Going Nowhere Fast

262
Tue, Jul 31, 2012 - 10:23am

I had hoped that Tuesday would provide some excitement. Nope. We are in Dullsville while everyone awaits the FOMC tomorrow. To kill the time, I found something we definitely need to discuss.

Last night, ZeroHedge decided to dip into their archives and recycle a post from September of 2009. In case you missed it, I thought I should focus on it here, while we wait for a tomorrow that will be about 1000% more interesting.

Here is the link to the story from last evening which begins with the following paragraph:

"Lately various media outlets have been swamped with stories and allegations of precious metal manipulation ranging from the arcane, to the bizarre to the outright ridiculous. At issue is not that these claims of price fraud are unfounded - they very well may be completely true - but without a notarized facsimile of an actual trade ticket signed by Brian Sack, or his replacement Simon Potter, or any of the BIS traders confirming they are indeed selling gold on behalf of the Fed, BOE, ECB, SNB or BOJ simply to keep the price of the metal down, what such constant factless accusations (and no, sorry, a chart showing that the price of gold may go up or go down sharply indicates merely that and nothing about the underlying factors for such a move) do is to habituate the broader public to the real issues surrounding precious metal, and other asset class, manipulation. So instead of searching for circumstantial evidence which one can easily find everywhere, we decided to go straight to the source. To do that we go back to a post we wrote back in September of 2009, based on an internal previously confidential Fed document, which conveniently enough explains everything vis-a-vis gold manipulation and leaves nothing to speculation or misinterpretation. Zero Hedge presents the smoking gun that may provide responses to all the various open questions regarding the Fed's Modus Operandi in the gold arena which answer the core question - motive - courtesy of a declassified memorandum, written by none other than the then Fed Chairman, and addressed to the president of the United States."

https://www.zerohedge.com/news/fed-gold-price-manipulation

And here is the link to the original piece from three years ago which concludes with the following:

"So to all conspiracy theorists claiming that gold is being manipulated on a daily basis by the Federal Reserve: when it occurs over and over, and is so well documented, it is no longer a theory, it is merely sad. And the fact that the US government goes to great lengths to hide the illicit dealings of the Federal Reserve, which through its monetary tentacles, has prima facie control over not just US policy but also over sovereign governments, is an unprecedented failure in the checks and balances system that the founding fathers had planned when they created the United States of America. Yet saddest is that the United States no longer pursues strategic goals that are in the best interest of the majority of its citizens, but merely manipulates other, less powerful nations into a servile existence that only provides gain to a very limited subset of the American financial oligarchy. It is time for the Fed's unprecedented control over affairs, both global and domestic, to end."

https://www.zerohedge.com/article/smoking-gun-fed-controlling-gold

Please take time to read the entire article and the 1975-era document which is attached in Scribd form. Lots and lots of juice discussion points here. Have at it.

I'll update later today if conditions warrant. I'm not expecting much, though, as both metals will likely remain in a tight range for most of the day.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  262 Comments

The Green Manalishi
Jul 31, 2012 - 12:14pm

Freedom of Speech gone in UK too?

Arrested, really?? WTF is happening to the UK when you get blatant Fraud on massive scale - trillions being stolen by bankers unpunished - and they arrest a naive (if vile) 17 year old kid for tweeting?

https://www.telegraph.co.uk/sport/olympics/news/9440261/Teenager-arrested-over-abusive-tweets-to-Tom-Daley.html

Teenager arrested over 'abusive' tweets to Tom Daley

A 17-year-old has been arrested after allegedly malicious tweets were sent to Olympic diver Tom Daley accusing him of letting his late father down.

Disappointment: Tom Daley said he was proud to be at the Olympics but today was not his day Photo: GETTY IMAGES

8:40AM BST 31 Jul 2012

845 Comments

Dorset Police have confirmed the teenager was arrested on suspicion of malicious communications at a guest house in Weymouth following a series of abusive messages.

Daley and his partner Pete Waterfield missed out on a medal yesterday when they finished fourth in the men's synchronised 10m platform diving event at the Olympics.

Shortly afterwards, Daley retweeted a message from user Rileyy69 which said: "You let your dad down i hope you know that."

