Gold and silver price manipulation, “we” have talked and written about it for years. I can still remember speaking two or three times a week with the late Harry Bingham back in 1997 and ’98 regarding this topic. No matter what “event” popped up which logically and in the past should/would have pushed the price of gold higher, we would see waterfall action instead. Then along came Bill Murphy and Chris Powell of GATA. They put forth all sorts of anecdotal evidence, work by Frank Veneroso, James Turk and others which made the “manipulation picture” clearer. Each piece along the way was added to the previous pieces and made it clearer “we were right.”
Of course, along the way there have been slurs and smears of GATA’s work and those of us who put the pieces together shedding light on the fact that gold and silver prices were manipulated. I must say, it was quite a frustrating experience when often times there was obvious evidence to the 3rd grade mentalities out there yet supposedly “smart” people would just turn their noses up saying “that proves nothing.” Even the latest operation last Wednesday at 12:30 AM where one week’s worth of global gold production (40 tons) was sold in the tight window of and Indian holiday and Chinese/Japanese lunch break was “apologized away” as being “routine selling.” Yes, I will agree, it has “become routine” but in no way is it “right.” Selling that which does not exist is illegal, morally wrong and in this case aimed squarely at suppressing the price. This is either “price fixing,” or “collusion,” both supposedly illegal.
UBS has agreed to pay a fine without of course admitting any guilt. It is said there are several other banks negotiating their own deals in London on this same issue. So yes, the prices of gold and silver have in fact been manipulated unless you want to say UBS and the other banks are agreeing to pay their fines out of “nuisance” and just want it to go away. I find the timing of this very interesting. Is this action coming out of London in an effort to show the Chinese (G-20 and the rest of the world) they are cleaning up their act? What about here in the U.S.? Will the CFTC stand alone and look the other way finding “nothing actionable”? As for the 40 tons “sold” last week, do you think the Germans might be thinking “hey, we want some of that, where’s our gold? We asked for less than that for year one and only got 5 tons, was some (or all) of that 40 tons our gold?”
In my opinion, London’s action of bringing this to light now is very significant. Not just because of the BRICS and G-20 meeting but because it comes at a time when GOFO rates spiked negatively suggesting a very tight gold supply in London. Are the British regulators trying to get out ahead of this? Is it possible that the vaults are close to empty? Based on what we know of Chinese and Indian imports the last few years, Western vaults have certainly been dented badly, maybe this move by the regulators is a “tell?” We will soon know one way or the other!
The UBS fine in my opinion is merely the tip of the iceberg and before this saga is over we will find out that gold and silver prices have been “locked” down in many other various ways. We know about the “gold fix” being “fixed.” Now we know about UBS and LBMA dealings not being proper, the last straw will be COMEX in the “land of free and fair markets” but I wouldn’t hold my breath waiting for U.S. regulators.
This “rigging” revelation has many more and far reaching repercussions than first meets your eye. This is not about gold, nor silver. This is not even just about the dollar, interest rates or the Treasury markets. This is about EVERYTHING! First, it’s about the “honesty” of Western markets which for 100 years has been held up as the reason “why” to invest in the West. Next, it is about the standard of living in the West, particularly the U.S. If gold and silver were allowed to rally, back in 1997 and ’98, maybe the dot com bubble would never have occurred or at least to the extent that it did. The housing crisis would not have happened because interest rates could not have been lowered the way they were. The U.S. could not have gone $18 trillion into debt because we could not have afforded 6% interest rates on the balance. The past economic “growth” and standard of living would have been far lower. Elections (if not stolen) would have come out differently, people would have lived their lives differently and decisions on the allocation of capital would have been far different. Yes, EVERYTHING “would have” been different!
So here we are and now we know. The “lunatics” who sounded logical but were “always wrong” were right all along and for the right reasons! What will this mean? If as I believe, the Chinese and the rest of the world are now demanding free, fair and honest markets out of the West as a requirement to doing business and “sitting at the table,” then “things” will change in a very big way! Call it a reset, dollar devaluation, financial crisis or whatever you’d like, “it” is coming. The standard of living in the West is about to change. We will be required to work, and actually produce things. No longer will we be allowed to import real goods and export as payment …fake money. The fake money will be devalued and with it all savings being held by institutions solvent or not.
I want to go back to the very basics as to what “underpriced gold means.” It means that your dollars are valued too high. It means that the interest rates you pay on everything are too low. This means that your house is worth less than you think because new buyer’s incomes can’t stretch to current pricing. It means the stocks you own are far too high and their PE ratios should be much lower. It means that everyday goods you buy from Walmart should cost more. Europe is living with $10 per gallon gasoline while we are under $3, how will that sit when it hits our shores? None of these “situations” should have or could have ever happened if gold was priced higher, maybe multiples higher than it is and has been.
