In Chris Powell’s recent response to my article, he has again done what the Gold Anti-Trust Action Committee (GATA) does best – massage the facts to fit their narrative, writes Avi Gilburt, technical analyst and author of ElliottWaveTrader.net.
So, while GATA admittedly will be unable to tell you where the market is heading next, they certainly know how to spin what people say to try to explain why they have no clue where the market is going.
So, in this rebuttal, I will address each of Powell’s points.
The facts about gold manipulation and GATA.
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“We construed Oleg Mozhaiskov’s reference to GATA as signifying that the Bank of Russia shared GATA's suspicion about the activity of the U.S. government and its allies in the gold market.”
Yes, of course GATA construed Mozhaiskov’s words in the manner most beneficial to GATA. Too bad Powell did not actually read or understand what he said.
You see, Mozhaiskov specifically prefaced his mentioning of GATA with the fact that some in the market “need to invent fantastic intrigues to explain price dynamics.” Yes, that is exactly what GATA does. And, this was a very accurate depiction of GATA by Mozhaiskov.
But, rather than actually deal with what Mozhaiskov literally said, Powell then engages in a very nice story telling segment about how Mozhaiskov’s speech came into Powell’s hands. While he tries to spin even this story as beneficial to GATA’s position, this entire segment of his article has absolutely no relevance to the issue at hand, whatsoever.
And, with this story now leaving the readers of the article with some artificial appearance of expertise, while clearly obfuscating the actual words spoken by Mozhaiskov, Powell pivots to my discussion of how they massage Alan Greenspan’s words as well.
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But, notice how Powell never even addresses the most definitive words spoken by Mozhaiskov:
“Now the time has come to admit that investment demand was, and still is, the main driving force behind price fluctuations on the gold market.”
Again, this is why GATA is best characterized as the Foghorn Leghorn of the metals market:
“Don’t bother me with facts, son. I've already made up my mind.”
Now, as Powell attempts another misdirection regarding GATA’s longstanding assertion that the Fed manipulates the price of gold, this has been answered many times by Alan Greenspan. And, as GATA even provides you with the links, it seems they don’t even read their own links.
In a response by Greenspan to a GATA letter claiming that the Fed manipulates the price of gold, Greenspan could not be any more clear:
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“The letter asserts that the Federal Reserve has beenseeking to manipulate the price of gold by intervening in or otherwise interfering with the free market ingold. This is not true. The Federal Reserve owns no gold and therefore couldnot sell or lease gold to influence its price. Likewise, the Federal Reserve does not engage infinancial transactions related to gold, such as trading in gold options or other derivatives.”
Powell continues with many more references about what people supposedly say, yet when you actually read what they did say, it never actually supports GATA’s propositions.
Again, they attempt to massage what people say in order to support their proposition, but their propositions remained unsubstantiated within their own cites. GATA’s propositions are based upon nothing more than supposition and they often take quite a leap when they present their suppositions, to the extent it often bastardizes what the person actually said.
In my initial article I provided a number of examples of their bastardizations, and, again herein, I have presented several more examples.
In fact, you can go through each and every citation presented by GATA through the years, and see the exact same conclusions based upon suppositions through bastardizations of what the writer or speaker had actually said. And, to be honest, I simply do not have the time to post each and every rebuttal to all their clear bastardizations.
If there were ever a house of cards upon which a proposition was held, GATA presents us with the classic example.
Yet, GATA continues to allude to how the manipulation in the market is what caused the drop in price of the metals from 2011 to 2015. But, they offer no proof of how this happened, and will never be able to do so, no matter how hard you press them to provide evidence as to how this was done. They simply cannot because it was a standard market correction. Nothing more.
There was no invisible hand causing the gold market to drop 40% or silver to drop over 75%. If there was, don’t you think this would be front and center to GATA’s argument?
One has to wonder that if they were so certain about the manipulation in the market to push it down from 2011 to 2015, why did no one use this obvious fact to short the market?
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Lastly, Powell ends his article with a very nice personal attack on me:
“By contrast Gilburt concludes his latest misrepresentations by proclaiming his great success at predicting monetary metals prices, as if that is somehow a rebuttal to GATA’s work and not just egotism.”
And, to be honest, I even expected it:
“Now, I am quite certain that I and my analysis methodology will be summarily attacked by GATA and its followers. So, I will simply provide two quotes to you:“Again, since we are most probably in the final stages of this parabolic fifth wave “blow-off-top,” I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time.”
--Avi Gilburt, August 22, 2011
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“As we move into 2016, I believe there is a greater than 80% probability that we finally see a long-term bottom formed in the metals and miners and the long-term bull market resumes. Those that followed our advice in 2011, and moved out of this market for the correction we expected, are now moving back into this market as we approach the long-term bottom. . . We are now reaching our ideal target region, and the pattern we have developed over the last 4 years is just about complete. . . For those interested in my advice, I would highly suggest you start moving back into this market with your long-term money . . .”
--Avi Gilburt, December 30, 2015
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The reason I posted this is because there is no way in hell I would be able to identify the top to the market in 2011 (within $6 of the actual high struck), and much less the bottom to the market in 2015 also, if it was as manipulated as claimed by GATA.
In fact, we nailed that bottom so tightly that our broker wrote this about us:
“I can attest to your accuracy on actually buying both gold and silver from us as close to the bottom as one could. With gold you called it to the letter and your limit order which was placed well in advance executed perfectly. The silver limit orders were within a tight range of the lows as well.”
-- Doug Eberhardt
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My point is that I simply understand the market, whereas they do not. And, my understanding is quite clearly devoid of any wholesale manipulation theory that caused the market to drop from 2011 to 2015. Again, this was a standard correction.
So, I clearly do not share GATA’s “need to invent fantastic intrigues to explain price dynamics.” That was my point in presenting my market calls.
Either I understand how the market works and the 40% decline in gold and the 75% decline in silver was a foreseeable and standard market correction, or as I noted before, maybe I am the one who is manipulating the market.
Which do you think is a more plausible explanation?
