Thanks for posting that Quixote2

Mish Headlocked is either terribly mis informed or he has an agenda. There are so many holes in his illogic it would take an hour to point them all out. He is just slinging $#it.

JPM is a market maker. They are the biggest bull in the china shop. They make money selling short contracts. They let more spec's pile on and have a nice pile of cash by the time OE approaches. Then at some defined time they do an all out assault on the paper contracts. The pull their bids! That means that the biggest player will not buy and they hit every bid of those trying to pick up a bargain on a long contract. Bids are often under the market just as when we do it, for say ECU, we call it a stink bid, and most just expire unfilled. But by pulling their own bids, they remove the biggest support under the market.

So sucessive bids are sold into and the price starts to go down reflecting the prices at which the bargain hunters bought. Next those with profits begin to sell into the falling price to protect their profits. Moron buys back its paper. This leads to technical levels being hit and more sellers. The price falls further and moron buys back more of its paper. It could continue falling until moron is net in the money or even wildly profitable on its latest cycle. After all, as market maker, they make a % of every sale in both directions.

But most of us conspiracy nuts believe that there is not a profit motive here anyway. What we believe is that moron is doing this manipulation, in both gold and silver, to keep the interest in gold and silver down and keep the US $ viewed as the best "safe haven" in the minds of investors.

In fact the total metals market is miniscule compared to FOREX. Most of the time when gold goes down a noticable amount, the $ rises. Moron could easily make many times any losses in the metals by hedging in the FOREX markets. After all they know full well when the pressure will be applied and can establish positions to profit from very small movements.

Moron has been trying to convince the CFTC that position limits are not needed. That they are a bad idea. In other words moron wants to continue its heavy handed bullying of the paper market. What is obvious is that if the $ dies, it takes moron and the fed with it. The price of the metals has steadily risen in spit of the paper schenagins. Remove the massive amounts of paper sales with no metal backing and you get coser to the levels that buyers ans sellers would transact at. In other words acloser to the free market price.

When the dominate # of contracts are just bets, you have an artificial market price heavily influenced by the "house". They ought to just move all options to the gambling casinos where they belong and force sellers to demonstrate that they have product to sell just like the force buyers to demonstrate that they can pay for the metal.

Lastly in the 80's, when TPTB wanted the price of silver to fall, they changed the rules in the futures market and would only allow longs to sell. They would not allow anyone to go long until the price had fallen significantly. Manipulation has been a part of the paper market since day 1. The whole reason for options, from the bankers perspective, is a tool for manipulation. All hedging could be done in the futures for legitimate buyers and sellers and that would eliminate a good amount of the players influence on real transaction prices.

JMO