Home > Was Market Manipulation To Blame For The Abrupt Plunges In Gold & Silver Prices?
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Was Market Manipulation To Blame For The Abrupt Plunges In Gold & Silver Prices?

March 3rd, 2012

Jeff Nielson: Gold and silver prices plummet because the U.S. economy is so healthy that the Federal Reserve won’t have to print any more money, and so there won’t be any more inflation. Lol! While it made good fiction for the mainstream pablum-dispensers, it certainly has no connection whatsoever with the real world.

The U.S. economy is “healthy”? As I have pointed out on previous occasions, 0% interest rates are nothing less than an economic defibrillator – a (temporary) desperation measure to attempt to breathe life into a dying economy. Permanent 0% interest rates simply mean that economy is already dead, as we have seen with Japan. All that remains to be done is to put these zombie-economies out of their misery, through debt-default followed by massive restructuring.

As I have stressed in my recent commentaries, it is also beyond absurd for Ben Bernanke to pretend that the Federal Reserve has ceased its money-printing orgy. The gravity-defying U.S. Treasuries market provides conclusive, mathematical proof that such a claim is tantamount to an admission of massive fraud.

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Maximum bond prices at a time of maximum supply defies every economic principle in the books. Maximum bond prices at a time of maximum supply, when the largest buyer (China) has beenselling Treasuries for more than a year, when the “economic surpluses” which financed Treasuries-buying have nearly vanished, when Treasuries auctions have been rigged so that no one knows who the buyers are, and at a time when the U.S. economy is obviously and hopelessly insolvent defies legality.

Someone, somehow is financing the totally opaque purchases of $trillions in U.S. Treasuries, and the list of suspects is rather short: the Federal Reserve. If the Fed is not financing those purchases with its officially/legitimately created funny-money then it must be doing so in some less-than-legitimate manner.

More broadly speaking, it demonstrates the terminal stupidity of the entire mainstream media that they could believe anyone claiming there will be little-to-no-inflation, in a world of deadbeat-debtors – who can only continue to finance their economic Ponzi-schemes through exponentially increasing their money-printing (and thus diluting their currencies, and thus producing inevitable inflation).

The only other mathematically-possible scenario is debt-default: bonds immediately going to zero (or close to it). Otherwise, exponential money-printing takes the underlying currencies to zero, also making the bonds worthless. Either way we are 100% certain to get to the same result. Paying maximum prices for any of these paper time-bombs goes well past idiocy and all the way to deliberate economic suicide.

As I have explained on a number of previous occasions, in either a debt-default or hyperinflation scenario gold and silver prices will explode in an equally exponential manner – again as a function of basic arithmetic (along with supply and demand). Thus the long-term upward revaluation of precious metals is as certain as sunrise following sunset.

With the supposed “reasons” for gold and silver prices going lower being exposed as ridiculously fraudulent propaganda, once again we are left no explanation other than market manipulation to explain the abrupt plunges in the prices of gold and silver – just as they had achieved technical break-outs indicating that prices should move substantially higher.

With both the fundamental factors and the technical factors absolutely and unequivocally bullish, there is no conceivable, legitimate explanation for the price moves seen on Wednesday. While it may frustrate the readers who send me their mail seeking guidance, I have essentially ceased any/all short-term predictions for the precious metals sector. My reasoning is elementary.

Market manipulation is both an exogenous and arbitrary event. As such, the timing of manipulation events can never be predicted – except as a response to any/every potential break-out with gold, silver or the mining stocks. The Catch-22 here, however, is that while we know the banking cabal will attempt to manipulate the market lower any time there is a break-out, sometimes they succeed and sometimes they fail. And when they fail, the train has left the station, and it’s never coming back.

Equally, whenever any “manipulation operation” is underway, both the duration and intensity of the event are also arbitrary, and thus these factors (as a matter of logic) can also never be predicted. Given these parameters, investors have two (and only two) strategies open to them.

They can continue to attempt to play the swings in the markets (knowing those swings are absolutely unpredictable). This is nothing less than pure gambling, and thus (in my own humble opinion) plays directly into the hands of the banksters.

The other alternative is to recognize we cannot predict the unpredictable, and are thus relegated to playing “pure defense”. In this context, this would seem to dictate a strategy as simple and conservative as dollar-cost averaging (or some close proxy). Remember that as long as we are able to exchange (worthless) paper for (valuable) metal at all that ipso facto this means the metal is “cheap”. Ignore the market fraud of the banksters. Ignore the wild gyrations in prices – and just keep buying real, “physical” bullion.

The Achilles Heel of the banksters is that they require significant amounts of real bullion toleverage in their illegitimate paper manipulations, and you cannot leverage zero. When the banksters run out of bullion, their paper-fraud schemes come to an end.

The latest desperation attack on the gold and silver markets is equivalent to pushing down (very hard) on a spring. Ultimately there is always a counter-reaction to such economic force – even if it is delayed. That counter-reaction will inevitably mean an even more violent explosion upward in prices. While we should avoid trying to time these manipulated markets, there would seem to be no more fortuitous time to buy than right after another of the banksters’ fraudulent take-downs.

Bon appetit!

Related Tickers: SPDR Gold ETF (NYSEArca:GLD),  iShares Silver Trust (NYSEArca:SLV), Market Vectors Gold Miners ETF (NYSEArca:GDX), Goldcorp Inc. (NYSE:GG), Barrick Gold Corporation (NYSE:ABX), Kinross Gold Corporation (NYSE:KGC), Yamana Gold (NYSE:AUY).

Written By Jeff Nielson From Bullion Bulls Canada

Jeff Nielson is from Canada and is a writer/editor for Bullion Bulls Canadawww.bullionbullscanada.com.   He has a personal background in law and economics. Bullion Bulls  Canada provides general macro-economic and political commentary,  since  the precious metals markets are among the most complex (and  misunderstood) in the world.

Bullion Bulls Canada also provides basic coverage of Canadian precious metals mining companies. Canada is the global leader in mining exploration, and Canadian-listed mining companies (on the Toronto Stock Exchange and Venture Exchange) are responsible for the majority of the world’s most-promising discoveries.


NYSE:GDX, NYSE:GLD, NYSE:SLV


 

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  1. Daniel
    March 4th, 2012 at 09:48 | #1

    Excellent and well written analysis! Your advice to acquire precious metals for their long-term value should be heeded by all.

  2. Jack
    March 4th, 2012 at 08:50 | #2

    How long can this go on? I keep reading of disaster, but ultimately the US Fed calls the shots. Eventually it will catch up to them, but in our lifetime?

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