Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

[EJ]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

EJ,

The issue for me I feel is to own paper gold ( ie GLD , or paper certificates etc) or to physical gold under the bed. I have learned the latter is the better.

You will not find a single recommendation here to buy gold ETFs versus physical gold. We were glad GLD opened in Jan. 2005, four years after we bought, because the ETFs made gold available to your average investor who'd never buy gold from a dealer but would gladly buy gold "shares" of an ETF for their brokerage account. That was the marketing argument for GLD. It produced incremental gold sales.

Our argument against owning gold ETFs has always been that gold, The Fourth Currency, is insurance against currency depreciation. We do not know how gold ETFs will behave in the extreme case.

I own only physical, albeit not "under the bed." Keeping gold in your home is a bad idea.

[phinolerun]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

I don't see how all of this tortured gold price manipulation analysis helps us figure out the one thing we care about, the thing that matters to us, our families and friends who own gold: When do we sell it?

For us, time spent on answering any other question is a waste of time.

I've been trying to understand this rationale since you first posted the "Gold Adopter's" chart. Towards the end in the 2012 - 2014 area you show only the gold bugs still buying and owning gold. Based on your outlook of there being several world currencies in the next 5 - 10 years and an increasingly diminished role of the US dollar in world affairs as time goes on, how can an argument be made to sell non dollar denominated assets? If anything, I would expect the trust in paper currencies to continue to wane.

But then again, as you have pointed out before, this was precisely the mentality in 1981. Everyone wanted precious metals, and no one wanted government debt. Truly amazing since it was at this time that both asset classes were at their top and bottom respectively for the next 20 - 25 years.

Do you think the signs that the time to sell gold will be similar to those of the previous bubbles?

[jtabeb]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

I've been trying to understand this rationale since you first posted the "Gold Adopter's" chart. Towards the end in the 2012 - 2014 area you show only the gold bugs still buying and owning gold. Based on your outlook of there being several world currencies in the next 5 - 10 years and an increasingly diminished role of the US dollar in world affairs as time goes on, how can an argument be made to sell non dollar denominated assets? If anything, I would expect the trust in paper currencies to continue to wane.

But then again, as you have pointed out before, this was precisely the mentality in 1981. Everyone wanted precious metals, and no one wanted government debt. Truly amazing since it was at this time that both asset classes were at their top and bottom respectively for the next 20 - 25 years.

Do you think the signs that the time to sell gold will be similar to those of the previous bubbles?

Simple answer is:
gold will go up until there is a viable new international monetary system. (EJ can correct me if he disagrees)

[jtabeb]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

EJ,

The issue for me I feel is to own paper gold ( ie GLD , or paper certificates etc) or to pyhsical gold under the bed. I have learnt the latter is the better.

And it is MUCH more fun to roll around on the bed with while being naked than paper. (Trust me on that one, Ok?)

[jtabeb]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Keeping gold in your home is a bad idea.

But it DOES make for great conversation over cocktails when you have guests.

(But in general I agree with you, for those that don't live in an armed compound.)

[LargoWinch]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Simple answer is:
gold will go up until there is a viable new international monetary system. (EJ can correct me if he disagrees)

or until CBs set real interest rates, which is not for a long time.

[Pascal]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

EJ, I fully understand and appreciate your reluctance to be labeled a nutcase goldbug. If I owned a website and had worked for a decade building its credibility, I too would probably steer well clear of anything that might generate the crackpot tin-foil hat label. Even with much less of a reputation - such as it is - to be concerned about, I tend to be careful to only discuss this topic with friends who I know will continue to like me even if I've gone "eccentric".

Nonetheless, IF in fact there is an 800 pound gorilla rolling around in this particular sandbox, then that is most definitely one of the many "fundamental" facts that investors playing in that sandbox are better off knowing about and taking into account. It is also appropriate to call the game warden to come and cage the gorilla if possible.

Personally, I find most of the attacks on "goldbugs" to be irritating, insulting and unfettered by supporting facts. People like Gata have a cause that they appear to whole-heartedly believe in and that they have pursued doggedly for years despite continuous ridicule. To some extent, regardless of whether they are right or wrong, there's something noble and courageous in that. It beats the heck out of most of my fellow citizens' biggest concern of who's getting kicked off the island next.

The fact that Gata and Butler's positions on manipulation are endorsed by experienced and highly knowledgeable people in this field like Sinclair, Sprott, Embry, and even some within the CFTC, tells me that they deserve fair consideration rather than ridicule.

Anyway, thanks for allowing the topic to be discussed. Like all here I very much look forward to your future articles.

[jtabeb]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

or until CBs set real interest rates, which is not for a long time.

Yes, if never is included in your definition of "long". ;)

[EJ]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

I've been trying to understand this rationale since you first posted the "Gold Adopter's" chart. Towards the end in the 2012 - 2014 area you show only the gold bugs still buying and owning gold.

That's right. Gold bugs are the first in and the last out because to gold bugs "now" is always the right time to buy. Go gold.

Based on your outlook of there being several world currencies in the next 5 - 10 years and an increasingly diminished role of the US dollar in world affairs as time goes on, how can an argument be made to sell non dollar denominated assets? If anything, I would expect the trust in paper currencies to continue to wane.

Yes, I have argued that continued debt deflation via dollar depreciation is the long term policy. I can see another 40% devaluation of the dollar as it is decommissioned as a leading reserve currency.For the UK and the pound the process took decades.

But then again, as you have pointed out before, this was precisely the mentality in 1981. Everyone wanted precious metals, and no one wanted government debt. Truly amazing since it was at this time that both asset classes were at their top and bottom respectively for the next 20 - 25 years.

You are recalling Everyone is wrong, again – 1981 in Reverse Part I: The Great Divide. It was the time that I noted the end of the so-called "deflation" on April 30, 2009. I compared that moment to the expectation in 1981, irrational in retrospect, was that the US government didn't have the political mandate to end inflation.

It’s October 1981, the year IBM launched personal computer, air traffic controllers went on strike and were fired by President Reagan, and Israeli jets destroyed a nuclear plant in Iraq. The annual inflation rate in September was over 12%, a 30 year Treasury bond carried a constant maturity rate of 14.68%, and the Effective Fed Funds Rate hit 15.5% as the Paul Volcker Fed stood on the brake pedal, determined to crash the economy to cut off multiple simultaneous inflation channels -- energy cost-push, supply shock, and the reckless monetary policy of the previous administration.

Conversely, in April 2009, deflation expectations were so strong that the government could sell a near infinite Treasury bond issuance at near zero rates.

Gold bugs in 1980 didn't believe the Volcker Fed had the political chops to end the inflation crisis. Worse, gold bugs didn't want the Fed to do it because if it did the right thing the gold price was certain to collapse.

I wish the gold price would collapse again because the government stopped pursuing bad policies, this time perpetuating debt financed asset price inflation rather than commodity price inflation. Of course, I'd like to know when the government planned to mend its ways so that I and readers have a chance to exit our gold as insurance against currency depreciation positions.

Do you think the signs that the time to sell gold will be similar to those of the previous bubbles?

No, not at all. The preconditions could not be more different.

For example, I warned in an article a few months ago that the government was going to adopt a VAT as a "solution" to excessive debt. I'd heard through my contacts that this was coming. I hope the irony of it coming from Volcker today is not lost on readers. A VAT is inflation dialed into an economy. A number readers argued with me that a consumption tax is more fair than an income tax, as if the government planned to replace the income tax with a VAT. Of course it will be additive. And one tax deserves another. A VAT is regressive, so yet another tax will be needed to redistribute the burden. This will be sold as fiscal prudence, but it's really intended to make sure that debts are repaid.

I'm doing my best to influence these policies directly in a more constructive direction. Wish me luck.

