Bankers are using HFT algos to manipulate gold and silver prices, Part 2

In Part 2 of his series of why HFT algorithsms are an important banking tool to suppress the price of gold and silver and keep stock market bubbles pumped up, the financial analyst J.S. Kim discusses the fact that many financial journalists feel that the gold and silver manipulation game is not that huge because they mistakenly only look at contractual values and not notional values of gold and silver futures contracts that are manipulated.

By J.S. Kim

The following article, that was originally posted here, gets republished at with the personal authorization given by J.S. Kim.

J.S. Kim is the President and Chief Investment Strategist of SmartKnowledgeU, an independent investment research and wealth consulting firm. His investment newsletter, the Crisis Investment Opportunities newsletter, has yielded positive return every year since its establishment in 2007, easily beating for example the US S&P500 in 2007, 08 and 09. He actively maintains a blog (see here), and is the author of the book “Confessions of a Wall Street Insider.” Mr. Kim’s investment strategies don’t rely on fundamental or technical analysis as primary screens to select stocks but instead utilize the strength of corporate-government-banking relationships to predict share prize appreciation. Mr. Kim lives in the U.S. and Southeast Asia.

Why Bankers that Use HFT Algorithms Literally Impede Life, Liberty & the Pursuit of Happiness
by J.S. Kim

In Part 2 of my series about the wealth-destructive misanthropic power of banker controlled HFT algorithms, I will link the revelations in Part 1, „The One Revelation About HFT Programs That Truly Scares Bankers“, to the fact that bankers use HFT algorithms destroy everyone’s wealth, regardless if you invest in stock markets, gold and silver markets, real estate markets or F/X markets. In Part 1 of this series, some pointed out that the crimes bankers commit in suppressing gold and silver prices with illegal deception schemes they build into their HFT algos is small relative to the dollar numbers associated with the crimes they commit in stock markets. Even though daily trading volume on the NYSE has dropped precipitously from nearly 9.8 billion shares a day in 2009 to about 7 billion shares daily during the first month of 2014, about $30 to $40 billion of stocks still trade daily on the NYSE. In comparison, the average daily trading volume of gold futures contracts (February 2014) of 137,239 contracts that represented a notional amount of 137,239 * 100 ounces/contract * $1300.97/ounce = $17.8 billion, and the average daily trading volume of 78,887 silver futures contracts that represented a notional amount of 78,887 * 5000 ounces/contract * $20.83 an ounce = $8.2 billion. Add these two figures up, and the notional amount of gold and silver futures contracts traded equals $26 billion a day, about on par with the daily volume of the NYSE.

Because unscrupulous bankers have turned gold and silver futures markets into a fractional reserve gold and silver market in which they fraudulently trade hundreds of more paper ounces of gold and silver than are produced in the physical world every year, I argue that it is the notional daily trading volume of gold and silver futures contracts that truly matters, and not the actual contractual dollars that trade. Why? Because bankers use the notional amounts, and not the actual contractual amounts, represented by gold and silver futures contracts, to suppress gold and silver prices. For example, in this article I wrote in April, 2013, I illustrated how the banking cartel sold 6,000,000+ ounces of gold in less than half an hour, represented by 60,000 gold futures contracts to spark a sell-down in gold prices. The banking cartel likely did not even sell one physical ounce of gold to affect this rout on the price of gold and the 6,000,000 gold ounces they sold were notional and imaginary ounces of gold that the bankers never owned nor sold. However, it was the imaginary 6,000,000+ ounces of imaginary paper gold that was sold in less than half an hour that caused the price of gold to crater that day, not the amount of real gold that could have been purchased with the much less amounts of currency used to purchase those contracts.
And just last week, on April 15, 2014, the bankers smashed gold by selling over a half a billion dollars notional of gold futures contracts in a very short amount of time. Allow me to present some quick mathematics for you. If we use the price of the prior day’s close of gold of $1,327.10 per troy ounce, a notional amount of $500M would represent 3,768 gold futures contracts that represent 11.72 tonnes of gold. However, since it only takes an initial margin of $7,150 to control a gold futures contract with a notional amount of $132,710, if the bankers were to buy REAL physical gold instead of fake paper futures gold with the money they used to buy those 3,768 futures contracts, considering they would have to likely pay at least a $30 per ounce premium over spot for real physical gold, they would have been able to purchase only 0.62 tonnes of physical gold to later dump onto the market, an event that clearly would not have had the same impact as dumping 11.72 tonnes of paper gold, or nearly 19 times as much paper gold. The bankers succeeded in knocking $44 off the price of gold by dumping 11.72 tonnes of paper gold, not by selling the 0.62 tonnes of real gold their contractual purchase price would have represented. Thus, this example should make it simple to understand why the notional dollar amounts, and not the infinitely smaller contractual dollar amounts, are the amounts that are key when bankers use HFT programs to smash gold and silver prices. Though many mainstream analysts dismiss notional amounts of the precious metals derivative markets and say that only the contractual values are important, they clearly are trying to cover up the banker fraud that is taking place in these markets. In gold and silver derivative contracts, the notional amounts mean EVERYTHING while the contractual dollar amounts mean almost NOTHING.
So now that I’ve established that the notional dollar daily trading volumes of gold and silver futures contracts (which in this case ARE the only values that matter when it comes to banker fraud) are on par with the dollar daily trading volumes of the entire NYSE, let me explain to you why the prices suppression of gold and silver prices carried out by the Western banking cartel (the US Federal Reserve, the Bank of England, the ECB, the IMF, World Bank, BIS, and their subservient global commercial banks like JP MorganChase, DeutscheBank, ScottiaMocatta, Citigroup, etc.) hurts YOU severely whether or not you choose to participate in gold markets or silver markets. Furthermore, I will make it crystal clear that the overall negative wealth effect of banker-executed HFT gold and silver price-suppression schemes is exponentially greater than the negative wealth affect of banker-executed HFT trade skimming that has occurred in global stock markets.

