Thursday, May 6, 2010

Foul Play Afoot in Global Metals Markets

Dear Townhall Subscribers,

Many of you have been watching the following story unfold via independent media sources for the past few days. We here at Gainesville Coins wanted to be sure we knew how the events would play out so we could better report how these occurrences would affect you, the precious metals investor. We can now confidently say there is foul play afoot in global precious metals markets, and we want you to be informed.

The Start of the Suspicion
On March 23rd, 2010, independent metals trader Andrew Maguire contacted Gold Anti-Trust Action Committee (GATA) director Adrian Douglas to make him aware of illegal activity which he thought was planned to transpire a few days later when the COMEX April Call Options expired. On March 26th, 2010, Mr. Maguire’s car was mysteriously struck by a hit-and-run vehicle. Luckily both he and his wife, who spent the day shopping together, were rushed to the hospital, and discharged the following day with only minor injuries.

This was not the first time Maguire predicted market-wide price manipulation. On February 3rd, 2010, he wrote an e-mail warning Eliud Ramirez, senior investigator for the Commodity Futures Trading Commission (CFTC) of a similarly illegal large-scale price manipulation within the silver market.

Andrew Maguire was on to something. He tried to warn those in a position to act on these fraudulent activities by spelling out for them exactly how they are occurring.

The Foul Play
Since its March 2008 acquisition of Bear Stearns, JP Morgan Securities has held a disproportionate share of the world’s supposedly silver-backed securities. Maguire postulated, after having heard enough bragging from several traders they employed, that JP Morgan used this power to engage in the “naked short selling” (short sale of a product that doesn’t exist) of silver paper. Simply put, this illegal activity allows whoever engages in it to profit not only from the sale of the security, but also from the transaction fees associated.

Perhaps most importantly, however, this influence, as evidenced by the observed decline in the spot price of silver since the initial takeover, has been used to manipulate the global price of silver. It is more than mildly curious that the price of silver should decline from over $21/oz. in March of 2008 (the month in which the takeover took place) to less than $9/oz. a few months later. What is even stranger is the fact that this all transpired after JP Morgan received a $29 billion non-recourse loan from the New York Federal Reserve. This association calls into question the mutual interests of these two entities.

Wise Investors Know...
Precious metals generally exhibit inverse movements in price to the U.S. Dollar. When investors perceive potential gains in either market, they tend to move their resources into this market, necessarily leaving the other market comparatively weakened. It stands to reason then, that any decline in a competing market (i.e. silver) would serve to popularize dollar-backed securities, and strengthen the dollar. Conversely, if precious metals are allowed to appreciate, the dollar will suffer a decline. This of course, would be undesirable for the Federal Reserve.

This story is still relatively new. It was only reported by the New York Post on April 11th— While the number of investors “in the know” remains relatively small, it can be guaranteed that more are learning about this story by the minute. As they do, they will likely precipitate an upward movement in price of precious metals.

Smart Investments
In order to help our subscribers prepare for this market change, we are offering among others products, the 2010 American Silver Eagle Coin, the Engelhard 100 oz. Silver Bar, and the individually encapsulated 2009 Australian Kangaroo 1 oz. Gold Coin at just fractions above spot price.

Buy Low Over Spot Gold & Silver before the Market Change!

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1 "Supposedly" silver-backed in that it is, and has been for quite some time common practice for banks to leverage their precious metals position up to 100 to 1.

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