I’m going to go way out on a limb here. Right now gold has no friends. Even some of its biggest proponents are declaring the bull market to be over…Let’s kick around a ‘short list’ of potential reasons for what caused the latest bloodbath… Words: 1170
So writes Andy Sutton (www.sutton-associates.net) in edited excerpts from his original article* entitled When Gold Has No Friends.
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1) Force Cyprus and the rest of the ailing EU fiscal influenza-ridden nations to liquidate all their gold. The mechanism here is obvious. Demand the sale of gold to meet bail-in requirements, then drive the price down, which forces these countries to sell even more – if not all – of their gold. This has the fingerprints of Mario Draghi and his henchmen written all over it. The Eurozone benevolent society is committing the ultimate fraud. Separate the now slave nations from any means of an independent monetary base, then put the people of those nations into debt slavery. Tell me I’m nuts – please – but this makes perfect sense and jives with everything else that has gone on to date.
2) Force physical sales to meet orders. I am not a gold market analyst per se, but I do pay a good deal of attention to those who are and the word last Friday was that there was literally no physical gold for sale – it was nearly all paper. For a long time now there has been talk of growing reductions in physical inventory and the notion that much of the gold in the warehouses is already spoken for – perhaps several times over. Would another Ponzi scheme really surprise anyone here? If there is little ‘clear title’ gold to deliver, then there has to be a means for shaking the tree branches, and what’s better than a paper-driven rout to blow the weak hands out of their positions?
3) Maintain confidence in the USDollar. This is where the talk becomes inflationary. Obviously, the U.S. dollar is being printed into oblivion while at the same time there are efforts of a Herculean scale being made to keep that printing away from finished goods prices. It isn’t working all that well, but it isn’t near[ly] as bad as it could be. Anything that rises up as a currency alternative must be defamed, marginalized, and crushed – and yes, lovers of Bitcoin, that includes your precious digital dollars too. I do believe we’ll eventually end up locked into such an electronic currency system, but right now we’re still in the dollar standard (albeit losing strength) and rivals will not be tolerated.
Countries have been bombed, leaders taken out, and resources pillaged because those countries dared sidestep the U.S. dollar but the pressure is mounting and the panic moves are going to get more and more spectacular. Russia and China, just for starters, cannot be bullied at this point. They’re doing their own thing and daring anyone to challenge them.
I don’t want to get too far into geopolitics here, but I don’t think all the saber rattling by PDRK [North Korea] and others is just a coincidence. There are huge monetary moves going on just across the Sea of Japan and elsewhere, and there will be a war about all this eventually, as sure as I’m sitting here and as surely as you’re reading this.
As far as maintaining the confidence in the Dollar goes, that is really the last bastion of a fiat currency before it dies. The rest of the world has already given the U.S. dollar a resounding vote of no confidence in the form of various extra-dollar trade deals, a lack of willingness to accumulate more USBonds and a trickle of sales of such bonds. For those who are still accumulating, they seem to be focusing on shorter-duration bonds while the not-so-USFed is left to buy up the longer-dated bonds with its QE. If gold has no friends, then the USDollar is sitting in the corner of the classroom with a giant dunce cap on its head and a ‘kick me’ sign taped on its back.
4) Pound the metals in advance of subsequent highly inflationary monetary moves. A popular tactic of the banking syndicate has been to knock the precious metals complex down a notch or two in advance of what it feels is going to be a big move for either technical, geopolitical, economic, or monetary reasons. The recent announcement by the Bank of Japan to buy virtually unlimited amounts of Japanese government bonds (monetization) is going to have massive ripple effects. They’ve joined the race to the bottom so [now] three of the four major central banks (BOJ, ECB, and USFed) are fully on board the monetization/quantitative easing bandwagon. The Bank of England is all but on board as well.
These other banking entities are facing crises of confidence in their currencies as well. It is to everyone’s best interests (those in the cartel, that is) to bash metals, gold in particular. It serves many purposes at once and will make the government of Cyprus (and probably some others too) look like Gordon Brown in a few years and maybe a tad sooner. Poor Gordon. He sold Britain’s gold for a song only to watch it soar in the years to follow. That move, in and of itself, is an entire essay.
