while with financials it's the longs that get the insider's help. In an irrational and "counterintuitive" decision the CME, at the height of extreme volatility in the financial sector, actually LOWERED margin requirements yesterday on the XAF by 33%. That's right, in the case of the financial index the CME is encouraging MORE volatility. There now can now be no doubt the CME manipulates trading through leverage and margin. After punishing silver and gold longs with well-timed and orchestrated margin hikes the CME is now intent on routing any financial shorts in the same manner. The XAF margin decrease announcement was once again perfectly timed, seeing how the Dow had just staged its 400 point "miracle" comeback. CME members should be long gasoline futures because they sure the hell have provided a lot of it lately scorching their opponents. Maybe the CME will next mimic Fed policy and end up with zero margin requirement for equities and TBTF banks.

CME margin for 1 silver contract: $24,975
CME margin for 1 gold contract $11,475
CME margin for 1 basket of insolvent too big to fail banks: $ 3,500

Facilitating manipulation for cartel traders: PRICELESS

zerohedge article:
http://www.zerohedge.com/news/soaring-financial-vo
l-leads-cme-announce-33-margincut

04 October 2011

Bill,
As I have pointed out in previous correspondence, the COT make up at present for the precious metals sector is almost as bullish as it truly gets,

A day or so ago, I forwarded the updated chart of the Silver Commercial COT setup,

Today, I’m forwarding the chart showing the Commercial Short-Long Ratio for both Gold and Silver, What this graph clearly depicts is that while either ratio have on occasion dipped below the ‘Magic 2’ level, they have rarely both been below that line in the sand together,

In fact this has only happened on 3 separate occasions in the last 10 years and the 1st was a bit a misdemeanour,

The 1st was for a week in mid August 2007 (although in fact the Gold Ratio only fell to 2 and not below),

The 2nd time was for the duration of 5 weeks from the 30th September 2008, following on directly from the collapse of Lehmans,

And the 3rd was last week,

Of course, no one needs reminding that the Lehman debacle was truly exceptional with banks doors across the Western hemisphere about to close permanently, And the price of the metals continued to correct through the month of October of that year, However in hind sight anyone who bought either metal during that time was most suitably rewarded in the months and years since,

OK, so even accepting perhaps that the COT setup is now signalling an uber buy opportunity across the precious metals sector and the beach ball’s are firmly underwater at this juncture, what’s to say we still wouldn’t see a continued sell off like October 2008, before things take off again?

Of course there is no guarantee that the continued slide in prices may not continue in the very near term and that slide could be reasonably steep, judging from the 2008 experience, However it is important to put the 2008 collapse into proper perspective, because today’s environment is different on a number of fronts,

Most especially the levels of irrational fear that haunted the market place at that time, Whilst we have seen a corrective sell off recently in the Dow, it is but an ‘ant hill’ compared to the waterfall of 2008, Coming into October of that year the Dow Jones had collapsed by over 30% in the 3 weeks prior, falling from circa 11,500 to 8,000, In comparison the Dow this time has fallen a much more modest 10% leading into this ‘Magic 2 Setup’, While there has been a modest run for liquidity in certain areas of late, it is nothing compared to the blind panic that ensued the collapse of Lehmans and the rush for every exit at that time!

On top of this, the concern (and it’s a big one) overhanging the market place at present is one of Sovereign Solvency, In the 2008 Collapse, the Sovereign Bond markets were the hiding places for capital liquidated out of the rest of the market place, This time around it is the Sovereign problems that are largely causing the uncertainty, which should ultimately lead a flight to safety into suitable substitutes, the most obvious of which are the precious metals,

In summary, We look clearly to be at most opportune juncture for anyone wishing to acquire a larger position in the precious metals sector, The COT set up as seen today from both a Gold and silver perspective is as bullish as it gets, This is not to say that we will see the price turn up tomorrow or that a bottom has already been put in, But, having followed this analysis for over 8 years, it does give me very strong confidence that the ‘Precious Beachballs’ are now firmly underwater and as such their longevity at these discounted levels is finite, A continued correction, akin to 2008, could see the metals fall a further 30+% from here, although I think such a scenario is unlikely, As outlined above, the panic surrounding the meltdown in 2008 was of a far greater magnitude than today’s environment and if anything today’s primary cause (sovereign debt issues) is a bullish not bearish argument,

I am confident that we are close to near term lows here and have been redressing my portfolio accordingly,
Very best,
Rich (Live from 'The Bridge of the Silver Rocket Ship')