Here is the third instalment from Jeff Nielson. Have a good long weekend all.

Deno G.

In Part I, we heard Jeffrey Christian declare “in all of my years of involvement in the gold market, I have never seen any evidence of any efforts to manipulate or suppress the price of gold”. Along with that, I pointed out that Christian did his best to undermine GATA's Bill Murphy – through a steady stream of insulting rhetoric and condescending lectures (contravening the “rules” of the debate).

In Part II, we listened to Christian talk about all the 'good' manipulation of the gold market which he had personally observed – which he vehemently attempted to distinguish from the 'bad' manipulation which he claimed was alleged by GATA. I also added some information which Christian left out: the reasons why the U.S. government and its bankers were engaging in their 'good' manipulation: to help the U.S. government cheat on its finances, and allow it to fund the immoral Vietnam War.

If Christian had stopped at this point, he could have still emerged from the debate with some semblance of his credibility remaining. His categorical denial that any gold manipulation had ever taken place could have been construed by apologists as a 'slip of the tongue': that what Christian meant was only that he had never encountered any 'bad' manipulation.

However, one thing Christian demonstrated consistently throughout the debate was his own arrogance. He divided his time in the debate almost equally in boasting about his own prowess and integrity and denigrating Bill Murphy and GATA. As with most extremely arrogant individuals, Christian is prone to overconfidence – and thus he simply 'over-played his hand'.

When conversation turned to the issue of the UK dumping more than half of its gold onto the market at the all-time low price for gold (in real dollars), Christian should have just walked away from the subject. He could have simply said that Gordon Brown had made a blunder, and that he didn't know what Brown was thinking at the time, or simply offered no explanation at all.

But “Loose-lips” couldn't restrain himself. He launched into his own myth about the great, UK gold-dump: he insisted that the UK government had not been trying to crash the price of gold by dumping this huge quantity of gold onto the market in open auctions, but rather had been trying to “protect” the gold market. In insisting upon pursuing this utterly absurd fabrication, Christian managed to contradict himself several more times.

First of all, it was Christian himself who previously said in the debate that these operations in currency markets worked best “if people don't know what you're doing”. Thus, if the UK wanted to “protect” the gold market and maximize the price it got from its own gold, it would have conducted the gold-sale discreetly – and not through public auctions, announced well in advance.

There is a second way of demonstrating that Christian was engaging in deliberate deceit, independent of his own self-contradiction. As we have seen over the last two years, the anti-gold cabal has been announcing and re-announcing the same sale of gold by the IMF – by coincidence, a quantity of gold that originally was almost identical in size to what was dumped onto the market by the UK.

The IMF sale has been “announced” on at least a half-dozen occasions: four times before the sale was even approved, and two more times since. After observing that this propaganda had no (negative) effect on the gold market (because participants believed that central banks would privately soak-up every ounce of that gold), the IMF changed its tactics. It refused to sell the second half of the gold privately. Indeed, Eric Sprott of Sprott Asset Management has publicly stated that he tried to buy the IMF gold, but was rejected as a bidder (without reason). It has also been rumored that China's government tried to buy that gold as well.

Instead, the IMF recently announced it “might” sell the rest of the gold in public auctions. In other words, even today – with gold demand being at its most bullish level in decades (now that central banks have become net buyers), the anti-gold cabal considers merely announcing a gold auction to be an act which would/should harm the gold market.

If merely announcing a potential auction of gold today is something which can damage sentiment in the gold market, then what does that say about Gordon Brown's motive? In announcing and then carrying out an auction of twice as much gold, when bearish sentiment was already at an all-time high, and the price was already at an all-time low, this was an action clearly intended to sabotage the gold market – not “protect” it.

But Christian wasn't finished with his “explanation”. To attempt to support his fiction that the UK was “protecting” the gold market, when it suddenly dumped half of its national holdings, he decided to start talking about his friends at the bullion banks. The reason that the UK needed to “protect” the gold market, said Christian, was that the bullion banks were continuously spreading rumors that various European central banks were about to dump gold onto the market – in order to manipulate the price of gold lower.

That's right. The same “Loose-lips” Christian who said at the beginning of the debate that he had never encountered “any manipulation”, and then later claimed that only 'good' manipulation existed, volunteered his own anecdote on bad manipulation: the relentless efforts of the bullion-banks to illegitimately move the price of gold lower by spreading false rumors.