Because I’ve established in Part 1 of this series, that bankers use HFT programs to deliberately set the price of gold and silver much lower than the prices of these precious metals would be in a free and fair market, they have been able to keep interest in real money (physical gold and physical silver) with zero counterparty risk low and maintain a monopoly on fiat currencies with extreme counterparty risk (see here and here). However, this low interest in real money (outside of Asia) will turn out to be a huge mistake for most, as I’ve explained in the video at the end of this article.

For example, were gold at $3,000 an ounce and rising, and silver at $300 an ounce and rising today, all fiat currencies would be cratering today and people would cease valuing and choosing cotton over gold as wages for their labor today. Not only this, free market prices for gold and silver would expose all the fraud of the government-banker cartel. Because rising gold and silver prices awaken the masses to the crashing purchasing power of the US dollar, no longer could they claim that inflation is a ridiculous less than 2% in the US when beef prices have soared 34% in 6 years, pork prices have soared by 33% in 4 years, and orange juice prices have soared 33% in just the last 6 months(remember all markets are rigged so we have no idea what the free market prices for gold and silver truly are, other than that they are multiples higher than the current banker rigged prices).
In addition, if gold and silver prices were freed from banker price suppression, no longer could bankers and politicians claim that the US stock markets 21% gain since mid-2007 was a sign of recovery because the US stock markets would probably resemble the 12-month 12,000% yield of the best yielding stock market index of 2007, the Zimbabwe industrial index. Of course the monthly inflation rate of 79.6 billion % by the following year in Zimbabwe rendered the trillions of Zimbabwe dollars of wealth gained by those in the Zimbabwe stock market useless. Gold and silver’s rise to anything near their free market prices would expose the sham that is the growth of the US stock market bubble built entirely upon the private banking cartel’s devaluation of the US dollar.
The bankers‘ ability to keep people believing in their counterfeit fiat currencies is what creates over 1 billion food-insecure people in the world today, causes millions to lose their home, creates a vacuum in new job creation, and perpetuates the terrorism that springs forth from abject poverty. Everyone in the world would be a thousand times better off with monetary competition in this world and the ability to choose real money over counterfeit fiat currencies as their method to store value over time. And this is why the critical connection between HFT algorithmic trading and the bankers‘ success in keeping gold and silver prices so undervalued today (versus their free market prices) is what literally puts the fear of God in bankers today. If bankers were deprived of their right to use HFT algorithms to suppress gold and silver prices as they did again just last week on April 15th, then everyone would wake up from their stupor, realize that the pot is already boiling, and jump up instead of cooking slowly to death.
But as long as the Western banking cartel can suppress the price of real money – physical gold and physical silver – they will subject everyone to boiling frog syndrome and a slow, painful economic death. For those that believe that it is ridiculous to think that the US dollar will collapse, if you consider an 80% or greater, devaluation of an asset a collapse, I explain here that the US dollar has already collapsed. Furthermore, as I explained above, it is also literally why this connection severely impedes the right of every person in this world to pursue the inalienable rights of life, liberty and the pursuit of happiness.
Remember that these are the 15 bankers that held a closed-door, secretive meeting with Barack Obama at the White House on 12 April, 2013 immediately prior to when they used HFT algos to slam the price of gold by more than $229 a troy ounce on two consecutive trading days on 12 April, 2013 and 15 April, 2013, so if you want answers, start with the men below and their highest executives responsible for their trading desks (or at least the ones that haven’t yet committed „suicide“):
Lloyd Blankfein, Chairman and CEO Goldman Sachs
Jacques Brand, CEO Deutsche Bank
Michael Corbat, Chief Executive Officer Citigroup
Jamie Dimon, Chairman, CEO and President J.P. Morgan Chase
Sergio Ermotti, CEO UBS
James Gorman, Chairman and CEO Morgan Stanley
Gerald Hassell, Chairman and CEO Bank of New York Mellon Corporation
Jay Hooley, Chairman, President and CEO State Street Corporation
Abby Johnson, President, Fidelity Financial Services, Fidelity Investments
Steve Kandarian, Chairman of the Board, President and CEO Metlife
Brian Moynihan, President and CEO Bank of America/Merrill Lynch
John Strangfeld, CEO, Prudential
John Stumpf, Chairman, President and CEO Wells Fargo
Jim Weddle, Managing Partner, Edward Jones
Bob Benmosche, President and CEO American International Group
Click here to watch a video that more fully explains the concepts of banker slavery and how fractional reserve banking infringes on everyone’s freedom.
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