Bob Chapman | November 19, 2008

What you are now witnessing is the slow motion destruction of the CRIMEX, formerly known as the COMEX, a commodities futures market which is supposed to provide a means for producers to hedge their products, but which has morphed into a rigged casino where commodities that don't exist are traded as if they did for prices that exist only in the fairytales woven by the Illuminati, who control the exchange. This destruction is what happens when the credibility and integrity of the market owners and managers of the CRIMEX, together with the credibility and integrity of the market regulators, the CFTC, move from near zero to negative infinity.

Not only do the owners and regulators do absolutely nothing about obvious criminal manipulations and illegal concentrations of short positions, but also we believe that they conspire with the criminal operators, which we refer to as "commercial shorts," to aid and abet their criminal mischief by divulging the precise nature of the trading positions of the "spec longs" who take the other side of the contracts, thus allowing pinpoint attacks on black-box formulations, especially where stops have been placed, thereby minimizing the cost of the manipulations by preventing the waste associated with overkill. Also, the owners and regulators change margin requirements, and whitewash investigations of obvious illegalities, whenever it serves to protect the commercial shorts, thus making a mockery out of the exchange and transforming what are supposed to be free markets into crony capitalist, corporatist fascist systems of syndicated piracy. This lack of integrity and criminal manipulation is the most pronounced in the gold and silver commodity markets, but many other types of commodities are under manipulation as well, especially oil, base metals and agricultural produce, meaning most of the rest of the exchange.

The despicable, nefarious dealings of the miscreant CRIMEX owners and regulators is quickly catching up to them in the precious metals markets of the exchange, and soon every one of the spec longs is going to pick up their toys and go home, and if the specs have any brains or sense of justice, they will take as much of the CRIMEX gold and silver with them when they leave by paying cash for it and taking delivery of it.

Since the end of October, when open interest for the December gold contract started a new series of decreases as the rollovers got off to any early start, the December open interest has fallen from 190,140 to this past Friday's 122,902, yet total open interest has fallen from 305,451 to 285,219 during that same period.

Thus, of the 67,238 December contracts that have been terminated in the rollover thus far, total open interest has plummeted by 20,232 contracts, meaning that many of the contracts are not being rolled over, and are being cashed out instead. If this 30% ratio persists, we could see gold open interest fall to under 250,000, a multi-year low, an astonishing drop of 58% from the peak of 593,953 contracts set on January 15, 2008.

This is an absolute disgrace for the CRIMEX owners and regulators, and we wish them well in the ensuing bankruptcies and criminal investigations that will occur after the exchange collapses. No one wants to play in a game where the owners and sponsors are in cahoots with certain privileged players to make sure they come out on top. In addition, we note that no commodities market can survive without speculators who provide balance to the markets by taking the other side of contracts and by keeping the pendulum of market momentum alternating between bulls and bears. Otherwise the markets lean to far to one side or the other, and then bubble and/or collapse due to the lopsided positions. Once the precious metals markets of the exchange collapse, all the other markets will soon follow, as everyone realizes that the whole system is rigged against them. The CRIMEX will soon be ostracized from participation by honest market players. The criminal manipulators will soon find themselves traipsing in and out of court in endless investigations, and they will be forced to sit in their bedrooms, lonesome, because their is no one left who wants to play with them.

In a stunning new development, the Dubai Multi-Commodities Center is now putting the finishing touches on the formation of an exchange traded fund for silver with a launch likely next month as demand for silver has surged in the past six months. What may be happening here is that the OPEC nations, and possibly also Russia, are setting up a counterbalance against the collapse of oil prices. You may recall from past issues that we discussed at length how we thought that sovereign wealth funds in oil-rich nations were tweaking gold and silver upward every time oil was smashed by the Illuminist manipulators. The message was, you leave oil alone, or we will send gold and silver to the moon and expose your destruction of the US economy by killing the canaries in the coal mines, thus ringing the gold and silver alarm bells loud and clear. This makes the Illuminists rabid, and induces collective myocardial infarctions among them, because precious metal suppression, especially of gold, is JOB ONE at the Fed. The failure to cap the price of gold was Paul Volcker's only regret as Fed Head during his handling of the inflationary crisis of the late 70's and early 80's, and the privately owned, Illuminist Fed does not intend to make the same mistake twice.