What makes Christian's spontaneous confession truly pathetic is that it didn't even support his own argument. If (supposedly) the UK government was trying to discourage the bullion-banks from spreading false rumors about gold-dumping, then announcing a huge auction of gold wouldn't hurt or discourage the bullion-banks, but rather it would encourage them to engage in this tactic to an even greater degree. “Look!” shrieked the bullion-banker, “The UK is dumping half its gold in a panic. I wonder who will be next...”

As a third means of repudiating Christian's argument, we can refer to what the Western central banks did do to restore some order to the gold market: they began their “gold sales agreements”. These sales agreements were vastly different from the UK's large, public auction of its gold. While the agreements provided a collective quota for all European central banks, it did not provide any details (in advance) on which central banks would be selling gold, how much they would sell, or when they would sell it – the antithesis of the UK's gold-dump.

At this point, I must digress to address a couple of points, lest some readers suspect me of engaging in Christian-like hypocrisy. First, having regularly included Western central bankers as being part of “the anti-gold cabal”, there are probably some readers who believe that my comments about the gold sales agreements by those central banks contradict my own position.

Knowing this issue would come up, in between writing Parts I and II, I took the time to write a commentary which focused upon this subject. Specifically, I pointed out how the banking cabal desperately needed the new supplies of gold provided by the gold miners. Thus, the central banks sales agreements had nothing to do with “protecting the gold market” and everything to do with keeping a necessary “tool” of the bankers (the gold miners) in some semblance of health. Without that stabilizing influence of the sales agreements, they couldn't trust their psychopathic minions at the bullion banks not to destroy the miners, completely – with their habitual manipulations of this market (see “Goldman Sachs and Gold”).

The other point which some readers might perceive as an inconsistency is how I have rejected much of Christian's posturing during the debate as being intentional fabrications, while I accepted his voluntary description of the bullion-banks' precious metals manipulation as fact. This is based on a well-established principle of both law and logic: that “admissions against one's interests” are always given a greater weight as evidence. Thus, when Christian took the time to describe the 'bad' manipulations of the bullion-banks – the very act which he had accused GATA of fabricating, again and again – that was the one statement Christian made in the entire debate which would carry the greatest credibility.

On a number of occasions, I have alluded to the complete absence of integrity demonstrated by Christian over the course of the debate. Nowhere was that clearer than in two exchanges which took place between he and Bill Murphy.

Referring to Christian's testimony at the recent CFTC hearings, Murphy paraphrased Christian by saying that Christian had said the bullion banks responded to “a rising price” by increasing their short positions. In actual fact, what a clip of that episode seems to indicate is that Christian had said that the bullion banks responded to rising sales volumes by increasing the size of their short positions.

Since rising sales volumes (for any commodity) imply higher prices, while Murphy was not completely accurate with his quoting of Christian, it was clearly a case of accidentally substituting one similar fact with another. In other words, it didn't distort Christian's position in any way when Murphy used the words “rising prices” instead of “rising sales volumes”. In both cases this would be seen as a bullish development for the market, and in both cases, increasing the short positions of the bullion banks would be seen as an attempt to suppress the price of bullion – since the general mantra in the market is “the trend is your friend”.

Clearly, this would be evident to Christian, as well. However, seeking to gain advantage, Christian lashed out, “you are lying!” Not only was this personal attack in direct violation of the explicit “rules” for the debate set out by Puplava, but it is an accusation which couldn't possibly be justified by the context.

A lie requires two ingredients: a factual inaccuracy and an attempt to deceive. As I already demonstrated, there was absolutely no indication of any attempt to deceive by Bill Murphy. He simply “misspoke”. Ironically, on the very same clip, the first thing we hear out of Christian's mouth was “I misspoke.” The difference being that no one accused Christian of “lying” at the CFTC hearings (despite how implausible his own “explanation” sounded – even to CFTC chairman Gary Gensler).

While Christian was accusing Bill Murphy and GATA of attempting to deceive, or exaggerate, or simply “lie” over and over, it was only Christian who demonstrated those failings during the course of the debate. Indeed, Murphy remained remarkably composed, given Christian's under-handed tactics.

Rather than attempting to engage in grandiose “explanations” like Christian, where the truth was seen as merely an “unnecessary accessory”, Murphy calmly stated that “GATA stood by its record.” He said that he felt GATA had made its case on precious metals manipulation – even without the recent “help” it had gotten, first from Andrew Maguire, and now from “Loose-lips” Christian. He said that the continued rise in the price of gold would provide all the “vindication” which GATA required, and challenged Christian to admit “he was wrong” about manipulation, should the price of gold continue to rise.

