Okay so the basic process is one of the exchanges decides they want fiat. They credit a house account with a bunch of btc that they don't really have, sell and reap the rewards. If they want btc, they do the opposite, credit a house account with fiat.
This would explain how they can have no fees.
Exactly, exchanges can create accounts with trillions of fiat money and millions of bitcoins. Since the trade is always happening in their database, there is no way to tell the validity of any account. But once people start to withdraw at large scale, they will blow up, just like what happened with MTGOX
BTC-China has passed the third party audit for their bitcoin reserve and also that dabase, so the manipulation could come from other exchanges. I think majority of the sell order are coming from those late established mining farms to pay for the expense, but that does not explain the 22K sell wall on bitstamp
