Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Investors’ Limitless Risk Appetite - 27th Jan 21
3 Dividend Paying Stocks to Ride the New Housing Boom - 27th Jan 21
Biden Seeks Huge Spending, Globally Coordinated Tax Hikes - 27th Jan 21
Will Inflation Make Gold Shine in 2021? - 27th Jan 21
Amazon AI Stocks Investing Analysis 2021 - 27th Jan 21
Why You Shouldn’t Get Excited About Gold Price Mini-Rally - 26th Jan 21
The Truth About Personal Savings Everybody Should Know and Think About - 26th Jan 21
4 Economic Challenges for 2021 - 26th Jan 21
Scan Computers 2021 "Awaiting Picking" - 5950x RTX 3080 Custom PC Build Stock Status - 26th Jan 21
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Standard, Gold Futures, and Perception Management

Commodities / Gold and Silver 2012 Jun 07, 2012 - 07:12 AM GMT

By: James_West

Commodities

Best Financial Markets Analysis ArticleThe apparent end to momentum in the 12-year bull market in the gold price is a carefully coordinated exercise in perception management. J.P. Morgan and a handful of the world’s largest banks have been permitted the right to originate contracts for forward sales and purchases of various commodity products far in excess of what is produced of each commodity annually.


There is seldom any delivery of physical metals, and the contracts are originated on completely false premises equivalent to a casino where every game is rigged in favour of the house. Thus, the effect of real
supply has been replaced by the effect of artificial supply.

This represents a regulatory deficiency on the part of the Commodities Futures Trading Commission at minimum,
and at worst, outright criminal fraud and collusion among the U.S. government, the banks, and the market operators themselves.

CFTC Commissioner Bart Chilton has admitted on behalf of his agency that they are of the opinion that certain entities are engaged in manipulative and unlawful practices in the futures markets, and announced and investigation was under way. Four years ago. No results from the investigation have materialized, and that’s because the apparent end to the momentum in the 12-year bull market in the gold price is a carefully coordinated exercise in perception management.

The banks will forever be able to lay legitimate claim to the pursuit of profit as the primary motivation for exploiting the regulatory aberration that permits and even abets fraud on such a large scale. The government will never admit to active collusion.

CNBC, Bloomberg, the Wall Street Journal et al refuse to extend their line of inquiry into the factors controlling the price of gold beyond superficial fundamentals such as jewelry demand and store-of-value investor demand.

This perception management apparatus has now become so finely-tuned that the gold price is rather deftly handled upward and downward in movements that serve the requirements of the two parties operating the scam. For the banks, reliable risk-free profit, and for the government of the United States, the perception that the U.S. dollar is a safer haven than gold.

I think the current continuous downward pressure on gold is undertaken to create the reality of a gold price that declines below its 52-week low. That would, in the invisible deliberations of the fraud participants, end the perception of gold as a safer store of value than U.S. Treasury bills, widely understood to be a key component of keeping the U.S. dollar lie alive.

The Bloomberg headline of May 29th is precisely the objective of anti-gold dollar defenders: “Gold Set for Worst Run Since 1999 as Dollar Strengthens”. The U.S. Dollar lie is complete.

When you’re living a lie, perception outweighs the importance of reality, and that is optimally here achieved.

The second part of the elaborate perception management ploy is that the third round of U.S. stimulus will coincide perfectly with the re-emergence of the U.S. deficit and debt position at the top of the news heap once Europe has fallen the rest of the way apart. Stimulus will be required then, because the banks who are the recipients of the stimulus are subject to conditions that result in substantial proportions of that money being invested into U.S. Treasuries, which is essentially the mechanism by which the United States government counterfeits its own currency to the detriment of U.S. dollar-denominated sovereign reserve currency
positions and its own population.

Thus the objective of the perception management exercise – the condition where selling U.S. debt is just slightly more egregious in a net-net evaluation of sovereign reserve value than buying more of it – is achieved. And the U.S. can continue bullying the rest of the world around because theoretically we are all unfortunate passengers in the same boat.

The problem with this strategy, as the perps likely comprehend perfectly, is that there is a point where the math can simply no longer support the illusion. That point is visible in a not-too-distant future. That is when all the major currencies collapse into the black hole of debt, whose traction is so strong that nothing in proximity can escape it.

Increasingly, that is the inescapable inevitability in this manufactured debt crisis charade.

For gold to fall below its current 52-week high implies a price of $1543 an ounce. That’s only ~$60 from where we are today. The fact that the ongoing futures market fraud is yet unable to drive it down below that mark is evidence of the growing demand for gold in view of the inevitable outcome for currencies outlined above. As Sprott U.S.A. CEO Rick Rule so aptly points out, “gold isn’t somebody’s promise to pay (like currencies) – its payment.” So China continues to accumulate gold surreptitiously to offset its U.S. dollar reserve risk, while other nations such as the Philippines, Kazakhstan, and Mexico do so more overtly.

The inflection point at which gold explodes to the long-awaited stratosphere (taking silver and PGM’s along with it) is exactly the moment at which it becomes apparent that what’s happening in Greece and Spain will engulf Italy, France, Germany, Britain, and ultimately, the United States.

When the largest capital positions suddenly hit that “Oh shit” moment, when they realize that they’ve been had, the relief valve for all that financial terror will be precious. Metals that is.

Knowing the date of that event in the future is not really that important. All a capital-preservation minded investor needs is to understand that no matter what price gold is had at below $2,000 and ounce, there’s a 5-bagger at least waiting just round the bend.

All of the institutional analyst calls for gold heading back below $1200 are not necessarily to be ignored either.

Remember, the supply of precious metals is now infinite, according to current futures law, and so the way to achieve $1,200 or even $1,000 or even $600 an ounce is to sell vast quantities of gold into the future at lower prices. For those with deep pockets sitting on lots of cash, PRAY that gold is driven below $1,200 because it will be the trade of the decade to scoop it up at that price.

The attention riveted on Greece and Spain is exactly the smokescreen that the banks and governments colluding to perpetuate and amplify the debt need to continue operations. The fabrication of capital in the form of loans and credit extensions, the primary source of revenue for many banks directly and for
many government officials indirectly, will thus intensify as Spain, Italy, France and finally the U.K. and Germany are dragged into the widening whirlpool.

Gold is the buy for the long term. Gut-wrenching plunges in the price should be expected and ignored, except perhaps to buy more on such dips. The entire global financial apparatus is slowly crumbling, and the collapse of investment banks and funds from Geneva to Toronto to New York is underway.

And as far as arguments go for and against gold as a standard, there has never been a time in human recorded history where whatever fiat currency was in use was not measured in ounces of gold for comparison. All those currencies have ceased to exist, just as the Euro and the U.S. dollar and renmibi must one day, because mankind is incapable of responsible fiscal management. Gold is not a theoretical, or even a possible, monetary standard. It is the only true monetary standard, and always has been.

James West is the publisher of the highly influential and widely respected Midas Letter at midasletter.com. MidasLetter specializes in identifying emerging companies in gold and silver exploration at the beginning of their share price appreication curves, and regularly delivers 10 baggers (stocks that increase in value by at least a factor of 10) to his premium subscribers. Subscribe at http://www.midasletter.com/subscribe.php.

© 2011 Copyright Midas Letter - 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.

Midas Letter Archive

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


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules