The Plunge Protection
Team (PPT) and the Exchange Stabilization Fund
Updated September 14, 2009
Derivatives are a mighty paper sword.
The United States of America continues their self-serving, fraudulent and surreptitious interventions in the
global energy and precious metals markets today. It’s economic warfare.
Maintenance of global U.S. Dollar hegemony requires this.
Was the price of oil purposely
raised, buying “paper barrels” on NYMEX, along with an accompanying Fed
Reserve orchestrated credit contraction to impair China’s global customers and
hence their export growth? Empirically and factually, once this occurred, the
price of crude oil then dropped precipitously [or was cut ruthlessly, perhaps?]
– robbing posturing American un-friendly states [Russia, Venezuela and Iran] of required income when push came to shove?
This is how it is done
and how Goldman Sachs in reality runs Washington D.C.: just follow the
money..... [The EU has similar institutions but they are working behind the scene.
They have a lot more secrecy]
Posted July 28, 2009
Intervention of the PPT and ESF. The USA has to sell a
QUARTER of a TRILLION debt this and next week. One has to be blind not to see
Posted October 2008
In how far are your deposits with Banks guaranteed by the
Posted September 19, 2008
The drift is eerily reminiscent of early 1931, in the months
before the global system snapped with the failure of Austria's Credit Anstalt.
and Good bank.
Resolution Trust Corporation) was created in 1989 to absorb the bad debts from
the Savings and Loans crisis.
The assets of the bankrupt lenders
were taken over by the state, preventing fire-sales that can drive prices even
lower in a self-feeding spiral. It worked well enough. The RTC sat on the
devalued assets until the bloodbath was over.
Such a Super-Sewer can put a floor
under the collapsing value of CDOs, CLOs, HELOCs and all the myriad instruments
of leveraged excess that lie at the root of this crisis. By doing so it would at
last allow banks to lick their wounds and compute losses. Above all, it would
mitigate the US housing crash, changing the whole profile of projected defaults
now haunting the banking system.
How much would it cost? Prof
Kenneth Rogoff, former chief economist at the IMF, says the bill would run to at
least $1 trillion. People don't seem to realize what the outcome is of
this: $1 trillion here, $ 80 billion there, $ 300 billion yesterday,...This
is nothing more but the monetization of the DEBT and therefore the prelude to
Hyperinflation and the Crash of the Dollar.
Saving the furniture!?
Barney Frank, chair of the House Banking
Committee, said he is ready to embrace the idea. "There have been a series of ad
hoc interventions that have not worked. Has the private market made so many
mistakes there needs to be some public intervention?
Posted September 18, 2008
"What we are witnessing is the nationalization of the
financial industry by the United States government."
The PPT has
been buying the tar out of the stock market all week. When the government buys,
it creates hyperinflation.
September 8, 2008
"As the Fed is not in
a position to increase the interest rates to protect the Dollar, it is forced to
use its last available arrows".
Posted August 29, 2008
Gold, Dollars, Bonds and central bank interventions ...or
how the puzzle starts to fall into place.
Manipulation?...The least one can say, is that
this is a weird happening.
Last week, widely regarded silver analyst Ted
Butler, reported on recent developments during the July 1 – August 5, 2008 time
period in the precious metals complex [specifically, open-interest data in COMEX
Butler’s work shows, as of July 1, 2008, two U.S.
banks were short 6,199 contracts of COMEX silver
ounces). As of August 5, 2008, two U.S. banks were short 33,805
contracts of COMEX silver (169,025,000 ounces),
an increase of more than
five-fold. This is the largest such position by U.S. banks I
can find in the data, ever. Between July 14 and August 15th, the price of COMEX
silver declined from a peak high of $19.55 (basis September) to a low of $12.22
for a decline of 38%.
3 U.S. banks held a short position of 7,787 contracts (778,700 ounces)
in July, and 3 U.S. banks held a short position of 86,398 contracts (8,639,800
ounces) in August,
an eleven-fold increase and coinciding with a gold price
decline of more than $150 per ounce. As was the case with silver, this is the
largest short position ever by US banks in the data listed on the CFTC’s site.
To wrap your head around “who” the perpetrator[s]
must and categorically do include, just take a peek at [admittedly dated] the
Quarterly Derivatives Report [Q1 / 08, pg. 30] compiled by the Office of the
Comptroller of the Currency to see J.P. Morgan (remember those guys
that took over Bear Stearns!?) sporting 93 billion+ of gold derivatives
[futures] on their books.!?
Manipulations in the capital markets are not
restricted to precious metals. We regularly see the same “man-handling” of the
interest rate complex when institutions such as J.P. Morgan wield amounts of 7 –
8 TRILLION in notional [largely 3 month interest rate futures based products]
from one quarter to the next.
The OBSCENE amounts of these
financial instruments being thrust through the system – allegedly in the name of
1 bank, amounting to MULTI-TRILLIONS per quarter –
ONLY BE THE WORK OF A PRIVATE CENTRAL BANK [read, the FED], because no
public entity – bank or otherwise - has the balance sheet maneuverability in an
impaired credit environment to conduct such business.
That such obscenities are allowed to continue –
UNREPORTED by the mainstream financial press – is, in
itself, a condemnation of not only how warped, twisted and connived our capital
markets are, but how COMPLETELY BROKEN and complicit our
system of free speech and irresponsible our media have become.
Posted August 14, 2008
Because of growing evidence indicating that there was a real risk the Dollar
would break through the €1.60 level there was unannounced intervention in
support of the dollar. This could have involved Asian countries, but rumors
are the intervention deal would more likely have been arranged with the Saudis
during the recent Bush-Cheney visits. All that this would have required is
sufficient buying commencing in mid-July to squeeze USD shorts and creating a
momentum move on the upside.
sharp drop in euro holdings in the
Treasury's Exchange Stabilization Fund, it seems that it may have
intervened in the currency markets, possibly out of fear that a more significant
run on the dollar could have resulted. While taking out insurance against such a
scenario may be understandable, we would argue that the recent surge in
volatility may well be the side effect of such intervention. Without having
proof, we would not be surprised if other countries, notably Asian governments,
also interfered in the markets, although with very different motivations.
Taking advantage of historically low trading volume during August was
certainly a tempting opportunity.
The positive of the surge in volatility is that it teaches hedge funds a lesson
- too many of them pile into the same trades. In recent months, we believe these
funds may have shorted financials to buy commodities and sell the dollar. The
global deleveraging must continue; for that to happen, hedge funds must have
their access to credit be tightened as well.
meantime, a lot of technical damage has been done to precious metals prices and
hard currencies versus the U.S. dollar. Just as everyone was piling into the
same trade, now it seems the speculators all either wanted to exit or received
margin calls and had to exit their trades.
Off course, pundits were eager to call a major shift in the
market, declare the end of inflation and the rebirth of goldilocks. An easy job
for masses that don't even know what the definition of Inflation.
question one may ask is how the markets will react to this damage as time goes
by and the markets will over time start to understand what and why these
interventions are happening and fresh problems will surface.
Before the existence of the Euro, Europe saw plenty of similar interventions in
an effort to delay pending devaluations of Spanish Pesetas, Italian Liras,
French and Belgian Francs. Each time again, this kind of action brought only
short relief for what was about to happen.
Updated September 5, 2008
Reality may be delayed sometimes for a day, week or month, but
eventually Mother Nature always wins the battles of reality versus rhetoric.
Public servants can control their constituents, the mainstream media and their
Dumbed down electorates, but Mother Nature and Global market fundamentals cannot
set up as the US was running high deficits to cover for the Vietnam War
and the Great Society. Its goal was to prevent the gold price to break
through the $ 35/onz. Each time the Gold price was about to overrun this
level, the international pool sold gold until the price was rebalanced.
General De Gaulle looked through this game and simply requested the
exchange of his dollars for GOLD. As a result in 1970 Nixon had no other
choice than to close the gold window.
2008 paper Gold pool has triggered a run on the Dollar and the World Gold
of the PPT can be compared to the
Gold Pool which existed before the last great financial crisis and was
revitalized in 1960. But instead of selling PHYSICAL Gold and Silver (there is
little left), this Summer (but also on many other occasions each time it was
needed) they sold PAPER Gold and Silver.
This action however is back firing: the
lower they take paper Gold and Silver down, the more physical Gold and Silver
is being bought! Johnson Matthey has weeks of delay in delivery and
today they even talk of stop taking orders all together and February of 2009
is the shortest delivery date for silver Eagles.