I almost forgot to mention, look for Michael Hudson's latest in the Financial Times tomorrow. I'm interviewing him Friday. The sovereign debt crisis in Europe may be off the front pages but it's only just begun. He says the ratings agencies are running a kind of extortion racket there. "Pay or we'll downgrade you and you'll have to pay more." Greece is a special case. It's public debt comes from not collecting taxes not like the post-Soviet private mortgage debt that came from public borrowing only to support the currency, "a self-destructive guaranteed loss."

[swannmex]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

EJ, I fully understand and appreciate your reluctance to be labeled a nutcase goldbug. If I owned a website and had worked for a decade building its credibility, I too would probably steer well clear of anything that might generate the crackpot tin-foil hat label. Even with much less of a reputation - such as it is - to be concerned about, I tend to be careful to only discuss this topic with friends who I know will continue to like me even if I've gone "eccentric".

Nonetheless, IF in fact there is an 800 pound gorilla rolling around in this particular sandbox, then that is most definitely one of the many "fundamental" facts that investors playing in that sandbox are better off knowing about and taking into account. It is also appropriate to call the game warden to come and cage the gorilla if possible.

Personally, I find most of the attacks on "goldbugs" to be irritating, insulting and unfettered by supporting facts. People like Gata have a cause that they appear to whole-heartedly believe in and that they have pursued doggedly for years despite continuous ridicule. To some extent, regardless of whether they are right or wrong, there's something noble and courageous in that. It beats the heck out of most of my fellow citizens' biggest concern of who's getting kicked off the island next.

The fact that Gata and Butler's positions on manipulation are endorsed by experienced and highly knowledgeable people in this field like Sinclair, Sprott, Embry, and even some within the CFTC, tells me that they deserve fair consideration rather than ridicule.

Anyway, thanks for allowing the topic to be discussed. Like all here I very much look forward to your future articles.

Amen and thank you.

[Adeptus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

The Latest Gold Fraud Bombshell: Canada's Only Bullion Bank Gold Vault Is Practically Empty, Is The Central Fund Of Canada Insolvent?

http://www.zerohedge.com/article/lat...ctically-empty

Continuing on the trail of exposing what is rapidly becoming one of the largest frauds in commodity markets history

....[SNIP]

Link to full Eric King interview [22 minute audio MP3].

While I can't personnaly attest as to how much physical gold/silver is in ScotiaBank's vaults, I happened to have bought from ScotiaBank physical gold AND silver right around Sept 2008 when the guy in the MP3 interview claims he walked into their vaults and saw them mostly bare.

My personal experience was as follows:
- SILVER: I asked what denominations of silver I could buy and get physical delivery on, and I'm on the West coast of Canada at one of the 1000+ ScotiaBank branches across the country, and the bullion vault is in Toronto (Central/Eastern Canada), so the lady at the branch had to call the Toronto central office to inquire with them. The answer was "we only have 1000 oz bars and nothing in smaller denominations". A week earlier I had tried to buy Silver from the Royal Bank of Canada (our #1 largest bank), and they said they had ZERO silver to sell me, and that they hadn't had physical silver to sell on the West Coast of Canada for *** several months ***!. So going back to my day at ScotiaBank, I proceeded to ask to buy 5x 1000 oz Silver bars. The lady asked the Toronto guy if they could deliver on that and to my surprise, the answer was NO, that they only had 2x 1000 oz Silver bars in stock that they could deliver on (note the guy in the MP3 interview was shocked that they only had 60 bars... my experience was they only had 2 bars! Unless they really had several dozen but were imposing quotas for delivery for some reason). So I ordered 2 bars, and got them some 2 weeks later... the MP3 guy's experience was a 6-8 week delivery, mine was 2; however, the cost of delivery was absolutely RIDICULOUS! They charged me $1,500 Canadian to deliver 2x 1000 oz Silver bars!! (over 5% of the total value of the Silver I was buying at the time!). Note: A two-way flight to Toronto and back costs around $600 !! Unfortunately, I thought the world was about to end (read: this was Q3/Q4 2008) and I didn't want to take any chances of me flying there and then the last 2 bars are gone.

