tv [untitled] April 30, 2012 8:31pm-9:01pm EDT
economy is now in recession for the second time since two thousand and nine this is tens of thousands of spaniards have taken to the streets protesting spending cuts and labor market reforms reportedly so with european weakness back at the forefront of the financial markets and mines what does this mean for safe havens like gold and other precious metals meanwhile growth in the lending to euro zone firms and consumers slow down in march as banks use cash to buy more government bonds that's according to new figures from the european central bank so the easy unprecedented easy money intervention through the now notorious the revere l t r o has helped banks avoid a credit crunch but it has not trickle down to the real economy remember that ladder was a major goal according to mario draw he publicly at least now this as in the u.s. bank c.e.o.'s are set to meet with the fed about regulations but what else are central banks governments and big big working on together behind the scenes will
talk about market manipulation with bill murphy and gather and guess who may reach the top spot at the bank of england. this minute seem looking squid is just one of many species out of sight and out of mind that could be. out of mind i don't think the vampire squid not in this life to i will talk about it let's get to today's capital account. all right it's monday let's talk about gold let's look back in one of his writings a leading english art critic of the victorian era john ruskin told the story of a man who boarded a ship carrying his entire wealth and
a large bag of gold coins now when a storm hit a few days into the voyage and the decision was made to abandon ship the man strap the bag around his waist jumped overboard and sank straight to the bottom of the sea now the man's body was found with the rock of the ship many years later and reflecting on this ruskin asked now as he was thinking had he the gold or had the gold him now i'm telling this story to emphasize the enduring value that gold is held in the minds of people throughout the centuries it's represented not only a store of value but a means to an end and any end evidently including one that is at the bottom of the sea now for much of western history gold has been synonymous with money listen closely to the characters counting their money in the classic gone with the wind. it's me. twenty thirty fifty and he's not afraid of money.
she was way more excited about the gold now it wasn't so long ago the united states and europe fixed their currencies to gold and despite the free floating currency regime that we've had since the end of bretton woods in the early one nine hundred seventy s. one could argue as some have that we are still on a de facto gold standard and that the market for gold is reacting to the ongoing debasement of paper currency after all gold has been rising steadily and at times rather frenetically since two thousand and one when it was trading at below three hundred dollars per ounce to levels near two thousand dollars in the past year now there are those like economist nouriel roubini who have been calling it a bubble since at least two thousand and nine now one of the good things about markets is that they tend to have their own minds and don't care too much what academics or policymakers think but even if markets don't need policymakers policymakers still need markets and the gold market in particular is one that central bankers keep a close eye on gold as our guest james turk recently said in an interview with us
is the messenger and what it's been telling us is that people don't trust governments and they definitely don't trust central banks but how far governments central banks and they're too big to fail handlers willing to go in order to silence the messenger and that is the question is market manipulation by governments real and if so how is it being done and where here to help us answer those questions is bill murphy who's chairman of the gold antitrust action committee and veteran of the commodities industry he's here to talk about it with us so first bill murphy welcome to the show thanks for being on. great to be here alone now i like that let's start with some real basic because you are a veteran of the commodities industry you've been cited by people throughout the process metals based on this issue your work so i just have a simple question do you think that gold is in a bull market still well it's going to go back in after twelve years i don't think any asset class has ever done that before in history and it's going to keep on
going because we'll talk about this gold cartel which consists of the buoyant banks that reserve the treasury the v.i.i.i.'s exchange that was a chanst on or are just trying to slow the ascent down so it doesn't stand out too much great too much excitement i call it a managed retreat and that's what's going and that's what's going to continue on for years to come what how long do you expect the bull market ultimately to last well it depends on an hour along that the gold cartel sticks around when they look great a gold trade surely because they asked to we had a conference in the u.k. on call go choice plus twenty one in august of two thousand and five back then when gold was for thirty six i thought it would take three to five thousand dollars to clear the market was jumping up and down about it and we got troubles two thousand last year and i think what we did at least three to five thousand thirty five thousand dollars before it before goes down well at least i mean it could go much higher than that all of
a sudden oh my stuff that i talked to that in two thousand and five looks pretty conservative i think if they continue printing money the way they are doing as you mentioned earlier three to five thousand is a lay up and then we'll see where it goes from there that's interesting i want to talk a little bit more about the reasons behind this bull market for more than a decade that you were just talking about it is about the fundamentals of the supply of paper money into physical gold or is there a larger psychological trend or trends that are really at play here. good question it's actually all of those it's about the psychology of that inflation that the supply demand situation that that we first got involved in understanding about this manipulation in one thousand nine hundred ninety the chinese weren't that active the russians weren't that active search of thanks for buyers like they are now then it takes three to four years ago the european central banks were selling four to five hundred tons a year and now they're gulping about it and they realized they were conned i think
