It’s Monday morning. Gold is due $7 lower, silver is due a $1 lower and is back to $29. Meanwhile the S&P is called 18 higher in the futures market before the opening. What’s going on? The debacle in the precious metals markets was set in motion supposedly because of dashes for liquidity, fiscal instability in Europe, and growing economic deterioration. If that was so, then why the noticeable divergence between the precious metals and the DOW on Friday with continued follow through of that divergence this morning?

The answer is the same: Behavioral Finance operations. The decision was made by the PPT to support the DOW, and US stock market, to present the notion that all would be really OK as far as potentially contagious European debt concerns go … as they would finally get their act together, and thus the US economy would be spared the fallout. However, any resolution to the European fiscal problems will require massive amounts of stimulus and money coming from somewhere. Any REAL solution ought to be quite positive for gold and silver, which should have their prices sharply higher this morning, not in the weeds again … swamp is more like it.

But, sharply higher gold and silver prices are just what The Gold Cartel and Obama Administration don’t want. For the only real way for the US to solve its own problematic economic situation is to do what Europe has to do. The Fed wants gold to be under a great deal of pressure to give them cover to jack the money spigots open.

To assist The Gold Cartel in their efforts to destabilize gold, and cousin silver, they have resorted to their margin raising drill once again…

COMEX 100 GOLD FUTURES (GC)
Spec increase from 9,450/7,000 to 11,475/8,500

COMEX 5000 SILVER FUTURES (SI)
Spec increase from 21,600/16,000 to 24,975/18,500

The sick part is these cretins operate in an unlawful, collusive manner, which is what the silver class action lawsuits against JP Morgan are all about. But, as we know, Morgan has the CFTC in its back pocket. No matter what occurs, the CFTC does nothing. For precedence of this cozy lack of oversight you only have to appreciate what happened in Enron’s case and Bernie Madoff. The whistleblowers at Enron were laughed at, or fired. The SEC ignored Harry Markopolos for a decade in the Madoff Ponzi scheme. In both cases the perpetrators of their respective massive frauds were in tight with the money powers and regulators … just like JP Morgan is with the Fed, the CFTC, and the politicians in Washington.

That represents a 21% increase in gold and 16% in silver. Speculative longs, already decimated by the worst two day drop in memory, are now hit hard again by the increases.

The irony is whether they have raised margins enough. Let me explain. The futures market was initially designed a long time ago to assist farmers with their business operations. The farmers could plant their crops and if they thought the harvest profits would give them a nice profit, they could sell their crops in the months ahead in the futures market to assure profitability, as long as their production at least matched normal expectations. Speculators who thought prices might go much higher in the future could take a bet on the long side in the hopes of making a speculative profit.

To make this form of business insurance and potential profit-making initiatives enticing, each party was only required to put up a fraction of the value of the crop in the form of a performance bond of sorts, or margin, which was placed with brokerage houses. The margin had to be enough to ensure that market participants don’t go into a deficit in which they have unsecured losses on the books that they might walk away from, leaving the brokerage houses with debts owed to the exchange.

To get to the point, The Gold Cartel, who works closely with CME (Comex), as they all are buddy buddy with each other well, knows what the exchange has to do to protect its members from getting into trouble with deficits from unsuspecting longs. They know that if the market is traumatized with huge losses, the exchange will raise its margins to meet the size of the drops. IMO this one particular fact is why the prices of gold and silver were deliberately hit so hard over a two day period. The margins in gold, and especially silver, were already very high. In order to affect even higher margins, the cabal force needed to bury the precious metals prices to the extent they did over specific daily trading periods. For crying out loud, gold was mangled to $1530 last night, with few traders around … the same Gold Cartel trick they played with silver on one of their recent takedowns.

The collective bums in the gang know the drill like the back of their hand. The Exchange never raises the margins ahead of time as price rises sharply, as we just saw in gold, because that would put increasing pressure on their Exchange’s buddies, the shorts. No, they always wait until the spec long is under the greatest of pressures when they make their move. It is pitiful to listen to the Orwellian Gold Cartel sycophants at the Comex explain they are increasing margins to reduce volatility, as the margin increases make volatility more so, as we saw when gold dropped another $100, with silver falling to $26 this morning in Asia, when the least amount of traders were around. If these Gold Cartel groupies on the Comex really wanted to decrease volatility, they would do so as the price moves up and up. Then, vulnerable spec longs (where deficits occur for the most part) would have that much more of a cushion to protect against debacles like this one. Thus, the volatility on breaks would be far less.

Now, for whether they have raised margins enough to prevent deficits? Under the new margin requirements a spec long could go into deficit if gold drops more than $115 in a single trading session. For silver that could happen if silver drops $5 in a single trading session. Silver did more than that on Friday and fell another $4 at its lows during the sparsely traded Asian trading hours overnight, but one in which Access Market trading is ongoing and brokerage houses are placing stops to prevent deficits. The Gold Cartel knows this and can pick off those stops, which escalates even further selling. The cabal forces all know how this game is played and are in on the orchestrated scam.

Which brings me to another sore subject: the clueless have no understanding there is a price suppression scheme and how The Gold Cartel operates. Many of them say if there is a Gold Cartel, they must be doing a lousy job because look at what precious metals prices have done the past decade. What these people don’t appreciate is the windfall profits made by the cabal forces in very short periods of time. The Gold Cartel makes a fortune in days and weeks following an operation like this. Silver just dropped $16 in a week. It dropped $13 in 2008 over a more extended period of time. It dropped $18 in early May of this year. Then, there have been so many other milder corrections over the years. That adds up to a significant amount of money made over time by JP Morgan and its cohorts. The Gold Cartel, and JP Morgan when it comes to silver, bombs the market in an orchestrated fashion with its allies, flushing out the spec longs, and then book massive profits. You think the JPM traders and execs aren’t smiling today?