Tocqueville's Hathaway examines comprehensive market manipulation by central banks

8:28a ET Wednesday, November 26, 2014

Dear Friend of GATA and Gold:

In his new letter for investors, Tocqueville Gold Fund manager John Hathaway focuses on market manipulation by central banks and their agent investment banks.

Hathaway writes: "A new generation of central bankers has transformed the staid portfolios of their predecessors -- consisting of inactive pools of currency reserves and bullion -- into hedge funds that trade derivatives, futures contracts, and instruments too exotic to comprehend. The Chicago Mercantile Exchange invites them to do so. In Exhibit 1 of a January 29 letter to the Commodity Futures Trading Commission, the CME Group offered special discounts to central banks "outside of the United States" to trade such un-central-bank items as stock index futures, foreign exchange, agricultural commodities, energy, and of course precious metals. It would appear that the CME has become an important interchange by which central bankers can tweak the financial markets to affect the thought process and behavior of the investor."

Hathaway adds: "The modern-day central banker trades with counterparties that are giant commercial banks with derivative books of disturbing scale and complexity. It seems impossible that these commercial exposures could be constructed and maintained without the knowledge and complicity of the official sector. For example, Deutsche Bank, already a defendant in 1,000 lawsuits, claims derivative exposure that is 20 times the GDP of Germany and five times that of the entire eurozone. It is not a great leap to suggest that central-bank traders and their megabank opposites -- spawn of the same gene pool, schooled in the same institutions, career paths intertwined, frequenters of the same conferences, and just a speed-dial away -- are ideologically indistinguishable and intellectually and morally corrupt in equal proportion. We applaud the efforts of litigators and plaintiffs already in process and those in the wings, and look forward to the depositions and discoveries yet to come."

Hathaway's letter is titled "Monetary Techtonics" and it's posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/26_F...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.