One of my fav websites (
http://goldprice.org/gold-price.html) has a daily commentary on gold and silver. I found the following extract from today's article most informative:
" . . . another reader asked me how the Nice Government Men on the Plunge Protection Team work to manipulate the stock market. Basically, they panic the shorts (those who have sold stock they don't own, betting that the market will drop much more and they can buy back the stock they sold cheaper than they bought it) & create a buying panic.
"Rather than buying stocks, I suspect that the NGM buy futures contracts for stock indices. As the index futures contract rises, watching arbitrageurs see a discrepancy growing between the price of the index futures contract & the underlying stocks, making the stocks appear cheaper than the index. It's a locked-in profit to buy the undervalued stocks and simultaneously sell the overvalued index futures contract.
"As stocks rally, the shorts begin to panic, first puking into their wastebaskets, then rushing to buy & cover their shorts at any price. Then watching bulls see the market rising, & they start buying again. The buying panic has taken hold.
"How do the NGM get out? Simple. After a few days of rising prices, just sell the futures contracts they are long. There's ne'er a fingerprint left.
"This is the same trick that the Fed used in 1987. To suppress gold, they waited until the market closed, then sold platinum futures in the very thin aftermarket. Seeing platinum drop scared off potential gold buyers & gold longs. Again, no fingerprints."
So if you believe it, now you can explain it . . .
