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Friday Morning Commentary: In a FREE MARKET, gold and silver prices would EXPLODE.

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OK, so the big question is this – does last Friday’s “named storm” attack, the “FEBRUARY NFP FARCE,” represent a new multi-week initiative to push gold and silver down sharply, and if so, will it work?  In Thursday’s RANT, I highlighted 2011’s MAJOR versus MINOR gold attacks, the difference being whether they were simply “one-hit wonders” that lasted no more than a day or two, or major initiatives that were longer-lived and more intense.

In actuality, we only had three MAJOR attacks last year – the “SUNDAY NIGHT PAPER SILVER MASSACRE” in May, “OPERATION PM ANNIHILATION I” in September, and “OPERATION PM ANNIHILATION II” in December, with the rest delegated to the MINOR level.  Since then, the closest we have had to a MAJOR attack was last Friday’s “FEBRUARY NFP FARCE,” but the jury is still out on its ultimate categorization.  It clearly was massively premeditated, in collusion with the BLS recalculation of employment data beyond human comprehension, but it took just two days for the entire impact of the $40 decline to be recouped.  Moreover, even when the Cartel attacked again on Wednesday, by Thursday morning gold was right back to the KEY ROUND NUMBER of $1,750, hardly evidence of a successful attack.

Of course, we then saw yesterday’s “we will stop at nothing” attack literally minutes after gold again breached the Cartel’s line in the sand at $1,750/oz, and here we are this morning nearly $40/oz lower again, with the Dow / Gold x 2 ALGORITHMS “set to kill” and the puppet media claiming gold is down because yesterday’s Greek debt “agreement” is in jeopardy.  As if anything was ever “agreed to” in the first place.

Agreed Upon Greek Bailout “Unagreed” 24 Hours Later As LAOS Leader Changes Mind, Euro Tumbles

Before we answer the aforementioned question, let’s take a look at last night’s chart.  If gold truly declined due to a sudden “un-agreement” in Greece – which is pure poppycock, by the way – the odds of such a realization occurring at EXACTLY 3:00 AM EST would be quite small, if not infinitesimal.  Boy was I shocked to see a $13/oz WATERFALL DECLINE at – drum-roll please – EXACTLY 3:00 AM EST, after being completely un-phased by Greece’s woes for the entire night.  Wow, what a coincidence.

After the 3:00 AM EST mob hit, gold meandered for hours, and don’t forget the daily walk-down while I was at the gym circa 6:30 AM EST.  But then look at what happened the second the COMEX opened at 8:20 AM EST – another $9/ounce WATERFALL DECLINE in one minute.  Yet another crazy coincidence, how all “gold negative news” is priced in every day at the EXACT same times, always as WATERFALL DECLINES.  Conversely, within the context of a nearly 12-year bull market, gold is only allowed to rise for roughly one hour per day – per the red line above – ALWAYS capped the second PHYSICAL trading ends for the global day at 10:00 AM EST.  “Greek news” indeed!

And what of the COMEX gold and silver margin decreases?  Boy, I’m really shocked that prices declined immediately afterwards – NOT!  Readers, if there is one thing you need to understand, it’s that EVERYTHING emanating from every government-owned, government-run, or government-colluded agency, such as the CTFC or CME, is pure PROPAGANDA.  Trust me, the so-called margin decrease was not intended to draw PM longs back into the game, particularly not amidst an obvious government attempt (the “FEBRUARY NFP FARCE”) to create a cascading PM collapse.  The only positive aspect of the CME machinations is that hordes of traders have left the COMEX forever – some by choice, and some by mandate – due to the BILLIONS of fraudulent losses resulting from Cartel naked shorting and – oh yeah – account theft via MF Global.

As for the question of whether the “FEBRUARY NFP FARCE” turns out to be a “Cat 5 hurricane” – like “OPERATION PM ANNIHILATION I” or “OPERATION PM ANNIHILATION II” – or a fizzled out tropical depression, I still believe the latter is more likely.  Sure, PAPER PMs could be vulnerable to a major market decline, but conversely could just as easily SOAR under such a scenario (which would occur in a FREE MARKET), just as they did at the end of Global Meltdown I in February 2009, the beginning of Global Meltdown II in August 2011 (necessitating the “OPERATION PM ANNIHILATION I” bazooka to be fired), and the first Greek bailout in May 2010, per the table below.

