CFTC issues warning on trading limits

I wonder if the CFTC is finally getting off their hands since the Department of Justice is investigating criminal price manipulation of the precious metals at the COMEX (see previous blog on DOJ Anti-Trust investigation).

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201005071229dowjonesdjonline000574&title=cftc-issues-advisory-on-compliance-with-speculative-limits

Look at the two charts in the following link to see if there there's any smoke. The announcement of the warning came at precisely 11:15 am Central Time. The spike in gold and silver prices coincided with the announcement. Coincidence?

http://market-ticker.org/archives/2286-CFTC-Warns,-GOLDSILVER-Spikes.html

The crimes in progress in our financial institutions aren't even debatable anymore--it's apparent to all except the blind. It's not just Goldman Sachs--it's the entire banking cartel. The bullion banks have been naked shorting gold and silver (selling precious metals they don't own) under the directive of the Fed for years with impunity. They know if prices of precious metals rise, it's an indicator of fear and loss of confidence in the currency Ponzi scheme. That's why government officials demonize gold; they know rising gold prices undermine their money printing presses. We've gone from million dollar deficits, to billion dollars, and now arrived at trillions in debts. Include derivatives, and the notional value of all worldwide derivatives tops $1 quadrillion. Folks, that is a lot of zeros behind the 1, considering worldwide GDP is only $60 trillion.

Hence, the central banks' and bullion banks' motivation to short sell gold and silver--even if it means naked shorting the futures markets and the ETF's. And hence, the motivation of the Fed to resist independent auditing of their transactions. They've gotten away with it since at least 1995. The concerted price manipulation forces speculative longs to liquidate their positions, enabling the suppression of precious metals pricing.

Between the Fed, US Treasury, other sovereign central banks, bullion banks, and sovereign governments, there is heft behind the price suppression schemes. They could create derivatives to infinity. Anybody on the long side of that trade using leverage has lost big. But the decade-long bull market in precious metals is starting to threaten the bullion banks' stranglehold on the paper trading market (again, via derivatives), because demand in the physical market is exploding, with intense buying pressure in Asia, the Middle East, Latin America, and now Europe with their debt crisis. Even hedge funds have loaded up on gold. Astute longs are refusing cash settlement--they are demanding physical deliveries.

But while creation of paper currencies may seem unlimited, the unwinding of toxic derivatives is coming home to roost. Even derivatives have limits--especially when payment is demanded in the form of physical bullion, rather than cash settlement. Why? Because the shorts are naked--they don't have possession of the gold and silver they have sold in forward contracts, so they will fail to deliver. And while it may take a microsecond to literally create trillions of fiat currency out of thin air, it takes 15 years to find and mine precious metals. They are valuable for a reason--they are scarce.

Therefore, longs will eventually trample the crooked shorts, although without a fight. While the long trade has been and will eventually be profitable long-term, soaring precious metals prices and physical shortages will threaten national security. Silver, used for jewelry and investment, is also an industrial metal, used in numerous applications, including electronics, solar panels, disinfectants, biotechnology, antibiotics, materials, construction, etc. Artificial price suppression of silver has discouraged miners from exploration, as it became an uneconomic business. This will create severe shortages in the future, undermining our already anemic industrial base.

This shortage will create disruptions in our defense, space exploration, high-tech, energy, greentech, and biotech industries. While the banks have profited from the precious metals suppression schemes short-term, they are setting us up for a huge economic collapse long-term. It's one thing to miss deliveries on an IPad, it is an entirely different circumstance to not deliver a stealth fighter, missile, or satellite to the Department of Defense. Precious metals traders in London and New York may joke about making easy money while screwing longs, but their crimes are treasonous. And the Fed is complicit.