-- Posted 13 December, 2010 | | Discuss This Article - Comments:

Dear Friend of GATA and Gold (and Silver):

As you read with delight tonight's Financial Times story about the difficulty in which J.P. Morgan Chase & Co. apparently has found itself with silver (http://www.gata.org/node/9419), it may be worth remembering the remark variously attributed to those most cynical statesmen Metternich and Talleyrand during the Congress of Vienna, which reorganized Europe in 1815. Told by an aide that the Russian ambassador had just died, Metternich -- or Talleyrand -- supposedly responded: "I wonder what his motive was."

Tonight's FT story, reporting that Morgan Chase has substantially reduced its silver futures position, is attributed to an anonymous source, "a person familiar with the matter." Of course it is unlikely that anyone outside Morgan Chase itself would be so familiar with the matter, just as it is unlikely that anyone except Morgan Chase itself would want such information, or misinformation, to be broadcast as widely as the FT could broadcast it.

The FT story acknowledges that Morgan Chase means to "deflect public criticism" of its silver dealings, and at least that much is plausible. But as the himself pseudonymous Tyler Durden remarks tonight at Zero Hedge (http://www.zerohedge.com/article/jp-morgan-admits-defeat-cuts-silver-sho...), any suggestion that Morgan Chase now has covered its silver shorts is "pure and total" effluent. If Morgan Chase really had covered its silver shorts, the investment bank could say so itself, on the record, and not have to operate through the usual compliant plants at the FT. But then, of course, Morgan Chase would have some liability in lying.

Manipulative as it is, the FT story does signify something important: that clamor from the rabble about market rigging -- starting so many years ago with silver market analyst Ted Butler and continuing with GATA and hundreds of ordinary investors and a few courageous investment houses like Sprott Asset Management and Hinde Capital and now including that clever provocateur Max Keiser and that modern American patriot, U.S. Commodity Futures Trading Commission member Bart Chilton -- is making things hot for the market riggers, and they would like to get the hounds off their tail.

Keiser and some others think that exploding the silver rig will explode the great parasite of an investment bank that is behind it. More likely we will find that the investment bank is the U.S. government and the U.S. government is the investment bank and that any silver shorts supposedly covered on Morgan Chase's books will materialize someplace else and be well-hidden there for as long as possible.

But no matter -- the riggers are having big trouble if they aren't quite yet on the run, and in a few weeks U.S. Rep. Ron Paul, R-Texas, will become chairman of the House Financial Services Committee's Subcommittee on Domestic Monetary Policy and Technology, with jurisdiction over the Federal Reserve. Paul wrote today (http://www.gata.org/node/9418) that "Fed transparency will be the cornerstone of my efforts as subcommittee chairman." As subcommittee chairman with much more time to speak, Paul at last may ask the right questions of the right people on the record -- something the Financial Times has yet to do -- thereby bringing forth what Morgan Chase and the bankers who control the U.S. government may already dimly perceive as the End Times.

In the meantime, please remember that it was GATA -- particularly GATA Chairman Bill Murphy, GATA board member Adrian Douglas, and GATA whistleblower Andrew Maguire -- who thrust the silver market manipulation issue in the face of the CFTC and the financial news media at the CFTC's public hearing in Washington last March 25. That's exactly when the silver rig started coming apart. Please remember also that it is GATA and not some mining industry group that is suing the Federal Reserve in U.S. District Court for the District of Columbia for access to the Fed's gold records and particularly for access to the records the Fed admits having of gold swap arrangements with foreign banks, arrangements that are the primary mechanisms of gold market rigging. Exposing the market riggers and sustaining the agitation for free markets in the monetary metals requires the financial support of those who believe in GATA's work. We're making good progress against nearly all the money and power in the world. If you'd like to help us, please visit:

http://www.gata.org/node/16

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.