"First, the speculators get blamed
for the problem of high food and raw material costs. Second, government
bureaucrats and officials begin meddling thinking that their intervention will
cure the problem."
The first step is to
start a vast communication offensive. It uses the same logic as for the Iraqi
situation before the 2004 presidential election: preventing voters from
becoming aware of the extent of the disaster in progress by flooding them with
fictitious news, by drowning “bad” objective news in a multitude of “good
subjective news” (this is what an American economist called “the
transformation of indicators into vindicators” ), by working out each week new
explanations proving that the “positive” situation was sustainable,….
In fact, what
we see on almost a daily basis, is a remarkable exercise of psychological war
probably coordinated by the very secret “Working Group on Financial Markets”
created by the Executive Order 12631 established under R. Reagan in March
1988, also called by the Washington Post, the “Plunge Protection Team”.
working group was created following the October 1987 stock exchange crisis
with the objective “to promote the integrity, the effectiveness, the
regularity and the competitiveness of the markets of the country, and to
maintain the confidence of investors”. .
note: the middle puppet was replaced by a new one.
This group does not produce any reports; has no public visibility and details
neither the agenda, nor the composition of its meetings; is directed by the
Finance Minister (Henry Paulson) and includes the president of the federal
Reserve Ben S. Bernanke
(former adviser of G.W. Bush, named to this position at the end of 2005) and
the two presidents of the authorities monitoring the markets: the Securities
and Exchange Commission, Christopher Cox
(named to this position by G.W. Bush in 2005) and Reuben Jeffery III
(also named by G.W. Bush to this position after having been its adviser), one
of the directors of the CPA, American authority of transition in Iraq and also
former member of Goldman Sachs, like H. Paulson.
We can see that the
double influence of the Bush administration and the Goldman Sachs bank on this
entity is total. This entity has the vocation of coordinating the actions of
the main public and private American players (who are invited to participate
in working groups) towards the objective of “healthy” American financial
Since the stopping of
the publication of the M3 indicator at the end of March 2006, as well
as many indicators previously allowing everyone to follow the developments of
the flows of credits in dollars in the world, as well as the possible actions
of the Fed and the American Treasury on the markets, this working group now
has increased possibilities of action since they cannot be tracked down.
Each 6 weeks there are
quiet meetings of the PPT that are the financial world's equivalent of
the war room. The officials discuss options and review crisis scenarios
because they know that the government's reaction to a crumbling stock market,
extreme Forex fluctuations and a strong Gold price would have a critical
impact on investor confidence around the world.
In the event of a
financial crisis, each federal agency with a seat at the table of the Plunge
Protection Team has a confidential plan. At the SEC, for example, the plan is
called the "red book" because of the color of its cover. It is
officially known as the Executive Directory for Market Contingencies. The
major U.S. stock markets have copies of the commission's plan as well as the CFTC's.
Forex market action of June 16, 2008
Today at 14:50 GMT
(08:50) right after Bernanke’s speech, the Euro was smashed from 1.560 to
1,545 so swiftly that some talking heads even saw for a moment the Dollar
flying. At the same time Gold was hammered from $ 893 to $ 877. On the
hourly chart, the intervention is obvious. However, on the daily chart the
action is nothing more than a small blip.
In less than two
hours time, the Euro jumped back to 1.546 and Gold to $ 884. Less than two
days later, the Dollar has slipped backed to 1.575 against the Euro and Gold
jumped back to $ 900. That’s how long the medicine worked!
Meantime all is well
Madame la Marquise: Bradford & Bingley in the UK, IKB in Germany and Lehman
Bros. (seeking another $ 4 bn) in the US are running into more financial
problems and GM is closing 4 truck and SUV plants. Yesterday Foreclosures for
the American and British real estate markets showed a new record and the ECB
(European Central Bank) and the UK treasury informed the markets they were not
planning is lowering the key interest rates for Britain and the EU.
seen this kind of actions of the PPT over and over again and it remembers me
of what happened in Europe years before the introduction of the Euro. This
scenario was frequently seen just before major devaluation of currencies was
announced (ex. French and Belgian franc, Spanish Peseta and Italian lira)
Gold market action for September, 2008:
cannot allow for Gold to be strong until after the Presidential Elections.