Friday, April 6, 2012

Why Blythe Masters is Telling the Truth About Precious Metals Manipulation

As by now all of our readers are aware, JP Morgan's Global Head of Commodities Blythe Masters yesterday appeared on CNBC for a soft-ball interview giving Ms. Masters the opportunity to deny rumors and allegations that JP Morgan is manipulating the metals markets, particularly silver.

With a smirk on her face, Blythe informed viewers that 'JP Morgan's commodities business is not about betting on commodities, it is about assisting clients' and 'we have offsetting positions....(manipulation) is not part of our business model.  It would be wrong and we don't do it.'

While Blythe's statements' have already been thoroughly dissected and ridiculed ad nauseum (The Doc included), the fact is that BLYTHE WAS NOT LYING THROUGH HER TEETH AS MANY CLAIM, SHE WAS TELLING THE TRUTH 100%.

Here's why:

As our friends at GATA have long alleged, it is highly likely that JP Morgan's 'client' referred to by Blythe Masters is none other than the Federal Reserve- specifically the NY Fed. 

NY Fed Building
Viewed in this light, Blythe's comments regarding gold and silver manipulation are completely honest (while obviously intentionally misleading, none-the-less they are honest at face value) as it is likely that JP Morgan is maintaining metals positions and trades per the instructions and wishes of their client, the NY Fed. 

Recall the rumors in the market that a central bank gave orders to dump 1 million ounces of gold on the market in the span of 2 minutes on February 29th.  Recall that gold and silver were taken down massively and counter-intuitively last fall exactly 5 minutes prior to the Swiss Franc's devaluation vs. the euro.   Recall that gold and silver are routinely smashed whenever the Federal Reserve Chairman is speaking publicly or the FOMC is meeting.

The Plunge Protection Team's (NY Fed's) Brian Sack (who was sacked this week....another story) routinely uses broker-dealers to conduct 'open market operations' to fund the Treasury ponzi.  i.e. the NY Fed makes agreements to handsomely reward the primary dealers for taking up treasury auctions with the full knowledge that the NY Fed will buy back the bonds at a premium in approximately a week's time.  Would Goldman and JP Morgan be buying $1.5 trillion worth of treasuries annually at 2.5% if they had to hold them on their own books for 30 years?  Of course not!

Why should we believe that the NY Fed's intervention in the commodities sector is any different?  Someone has to execute the trades on behalf of the NY Fed's commodities intervention.  It makes perfect sense that JP Morgan holds their massive naked short gold and silver positions on behalf of their client, the NY Fed, and not as their own speculative bet. 

If JP Morgan held these positions on their own behalf, the CFTC would likely not be in their 4th year investigating silver manipulation.  The DOJ would be involved
, and let's just say that Blythe would not be making charity appearances donating millions of dollars to community colleges in Colorado. 

Unlike JP Morgan, the Federal reserve would have a variety of motives in suppressing the price of gold and silver, managing the metals markets with an iron fist, and ensuring the metals are smashed upon any significant macro-economic news intuitively harmful to fiat currencies. 

Gold and silver are anathema to central banksters, who make their living by sucking the value out of the population's currency through inflation and currency devaluation.  The Federal Reserve has every motive to ensure that this process can continue unnoticed by the masses, until the wealth transfer is complete. 

Imagine if the American people en-masse became wise to the scheme and began saving their wealth in gold and silver rather than federal reserve notes which the NY Fed can run off by the trillion with a simple keystroke?  The entire con would be up overnight! 

Gold and silver must be managed and controlled by the Fed until the wealth transfer is complete, at which time they will be 'revalued' higher.  Ben Bernanke has already informed us of the exact plan back in his famous 'Helicopter' speech! Gold revaluation is the end game, but until then, it is management, suppression, and intervention. 

When Blythe Masters yesterday claimed that 'JP Morgan holds their metals positions on behalf of clients', that 'JP Morgan is not in the business of betting on commodities', and that they 'are not running a large directional position', she was likely telling the truth. 


'There are no markets anymore, just interventions'