The Bottom Line
For years now those interested in gold have been divided into two camps:
- those who feel gold will protect wealth in an inflationary environment and
- those who feel gold is a foolish investment because we’re likely to see a deflationary, Great Depression-like event.
I’ve always leaned towards the inflationary side but, while I haven’t discounted the possibility of another attempt to ‘reset’ the system through a deflationary flush, at this point it really looks like the urge is to put the worst kind of beating on the commoners of the world by sticking us with an extended period of stagflation, which is what we’ve gotten for the past half dozen years now….
In this kind of an environment, the shenanigans of the JPMorgan/Goldman Sachs crew notwithstanding, precious metals are a tangible way to protect your purchasing power. These machinations are intended to convince you otherwise. If that weren’t really the case, do you think all these top-tier elites would be grabbing it up? Seriously. Follow the money. Just as I wrote back in 2008 when I said that gold was the ‘Opportunity of a Lifetime’, that is just as true today as it was then. Granted, it’ll cost you quite a few more FRNs to get yourself some, even after the recent stunts, but this episode, like its predecessors, will soon be nothing more than a memory and then gold will once again have many friends.
For now I’m content to stick with the money of monies and the only money with a 6000-year track record. Gold is the real McCoy; not these cheap substitutes pushed by greedy banks and governments. For those with the enough fortitude, today is to gold what March 6, 2009 was to stocks.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.sutton-associates.net/issues/mtc_2013/mtc_04182013.php (Please feel free to distribute, copy or otherwise disseminate this information.)
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The recent plunge in gold prices below $1500 an ounce has suddenly awoken, well, just about everyone. The “gold bugs” are yelling that it is a conspiracy theory by the Fed while the stock market bulls say it is a sign that the Fed has achieved its goal of creating economic growth. Unfortunately, both arguments, while great for headlines, are wrong…The simple truth is that…
Everyone personally holding physical gold and silver, as we have been recommending, has no margin call to meet and no reason to sell. This is a temporary situation, and it will pass. Now is not the time to panic, as that is the intent of the central planners/bankers in forcing gold and silver through strong support levels. Stay the course. To the extent you can, continue buying the physical metal.
What happened?! is the question so many are asking about Friday’s waterfall in prices. A better question is, “Why?” Outside of the insiders, no one really knows. Yes, there can be some fairly cogent explanations, lots of glib answers, but no one knows, for sure. What we do know for sure is that the market is always the final arbiter [and this is what the market is saying:]
The paper gold market is being used to shake the bullish tree harder this time than any time before because of what is to come. Fear is the most powerful emotion in markets and it is being used perfectly to enrich the grand names of finance at your expense. We are right in front of that time when the market performs a classic bottom both in shares and physical. From this point gold is going to and through $3500 [so] if you are unable to buy at this time there is one thing you can do – to get into the fight and out of the stands. That act is do nothing, and do not capitulate. Let them play the price game, but give them nothing whatsoever of yours. Words: 758
By its obvious and concerted attack on gold and silver, the U.S. government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt. For Americans, financial and economic Armageddon might be close at hand….
David Mcalvany (www.mcalvany.com) covers the reasons behind the major pullback in metals on April 12, and where they may go from here, in this most enlightening and re-assuring 8:14 minute video.
I have no problem with corrections in general, as they are a healthy part of any bull market and provide a platform from the which the next upleg can spring but something is not quite right about the recent price action in precious metals as the markets have become increasingly divorced from reality over the past few months. Let’s look at some of the glaring contradictions and then discuss the implications.
In my article of April 5th, posted here, I maintained that in the next year, and particularly for the next three to six months, a liquidation phase in the current cyclical bear market in gold would likely develop,,,[causing gold to] fall sharply. [Below are the 8 reasons I mentioned back then which still remain relevant today.]