Long Gold, Short Silver And Exponential Demand

Each day more conspiracy theories are becoming conspiracy fact. From Enron to Madoff, the NSA to LIBOR, these scandals were "known" years before being acknowledged or embraced by officials or the mainstream media.

What remains unknown is the distortion this "new reality" will have on behavior and ultimately, the market and nowhere has the distortion been allowed to continue for as long as that associated with the Precious Metals. 

Indisputable Facts

Ted Butler announced the development of the long corner in gold months ago. He documented the short corner in silver for multiple decades.

There have been no credible critique of how these calculations were made. Butler consistently filters swap trades from the trading positions and has tracked it this way for years, ironically using the data.

GATA's role has been more focused on documenting gold price suppression -- or the surreptitious official intervention by central banks. In some ways, they have a tougher battle, given the overwhelming mass of evidence collected.

The CFTC Ignorance - We Were Always on Our Own

The regulatory failure should come as no surprise to practically any interested observer. Across the board, power has been usurped by the ever increasing meddling between big money and the judicial system. The combined budgets of the DOJ, CFTC, and SEC pale in comparison to the deep pockets of the giant multinational hedge fund, primary dealer, and member banks of the Federal Reserve - otherwise known as investment banks - that became deposit institutions after the failure of Lehman in 2008.

The ENRON scandal damaged the credibility of the corporate world. But the monetary policy has been able to paper over the damage.

While the revelations of the NSA seem less well understood. The Libor Scandal is in its infancy and could very well continue indefinitely or at least as long as the system remains (open).

But the distortions created by the manipulation of precious metal prices are the greatest of all.  Superficially, it appears sentiment has suffered enough to keep the masses distracted from the much needed precious metals safety hedge. However, by definition, the metals are precious and rare. The unintended consequence of allowing suppression in the name of industry or to protect fiat currencies has led to a world record surge in physical off-take demand like the world has never before seen.