 

Recent Gold Safe Haven Periods
WHEN THE CARTEL FAILED

Date

Gold

Dow

Event

Feb 2009

11%

-24%

Bottom of Global Meltdown I

May 2010

9%

-14%

First Greek collapse/bailout

July/Aug 2010

27%

-15%

Beginning of Global Meltdown II

 

In a FREE MARKET, gold and silver prices would EXPLODE during traditional “safe haven” periods, as they have for 5,000 years of human history.  The Cartel is quite cognizant of this dangerous fact, which is why they redouble their efforts to suppress PAPER PM prices during such times, and conversely make sure their beloved Treasury bonds are viewed as such.  No matter that the Fed has purchased an incredible 91% of all new Treasury issuance since “OPERATION TWIST” commenced in mid-2011, there’s no need to let facts get in the way of PROPAGANDA that Treasury Bonds are “safe-haven assets,” even if they yield less than the government’s (vastly understated) inflation statistics!

Will gold and silver be slammed once again, negating January’s gains and generating a new wave of PM investor fear?  I guess we’ll have to see, but based on gold’s inexorably rising 200 DMA moving average – up to $1,668/oz as we speak – it seems EXTREMELY UNLIKELY, in my view.  Of course, given that I own PHYSICAL metal (i.e. REAL MONEY) instead of PAPER PM securities such as ETFs, futures, and MINING STOCKS (i.e. INVESTMENTS), I could care less, as I know REAL MONEY will rise versus ALL FIAT CURRENCIES over time, to be pried only from my cold, dead hands.

As for silver, the 200 DMA is gently flattening in the low $35/oz range, and as I’ve written exhaustively for weeks now, I believe the KEY ROUND NUMBER of $30.00/oz has become iron-clad, possibly impenetrable long-term support given the effort required to break the Cartel’s vicious resistance there in late 2010 – when the Cartel deployed, in sheer desperation, it’s FAILED “D-DAY” tactics.  As I write, silver is down just $0.20/oz to $33.70/oz, never veering too far from the Cartel’s $34.00/oz line in the sand before rapidly springing back.  Way to go ADMIRAL SPROTT!

By the way, don’t forget that gold and silver are GLOBAL commodities, priced in 183 currencies around the world – NOT just the dollar.  Just as powerful as the Cartel’s line in the sand at the KEY ROUND NUMBER $1,750/oz is its resistance at €1,300/oz, just 5% from its ALL-TIME HIGH of €1,380/oz, also set in September 2011, just before “OPERATION PM ANNIHILATION I” was unleashed.

As we speak, Euro gold is essentially unchanged for the day at €1,303, building a MASSIVE, bullish pennant formation over the past six months that will certainly resolve itself by mid-year.  Euro gold’s 200 DMA stands at €1,205 and is rapidly rising as well, indicating MASSIVE support just below the current price.  Given that much of Europe is on the verge of COLLAPSE, and subsequently HYPERINFLATION, you tell me if you think Europeans will be selling their gold for “liquidity” or buying for SAFETY.  Heck, pretty soon gold could be more liquid than Euros!

As for Greece itself, I don’t know how much more loudly I can SCREAM FROM THE ROOFTOPS that no matter what the media says, this is a nation in COMPLETE AND UTTER ECONOMIC, POLITICAL, AND SOCIAL DISARRAY!  It matters not if they are “bailed out” (with freshly PRINTED MONEY) or not, as that such money will do NOTHING to improved the nations finances (as the $145 billion bailout in May 2010 proved).  Moreover, the primary benefactors of the proposed €140 billion bailout are not the Greek people, but EUROPEAN BANKS that preyed on Greece by inducing it to borrow too much money, and I assure you the people of Greece will not stand for it!

Rioters clash with Greek police at Athens protest

Prequel To The Main Event: Video Of Greek Warm Up Scuffles With Police

Per the article below, I will bet my LIFE that nine of ten Greeks want OUT of the Euro currency, and OUT of the massive debts built up as a result of joining the EU and being hoodwinked by international CRIMINALS like Goldman Sachs into mortgaging their future, as well as the bureaucrats at EU/ECB/IMF Central and technocrats installed by elitists to run their country.  A proud country at that, with more history than practically any on the planet.

Greek Police Threaten IMF Arrests Due To “Austerity Demands”

Greece WILL be out of the Euro Zone – and the Euro currency – sometime in the next 12 months, and best of luck to Goldman, JP Morgan, and the ISDA CRIMINALS in NOT characterizing it as a “default,” especially when ALL the PIIGS follow suit, followed by France, the UK, Germany, and the big kahuna on this side of the pond.  Either by non-payment or monetization, ALL the world’s debt will be defaulted in the coming years, and don’t be surprised if “the coming years” is NOW.

Let My People Go – Zero Hedge

And for my last article of the week, check out this gem about a town with a few good men and women running the show.  And if you think this is an isolated incident, check back with me a year from now, and two years, and three…

Small Town of Andover’s Voters to Decide if Town Employees Can Be Paid in Silver Eagles

PROTECT YOURSELF, and do it NOW!

 

 

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