PCR on the Suppression of the Price of Gold

[gwynedd1]

Re: Greenspan on the Yen?

I'd say Japan is in a similiar pickle. Their deficits are huge, and no end in sight.

Their deficits are huge because they have to feed the Japanese desire to save , not to mention they don't like going into private debt.

[santafe2]

Re: PCR on the Suppression of the Price of Gold

I started looking carefully at gold in 1998, three years before buying in. In those days only gold bugs talked about gold. They became anxious and angry whenever the gold market wasn't going their way, which was most of the time for the three years I observed them, and the previous 17 years before that.

I was consulting at JP Morgan in the late 90s and beginning to look at metals as an investment. Morgan, (now Chase), was the conspiratorial devil to gold bugs. It still is I suppose. Several of the large banks shorted gold during that time, it was good business. When it was no longer good business, the smart banks got out of that business.

[santafe2]

Re: PCR on the Suppression of the Price of Gold

they ARE being taken, ms shiny!
with every passing day of ZIRP, our savings are being S T O L E N right out of our bank accts.

This is a country that supports spenders, investors and entrepreneurs. It does not respect savers. I'm not judging, just observing. No saver should be saving in the US. There are stable countries that respect and require savers. The US wants entrepreneurs, investors and spenders. If you're a saver, find another place to save...btw, that place is not Japan but there are almost 200 other countries to choose from.

[Thailandnotes]

Re: PCR on the Suppression of the Price of Gold

There are almost 200 other countries to choose from.

Easier said than done, especially if you’re not a resident of the country. Restrictions on opening an account in Asia tighten almost every year. When I moved to Chiang Mai from near Bangkok, I was going to switch banks. Resident of Thailand, lived here 15 years. Nobody wanted my $ 100,000. In some countries, even if you are a resident and are allowed to open an account, there are strict limitations on how you can invest it.

http://www.thedailycrux.com/Post/402...losing-quickly

[santafe2]

Re: PCR on the Suppression of the Price of Gold

Easier said than done, especially if you’re not a resident of the country. Restrictions on opening an account in Asia tighten almost every year. When I moved to Chiang Mai from near Bangkok, I was going to switch banks. Resident of Thailand, lived here 15 years. Nobody wanted my $ 100,000. In some countries, even if you are a resident and are allowed to open an account, there are strict limitations on how you can invest it.

It's too hard to do a lot of things that have value. I could not open an investment account in Singapore without an introduction. Capital gains for a US citizen, in an investment account held there are taxed as regular US income no matter the holding period. The rules are never fair or easy. If they were it would be 10X as difficult. I don't think anyone with $100k US to invest has the right to complain. Most humans can't and don't care about these issues. Two billion people live on less than $2 a day. They won't make half your $100k in a lifetime. As you opened, it's easier said than done.

[Polish_Silver]

Re: Greenspan on the Yen?

Do you think Japan can pay back it's debts with yen at constant purchasing power?

The Japanese savings rate is much lower now than 20 years ago. Trade surplus is much smaller.

If Japan's situation was "savings driven" the government would issue bonds, and save cash.

Hong Kong runs a budget surplus almost every year.

[verdo]

Re: Gold, Oil, IMS insurance

EJ has put off the IMS breakdown until 2019

He did? I thought this was going down around 2016. Why so long? I mean, right now when I turn on the TV and go to the financial channels, all I see are pundits calling this the new dawn for the stock market, and I see little support for stocks going much higher. I remember EJ saying that once inflation starts to become more obvious, stocks wont perform well. I can't imagine it taking until 2019 for inflation to start ticking upwards

[astonas]

Re: Gold, Oil, IMS insurance

He did? I thought this was going down around 2016. Why so long? I mean, right now when I turn on the TV and go to the financial channels, all I see are pundits calling this the new dawn for the stock market, and I see little support for stocks going much higher. I remember EJ saying that once inflation starts to become more obvious, stocks wont perform well. I can't imagine it taking until 2019 for inflation to start ticking upwards

Inflation is about what people think almost as much as it is about prices. We here do a lot of thinking about such things, but the average man-in-this-street might not come to similar conclusions until much later. How much later is hard to guess.

[ProdigyofZen]

Re: Gold, Oil, IMS insurance

Inflation is about what people think almost as much as it is about prices. We here do a lot of thinking about such things, but the average man-in-this-street might not come to similar conclusions until much later. How much later is hard to guess.

