Martin Armstrong peek behind the curtain view was put forward in his latest blog where he reveals his take on the thorny issue of market manipulation, particularly in precious metals, and a wealth tax, which he believes is coming.
Active traders and investors of precious metals already have their view set in cement that there is no true price discovery but instead a central bank prop trading desk operating in the shadow with the sole purpose of not making money, but setting prices according to their agenda. Of course, it is all for the greater good of keeping financial markets stable, the economy robust and people employed, which is how central bankers spin it when they are pressed on the issue.
“Martin Armstrong’s view on market manipulation, particularly in precious metals, and a wealth tax, which he believes is coming”
MARTIN ARMSTRONG
When the central bank targets the yield curve to keep borrowing costs down or purchases 120 billion dollars of assets per month, financial pundits refer to this as monetary accommodation.
While we are not criticizing loose monetary policy because for investors it means fluffy portfolio values and as a business lower costs for servicing debt and ample inexpensive credit to expand. If the central banks didn’t pursue loose monetary policy, they would be criticized for not doing so.
Is monetary accommodation and its other synonyms, emergency monetary policy, monetary easing all fancy ways of saying the same thing, which is central bank market manipulation?
Even if you believe that a central bank prop trading desk manipulating prices is fantasy, well then how about central bank affiliates doing the heavy lifting.
Remember last year, 2020 JP Morgan was ordered to pay almost $1 billion to settle charges from US regulators of spoofing in precious metals and Treasury markets.
Spoofing involves making several orders in a market without the intention of filling them, often to mislead other traders into pushing prices in a certain direction.
If you think these shenanigans are not happening now, we have got a bridge in London to sell you.
“Is monetary accommodation and its other synonyms, emergency monetary policy, monetary easing all fancy ways of saying the same thing, which is central bank market manipulation?”
WEALTH TRAINING COMPANY
Martin Armstrong peek behind the curtain view regarding manipulated markets could come as a surprise for investors/traders, particularly in precious metals
“They can ‘manipulate’ any market within the trend. What they cannot do is make a bull market out of a bear market or vice versa because everything is connected” explained Martin Armstrong.
You cannot have gold trading for $100 more than it does in Shanghai compared to New York, it will be quickly arbitraged. So, to be very clear, what I am talking about is a sustainable reversal of trend counter to everything else in the world. I went head-to-head against Buffett during his last and final attempt at commodity manipulation thanks to PhiBro. This is what I am talking about. They moved the silver from New York to London and had the fake news talk about a shortage in silver to jack the price up. They were only looking for a rally to $7 and then they sell it to the retail crown once again” said Martin Armstrong.
“I know the gold bulls hate my guts because they want to always say gold is manipulated” – Martin Armstrong
No asset price can be manipulated in the long run is the crux to Martin Armstrong peek behind the curtain view
“I know the gold bulls hate my guts because they want to always say gold is manipulated” said Martin Armstrong. “Nothing is systemically manipulated for decades. The only time that has taken place is governments imposing controls of fixing currency values” he added.
Martin Armstrong peek behind the curtain view leads him to the Swiss peg collapse in January 2015 which he cited as an example where even governments cannot manipulate prices indefinitely
“I was named FOREX person of the year because I had forecast when the Swiss peg would collapse. I even met with the head of that operation for the Swiss central bank. I warned him the peg would crack a few weeks prior. He said they could hold it and I replied nobody has ever been able to fix a currency against the capital flows. The peg broke. The same was true in the 1997 South East Asia Currencies Crisis where the pegs broke. I was called in by the central bank of China on that one” said Martin Armstrong. “Then there was the British pound peg to the ERM that broke and made George Soros a billionaire” he added.
“History repeats because human nature remains the same”
– Martin Armstrong
Martin Armstrong peek behind the curtain view regarding market manipulation is based on more than two decades of attempted and failed market manipulation by central banks
“I have been around with all of these attempts to manipulate. Never has it ever been able to be sustained against the trend. Yes, they can get a blip. But never have they been able to change the long-term trend. The manipulations that they have often been fined over as in LIBOR is they know where the stops are and they push the market to elect them. But that is not changing a bull market into a bear market. That is often involving front-running” he said.
Martin Armstrong peek behind the curtain view also coved a wealth tax, which he sees coming
Martin Armstrong explained that in Germany during December 1922, the last straw that broke the back of the German economy was a forced loan of 10% of all your assets. He noted that this destroyed the confidence that remained in the Weimar Republic and thereafter people withdrew the money from banks and started to convert to other currencies and to buy whatever tangible assets they could. Hyperinflation took off in 1923.
“History repeats because human nature remains the same” said Martin Armstrong.
He said that in an interview with The Hill, it was a Democrat from New York Thomas Suozzi who said he’s in the early stages of looking at what he called a “patriot tax” which is a wealth tax that he is proposing to impose as a one-time surcharge of 2.5% wealth between $50 million and $100 million and a 5% on wealth above $100 million.
“My real concern is once they push this through, then it is one small step for the government to lower that to $1 million or $500,000” said Martin Armstrong.