True to form, Christian pulled the old “Jon Nadler” routine. “I won't do that,” he replied, “Because I'm a gold bull, too" (just like Kitco's Mr. Nadler). Knowing that he had caught Christian with another one of his “loose interpretations” of the truth, Murphy countered that Christian was on the record as being bearish about the price of bullion.

“Not true,” denied Christian. He said that he recently wrote that the price of gold could go “as high as” around $1320/oz over the next few weeks (less than $100/oz above where it was on the day of the debate). Thinking that he might be able to eke-out a 7.5% swing-trade doesn't sound like any “gold bull” I've ever heard of. But Bill Murphy had a much more compelling response: pointing out that only a few weeks earlier (at the “Silver Summit”) Christian had gone on the record as calling for the price of gold to average $941/oz for the next decade.

Even in the face of that absurdity, Christian refused to back down. He still maintained that he was a “gold bull” - holding his bullion with the expectation that he would lose more than 20% on his investment over the course of the next ten years. Presumably, Christian isn't planning on getting rich based upon his investing acumen.

Speaking of “absurdity”, I can't complete my review of “The Great Gold Debate”, without zeroing-in on a couple more memorable moments with which Christian provided us. First, he trotted-out a thinly disguised version of the old “barbarous relic” yarn – a fiction that even the central bankers no longer maintain, now that they have reverted to being net-buyers of gold.

All of us gold bulls are suffering from “gold-centricity”, warned Christian. Because of this form of insanity, we're under the delusion that “gold is important”. In “reality” assured Christian, “bankers think little about gold,” and gold had become “a back-water in the global financial community.” (Notice how cleverly Christian substituted the words “back-water” for “barbarous relic”.)

Let's take a moment to analyze this Christian revelation – in light of what he had been saying elsewhere in the debate. We know (from Christian) that the bankers thought about gold a lot during the 1960's, because not only were they manipulating the market on a regular basis, but they considered those manipulations to be of such great importance that they were 'entitled' to conceal their actions – to maximize the effectiveness of their manipulations.

We can assume that the bankers thought about gold a lot during the Seventies – when it rocketed to its all-time (real-dollar) high. We know the bankers were thinking about gold a lot during the 1990's. Not only were the bankers deeply involved with enslaving the gold-miners, to gain access to yet more bullion to dump onto the market, but the bullion-bankers had become so voracious (according to Christian) in their gold-manipulations that the central banks had to rein them in, through devising their “sales agreements”. We can assume that they were thinking about gold a lot during the last decade, as they watched it quadruple in price (and then bought more gold – on a net basis - than any other time in 50 years).

In the real world, the only decade in the last 50 years where the bankers might have had the luxury of ignoring the gold market was during the 1980's. And the only reason they could afford to dismiss it from their concerns for that one period of time was that this was at the point in time when they still possessed their greatest hoards of bullion – which made keeping their choke-hold on the market relatively effortless.

Christian also treated us to an attempt to “explain” his famous “100:1” remark at the CFTC hearings. Given that former Bank of America CEO, Ken Lewis had to come up with three totally different versions of the Merrill Lynch acquisition – before he found a version he liked – I think we can classify Christian's efforts at “clarification” as “a work in progress”.

In Version #2, Christian now tells us that all of us malicious gold-bugs willfully misinterpreted his remarks when we quoted him. When he was talking about “the gold market being a hundred times bigger” than the actual amount of “physical metal” (at the end of his testimony), he wasn't talking about “leverage”, he was talking about sales volumes. The total “traffic” in gold each year amounted to 100 times the amount of actual metal, he now claims.

There is one slight problem with Version #2. In the last several minutes of his CFTC testimony, when he was engaged in the discussion which led up to the “100:1” reference, he never mentions the flows in the gold market – even once. He talks about leasing. He talks about hedging. He talks about shorting. He talks about everything except the total flows in the gold market. Stay tuned for Version #3...

Listening to the private “reviews” of a few other people on this debate, including some who simply got fed-up with Christian's tactics, and stopped listening, it's a shame that Jim Puplava didn't become much more proactive in restraining Christian, when he methodically set out to poison the atmosphere. As a result, a lot of gold (and silver) bulls missed-out on what were yet more stunning revelations by Jeffrey Christian of the CPM Group.

We now have two “whistle-blowers” about precious metals manipulation. We have Andrew Maguire, who so far has been unable to present his own evidence in official, public testimony. And we have Jeffrey Christian, who keeps blowing his own “whistle” again and again – even though he's trying not to.