by the rest of the people in the gold cartel and now the supply is much less than people think and you know i want to get more into that manipulation story and the cartel as you call it and a little bit but i do want to stay on this issue of why the prices it has done what it has over the last two years and one of the question i have for you is about property rights because one really good example of this concern over property rights is something that i've heard from a number of investors in the wake of m.f. global investors with m.f. global rhetoric we were told that their money had a prize in the bankruptcy of that firm so to what extent is people's moving to gold to physical gold in particular a reflection of people's concerns about property rights and the safety of their money. leaving when you have gold is it or that's a very good point i'm appalled about to see and it will ever allow this and they claim that there's never been a default and they were still proud and proud of it over all these years and yet these people have lost their money something yes gold is
a safe haven it's where people should go to but it's also where you have it there are certain e.t.s. that are very shaky in that regard. g.l.d. the big one by h.s.b.c. is the custodian where j.p. morgan is custodian of the s. i l. the the big silver e.t.f. there is a major shortage in each market and you can contrast that to other e.t.f. where that's not the case like the spot asset management group is one of the really good point you brought this up so it's a lot about a question i did have one of the reasons to own gold is that it's not somebody else's liability so what is the reasoning on the rationale behind going to yes for investors. well my contention would be that during a different for example that we don't know what just b.c. could be doing with their gold in geology or morgan with death which still there's nothing in their charters there are agreements to for kids then to get out. pretty gold silver in the market we just don't know so where you have
a disk is cheap so then let's talk a little bit more about the manipulation of this market because there is governments and there is big banks and there is markets and kind of in the middle of all of this is the central banks and they know something about perception and they are certain certain about it and one issue that above all they might be considering is the perception of the currency is that they are overseeing so this gets into the argument about manipulation and one of the things that people like yourself other guests we've had on the show argue is that there is manipulation going on in the gold market and some other precious metal markets too with some of the big banks the big boy in banks and such as j.p. morgan h.s.b.c. so what is your reasoning for this think about it every time don't shoot ship quickly what is the talk in the press what do you hear is it something about a crisis or problem too much inflation that stands for business it's good for the politicians it's been for the big banks and so that's why they go all out to keep
going under control he's changed the church said it's a barometer of financial health and they don't they don't want to shoot a young it's negative for what i just mentioned so they don't they don't want the price to move up to reveal what's actually going on and so then there's a reason as to why they would want to do this now what is the analysis or the evidence that makes you believe this actually is going on. well it's twenty you know it's like a murder trial you know we've got a hundred two hundred five hundred things that would show that the accused is guilty beyond a reasonable doubt and if you put it all together we've been gaining putting together evidence since one thousand nine hundred ninety it's overwhelming there's so much stuff on the public record and if people are interested interested they can go to got a dot org it's all there it's plain as day paul volcker it is lamar said one of the biggest mistakes he made was what he didn't manipulate the gold enough to suppress it enough and the people since him have taken over that the role of which started
really big league with robert rubin when he was treasury secretary of the treasury can you can you summarize that kind of what the most glaring evidence of it is or how this works now and the way that you think it absolutely and the most obvious things for the people that watch your show is how the market trades on a day to day basis it's always counter-intuitive black is white white is black just one goal to go up the most it gets hit it gets hit around certain events like an auction expire like j.p. morgan to distil for just the other day now it's over and watch silver move right back up again they attack at certain times of the day the most obvious is about three am new york time when the london gold car traders go to work we call that plan a i don't know it must have been three out of five times a week for the past six weeks and how does that work between the central bank and large banks like j.p.
morgan and kathy thing that you believe are doing this. well they they work they need some data dump on the physical market shill they using work at history chick times like i mentioned we go in in the in the derivatives market and in the futures market in matter of seconds. they hit gold i think something like fourteen dollars in a minute or two for no reason do is no moves ten deaths when you know that they're going it just stops they're trying to get destruction of longs out of the market and that's how they play with it and they do it over and over again but because the supply demand situation is so much against them all they can do is manage to retreat it's interesting you know i want to keep you on we're going to go to a quick break when we get back we're going to talk about what impact this maybe has or opportunity this has is for the central banks who have been stocking up on gold so just stay right there bill murphy we'll have more with you in a few minutes chairman of the gold antitrust action committee to be back in a moment and also still ahead the bank of england will have
a job opening next year it seems the vampire squid may be making its way to the top of that particular ladder i'll give you our three cents but first their closing market numbers. don't use that so much you know there's a huge decision on the market over a year ago or a week started in quickly inspired millions in north africa and the middle east what is the current state of this.