GOLD - I also bought some physical gold that day, and when I inquired as to the denominations, they basically had almost everything (I forget now which ones they didn't have, but it was nearly every denomination). I ordered some gold, and it arrived at the same time as the silver. The delivery costs were reasonable for the gold since they added up to less than 1% of the total I was purchasing.

On a side note, when I first did walked into the branch to buy the PMs, two different ladies (manager & teller) tried several times to convince me to buy the paper certificates instead... They looked at me really oddly when I said I wanted physical delivery, and I looked at them really oddly when they suggested I should buy paper certificates... we'll see who laughs last.

Adeptus

[icm63]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

For example, I warned in an article a few months ago that the government was going to adopt a VAT as a "solution" to excessive debt. I'd heard through my contacts that this was coming. I hope the irony of it coming from Volcker today is not lost on readers. A VAT is inflation dialed into an economy. A number readers argued with me that a consumption tax is more fair than an income tax, as if the government planned to replace the income tax with a VAT. Of course it will be additive. And one tax deserves another. A VAT is regressive, so yet another tax will be needed to redistribute the burden. This will be sold as fiscal prudence, but it's really intended to make sure that debts are repaid.

The VAT tax or GST (Good and services tax) or whatever.

I am in New Zealand.

Here is a a little bed time story for USA on NZ experience.

In 1982, we (NZ) had massive debts as a country. After the 1970s 'think big' spend up (Dams, power plants, roads, railways, Govt waste), and I believe after the International lending community said pay us back or else. Just after the 1982 election a rightish wing labour govt got in power. This is what happened

1) Privatisation of govt departments: Sold off to public via stock exchange (Telecom, Power plants, govt energy assets, govt forests, govt land, etc)
2) NZ dollar devalued, and floated (was pegged to USD I think)
3) I think income tax (personal and coy) was reduced slightly 45c to 33c
4) GST/VAT introduced on all transactions except financial at 10%. ( Sold to public as USER PAYS)

YES we paid back the monies owed as a country, yes Debt to GDP reduced to 22% or there abouts.

Thats was 1990s..

Ok now its 2010

GST is going to 15% from 12.5% this year. The Govt is borrowing $250m a week as our deficit cant fund the govt social policy.

Our Govt debt is soaring, last I checked it was forecast to be 44% of GDP. Up from 22% in 2008. (NO bad, USA is forecast to be 100% of GDP)

The TAX take used to be 85% income tax and payee, NOW its 40% income and payee and 55% GST (or there abouts).

POINT: Any new tax just gives govt more money to spend on policies to get them into power. One would have hoped for GST/VAT to be removed after we settled up our govt debts in the 1990s, BUT no we still have GST and we having a rising govt debt, GO FIGURE !

In NZ we are quite a RICH country, plenty of GDP per person, BUT the govt takes it all in tax for social policies or entitlements as you say in the USA...How do I know we are rich, buy the massive tax bill.

USA you are going to join NZ and UK ...not a smart plan.

I suggest you cut spending, rather than raise taxes. As you never get rid of them !!!!

UPDATE: Any kiwi historians out there wanna add or subtract be my quest.

[kartius919]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Love the backhanded compliment. Way to woo a girl ej. Of course anyone who believes that the gold market is manipulated is a gold bug. Its just silly hogwash based on fairies and gnomes and those rascally rabbits. And all gold bugs are too stupid to realize when to jump ship and will all be so so miserable and bankrupt. And of course anyone who thinks the gold market is manipulated is a miserable, foul smelling, ill tempered troll! Oh yeah, poor too cause they are so foolish because they are so desperate to catch a little girl or boy skipping merrily over his bridge that he'll never know when too late is too late. Sad pathetic existence. You hear that Jessie? I'm talking about chu! Chu smalz lit' tro'z thoz.

