We have been in and around the gold markets for 53 years and conditions have certainly changed, driven mainly by market manipulation of all markets as a result of the Executive Order, which created the “President’s Working Group on Financial Markets.” Those who doubt that are either on the government payroll one way or the other, or you are just too dumb to understand what is really going on. In spite of these machinations and ignorant naysayers the bull markets in gold and silver are still alive and well. What you are seeing are paper markets and the use of derivatives to effect short-term pricing, especially when negative events are about to occur. Those events are aided by naked shorting and illegal concentration in both gold and silver and the shares. Mind you, this is being done in a market to control it and in addition government and central banks relish stomping gold and silver into the ground. For years they hid what they were doing. Today their manipulations are in your face. These dramatic forced price falls are fortunately accompanied by heavy buying by China, Russia, India and others. All the elitists are doing is giving long-term investors an opportunity to purchase both metals at prices far below their real value. Official government inflation figures say gold should be selling at about $2,500 an ounce. Real inflation statistics would have gold selling today at almost $9,000. Such deliberate under pricing is accompanied by financial chaos in Europe and England, high oil prices that reflect the possibility of conflict in the Middle East, the results of $1.4 trillion in loans to 800 European banks, England on the edge of bankruptcy and the continual quantitative easing and things such as Operation Twist by the Federal Reserve. The official government line on statistics is all lies. We see one research report after another pandering to these falsities, which is next to worthless. The professionals and investors continue to use these bogus figures and continue to lose money in the process.
There are few sellers in the physical gold and silver markets. The selling takes place in the paper markets. Demand worldwide for these metals as a store of value has never been stronger. Buyers are countries and flight capital from the Middle East and Asia. The traffic is very intriguing. In China the government promotes gold ownership and has thousands of outlets across the country, as does CIBC. They are called gold savings accounts. Just the opposite is true in the US, UK and Europe, where violation of privacy and freezing or confiscation of assets is possible.
Last year demand for gold rose 20% worldwide and it could top $100 billion in 2012. We are seeing major demand as well for Europe as the euro zone deteriorates without a solution in sight.
We have already seen shortages of 1/5 and ¼ ounce coins from time to time as Europeans gobble them up. These developments are reflections of the ongoing financial problems facing the US, UK and England. Those problems are recognized worldwide and thus, we have massive gold off take by many countries. In tandem all countries are running deficits and it is getting worse not better. The attitude is print money like everyone else is and buy gold at cheap prices. There has to be a lesson to be learned when US dealers go to European wholesalers and get little or no new product. At retailers product offerings are even slimmer.
Gold and silver have been in bull markets since June of 2000 and the trend continues, as nations get deeper in a financial hole, which is reflected in their currencies in the form of higher gold and silver prices. Manipulation of paper gold markets cannot continue on forever. One derivative default and the whole edifice could collapse. Manipulation only allows you to buy cheaper, but once the cartel is out of gold and silver underlying their positions, the game will be over.
The gist of the article is that the CFTC knows that the silver market (and all other markets) are manipulated but because of the importance of the operations to the US Government they will not do anything about it.
GATA is 100% correct. Market Manipulation is being done for "official purposes". The CFTC will not be the ones to stop it and the reason is very simple...
If the silver manipulation is ended every single electronic monetary "asset" in the world will suddenly and violently implode erasing the entire Global Monetary System.
This is a fact that is inescapable. Without silver price manipulation the mega silver short, JP Morgan, would be vaporized and with them goes $75 Trillion in derivatives that are used to rig the other important markets such as interest rates, currencies, commodities, stocks, bonds...all of it. They are the tool that the US Treasury uses to orchestrate our monetary world from behind the curtain of the Great and Powerful OZ!
So in the case of JP Morgan..."Too Big Too Fail" means just that.
But in the Road to Roota Theory this "End Game" has been the plan since the very first computer market rigging programs were written and implemented in the early 1970's by Alan Greenspan and his friend John Kemeny.
This is the first time in human history that the world has used electronic assets as money and as a store of wealth. We laugh at those who believed in the Dutch "Tulip Bubble" of the 1600's where people invested their entire life savings in tulip bulbs thinking they would get rich. Of course they lost everything when reality hit. What advice would those who lost everything in the 1600's give us today when we tell them that we use electronic blips as our "assets" now?
So can we really blame the CFTC for not doing their job? If it were YOU who could stop the manipulation of silver WOULD YOU? Would you pull the plug if it meant every person in the world would lose everything they ever worked and saved for?
Tough call but don't fret....it will all end. It just won't be the CFTC that pulls the plug.
