Why do regulators ignore market rigging? Because government does it and it’s legal

Why do regulators ignore market rigging? Because government does it and it’s legal by Chris Powell for GATA

Dear Friend of GATA and Gold:

Silver market rigging critic Ted Butler’s new commentary details the capture of the commodity markets by derivatives employed by a small number of financial houses, thereby destroying market pricing. His commentary is headlined “Deliberately Looking Away,” referring to the failure of the U.S. Commodity Futures Trading Commission and Justice Department to do anything about it.

Unfortunately Butler can’t seem to acknowledge the probability that these enforcement agencies fail to act against market rigging because the actual perpetrator is the U.S. government itself, operating through intermediary brokers, and because such rigging is legal.

That probability is greater because of the refusal of the U.S. Treasury Department and Federal Reserve to answer the simple question posed to them more than a year ago by U.S. Rep. Alex Mooney, R-West Virginia: Which markets are you secretly trading in, and why?:


The probability is greater still because of the refusal of the CFTC itself to answer GATA’s question, reiterated by Mooney, as to whether the commission has jurisdiction over manipulative trading by the U.S. government or its agents or whether such trading is legal, authorized by the Gold Reserve Act of 1934 as amended since then:



The probability becomes a near-certainty in light of the discount program offered by CME Group to governments and central banks for their secret trading in all major futures contracts traded on U.S. exchanges:


Indeed, a formal admission of the U.S. government’s power to rig markets secretly was given by an assistant U.S. attorney during GATA consultant Reg Howe’s lawsuit against the Fed, Treasury, Bank for International Settlements, and bullion banks in U.S. District Court in Boston in 2001. Moving to dismiss the lawsuit, the assistant U.S. attorney told the court that, while it wasn’t admitting to rigging markets as the lawsuit complained, the government did claim the power to rig them secretly, power conferred by the Gold Reserve Act:


So the much bigger concern here is not why the regulatory agencies are looking away from futures market rigging but why the mainstream financial news organizations, market analysts, and commodity producers themselves are looking away. There is no mystery about what is happening here. All anyone has to do is put the critical, specific questions to the responsible government agencies and then watch them run.

Butler’s commentary is posted at GoldSeek’s companion site, SilverSeek, here —


— and at 24hGold here:


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

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Chris Powell

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (LeMetropoleCafe.com), and by Chris Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.