[jtabeb]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

That's right. Gold bugs are the first in and the last out because to gold bugs "now" is always the right time to buy. Go gold.

Yes, I have argued that continued debt deflation via dollar depreciation is the long term policy. I can see another 40% devaluation of the dollar as it is decommissioned as a leading reserve currency.For the UK and the pound the process took decades.

You are recalling Everyone is wrong, again – 1981 in Reverse Part I: The Great Divide. It was the time that I noted the end of the so-called "deflation" on April 30, 2009. I compared that moment to the expectation in 1981, irrational in retrospect, was that the US government didn't have the political mandate to end inflation.

It’s October 1981, the year IBM launched personal computer, air traffic controllers went on strike and were fired by President Reagan, and Israeli jets destroyed a nuclear plant in Iraq. The annual inflation rate in September was over 12%, a 30 year Treasury bond carried a constant maturity rate of 14.68%, and the Effective Fed Funds Rate hit 15.5% as the Paul Volcker Fed stood on the brake pedal, determined to crash the economy to cut off multiple simultaneous inflation channels -- energy cost-push, supply shock, and the reckless monetary policy of the previous administration.

Conversely, in April 2009, deflation expectations were so strong that the government could sell a near infinite Treasury bond issuance at near zero rates.

Gold bugs in 1980 didn't believe the Volcker Fed had the political chops to end the inflation crisis. Worse, gold bugs didn't want the Fed to do it because if it did the right thing the gold price was certain to collapse.

I wish the gold price would collapse again because the government stopped pursuing bad policies, this time perpetuating debt financed asset price inflation rather than commodity price inflation. Of course, I'd like to know when the government planned to mend its ways so that I and readers have a chance to exit our gold as insurance against currency depreciation positions.

No, not at all. The preconditions could not be more different.

For example, I warned in an article a few months ago that the government was going to adopt a VAT as a "solution" to excessive debt. I'd heard through my contacts that this was coming. I hope the irony of it coming from Volcker today is not lost on readers. A VAT is inflation dialed into an economy. A number readers argued with me that a consumption tax is more fair than an income tax, as if the government planned to replace the income tax with a VAT. Of course it will be additive. And one tax deserves another. A VAT is regressive, so yet another tax will be needed to redistribute the burden. This will be sold as fiscal prudence, but it's really intended to make sure that debts are repaid.

I'm doing my best to influence these policies directly in a more constructive direction. Wish me luck.

I almost forgot to mention, look for Michael Hudson's latest in the Financial Times tomorrow. I'm interviewing him Friday. The sovereign debt crisis in Europe may be off the front pages but it's only just begun. He says the ratings agencies are running a kind of extortion racket there. "Pay or we'll downgrade you and you'll have to pay more." Greece is a special case. It's public debt comes from not collecting taxes not like the post-Soviet private mortgage debt that came from public borrowing only to support the currency, "a self-destructive guaranteed loss."

IF we get VAT Plus the income tax and the same policy on deficits and bailouts then they truly don't give a shit on fixing everything and just want to blow everything up so as to hide all the wrong doing over the past thirty years.

If your suppositions are correct, then Max Keiser is essentially correct too, and washington and wall street are nothing more than a bunch of "Financial Terrorists" and the dollar WILL break before there is any reform. I hope they do not follow that path (for obvious reasons).

There are two maybe three economists that actually make any sense. Hudson is at the top of the list. Fade him at your own peril.

Which is why I say we VOTE with our funds.

See this:
(If you REALLY want to fix things)
http://www.itulip.com/forums/showthread.php?t=15075

[labasta]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Certificate owners miss the whole point of gold and silver. It's protection against banks and bankers, and inflation as well. If you don't hold it, you don't own it. It's like trying to defend your home with a firearms certificate.

Brilliant.