Ongoing Flash Crash Speculation

By:  Lynn Fisher.   In August of 2013, Nasdaq-listed securities fell offline for just over three hours.  On October 15, 2014 the 10 year Treasury Note experienced an extreme flash crash.  Then on July 9, 2015 there was the Nasdaq’s “Flash Freeze”.  And in the final week of June, gold dumped 1.8 million ounces at 4 a.m., driving the metal below its 200-day moving average.  Flash crashes continue, year after year, and there is ongoing flash crash speculation.

Now add the recent silver flash crash of almost 11% in the overnight market on July 6th US that moved silver from $16.06 USD down to a bottom of $14.34 USD within a 1 minute interval, a market move that has all of the world speculating on the actual cause.  It is purported to be one of many things, a broker liquidating a massive client position, a genuine algorithm glitch, the Bank of Japan liquidating six thousand contracts,  or an overt manipulation to take gold lower via silver (if so, it worked.)  However, the bulk of speculation via the mainstream media pointed to electronic, or algorithmic trading as the cause of the “Flash Crash”.  Hmmm.

Ironically, the CME has chosen to stay completely silent on the issue, other than stating that their “Velocity Logic” safeguard that paused the market for 10 seconds “worked as designed, allowing liquidity to come back in to the market.”  Nothing like manipulation, as the September and December silver futures were adjusted, in addition to a multitude of mini-futures. As if flash crashes are completely normal events and to be expected in market performance – they are not.

In our humble opinion, the overt manipulation is clear.  Add up the key factors to determine means and motive.  Note that the trades were executed after the US market closed and upon the Tokyo open.  This was done specifically so that the orders did not have to be filled with physical COMEX silver.  No physical metal inventory moved, it was a complicit paper move, executed with extreme precision.  That was the means, now what about the motive?  The government is desperate to drive investors out of physical gold and silver and in to fiat currency, plain and simple.  By instilling fear via perceived volatility, they hope to decrease investment in the real money of precious metals and increase the purchase of national currencies.

Keep in mind, if you are of the manipulation mindset, be encouraged that the bullion banks would not be cycling out of massive numbers of short positions if they thought the price was going to go down significantly.  One can then rest on the rationale that prices are about to go up.

Here is what we DO know for sure.  Market manipulations always fail… eventually.  The paper markets continue to separate from the physical metals.  The backwardation that exists in the metals market has only been furthered by these flash crashes.  And remember that patience is a virtue that is rewarded in the physical metals market.

I’ll take this opportunity to add silver (still the buy based on the current gold:silver ratio) to my holdings.

Finally, stop reading the ongoing flash crash speculation and gain further education on the physical precious metals market manipulation from our friend and colleague Chris Powell via the GATA.org site.

 

 

8 Comments
  1. Does anyone count the number of so called “flash crashes” with the number of “flash spikes”
    What determines a “flash crash” or “flash spike?”
    The market needs a definition. Is it a sudden drop or rise in price of greater than 2% in a period of 10 seconds or less where market volume is less than 50% of the average annual daily volume on a rolling 12 month basis? I other words, until one can come up with a definition it is all gibberish.

    anyone else want to offer a definition. If not its all hype and garbage in or gARBAGE OUT.

  2. How is this type of trading being tolerated! It is the crime of the century against the American people and their money. This was the people’s money up to 1964..Even copper content has been stripped from the penny! A public hearing to resolve this corruption needs to be scheduled..Criminal judgments need to be assigned to this situation. CFTC is a lame agency and JP Morgan and Scotia Bank know whats going here.So do frauded investors..

  3. Dear Lynn,
    Amen. You have to look at all the moving pieces, inferring those that are hidden from the public, and not focus only on the headlines.

  4. Price manipulation is a mere mouse click away.

  5. yep, thanks boys A nice lower price to add to my holdings, keep stacking, this selloff scare tactic may not last much longer max

  6. The “too big to fail, privatize the profits, socialize the losses” western central banking cartel is the single largest “INSIDER TRADING & PONZI” scheme known to mankind. At this point in the history of “western civilization”, this cartel controls the markets AND the governments in which they operate.

    Controlling the precious metals markets is but a SMALL slice of their operations. A very small slice.

    Knowing this, and that a global sovereign debt default is a probability (not possibility) at some point in the future (within the next 5-20 years ?), one should be as concerned with their physical safety and well-being as they are with their financial well-being.

    Because if this boils down to survival of “government” vs YOUR survival, the odds are NOT in your favor…with or without gold.