welcome back we're talking with bill murphy of data about the central banks involved in manipulating the gold market market i should also note that central banks have been accumulating gold reserves have increased by more than five hundred tons over the last two years driven by the developing world that's according to the world gold council we've seen central banks load up in general and recently mexico russia turkey in march numbers that just came out from the i.m.f. now the world gold council believes china's central bank also has been making purchases and made significant gold purchases in the final months of two thousand and eleven so what's going on here and are they possibly getting an advantage allowing them to buy on the dips we're going to ask bill murphy chairman of the
gold antitrust action committee and veteran of the commodities industry so bill murphy these banks that have been loading up in conjunction with the manipulation you allege that some central banks want to protect the perception of their currency is that an opportunity for the central banks that are loading up and are they perhaps buying on the tips. absolutely they know what the car does and they know how they've got on the market and they're waiting for him just recently we were told that there were these huge banks including china central banks ready to buy gold between sixteen twenty sixteen forty five and we've had these recent attacks waterfall attacks down and the markets come right back each time because all that flying is there i know this for a fact because the russian central bank knows all about gotta be mentioned only cos the number two guy there mentioned us in two thousand and four the only. word mentioning us for this big billion copies which stunned the crowd was it's gotten underway by claus who is an economist worked closely with president putin has come
to two of our conferences love that after the first one he was there the gold market was dead two days later exploded out of nowhere they've been all over it the chinese followed us closely i've had three conference calls with their sovereign wealth fund the chinese investment corporation we were the first ones that go to chinese banks five years before anyone else and noted it every few months for all that time till it was announced so they know what to go cartel is done and why and they want to go to as possible before things blow up that's interesting so when they come to you they're going to say i hate we want to get more information into gold manipulation and is that what they're asking for and looking for you know what you probably know or you know the russians and the chinese they're not going to say anything they just listen but. and that's that's the most important thing is they keep coming back for more information from us ok and bill what do you think this is about the think cumulation of gold reserves is this because perhaps you think that
some of these developing countries could be looking to introduce a new reserve currency possibly backed by gold or do you think they're just maybe trying to increase the size of their holdings to be on par with the us in some european countries. well i think it's only natural them to want to grow their reserves because they get so much so much dollars when i look at the chinese i mean they get these hoards of dollars they know we're doing they know our printing money . this is their way to do i get some protection i know when we had our conference in south africa or the chinese will all over that country and over africa and africa of building up their different reserves a different kind of metals a long time ago they know what's coming and they want some protection of the same time they can't dump all their dollars at once and they don't want to. think any of this has anything to do with that any kind of gold backed currency possibly.
it's possible i mean if there is to talk about them there's talk about other countries that are using gold as part of their transactions and there's talk about other currencies you know. for me different unions and not not using the dollar and of course this is what the united states is desperate to prevent which is why they're all over the gold price that's interesting and when you're talking about the manipulation of gold again who are the names that you would give a country their central bank that you believe are involved in as you mention the united states is there anybody else. well the bank of england is involved but the big the big one is united states that said treasury you can. exchange stabilization fund certainly and then just b.c. j.p. morgan goldman sachs should mention the squid they were the ringleader chill of that three or four years ago and i have just completely disappeared from the sea so they're gone but it's just a combination of course and then they have their lies and other central banks to help them some gold on the market as i mentioned earlier i think the europeans got duped another gulping because. they're not selling any more gold at all while other
countries are buying as you mentioned and now one thing i do want to ask you about you you mentioned a d.p. world and several times and they really have gotten a lot of flak for what people believe is manipulation of the silver market and we did actually hear from blythe masters the head of global commodities answering a question about that and she defended it saying that they're hedging she has said that they're hedging by this and that they have and that specular bets aren't part of the business model and that market participants don't see all of their activity and bloggers have a misunderstanding of the nature of the business there's an underlying client position we just have a minute here but do you buy that. well let me let me put it this way we justified in saying the c s t c two years ago and got a statement from andrew maguire in which he showed that he eats it sent e-mails to the c.f. t.c. saying when j.p. morgan was going to bomb the market ahead of time and how they alerted their allies
what was going to happen this happened over a three to four month period and it happened in the evidence list right there the c f t c has done nothing about it when it comes down edging that's hogwash it's just it's just not the way we're there to see if t.c. just confirm that that's it that these are hedges and they won't do it hot take that live matter that's hogwash i think is the way her being on this album or pay was really great to get a chance to talk to you he's chairman of the board antitrust action committee thanks. all right let's wrap up with liz change because i want to chance to talk to dimitri