Lanikai
Jul 31, 2012 - 12:15pm

Most Basic Freedom being Patented for Profit

The greatest oppression of people is through food, and it's going to be controlled by Monsanto, whose board is powerful government officials/military for a supreme alliance of ultimate control.

Spread the word, join one of the orgs at bottom of Dr. Mercola link, donate. This is silver manipulation x 3 or more: it's about food and our livestock dying from eating GMO.

https://articles.mercola.com/sites/articles/archive/2012/07/31/monsanto-...

https://naturalsociety.com/genetically-modified-grass-kills-cattle-by-pr...

Nana
Jul 31, 2012 - 12:25pm

Federal Reserve is as federal as Federal Express is

https://www.save-a-patriot.org/files/view/frcourt.html

Court Rules Federal Reserve is Privately Owned

Case Reveals Fed's Status as a Private Institution

Lewis v. United States, 680 F.2d 1239 (1982)

John L. Lewis, Plaintiff/Appellant,
v.
United States of America, Defendant/Appellee

No. 80-5905
United States Court of Appeals, Ninth Circuit.
Submitted March 2, 1982.
Decided April 19, 1982.
As Amended June 24, 1982.

Plaintiff, who was injured by vehicle owned and operated by a federal reserve bank, brought action alleging jurisdiction under the Federal Tort Claims Act. The United States District Court for the Central District of California, David W. Williams, J., dismissed holding that federal reserve bank was not a federal agency within meaning of Act and that the court therefore lacked subject-matter jurisdiction. Appeal was taken. The Court of Appeals, Poole, Circuit Judge, held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations.

Affirmed.

1. United States

There are no sharp criteria for determining whether an entity is a federal agency within meaning of the Federal Tort Claims Act, but critical factor is existence of federal government control over "detailed physical performance" and "day to day operation" of an entity. . . .

2. United States

Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations in light of fact that direct supervision and control of each bank is exercised by board of directors, federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as "wholly owned" government corporations nor as "mixed ownership" corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names. . . .

3. United States

Under the Federal Tort Claims Act, federal liability is narrowly based on traditional agency principles and does not necessarily lie when a tortfeasor simply works for an entity, like the Reserve Bank, which performs important activities for the government. . . .

4. Taxation

The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation.

5. States Taxation

Tests for determining whether an entity is federal instrumentality for purposes of protection from state or local action or taxation, is very broad: whether entity performs important governmental function.

--------------

Lafayette L. Blair, Compton, Cal., for plaintiff/appellant.

James R. Sullivan, Asst. U.S. Atty., Los Angeles, Cal., argued, for defendant/appellee; Andrea Sheridan Ordin, U.S. Atty., Los Angeles, Cal., on brief.

Appeal from the United States District Court for the Central District of California.

Before Poole and Boochever, Circuit Judges, and Soloman, District Judge. (The Honorable Gus J. Solomon, Senior District Judge for the District of Oregon, sitting by designation)

Poole, Circuit Judge:

On July 27, 1979, appellant John Lewis was injured by a vehicle owned and operated by the Los Angeles branch of the Federal Reserve Bank of San Francisco. Lewis brought this action in district court alleging jurisdiction under the Federal Tort Clains Act (the Act), 28 U.S.C. Sect. 1346(b). The United States moved to dismiss for lack of subject matter jurisdiction. The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Act and that the court therefore lacked subject matter jurisdiction. We affirm.

In enacting the Federal Tort Claims Act, Congress provided a limited waiver of the sovereign immunity of the United States for certain torts of federal employees. . . . Specifically, the Act creates liability for injuries "caused by the negligent or wrongful act or omission" of an employee of any federal agency acting within the scope of his office or employment. . . . "Federal agency" is defined as:

the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentalities of the United States, but does not include any contractors with the United States.

28 U.S.C. Sect. 2671. The liability of the United States for the negligence of a Federal Reserve Bank employee depends, therefore, on whether the Bank is a federal agency under Sect. 2671.

[1,2] There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act, but the critical factor is the existence of federal government control over the "detailed physical performance" and "day to day operation" of that entity. . . . Other factors courts have considered include whether the entity is an independent corporation . . ., whether the government is involved in the entity's finances. . . ., and whether the mission of the entity furthers the policy of the United States, . . . Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purpose of the FTCA, but are independent, privately owned and locally controlled corporations.

Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank's nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. Sect. 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. Sect. 341, and appoint officers to implement and supervise daily Bank activities. These activites include collecting and clearing checks, making advances to private and commercial entities, holding reserves for member banks, discounting the notes of member banks, and buying and selling securities on the open market. See 12 U.S.C. Sub-Sect. 341-361.

Each Bank is statutorily empowered to conduct these activites without day to day direction from the federal government. Thus, for example, the interest rates on advances to member banks, individuals, partnerships, and corporations are set by each Reserve Bank and their decisions regarding the purchase and sale of securities are likewise independently made.

It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks:

It is proposed that the Government shall retain sufficient power over the reserve banks to enable it to exercise a direct authority when necessary to do so, but that it shall in no way attempt to carry on through its own mechanism the routine operations and banking which require detailed knowledge of local and individual credit and which determine the funds of the community in any given instance. In other words, the reserve-bank plan retains to the Government power over the exercise of the broader banking functions, while it leaves to individuals and privately owned institutions the actual direction of routine.

H.R. Report No. 69 Cong. 1st Sess. 18-19 (1913).

The fact that the Federal Reserve Board regulates the Reserve Banks does not make them federal agencies under the Act. In United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976), the Supreme Court held that a community action agency was not a federal agency or instrumentality for purposes of the Act, even though the agency was organized under federal regulations and heavily funded by the federal government. Because the agency's day to day operation was not supervised by the federal government, but by local officials, the Court refused to extend federal tort liability for the negligence of the agency's employees. Similarly, the Federal Reserve Banks, though heavily regulated, are locally controlled by their member banks. Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker's compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees travelling on Bank business are not subject to federal travel regulations and do not receive government employee discounts on lodging and services.

The Banks are listed neither as "wholly owned" government corporations under 31 U.S.C. Sect. 846 nor as "mixed ownership" corporations under 31 U.S.C. Sect. 856, a factor considered is Pearl v. United States, 230 F.2d 243 (10th Cir. 1956), which held that the Civil Air Patrol is not a federal agency under the Act. Closely resembling the status of the Federal Reserve Bank, the Civil Air Patrol is a non-profit, federally chartered corporation organized to serve the public welfare. But because Congress' control over the Civil Air Patrol is limited and the corporation is not designated as a wholly owned or mixed ownership government corporation under 31 U.S.C. Sub-Sect. 846 and 856, the court concluded that the corporation is a non-governmental, independent entity, not covered under the Act.

Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds from Congress. . . .

Finally, the Banks are empowered to sue and be sued in their own name. 12 U.S.C. Sect. 341. They carry their own liability insurance and typically process and handle their own claims. In the past, the Banks have defended against tort claims directly, through private counsel, not government attorneys . . ., and they have never been required to settle tort claims under the administrative procedure of 28 U.S.C. Sect. 2672. The waiver of sovereign immunity contained in the Act would therefore appear to be inapposite to the Banks who have not historically claimed or received general immunity from judicial process.

[3] The Reserve Banks have properly been held to be federal instrumentalities for some purposes. In United States v. Hollingshead, 672 F.2d 751 (9th Cir. 1982), this court held that a Federal Reserve Bank employee who was responsible for recommending expenditure of federal funds was a "public official" under the Federal Bribery Statute. That statute broadly defines public official to include any person acting "for or on behalf of the Government." . . . The test for determining status as a public official turns on whether there is "substantial federal involvement" in the defendant's activities. United States v. Hollingshead, 672 F.2d at 754. In contrast, under the FTCA, federal liability is narrowly based on traditional agency principles and does not necessarily lie when the tortfeasor simply works for an entity, like the Reserve Banks, which perform important activities for the government.

[4, 5] The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation. . . . The test for determining whether an entity is a federal instrumentality for purposes of protection from state or local action or taxation, however, is very broad: whether the entity performs an important governmental function. . . . The Reserve Banks, which further the nation's fiscal policy, clearly perform an important governmental function.

