My name is Tommy Flanagan, and I’m a member of Pathological Liars
Anonymous. In fact…I’m the president of that organization. Yeah, that’s who I
am.
I didn’t always lie. No, I used to tell the truth. Then one day I told
a lie, and I got away with it. Yeah, I told my parents that I had a brother
that they had never met…
-Jon-the-Liar Lovitz, The
Johnny Carson Show, March 28, 1985
As the character Jon Lovitz explained on The Johnny Carson Show,
lying is habit-forming. If perpetuated, it becomes compulsive conduct. Lying
is a form of deviant behavior that (in the eyes of the liar) makes problems
go away. Of course such problems never disappear permanently, because a lie
can never solve anything. At some point the problem resurfaces, and because
it never was addressed, often the problem has grown even larger.
The response from the liar is to tell another lie. But, because the
problem is now almost inevitably larger, the new lie tends to be bigger or
worse than the original. The process repeats. As the lies become larger and
more numerous, eventually some of the new lies begin to openly contradict the
old lies.
At this point, the proverbial “jig is up” for the liar. At least that is
how things are supposed to work, as illustrated by the fable The Boy Who
Cried Wolf. Which brings us to the “silver fix.”
The most obvious starting point is a question: why do we need a “silver
fix”? In an era of electronic, instantaneous communication, and with
(supposedly) “free and open markets,” why do we need someone to tell us what
the price of silver is supposed to be at a particular moment in time? Why
can’t market participants simply observe for themselves the current
spot-price in our “free and open markets”?
The bankers (playing the role of Jon-the-Liar) have their answer at the
ready.
We need an official “fix” of the price of silver, because the
settlement of a number of a different types of contracts is based upon the
prevailing price of silver, at particular times in the daily trading. If we
didn’t have an official “fix,” then traders could attempt to manipulate the
price at those particular times, and cheat the system. That’s right, someone
else could cheat the system.
How would “fixing” the price of silver (a process which even sounds
corrupt) help to prevent corruption in the marketplace? The Liars again have
their answer.
We’ll get some 'honest people' to tell us what the price of silver
should be. These 'honest people' will meet behind closed doors, and then tell
us the honest price for silver. Yeah, that’s the ticket! Honest people,
meeting behind closed doors.
And thus 'the silver fix' was born. Who were these 'honest people' who
were going to provide us with the honest price for silver via their secret
meetings?
As regular readers know, the Big Banks of the West have been convicted of
every form of financial
crime in the books, most involving fraud (i.e. lying) in one form or
another. The only reason that these fraud-factories haven’t been convicted of
far more crimes is because our corrupt governments have erased many of our
former laws and simply stopped
enforcing many others.
The Pathological Liars were handed the responsibility of providing us with
the honest price for silver. But wait, it gets better. The silver fix was
supposedly created to prevent corruption in the silver market.
However, not only are the Pathological Liars allowed to trade in the same
market where they are providing this quasi-regulatory function, but they are
by far the largest traders in these markets.
The Pathological Liars, who have the largest financial motive to rig the
price of silver, are the people to whom we handed the responsibility of
providing us with the honest price for silver. This is not merely a matter of
“putting the Fox in charge of the henhouse.” Rather, putting the hungriest
fox we could possibly find in charge of protecting the hens.
However, we were told for many, many years that this system worked just
fine. Then one day the Pathological Liars themselves told us that the silver
fix was no longer working. Of course this was far less than a voluntary
admission. Instead, it came as a consequence of several of the Pathological
Liars being sued for – surprise, surprise – manipulating
the silver fix.
The bankers, as always, had their next lie ready.
We’ll fix the silver fix, and make it better than ever. That’s the
ticket!
And so, we got the bankers new-and-improved silver fix. How was it
“improved”? The particular Pathological Liars who were being sued for
manipulating the silver fix would no longer be involved in “fixing the fix.”