Well most of the inflation has occurred in assets tied to debt yet no one realizes it.

For example I mentioned to my GF that it cost Michael Hudson 500 dollars a semester to attend The University of Chicago in the mid 1950s but now it cost 25k per semester to attend. She was astonished.

Thats inflation. The question has to be asked is "how much did it cost to attend the same college from 1900 to 1955?"

The same can be said of houses, cars, boats and salaries (only the high end, athletes/CEOs/actors) etc. It is quite remarkable what has occurred without a peep from the American public.

[Polish_Silver]

Re: Gold, Oil, IMS insurance

He did? I thought this was going down around 2016. Why so long? I mean, right now when I turn on the TV and go to the financial channels, all I see are pundits calling this the new dawn for the stock market, and I see little support for stocks going much higher. I remember EJ saying that once inflation starts to become more obvious, stocks wont perform well. I can't imagine it taking until 2019 for inflation to start ticking upwards

EJ thinks the "new oil" will help the US avoid the crisis for a few years. Also, the yen and euro look pretty sick, which helps the dollar.

[don]

Roberts has yet to get the word

The Assault On Gold — Paul Craig Roberts


For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.
The Federal Reserve realized that its massive purchase of bonds in order to keep their

prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.

Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.

Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.
When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.

The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.

However, for the Russians and Chinese, whose central banks have more dollars than they any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.

The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.

As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.

The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.

The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.

When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.

The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.

By its obvious and concerted attack on gold and silver, the US 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.

Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.

http://www.paulcraigroberts.org/2013...craig-roberts/

[doom&gloom]

Re: Roberts has yet to get the word

Whether the Fed is actually doing it or not, by default the lack of enforcement and blind eye towards trading irregularities is one in the same.

I do agree with PCR that we are headed down Banana Republic Way. Such places tend to have a concentrated wealthy class.
, lack of rules enforcement upon such class, a large poor or lower middle class, unequal opportunities and a kleptocrat if governance policy. All that is in place here and now.

[don]

Re: Roberts has yet to get the word

http://usawatchdog.com/if-bullion-we...craig-roberts/

[lektrode]

Re: Roberts has yet to get the word

For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.

----snip.....

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales.

http://www.paulcraigroberts.org/2013...craig-roberts/

and right on cue, the bullhorn blares:

• April 10, 2013, 10:05 AM

Goldman Sachs: Short Gold!

By Steven Russolillo

Goldman Sachs

Goldman Sachs GS +1.77% is chasing gold to the downside.
With the precious metal inching closer to a bear market, the firm tells clients that now’s the time to short gold.
Goldman slashed its short- and long-term gold forecasts, a move that comes about six weeks after the firm had already turned even more bearish on the metal. Goldman now sees gold ending the year at $1,450, a forecast that came down from $1,600 at the end of February and $1,810 prior to that.
Goldman sees gold falling to $1270 by the end of 2014.
“We see risks to current prices as skewed to the downside as we move through 2013,” Goldman analysts Damien Courvalin and Jeffrey Currie told clients. “In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast.
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“While we may be end up too early in entering this trade, we prefer that to being late given our belief that the skew to current prices is to the downside,” they added.
Comex gold prices recently fell 0.6% to $1,577.80. Gold is down 16% from its record settle high of $1,888.70 hit in August 2011. A decline of at least 20% from a recent peak is considered a new bear market.
The bank cut its three-month view on gold to $1,530 an ounce from $1,615. It also dropped its six-month forecast to $1,490 from $1,600 and its 12-month gold outlook to $1,390 from $1,550.
Gold is often considered a refuge from economic uncertainty and a means of safeguarding wealth. It’s also viewed as an inflation hedge. Considering the Fed has been buying $85 billion a month in Treasurys and mortgage-backed securities in an effort to spur the economy, one would think the precious metal would do well in this type of environment.
But as questions continue to arise about when the Fed will start pulling back on its stimulus efforts and easy money policies, traders have been selling now and asking questions later. FOMC minutes released Wednesday morning showed Fed officials are actively engaged in a debate about whether to begin winding down an $85 billion a month bond buying program in the second half of the year.
Goldman points out worries about Cyprus and weaker-than-expected economic data normally would’ve pushed gold prices higher, as the precious metal has typically behaved as a safe-haven play.
But that hasn’t been the case recently.
“Despite resurgence in euro area risk aversion and disappointing US economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning,” the Goldman analysts say. “With our economists expecting few ramifications from Cyprus and that the recent US slowdown will not derail the faster recovery they forecast in 2H13, we believe a sharp rebound in gold prices is unlikely.”
By the end of March, gold had dropped 10% in six months and suffered back-to-back quarterly declines for the first time since 2001.
Prices have fallen further so far in April. The decline may be far from over, Goldman says.

