russell caned by gata

  1. 13,013 Posts.
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    Dear Friend of GATA and Gold:

    Today's daily commentary by Richard Russell in his
    Dow Theory Letters has been posted in the clear at
    321Gold, and some readers are remarking that Russell
    has just gotten closer than ever to acknowledging
    manipulation of the gold market.

    Russell writes:

    "The 'battle of gold' has been long and arduous. The
    central banks want to control the world's money, and
    gold (real money) is in their way. Therefore, the
    central banks have fought gold both economically and
    psychologically. They've fought gold economically by
    periodically selling portions of their gold holdings.
    They've fought gold psychologically by implying that
    fiat money is real money and gold is 'an ancient
    relic.' This 'war against gold' worked for many years
    but it stopped working around 2001-2002. It stopped
    working when smart money started accumulating gold
    when the metal got down to absurd prices around $250
    to the ounce."

    Russell has earned respect as a longtime gold advocate
    but that is exactly why his tentative recognition of
    what has been going on is so pathetic. For it comes as
    he repeatedly remarks that he is having more trouble
    than ever figuring out the markets, Dow Theory seemingly
    proving less and less reliable.

    Of course Dow Theory is less reliable because there
    really are no longer markets as markets have been
    understood; instead there are mainly surreptitious
    government interventions and manipulations. What GATA
    Chairman Bill Murphy first established with gold,
    tying it to the coordinated interventions of bullion
    banks and central banks, and what GATA board member
    Mike Bolser first established with the bond and
    equity markets, tying them to the Federal Reserve's
    daily repurchase agreements, what Sprott Asset
    Management's John Embry and Andrew Hepburn compiled
    in their magnificent report on the rigging of the
    gold market in August 2004 and their magnificent
    report on the rigging of the equities market this
    August -- all this seems to have gone over Russell's
    head. Even Dennis Gartman of The Gartman Letter,
    no friend of gold, picked up on it before Russell

    Maybe it is understandable enough -- for anyone
    who, like Russell, has built a career as a
    technician cannot want to know that all this
    stuff is utterly meaningless now that the data is
    not the market talking but rather the government.

    For GATA supporters, the best part of the
    Connecticut newspaper story dispatched to them
    today about the latest Sprott report, the one on
    the U.S. government's repeated intervention in
    support of the equities market, came in the last
    several sentences. Asked for comment on the
    report, the Federal Reserve, the Securities and
    Exchange Commission, and the Treasury Department
    all declined.

    Perhaps news organizations with more influence
    can be persuaded to thrust the Sprott report into
    the hands of U.S. government publicists and will
    have better luck getting responses. Russell, a
    highly respected newsletter writer with an
    influential audience, should try it himself and
    stop confusing himself with his charts.
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