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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

The Coming Gold Price Explosion

Commodities / Gold and Silver 2010 May 27, 2010 - 01:12 AM GMT

By: GoldSilver

Commodities

Central Banker's Dream - (n) the unlimited expansion of fiat currency and credit without the disastrous effects of price inflation or a loss of confidence in the paper currency itself.

Why would the government want to suppress the price of gold and silver?


Gold and silver are real money.

Gold and silver are competitors to paper fiat currencies the world over.

Gold and silver values tend to inversely reflect the public's confidence in paper currency.

When central bankers abuse their fiat currencies and credit supplies (like they have been and are currently doing), the inevitable results are a loss of confidence in both fiat currency and in its purchasing power. When the prices of gold and silver are high, it reflects poorly on central banks, interest rates rise, and it becomes extremely difficult for governments to finance expenditures via deficit spending.

Who has the means, motive, and opportunity to suppress the price of precious metals?

The Gold Anti-Trust Action Committee (GATA) was formed in January 1999 to expose the alleged manipulation and suppression of the price of gold. Over the past 11 years GATA has complied evidence alleging that the bullion banks (JP Morgan, Chase Bank, and Goldman Sachs among others) have been working closely with the U.S. Treasury Department and Federal Reserve in a gold cartel, part of a broad scheme of manipulation of the currency, precious metals, and bond markets.


GATA has long implicated the New York Commodities Exchange (NYMEX) as being a mechanism by which gold and silver price suppression is implemented. The smoking gun, according to the committee, is the excessive concentration of bullion bank positions in the gold and silver futures markets. They say this concentration enables market manipulation. One of GATA's points is that market concentration was the justification offered by the CFTC in 1980 when it acted against the Hunt Brothers in the silver market.

If you can't touch it - You don't own it!

ETF's or Exchange Traded Funds are indicted as the other half of the price manipulation of gold and silver. Try reading the prospectuses of GLD and SLV. You will find these funds could be mere derivatives garnering their shareholders exposure to the future spot price of their respective metal; they are not gold and silver that the shareholder wholly owns.

For more thoughts from Mike Maloney on ETF's - Click Here.

All manipulations end. Fiat currencies die. And the free market always wins. The longer the manipulation and price suppression, the more explosive the upside becomes. Buy physical gold and silver and hang on - this promises to be an incredible ride!

"They are getting caught in one of the world's most gigantic short squeezes. One day we will see these prices just absolutely explode. I want to be on the correct side of this, and I want to own as much physical gold and silver coins and bars as possible when this happens."

- Mike Maloney

http://goldsilver.com

Mike Maloney is the owner and founder of GoldSilver.com, an online precious metals dealership that specializes in delivery of gold and silver to a customer's doorstep, arranges for special secured storage, or for placement in one's IRA account. Additionally, GoldSilver.com provides invaluable research and commentary for its clients, assisting them in their wealth building endeavors.

© 2010 Copyright  GoldSilver - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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