The Illuminati have made two major mistakes, and the Dubai exchange may be the OPEC solution to the oil takedown, which is the direct result of those mistakes. The first mistake is that the Illuminati gave OPEC a taste of 147 oil, and then pounded it down to 55. This will not be tolerated, especially after these nations got a chance to experience the huge profits generated by such lofty oil prices. The second mistake is the trashing of silver prices in the face of growing shortages at a time when the above-ground silver stocks are at an all-time low and headed even lower. The shortages are being caused by manipulated silver prices that are below the cost of production, thus causing a collapse in production, and the manipulation of base metals prices into the subbasement is adding to the loss of production because 70% of silver is produced as a by-product of base metal processing. Due to these criminal price manipulations, the gold to silver ratio is now 77 to 1, when historically is should be around 15 or 20 to 1. This huge price imbalance, growing shortage and all-time low levels of above-ground stocks has set up the greatest opportunity to corner a commodity market in the history of the world.

The Hunt Brothers would be drooling right now. When they were trying to the corner the market, it was much, much larger by many billions of ounces, and prices were being driven much, much higher, topping $40 per ounce, because there was far less manipulation of those markets than there is today (yes, believe it or not, we once had something bordering on free markets). The Dubai silver ETF may pick up where the Hunt Brothers left off. Since there are only about a billion ounces of above-ground silver stocks left, and because silver is trading at a ridiculous sub-10, ten billion could clean out the entire above-ground silver stock. This is chump change for these wealthy oil sheiks and their sovereign wealth funds. So get ready to rumble as the evil Illuminist scum and the price-gouging sheiks of OPEC prepare to "get it on" in an oil-silver showdown, complete with some very spectacular fireworks to come. Both oil and silver are headed much higher, and gold will tag along for the ride as silver vaults to new heights.

In the end we expect some sort of compromise, as $150 oil would take down the entire world economy, which is now teetering on the brink. We should soon see $80 to $100 oil and $15 to $20 silver. Silver may go much higher than that depending on how stubborn the Illuminists become about the price of oil. This is starting to get very interesting, so stay tuned, as one of the greatest financial battles of all time gets under way.

Instead of foolishly pumping money into insolvent, zombie banks, the sheiks may well have decided to go after the silver market. Imagine what will happen as those who require silver to make their products see the COMEX gold and silver being funneled to Dubai's ETF. All we can say is, if you were waiting for some precious metals fireworks, get ready, because it's coming. It is now time to load up on precious metals, especially silver. Oil will do well also. As some form of confirmation, we also note the growing open interest in the February gold options and futures contracts. Let the Battle of the Titans begin.

The WSJ again avoids reality in an op-ed piece by Judy Shelton, called “Stable Money is Key and How the G-20 Can Rebuild the Capitalism of the Future.”

She points out, and rightly so, “that foreign attendees will take the view that Wall Street greed and inadequate regulatory oversight by US authorities caused the global financial crisis – never mind that their own regulatory agencies missed the boat and that their own governments eagerly bought up Fannie Mae and Freddie Mac securities for the higher yield over Treasuries.”

Ms. Shelton forgets that US interests asked, cajoled and strong-armed many nations into those purchases, as they did CDOs, SIVs and ABSs. Don’t you think they read the fine print and knew what they were buying – they are professionals? Behind the scenes there was a plan to spread the risk. Why would any sane government buy such toxic waste? Incidentally, where are the lawsuits and criminal actions? There are none because they were all in on the plan to distribute America’s problems, because if the US goes under they all go under. Regulatory agencies deliberately missed the boat because they were told to do so.

Then she has the temerity to tell us that “at the bottom of the world financial crisis” is international monetary disorder. Stating, “ever since the past WWII Bretton Woods system – anchored by a gold-convertible dollar – ended in August of 1971, the cause of free trade has been compromised by sovereign monetary – policy indulgence.” Spoken like a true internationalist Illuminist. This is what the WSJ and Barron’s have always been mouthpieces for – the Illuminists.