[don]

Re: Roberts has yet to get the word

Assault On Gold Update — Paul Craig Roberts

April 13, 2013




NOTE: Gold weights are based on metric tons and Troy ounces. 500 metric tons of gold would be 16,075,000 troy ounces. This changes the arithmetic slightly but not the point

I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the US dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.

A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big too fail” balance sheets. The financial system would be in turmoil, and panic would reign.

Rapidly rising bullion prices were an indication of loss of confidence in the dollar and were signaling a drop in the dollar’s exchange rate. The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. Short sales that drive down the price trigger stop-loss orders that automatically lead to individual sales of bullion holdings once their loss limits are reached.

According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.

A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.

In other words, with naked shorts, no physical metal is actually sold.

People ask me how I know that the Fed is rigging the bullion price and seem surprised that anyone would think the Fed and its bullion bank agents would do such a thing, despite the public knowledge that the Fed is rigging the bond market and the banks with the Fed’s knowledge rigged the Libor rate. The answer is that the circumstantial evidence is powerful.

Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.

Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?

What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.

Who can afford to lose that kind of money? Only a central bank that can print it.

I believe that the authorities would like to drive the gold price down further and will, if they can, hit the gold market twice more next week and put gold at $1,400 per ounce or lower. The successive declines could perhaps spook individual holders of physical gold and result in actual net sales of physical gold as people reduced their holdings of the metal.

However, bullion dealer Bill Haynes told kingworldnews.com that last Friday bullion purchasers among the public outpaced sellers by 50 to 1, and that the premiums over the spot price on gold and silver coins are the highest in decades. I myself checked with Gainesville Coins and was told that far more buyers than sellers had responded to the price drop.

Unless the authorities have the actual metal with which to back up the short selling, they could be met with demands for deliveries. Unable to cover the shorts with real metal, the scheme would be exposed.

Do the authorities have the metal with which to cover shorts? I do not know. However, knowledgeable dealers are suspicious. Some think that US physical stocks of gold were used up in sales in efforts to disrupt the rise in the gold price from $272 in December 2000 to $1,900 in 2011. They point to Germany’s recent request that the US return the German gold stored in the US, and to the US government’s reply that it would return the gold piecemeal over seven years. If the US has the gold, why not return it to Germany?

The clear implication is that the US cannot deliver the gold.

Andrew Maguire also reports that foreign central banks, especially China, are loading up on physical gold at the low prices made possible by the short selling. If central banks are using their dollar holdings to purchase bullion at bargain prices, the likely results will be pressure on the dollar’s exchange value and a declining market supply of physical bullion. In other words, by trying to protect the dollar from its quantitative easing policy, the Fed might be hastening the dollar’s demise.

Possibly the Fed fears a dollar crisis or derivative blowup is nearing and is trying to reset the gold/dollar price prior to the outbreak of trouble. If ill winds are forecast, the Fed might feel it is better positioned to deal with crisis if the price of bullion is lower and confidence in bullion as a refuge has been shaken.

In addition to short selling that is clearly intended to drive down the gold price, orchestration is also indicated by the advance announcements this month first from brokerage houses and then from Goldman Sachs that hedge funds and institutional investors would be selling their gold positions. The purpose of these announcements was to encourage individual investors to get out of gold before the big boys did. Does anyone believe that hedge funds and Wall Street would announce their sales in advance so the small fry can get out of gold at a higher price than they do?

If these advanced announcements are not orchestration, what are they?

I see the orchestrated effort to suppress the price of gold and silver as a sign that the authorities are frightened that trouble is brewing that they cannot control unless there is strong confidence in the dollar. Otherwise, what is the point of the heavy short selling and orchestrated announcements of gold sales in advance of the sales?

http://www.paulcraigroberts.org/