Instead, only those Pathological Liars who were not being directly sued would
be allowed to provide us with the honest price for silver.
Then January 28th, 2016 rolled around, and Bloomberg Media
released the following:
A daily silver price used as a benchmark by traders, miners, and
jewelers risks losing credibility with investors after it was set beyond
levels traded on the market. One said the system seemed “broken” and another
that clients had adopted alternatives.
The London Bullion Market Association Silver price was set at $13.58 an
ounce Thursday, 3.5 percent less than the intraday low on the Comex in New
York.
That came from the
mainstream media, meaning that (at most) it contains half the truth. Here
is what was left out. The phony “honest price” produced by Pathological Liars
Anonymous on January 28 th was not merely 3.5% less than the
intra-day low. It was 6% below the current price.
Also conveniently omitted by the mainstream media was the significance of
that date, which was the “options expiry day” in the futures market. All of
the options trading for that month was settled based on the price set by the
silver fix on January 28 sup>th – the “honest price” produced by the
Pathological Liars. This means that all of the options traders who would have
cashed in if the honest price reflected the actual price of silver were,
instead, blatantly cheated out of their rightful gain.
When Bloomberg and other mainstream propaganda outlets reported
that some traders accused the London Bullion Market Association (LBMA) of
operating a “broken” system, it was referring to some of those cheated
options traders. What was also omitted was that the silver fix tended to
conveniently dip below the actual price of silver on most option-expiry days.
Prior to January 28th the Pathological Liars had not engaged in
the fraudulent rigging of the silver fix in such blatant terms, not even
before the fix was “fixed” the first time. But even more troubling was the
latter part of the quote from Bloomberg: “ …clients had adopted
alternatives.”
The Pathological Liars lie to us (among other reasons) for profit. If
market participants choose to simply tune out the Pathological Liars, then
they could “fix” the silver fix at any fraudulent, outrageous price they
chose, but there would be no profit in doing so. You can’t cheat the other
children if they won’t play in your sandbox.
Alarmed, Pathological Liars Anonymous called another meeting, where the
bankers in attendance quickly cobbled together their next lie that would have
gone something like this:
We’ll “fix” the silver fix…again, and this time, it will really be
better than ever!
Thus, now the Pathological Liars have presented their new
new-and-improved silver fix, designed to replace the old new-improved
silver fix, which was only put into place last year. What did the Liars do to
make the new-new fix better than the old-new fix?
The first of the new measures is the introduction of a blind auction.
The aggregate bid and offer volumes will no longer be disclosed during the
auction round. This information will only be made available after the end of
each round.
The second measure is a “sharing of the imbalance” in the auction. In
other words, after the auction is complete, the remaining buy and sell orders
will be equally shared among the participants.
Finally, the calculation agent will now be able to increase the imbalance
threshold during the auction within an approved range.
In short, today the CME Group and Thomson Reuters (the other Pathological
Liar associated with this particular fraud) announced that they are taking
action to prevent it from being extraordinarily easy for the Pathological
Liars to manipulate the silver fix. They are doing some of the things they
should have done when they fixed-the-fix the first time, if they had actually
wanted to make the system less corrupt.
Why continue this farce at all? Why would the Pathological Liars risk
shredding their near-zero credibility even further? Why not put to death this
now thoroughly exposed financial fraud? Why don’t the Pathological Liars
content themselves with their 24/7
manipulation of silver trading, in their paper “bullion” markets, which
as everyone knows, are already more than 99% paper, and less than 1% bullion?
It’s all about control. Clients had adopted alternatives. These are
words which strike fear and hatred into the hearts of the Pathological Liars,
such as only a few other words or phrases in the English language are capable
of doing. Words like “competition” and “law enforcement.”
The views and opinions expressed in this material are those of the author
as of the publication date, are subject to change and may not necessarily
reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the
accuracy, completeness, timeliness and reliability of the information or any
results from its use.