Gold – Is This The Stench Of A Stitch Up?

April 17, 2010 | By | Reply More

NewsSo Goldman Sachs are being pursued for mortgage fraud by the U.S. Securities & Exchange Commission for selling their clients packages of toxic mortgages (SDOs,) that, it is alleged, they knew were heading for disaster.

At this moment the blame is being laid at the feet of a 31 year old Frenchman working in Europe as a vice president of the bank. How convenient that he is a non – American located far away in Europe.

At the time of the alleged fraud for which he is allegedly responsible he must have been considered a very high flier indeed. Only twenty-eight years old and needed no overseeing by, or advice from, a more experienced colleague!

Still it did net the bank a billion dollars! Wonder what his bonus was.

Is it believable that no other senior executives of the bank knew that the toxic mortgages were being packaged on the advice of Paulson & Co. the hedge fund managers and were also not aware that they were selling them short for an eventual profit of around a billion dollars?

In this instance John Paulson’s hedge fund is said to own three billion dollars worth of shares in the SPDR Gold Trust (GLD), the ETF that backs its shares with gold bullion.
So far we are told that Paulson & Co. have broken no laws or SEC regulations and will not be involved in any legal action.

In that case why did the iShares Silver Trust (SLV), another ETF whose shares are backed by silver bullion, rid itself of a further seven million ounces this week to add to the ten million ounces sold since late February.

For those that do not know, dealing in the much smaller silver market is a far easier and less expensive way of manipulating the price of gold as the two metals rise and fall in tandem.

At this time of writing we are unaware if GLD has run down its bullion stock recently.
However our personal opinion is that the silver sales might be more than coincidence and that perhaps a little insider dealing may be worth investigating, even if it transpires that the US Treasury and Fed are involved.

How convenient has it been for Ben Bernanke and Tim Geithner that this has erupted just at a time when gold (and silver) looked on the verge of breaking out to over $1200 an ounce?

Conspiracy theorists amongst us have long suspected the Feds of manipulating the gold market to sustain the value of the dollar. Not that either of these two head honchos in whom Obama has placed his trust in the future of the U.S. economy are strangers to accusations of dubious activities.

  • Geithner was pursued for $35,000 dollars in unpaid taxes over several years and there were queries over questionable expenses claims.
  • Helicopter Ben was subject to allegations of fraud in 2009 by the New York State Attorney General and earlier this year questions were raised about his activities in the controversial AIG bailout.

Would it be beyond the wit and imagination for either of these two to set up this present scenario to aid and assist the dollar and as a PR exercise to bolster the public’s falling confidence in the Obama administration’s handling of the current financial crisis at a time when many of the governments stimulus programs are coming to a halt?

Would it also be beyond belief that the plans “leaked” resulting in SLV selling its silver and then its shares taking a bath? Who knows what is in store for gold, particularly if Paulson & Co do get involved in litigation as well they might.

In case of doubt Henry (Hank) Paulson, former Treasury Secretary at the time of the alleged fraud and previously Chairman & CEO of Goldman Sachs, is not related to John Paulson, the CEO of Paulson & Co.

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