and sam then on this monday and for you guys get to get to hear our opinions on this guess who may reach the top spot at the bank of england. it has a unique ability to react when it is startled it can curl its whip and arms around the rest of its body turning sort of inside out this change in appearance may help avoid being attacked by predators. you better believe that was the vampire squid otherwise known as goldman sachs the famous term that was coined back by matt taibbi now it has been reported that jim o'neill a senior executive at goldman sachs has been approached by officials and is a potential candidate to take over the top job at the bank of england when current governor sir mervyn king steps down and june two thousand and thirteen this is only fitting considering that the tentacles of the vampire squid are absolutely spread over europe and they have not at the top of the bank of england recently but they should considering that london is the seat of so much big banking craziness with
three hypothecation in all of this shadow banking right of course those who are. most able bodied son to spread them out across you know munich and berlin where were the capital was were the money center was in germany. but this to me honestly it's concerning it's not remarkable it's what you would expect because we live in a politically entrepreneurial world now so goldman sachs makes its money not by its ability to provide market functions and and we're going to free market but actually capitalize on its very well articulated governmental power connection is eventually similar to the warren buffett argument with crony capitalism that we've heard made there's more to be gained by this political power these days than by actually fundamentals of the market right i mean won't be long before we do see blankfein talking about how he was a paper boy or something analogous i don't know what he did when he could be
working. but you know there's that he won't be long before that so yeah it's capitalism one hundred one and political entrepreneurial ism and that's these guys are into so i'm i don't know what they've been waiting for this long. the take over the bank of england soon will be at the people's bank of china is god knows where i was. expecting c.n.n. you want anything here i think we need a predator to come and obviously hunt the vampires we need. you know on the menu i was going to say it's a real shame that that any badger is not in the water doesn't operate in the water because that would be a good opponent because nothing can kill it to move on because speaking about opponents poker men the nobel prize winning economist is one who has a lot of them ok we've talked about him and steve king economist who has been on this show a number of times getting into it also more recently ben bernanke gave one crewmen a kid bernanke not being enough of an academic in his running of the fed saying he should do more burning he said recruitment was incorrect and fire back when he had
the opportunity and program when he had his double down take a look at what's happened to bernanke you say he's been assimilated by the borg he's become he's become more concerned probably unconsciously with defending the institutional safety because it's the apostle of profitability then with doing whatever he can to get this economy moving that wasn't enough he wants more opponents the whole lot crewman went after c.e.o. of hewlett packard carly fiorina within that panel. nothing you said of a business taxes is actually true and so we think that's how she doesn't split with but it's not true. now not true and that wasn't enough he had to go into with blog afterwards and basically the whole panel saying we're doomed saying. that was my reaction after the debate on this week basically he was very disappointed that nobody on that panel believes what he believes so cruel and is just going to town
here he is relentless we just saw him with ron paul which was really exciting and it was on bloomberg that was good. producers forget things together like you know there's so many things that are wrong with paul krugman that i don't even know where to start and it's very frustrating and part of it is obviously i have a certain thing for against academics who never actually practice what they preach they just kind of preach from an ivory tower yeah i mean look at their own fantasy universe which is what paul krugman does but just think one of the one of his points for example which is this obsession with lowering interest rates and if they won't go below zero lower than below zero just keep lowering interest rates until there's nothing i mean it's a mindless obsession with models that don't work he doesn't look at reality he doesn't understand it but the thing i think that's frustrating is that he'll have a model to back up what he says his models will do and so then it's just you know a model supports model supports like we have population of the models to support his analysis but you also think he also seems to just not understand what interest rates are he doesn't seem to get that they're prices ok it's remarkable it's
a big statement but it doesn't seem that he seems to have an ability to fathom that the market can actually determine interest rates he seems to feel like there needs to be these policy makers but you know it is it makes sense because he has to justify his own existence because he needs to give a justification for why he needs to be considered important in the bloomberg that he isn't just an academic he wants to be more powerful he wants to be bigger than his britches so that's ultimately sardis a whole program and psychological problem maybe you have a psychotherapist can help me he just he needs to get rid of the space analogies he's got the star trak he's got the bernanke it's a little too much space. because he's obviously a space cadet as to me and if you don't remember god that's good ok we don't have time but i remember you said you wanted to dig holes or something about aliens there was another alien analogy in there that's all we have time for there thanks so much for tuning in don't forget to come back tomorrow and remember right here have a great night. deadly
terror attacks in the syrian city of easily killed nineteen injured dozens more as the un warns its powerless to implement a peace plan unless both sides lay down their arms both the government and opposition point the finger at each other for the bombing. political pressure on ukraine growing over the treatment of former prime minister yulia timoshenko with the e.u. politicians threatening to boycott the euro two thousand and twelve football championship to mission to go says she was assaulted by guards in the prison where she's serving a seven year term for abuse of power brussels says the case is politically motivated. the wiki leaks founder ready is to take center stage again as the host of an exclusive our t.v. interview program later tuesday a sunday gets to the heart of the arab spring rosa revolts in his interview with tunisia's new president going to show up next stay with us here on r.t. .