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Silver mining company says it's helpless against market manipulation

Section: Daily Dispatches

9:54p ET Tuesday, December 3, 2013

Dear Friend of GATA and Gold:

A GATA supporter wrote the other day to the investor relations officer of a silver mining company in which he is invested to complain about the company's seeming indifference to the manipulation of the monetary metals markets. He soon received this reply:

"Thanks for your email. We share your frustration about the silver price. However, we don't attempt to take action against the bullion bankers for manipulation because 1) it is primarily the responsibility of the U.S. Commodity Futures Trading Commission, not the companies, to regulate these markets, so the companies would have to sue the bullion banks too; 2) manipulation is just too difficult to prove; 3) such a lawsuit would take many years and cost many millions of dollars with no certainty as to the outcome; and 4) every company invests its cash where it thinks it can create the biggest return to shareholders.

... Dispatch continues below ...


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"In our case, we think investing shareholder money in things we can control, such as growing our business and our profits, is of greater benefit to our shareholders than investing in things we cannot control, such as suing the bullion bankers and the CFTC, both of which have far more financial and human clout than we companies do. They would just outspend us and stall for time."

And yet the prospects for legal action may not be as poor as this particular silver mining company maintains.

For less than $50,000 GATA sued and, in 2011, defeated the Federal Reserve in U.S. District Court for the District of Columbia in pursuit of gold-related records the Fed was refusing to disclose:

Of course that was a freedom-of-information case, not a market-manipulation case per se, but it demonstrated market manipulation and the monetary metals mining industry did nothing to publicize it and didn't even complain about what was proved. And while $50,000 was a huge amount to little GATA, many mining companies could squeeze that much out of their tailings pile in a few days if they were so inclined.

Of course mining companies and their employees have elected representatives in government in most countries and could ask those representatives to get involved with the manipulation issue on behalf of their constitutuents.

Mining companies and their employees also are served by news organizations that could be urged to take up the market manipulation issue.

And many industries -- though apparently not the monetary metals mining industry -- sponsor trade associations to advance their interests generally, realizing that there is strength in numbers.

That silver mining company IR rep's reply was not very imaginative. It really was no more than a shrug signifying that the company can't be bothered to take its head out of the ground while the price of its product is rigged downward. Such a company and such an industry are not good candidates for survival.

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

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