She goes on relating to sound money – perhaps even to a gold-based international monetary system. She says, “It’s hard to imagine a more universally accepted standard of value.”

Ms. Shelton admits that the nation of sound money and a new gold standard international monetary regime is appealing, neither will be part of any solution coming out of Washington or the G-20 this weekend or anytime soon. She goes on to say that fundamentally, our nation has only a sliver of bullion available to back tens of trillions in financial claims that are the crumbly bedrock for the entire global financial system.

Someone should make Ms. Shelton aware that in order to accommodate a gold standard for the world or the US all that has to be done is to officially increase the value of gold to where it belongs at $3,000 to $6,000 an ounce. Nations, particularly the US, do not want to do that because they have sold most of their gold in their efforts to suppress the gold price. That is why a gold standard is dismissed out of hand. She says the consensus is that concerted inflationary measures are the only possible solution. They would be wouldn’t they? She and all concerned know better. Every time in history re-inflation has been used it has been a failure.

That said don’t expect much in the way of public statements on a new currency. Along those lines there will only be leaks until they decide what can be done without weakening their control. Remember, part of what will happen is the further exposure that conventional economic doctrine is fatally flawed. What is disturbing is that many say that today’s problems are not the result of policies of the last 15 months. The greatest bubble in history began on August 15, 1971, and is littered with a trail of greed and power. Wall Street and banking led the looting of our country and Washington complied. Almost universally as well the media never questions decisions by the Treasury, Fed or Wall Street. They just report what the elitists want the public to hear. The revisionist falsehoods promulgated by the likes of Milton Friedman, Keynes and Ben Bernanke are enough to make real scholars cringe. The disinformation and distortion is startling. The public doesn’t know the difference and we never get to challenge them. Often what they have had to say are lies. Defending any of these liars from academia, Wall Street, such as Paulson, and government is a sacrilege. These people all participated in the rape of America over the past 31 years.

The best-laid plans often go astray. The elitists figured they’d have the time to lay off their losses over time. Banking analyst Meredith Whitney of Oppenheimer 1-1/2 years ago when she blew the whistle on Citigroup upset that plan. She still probably doesn’t realize that she changed the course of history.

These events have upset the elitists’ plans forcing them into policymaking out of desperation. In fact after 15 months the system is still out of control. We do not believe they will ever get a handle on it. No reform is on the way and only stopgap measures, such as creating more money and credit and having zero interest rates are the solution. Of course, they are not a solution. The powers are going to play this out to the bitter end. There is no stable money or monetary unit on the way. They just want you to think there is. They are scrambling now to create a major war, because they know if they do not they’ll be revolution.

Over the past eight years a major change has overcome America. As we have said before it is now socially and politically acceptable to lie and to mislead. Fascists have stolen our rights under our Constitution, from us and our leaders in Washington and Wall Street and banking are corrupt. There is no one left to complain too. There is no one there to protect us. Our Congress, courts, law enforcement, and regulatory agencies only protect the elite. We have just seen massive fraud by Wall Street and banking and our government allows American taxpayers to illegally bail them out.

Our protectors are looking the other way deliberately as we are looted of our assets and our freedom. This will continue until there is war or revolution. There is no meaningful change coming from Washington nor will the corruption and looting stop.

It seems now everyone is too big to fail except the average taxpayer. Each and every day brings us closer to the economic brink, even though our government is able without interruption to manipulate all world markets. This fraud will soon come to an end and we will have our vengeance.

The brainwashing of the American public has been successful but there will soon come a time via more hardship that they’ll finally wake Americans up. All those who have misled us and lied to us will be dealt with including those in our media.

At $1.25 quadrillion derivatives inhabit every part of our society and the world as well. We are at the beginning of the beginning of the horrible fallout we face caused by the Federal Reserve, Wall Street and banking. The $10 trillion plus that we have forecast as the bill for the taxpayers is but a drop in the bucket. Credit ratings are falling like stones and well they should. The only AAA rating left is for gold. You had best own it or you will regret it.