Now, the cat has come gingerly crawling out of the bag and everything I and my “tinfoil hat” colleagues have told you for so long turns out to have been so. Will the “re set” or adjustment we have been telling you of be slow and orderly or overnight and disorderly? This I do not know. What I do know is that it will occur and if you have not prepared for it you will never have the chance again to “catch up.” This is all about your savings and whether they will have value when you need them. This is all about “equality” around the world. Jim Sinclair calls it “the great leveling” which can be seen from two separate points of view. First, if you have it … in paper form …it will be “leveled.” Secondly if you are a producer of goods and are not being properly compensated …your efforts will become “leveled out” and you will be compensated. It is really this simple folks, we have lived a lie put forth by our monetary authorities, and we wanted to believe it because it was a “good lie.” We benefitted from it and enjoyed the fruits of the lies for many years. If you can see this and admit it to yourself now, not tomorrow (or especially next week), get cracking and protect yourself because the truth is going to hurt a whole bunch!
Great article and totally agree. The funny thing about lies is that they do need to be made up, unlike the truth which simply just is.
“paper and metal”.
Great article Bill and thanks again.
I’m glad that you and Andy and Miles Franklin give us folks on main street the truth and not the lies that the MSM want’s us to believe in.
Your articles every day makes my day a better one!
thank you Farrell
Bill, I am a little confused. If the price of Gold goes down, it means the dollar is stronger. If the dollar is stronger, why should everyday goods I buy from Walmart cost more? Most everything in Walmart is imported so if the dollar is strong, it should reduce the sticker price of imports, correct?
do you know of anything at Walmart cheaper today than 3 years ago? Even thought the dollar is “stronger”? Gold has been forced down to “show” strength, the Chinese and rest of the world know this which is why they are accumulating feverishly. To answer your question, yes in theory.
Very nice overall summary of the big picture Bill!
thanks Steve …of a very ugly picture!
Thanks Bill for my daily fix of truth telling. Each of us has a big job in keeping our heads high and not swooning over the misinformation and lies being perpetrated. It’s been a tough slog in maintaining a positive mind state. When the whole system is engineered to maintain a falsity, one can doubt one’s sanity over the long haul. What you, Andy and the Schectman’s are doing will go down in history as one of the more helpful points of light that were offered pre-reset.
“slow and orderly or overnight and disorderly?”
It’s been slow and orderly since 1913; doubtful that this can continue given all of the problems of the global economy that are reaching “peak” status with many war drums beating in the background. All of the “safe havens”, whether geographically, or materially, are no longer viable. In the near future, probably on a Friday afternoon before a Monday holiday, it will be announced that all banks will be closed until future notice andthen we’ll know why the govt bought 2.5 billion rounds of hollow core ammo.
we already know “why” they stockpiled ammo. Anyone who doesn’t get it now will surely get it later.
I have been continually confused that almost economist equate the US economy with China’s economy. The US economy is the World’s largest debtor and therefore the most poor. China’s economy is the World’s largest creditor and is the most wealthy country. They are both at the extreme ends of the Wealth Scale, and therefore, cannot be equated as being comparable.
yes, exactly Victor!
Kung Fu was asked by a child, “Master if I lie once, am I a liar?
Kung Fu’s answered was, “Dear child, if you lie once you will be considered a liar all of your days on earth.
These are not perfectly quoted quotes. Only as I remember them.
I say, there can not an honest soul in government.
they go in with naivety and are going to change the world …go through the meat grinder and come out dirty every time. How on Earth did Ron Paul avoid the stain?
yes Red1, one of the VERY few.
Excellent article yet tragic beyond words. John Perkins, in his book ‘Confessions of an Economic Hit Man’, describes how we, the sheeple, have allowed this to go on ‘unnoticed’. After all, it was only happening in third world countries to people who were most likely lazy and therefore deserving of their fate. Right? Of course the N.A. Indians (and indigenous people everywhere) are a prime example that this occurred within our borders. But of course, they too were lazy and most likely deserving of their fate. Right? The Trail of Tears (http://www.pbs.org/wgbh/aia/part4/4h1567.html) is after all nothing more than a documentary for TV (as in television ‘programming’). Right? But now, this crime against humanity is again washing up to our shores, in a tsunami-like fashion. However, this time, we are the third world, lazy, indigenous people. Right? It’s called karma. Before this chapter in our life is closed become your own prince of peace and chase the money changers out of our world, forever. It is one minute to midnight and the clock is ticking.
“Even a dog knows the difference between being tripped over and being kicked.”
Oliver Wendell Holmes
It’s going to be very interesting going further. Oh well it was a good run while it lasted. Glad I’m viewing this one from the bleachers. Good luck
Unfortunately there are no bleachers.
UBS has agreed to pay a fine.o k that’s good but where does that money go and what about people who were damaged, how will they be compensated?I thought jpm and the fed were
the primary culprits.How many players are there or is it just one big rats nest?
we don’t know how many, JPM being one of them I believe is a very good bet.