It’s the End Game of a Fantastic Manipulation of the Markets

One of the savviest and well connected hedge fund managers in the world spoke about the smash in the gold and silver markets and what to expect going forward. Outspoken Hong Kong hedge fund manager William Kaye also discussed the stunning volume in the gold and silver markets, as well as the suspect nature of the trading, and the propaganda coming out of the U.S. Federal Reserve. Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in his tremendous interview.

Eric King: We are in the midst of a massive gold and silver plunge here. What are your thoughts on the action we are seeing?

William Kaye: It’s the end game of a fantastic manipulation of the markets. I’m looking at my screen now as we talk, Eric. I’m in L.A. (Los Angeles), but we are still in Asian (trading) time with London just coming in at the moment, and we’ve traded over 94,000 contracts.

So passing the baton to London we will have already traded 100,000 contracts. A normal night (during Asian trading) would be 20,000, to put that in perspective. So the question is, who is selling all of these contracts at levels that are multi-year lows? Who’s so keen to sell?...

And if you need to sell, why are you selling at the worst time of day? Why are you selling in Asian time, which is always the thinnest section of trading? Why don’t you wait for London and Chicago to take over? 

And the answer is very obvious: These markets are clearly and blatantly being manipulated. The people doing it have clear price objectives. My guess is they want to see a print below $1,300 (on gold) before they are done. That will allow people (trading for the bullion banks) to make profits on their shorts.

The bullion banks, from the Commitment of Traders Reports that we’ve seen plus other information that we’ve gathered, strongly indicates that the banks, which are the centerpiece of this conspiracy, have shifted rapidly from being on the edge of default, as ABN AMRO has already done, to being net long, and in some cases being very net long.

So they (bullion banks) have taken the opportunity that’s been provided by the cover from what would appear to be official intervention, in what I suspect is the Fed and possibly the ECB, to take the other side of that trade. Now they are extremely net long and that sets the stage, in addition to a very promising technical picture, for a very powerful rally as we look at next week, into July and beyond.

The second half (of the year) could be extremely explosive on the upside for gold and silver as well.

Eric King: For the last two days we’ve had Fed propaganda, and now we’ve seen the US dollar start to move sharply higher (in tandem) with this gold and silver smash. Your thoughts on the Fed and what they are saying?

William Kaye: It’s all part of one big manipulation. It’s all absolute bullshit. They (the Fed) didn’t say anything new. And you might recall that we’ve gotten for several months now FOMC minutes that said ‘several members disagreed with the existing QE policies.’

Well, that’s very interesting because I always thought that several always meant more than two. You would say, ‘one member,’ or you would say, ‘two members,’ but you wouldn’t say, ‘several members.’ So it’s a real misuse or abuse of the English language. (George) Orwell would approve.

If we’re to believe what the Fed has now come out with, which is the vote has gone from 11-1 endorsing what is a continuation, until we tell you later, of the most aggressive money printing program in the history of mankind, then we’ve gone from an 11-1 endorsement of that, to a kabuki theater 10-2 endorsement.

So where are the ‘several members’ that don’t like this policy? Where is the legitimate debate? If I won a baseball game 10-2, I won it pretty decisively. I really don’t understand this concept (by the Fed). This has been propagated now for some period of time as if there is legitimate tension in these FOMC meetings.

If that was the case we wouldn’t have a 10-2 vote to continue, until further notice, a set of policies that are extremely debasing of the US dollar currency. And whether you agree with the policy or not, it does debase the currency. No one even argues that.

So people need to put things in the proper context. There is no legitimate debate. Whether it’s 11-1, or it’s 10-2, that is a very powerful mandate for the continuation of what is an extremely unorthodox set of policies which is deliberately designed to debase the currency.

The only protection as I see it that investors have to offset the long-term effects of these policies is to own precious metals and to own the physical precious metals because paper gold can’t be trusted. My strong advice to most investors who might be listening to this program (or reading KWN) is keep it simple. Just buy physical metals (at these depressed prices), store it outside of the banking system and allow it to go up.