Very few investments performed as well as gold did in 2008. Gold started the year at $838. It is now going to end the year well above that mark. Gold has now closed higher in nine out of the last ten years! That is a powerful bull market. It is just now getting warmed up.
The precious metals got tripped up a lot last summer. Bailouts and monetary chaos had them on the launching pad last July when two US investment banks pulled the rug out from under the gold market. The paper price for gold is set by the Comex market in New York. You don’t need me to remind you how fraudulent paper prices can be these days.
Two US banks sold an eleven fold increase in paper gold during this critical July time frame. They shorted gold by throwing outlandish amounts of phony paper gold at the market. The market caved and gold plummeted:
Bill Buckler of the esteemed “Privateer” likes to say gold is “governed” because it represents competition to our dishonest system of fiat money. The banks most frequently identified as implementing official policy are JP Morgan and Goldman Sachs. You can be well assured the two banks profited handsomely from this venture. Hank Paulson is a Goldman Sachs man and is responsible for much of the creation of exotic derivatives that continue to implode across the economic landscape.
It is nothing short of astounding that the crooks that caused this historic mess are now the ones in charge of solving it! Global citizens are aghast but the US public remains largely clueless. This country and our freedoms are set to be unrecognizable in a three to five year time frame. Most US citizens are uninformed or in complete denial.
Silver was also taken down last July. Ted Butler, the world’s foremost silver watchdog, has reported that two US banks used paper short positions to turn the silver price downwards. The massive short position was the equivalent of 25% of the annual world silver production. It was highly likely a naked short. The CFTC regulators refuse to identify the two banks even though they most certainly made enormous dishonest profits from this manipulation.
As a side note, you may remember the various oversized airline and insurance puts that were placed at the time of September 11th 2001. Our “regulators” to this day have decided to protect investor privacy as opposed to divulging these culprits. See a pattern here? They will chase a boogey man to the ends of the earth but won’t divulge a local who commits high crimes.
Both gold and silver have rebounded nicely from last summer’s intervention. Manipulations always fail in the long run. They buy time but they also wind the market even tighter for the eventual launch. If you pay attention to gold and silver, the monetary metals, you likely know that you can’t buy the smaller amounts of the metals close to the NY listed price. Premiums, shortages and delivery delays are the norm these days.
Government and private mints across the world are unable to keep up with overwhelming demand for physical gold and silver. The music is stopping. An era of cheap gold is actually ending in spite of a decade of rising prices.
Gold did its job this decade. It sniffed out economic and financial crimes. It performed in spite of official suppression. The financial high crimes and misdemeanors have now evolved into treasonous felonies. Don’t think for one second that gold and silver won’t continue performing.
Global gold demand is soaring and mining production is diminishing. There are multiple reports of low quality bars being shipped to market. This product smacks of scraping the bottom of the barrel.
Very few savvy investors understand that gold is traded in enormous quantities as part of the world financial system. You get a nose for sniffing out desperation after spending enough time in this arena. There is an absolute stench emanating from the NY/DC axis of weasels.
The LBMA market in London is the primary site for world gold trades although it is shrouded in secrecy. Global trading accounts are settled here which clearly demonstrates that gold never ceased to be an important component of world finance. The biggest players in world finance understand this phenomenon. Joe and Jane think gold is shiny, pretty and ornamental.
This London international gold market is also locking up. How do we know this? The work of Professor Antal Fekete has demonstrated that gold has been in and out of backwardization in the futures markets over the last month. Normal futures trading shows higher prices for coming months over the present “spot” price. Backwardization means higher present prices compared to the contracts in the coming months. This is extraordinarily unusual and highly significant in the history of gold trading.
Gold players are hanging onto their gold and creating higher spot prices.
The globe’s biggest players don’t trust each other in the financial sector or the true wealth sector. Fraud and derivatives have contaminated most everything. How many “dark pool” derivatives would you trade a ton of physical gold for?
You also know that central banks across the world are trimming their gold sales. Gold is real money, especially during times of crisis. Only the naïve and indoctrinated investing public believes otherwise.
Citigroup, of all people, has sent out an “internal client note” advising that gold will likely see a “dramatic surge” in the coming year. They predicted a move through $2000. Maybe something good can come out of Citigroup after all. We are clearly poised for that type of move.
The point is … Gold is in play!
The Crimex market in NY has limited amounts of physical gold and silver. It is window dressing to a large degree. I have advocated for at least five years that investors take away these toys by demanding delivery of physical metal. After sufficient years of continued market abuse more and more gold gurus are arriving at the same conclusion. This process is now underway as large and small players have their eyes and pocketbooks on Comex gold.
I will make no predictions as to when the Comex precious metals department will default. They have been largely discredited and that is an initial reward. It is increasingly recognized as a crooked market by global players. Comex is simply one more stagnate pond in the NY/DC cesspool. It deserves to implode.
Run an honest market or shut it down!
Governments across the globe are cranking up the printing presses in another desperate attempt to blow up another credit bubble. They think they can “fix” the problems they caused by reckless monetary and fraudulent paper creation by creating more of the same. That is a bad joke. We’ve only see about half of the bad news heading our way. This is no common “recession”. I’m told Ben Bernanke reported to his wife just the other day … “Honey, I shrunk the planet.” He had plenty of help and now the goal is to reinflate it with another credit bubble. Good luck. Can you spell hyperinflation?
The precious metals are going to absolutely soar as these events continue to play out. The metals represent one of the very few escape hatches to make and preserve true wealth. Gold is going to shed its paper wrappings in the coming months and years.
Resource stocks have been obliterated since the summer carnage. This is the worst damage any who closely follow these markets have ever seen! Gold and silver got pounded mid year but held up fine over a twelve month time frame. Gold and silver stocks have been indiscriminately sacrificed. They are just now starting to show signs of new life.
I attended the New Orleans Investment Conference again this year. A panel of experts predicted 2009 gold prices in the range of $1000 and $1600 for the most part. Most also believed the resource stocks aren’t coming back very quickly. Excuse me; a $1200 gold price will set a fire under the highest quality gold stocks! This arena can turn over a weekend. Absolutely no one was interested in gold and silver shares around the turn of this century. That changed in a heartbeat and mind boggling profits poured in in the coming years for those that had been accumulating shares.
A lot of producers are now up 50 to 100% in the last 6 weeks. It’s been somewhat of a stealth move. The near term producers should move next and they will hold even more leverage. The disparity between the share prices and the underlying metals is getting more and more extreme. Higher gold and silver prices will close this chasm! Few are dumb enough to overlook gold or silver companies with soaring PM prices. You cannot extrapolate the current market forward indefinitely.
The explorers will move even later as this sector catches fire once more as it always has in the past. The micro-cap explorers are the ones that bring in 2X, 5X, 10X, 20X or even 100X. There are now tons of high quality companies with market caps well under $10 million. Those that survive this recent shake out will re-enter the launch pad.
Market activity since mid July 2008 has been one giant charade. There is no other reasonable explanation. The rug was pulled out from the precious metals but it is simply a manipulation anomaly. A strengthening dollar and a rising Treasury Bond market have no legitimate legs to stand on. These interventions will all reverse themselves.
What to do at this point? Physical gold and silver, in your personal possession, should be a foundation of safety. The larger and better capitalized gold stocks should be the first to see dramatic recovery as this historic mess continues to play out.
A dangerous global reflation lies dead ahead. Protect yourself. Make sure you have a golden seat when the music stops. Gold is now in play.