Performance of an important governmental function, however, is but a single factor and not determinative in tort claims actions. . . . State taxation has traditionally been viewed as a greater obstacle to an entity's ability to perform federal functions than exposure to judicial process; therefore tax immunity is liberally applied. . . . Federal tort liability, however, is based on traditional agency principles and thus depends upon the principal's ability to control the actions of his agent, and not simply upon whether the entity performs an important governmental function. . . .

Brinks Inc. v. Board of Governors of the Federal Reserve System, 466 F.Supp. 116 (D.D.C.1979), held that a Federal Reserve Bank is a federal instrumentality for purposes of the Service Contract Act, 41 U.S.C. Sect. 351. Citing Federal Reserve Bank of Boston and Federal Reserve Bank of Minneapolis, the court applied the "important governmental function" test and concluded that the term "Federal Government" in the Service Contract Act must be "liberally construed to effectuate the Act's humanitarian purpose of providing minimum wage and fringe benefit protection to individuals performing contracts with the federal government." Id. 288 Mich. at 120, 284 N.W.2d 667.

Such a liberal construction of the term "federal agency" for purposes of the Act is unwarranted. Unlike in Brinks, plaintiffs are not without a forum in which to seek a remedy, for they may bring an appropriate state tort claim directly against the Bank; and if successful, their prospects of recovery are bright since the institutions are both highly solvent and amply insured.

For these reasons we hold that the Reserve Banks are not federal agencies for purposes of the Federal Tort Claims Act and we affirm the judgement of the district court.

AFFIRMED.

The Green Manalishi
Jul 31, 2012 - 12:32pm

Frisby's Bulls and Bears

From the guy who brought you this:

https://www.youtube.com/watch?v=GXcLVDhS8fM&feature=player_embedded#t=140s

A podcast with:

Detlev Schlichter

Dominic Frisby meets Detlev Schlichter and discusses some of the issues from his book, Paper Money Collapse.

Detlev is an author and Austrian School Economist.

Read his blog.

Buy Paper Money Collapse from Amazon.

https://commoditywatch.podbean.com/2012/07/21/detlev-schlichter/ PS. I think I might buy the wife some Gold nipple covers.
ivars
Jul 31, 2012 - 12:35pm

@Nana

Great stuff.Thanks, this issue is resolved clearly .

Zoltan
Jul 31, 2012 - 12:38pm

One Last Sickening Plunge?

I know this is a big week and people have high hopes but consider this option. The Bernanke disappoints by saying nothing and the monkeys get one final hammer at the price of gold and silver to run all the stops (only a 10% move in silver would be a new recent low and would trigger a lot of sell stops).

Don't take this the wrong way, I am very bullish on the price of the PM, just think there will be a big shakeout of the weak hands before there is any run up in price. If they know the game is up (with the manipulation investigation coming to an end) they will want to cover their final shorts before the price is allowed to explode higher.

Just be cautious my friends.

Z

ReachWest
Jul 31, 2012 - 12:42pm

Mad World - Distasteful, but Not Illegal

@The Green Manalishi:

Thanks for posting that - I certainly don't understand how tweeting the message "You let your dad down I hope you know that", to an Olympic athelete is illegal (or worthy of Police intervention) in any way. It's obviously distasteful, given the recipient's personal family situation - but - the Police intervene for this?

Has everyone gone mad?

​Sidenote: I think anyone in the public eye that is overly sensitive to the opinions of others, should avoid using Twitter, for their own sanity. That's just common-sense.

ReachWest
Jul 31, 2012 - 12:47pm

Fed May Disappoint

@Zoltan: Unfortunately - I think you are correct - my bet is that the Fed disappoints the markets and the Metals are hammered back.

Given recent history - We've all been conditioned to expect that particular outcome.

waxybillduppNana
Jul 31, 2012 - 12:47pm

Trillions missing?

Good grief, Nana. Cut the FED some slack. They are 100 years old. I'm old too. I lose crap all the time. Sometimes I find it again; sometimes I don't.

wax off

billhilly
Jul 31, 2012 - 1:02pm

podcast's

Turd,

Don't want to sound critical here but there has not been a new podcast offered since the John Williams one last month. Is this the shape of things to come for us that cannot afford the premium service? The podscast's you have were always a special part of the complete "Turd" package but it seems they MAY be a disappearing feature.....I hope not !

As always, I am most grateful for your efforts and offerings.

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