And remember - when it does end you will be VERY happy you have physical silver in your own possession.
The Federal Reserve and the Financial Crisis
Origins and Mission of the Federal Reserve, Lecture 1 George Washington University School of Business March 20, 2012, 12:45 p.m.
An interesting lecture on the history of the Fed and US monetary history.
For Gold Bugs who don't won't to watch the whole lecture jump to the 26 min mark.
My critique of Ben's comments on the Gold Standard:
Yes, gold does take a huge amount of oil, labour and brainpower to locate, dig up, refine, transport and vault. Hence gold has intrinsic value, unlike the guy on the desk at the New York Fed adding a few zeroes to the money supply which takes little effort, and apparently no brainpower.
Yes under a Gold Standard the amount of gold held determines the money supply and there's not much scope for the central bank to use monetary policy - well what a damn shame that is. The world gold stockpile then to increase on average by 2% per year. So if we were on a Gold Standard the money supply would also increase by 2% year. Interesting to note the world's population tends on average to increase by 2% year. Some with a religious belief may be inclined to think this is by design. Of course all the world's major religious texts stating Gold and Silver are money are merely a coincidence to this 1:1 ratio.
Ben: "under a gold standard, typically the money supply goes up and interest rates go down in periods of strong economic activity. So that's the reverse of what a central bank would normally do today" - Well of course when the supply of a good increases the cost to buy, or in this case borrow, of that good goes down. That's basic supply and demand, a natural law, not a man made law.
Ben: "So again, because you had a gold standard which tied the money supply to gold, there was no flexibility for the central bank to lower interest rates in recession or raise interest rates in an inflation. Now some people view that as a benefit of the gold standard, taking away the discretion from central banks and there's an argument for that, but it did have the implication that there was more volatility year-to-year in the economy under a gold standard, and there has been in modern times" - Damn straight some intelligent people think this is a benefit of a Gold Standard. As to the volatility, Suck It Up! Regular downturns kill off the weak and useless businesses allowing better managed and innovative businesses take their place. In an Aussie context regular recessions are akin to control burns of bushland in winter to prevent massive bush fires in summer. Yes some trees get burnt, some cute furry animals die but the whole place doesn't go up come summer, killing everything. If prior to the 2008 financial firestorm we had regular downturns taking out some institutions before they become To Big To Fail would 2008 have been any more than a spot fire?
Ben: "Yet another issue with the gold standard has to do with speculative attack. Now normally, a central bank with a gold standard only keeps a fraction of the gold necessary to back the entire money supply. Indeed, the Bank of England was famous for keeping, as Keynes called it, a thin film of gold. The British Central Bank only kept a small amount of gold, and they relied on their credibility to stand by the gold standard under all circumstances to--so that nobody ever challenged them about that issue. But if for whatever reason, if markets lose confidence in your willingness and your commitment to maintaining that gold standard relationship, you can get a speculative attack. This is what happened in 1931 to the British. In 1931, for a lot of good reasons, speculators lost confidence that the British pound would stand gold, so just like a run on the bank, they all brought their pounds to the Bank of England and said, "Give me gold." And it didn't take very long before the Bank of England was out of gold cause they didn't have all the gold they needed to support the money supply and then, there was essentially--they've essentially had to leave the gold standard." - Well if they were running a Gold Standard that held Gold on a fractional basis then they were just liars and deserved to get called out on it. One of the strengths of a true Gold Standard is if the market no longer believes you have the gold to back your issuance of paper claims on that gold you get punished for your crimes.
I could go on but I am starting to rant, and that I will leave to Alex Jones. Personally I don't believe in a Gold Standard (although it seems to be better than what we have now). I believe we should have a free market in money, radical I know. If a business wants to sell their products in grams of 9999 gold or 999 silver go for it, if others want to trade in dates, rice, wheat, oil, sugar they can do that to. The market will quickly work out what the majority of buyers and sellers prefer and create payment and collections solutions around this chosen range of trade able items. In the US there is currently a black market using Tide washing powder as the currency, and why not? it is fungible, has intrinsic value, can be stored for later trade and cannot be created in infinite quantities.
In this episode, Max Keiser and
co-host, Stacy Herbert, discuss the great 'unbanked' masses dumping
gold believing in a 'recovering economy' and an end to money printing
while banks and insiders buy gold and mortgage backed securities in
preparation for more quantitative easing by the Fed. In the second half
of the show Max talks to Mark Melin of Uncorrelated Investments about MF
Global, JP Morgan and the future of the futures market. They also
discuss the Charles Manson's of the futures industry and the branch
office of the too big too fail banks formerly known as the SEC.