Next year will be the 20th year, or two decades, that Chris Powell, the GATA army, and I have been out there doing what we could to expose the gold price suppression scheme by what we call the Gold Cartel.
What we have learned over all this time is how all encompassing the market manipulation schemes really are. Initially, we realized that various bullion banks (such as Goldman Sachs and JP Morgan) were collectively suppressing the gold price to keep it below $300 an ounce. Eventually we realized the manipulation extended to silver too AND included the Fed, The Treasury, Exchange Stabilization Fund, BIS and other central banks.
Over the many years it became apparent the market rigging extended to other financial markets … including acknowledged intervention in our bond market and clandestine operations in our stock market, marshaled by the infamous Plunge Protection Team. One of the first people to acknowledge the magnitude of it all was Chris here, who at GATA's 2008 conference outside of Washington, D.C. came up with his great line, "There are no markets anymore, just interventions."
That was quite the notable comment back then, way ahead of its time. These days, it is hard not to notice the interventions, if you have an open mind.
I'd like to take us back to this conference one year ago, which took place ahead of the Presidential election. Back then, most everyone predicted a win for Hillary Clinton. However, if there was any hint that Donald Trump might win, our stock market was nailed to the downside and the price of gold spiked higher. And then, immediately after the stunning Trump upset, the Dow tanked and the price of gold soared. That's when market intervention went on steroids.
Our stock market soon began to soar, while the price of gold began to collapse. Since the election, the Dow has been on a one way street to the upside with corrections not allowed. Meanwhile, the gold/silver prices have been prevented from doing anything on the upside, with all rallies sold. On election eve, the Dow was 18,200, while gold was $1274 and silver: $18.33. The dollar was 97.83.
So since then the Dow has rallied more than 5,000 points; gold is flat, but silver is off $1.30 … and all this with the dollar dropping 4/5 points. Whatever happened to the dollar being a major influence on the gold price and whatever happened to the economically oriented Dow having some influence on silver? Since the election, the price of copper has risen nearly $1 per pound, over 40 percent.
Now this is my own opinion and not one articulated by GATA, but it has everything to do with market manipulation on steroids.
The money and power behind the scenes in the U.S. were petrified of a Donald Trump Presidency. He would be an outsider and based on his manner of saying things there was no telling how he might upset the markets. It is essential to appreciate that very few in the establishment predicted before the election that he would be good for our stock market. That is fact. SO, to make sure that no matter what Donald Trump did or said, perceptions had to be changed immediately so that his Presidency would not cause a market debacle. That meant an increased propping up of our stock market by our government, in conjunction with the Counterparty Risk Management Group, etc. This included other central banks joining the party, such as Switzerland, etc.
This is not an anti-Trump diatribe. When living in New York, we both attended Dr. Norman Vincent Peale's church. Dr. Peale you may recall wrote the "Power of Positive Thinking." I even met his second wife, Marla Maples. But when have you ever heard a comment such as the one Senator Corker made that the three key people around the President are preventing the country from going into chaos? Corker is a Republican who supported Trump. There is much else we could get into. The point is, no matter what happens, regarding how the President outrages people, our stock market goes higher.
Meanwhile, gold (which is so often viewed as the barometer of U.S. financial market health … with down being good, and up being bad, as reflected on by former Fed Chairman Paul Volcker) is never allowed to reflect the true state of fiscal/economic affairs in our country. The fact that Congress could not even come up with a budget and our debt has soared past 20 trillion dollars is cast aside, just like everything else.
Oh yes, we may now have a budget which will have a deficit of 1.2 trillion dollars, around double the one this year of 666 billion. Let's hear it for the fiscal conservatives! None of the bullish fundamentals which would normally seriously affect the gold price mean anything. All that matters these days is what The Gold Cartel can get away with.
As a result of what they have done, the situation is now a dire one for much of industry. The reasons are straight forward and simple…
-- Gold and silver are now in their 7th year of being in a bear market.
-- Meanwhile, investors in our general stock market watch our major indices make one all-time high after another.
-- Investors in art and real estate are dealing with new highs too.
-- But perhaps the most debilitating of all for our sector at the moment is what the crypto currencies have done this year. Early this year I presented at a Jeff Berwick conference in Acapulco. The conference focused on precious metals and crypto currencies. The crypto folks were ecstatic back then as bitcoin had risen to the same price of gold at $1240. Even then, the crypto crowd was bubbly as could be. So upbeat compared to the gold/silver crowd. Can you imagine what that convention will be like this year with bitcoin around 6,000? Good for them.
Come to think of it. Us gold/silver guys might not even be invited this year. Just too embarrassing.
-- As a result of what the crypto currencies have done, investors have seen what an investment, which is out of the system and not manipulated, can do. Unfortunately, what a bitcoin has done has revealed just how right GATA has been about The Gold Cartel and their price suppression scheme. Investors are fleeing our sector like never before, at least in the U.S. The beat downs of gold and silver year after year, compared to other assets soaring, has led to "I can't take it anymore." And bye bye they are going. Where this is very noticeable is in the subdued action of the gold/silver shares, which remain limp most of the time these days. No excitement whatsoever.
This is not to leave you with a bah humbug feeling when you leave this workshop. Gold and silver are the cheapest assets on the planet, held down now at artificially low prices. Now is the time to be accumulating them, not running away from them. The reality check problem is the same thing could have been said last year or the year before that.
The difference today, and it is a very valid one, is that an enormous amount of pressure in both the gold and silver is building in each market as a result of what The Gold Cartel has done. Each time they knock the precious metals down, as other assets soar, the pressure increases to a new level. As a result, we have pressure cooker or volcano type of set ups which can blow at any time.
Silver, which some of us call the cartel's kryptonite, is particularly vulnerable to blow sky high. Silver has that nickname because it is only a matter of time before JP Morgan and gang runs out of enough physical supply to meet growing demand at these lowly price levels. The feeling among a number of us is that once silver is able to blow through $21 an ounce, The Gold Cartel will begin to lose control of systematic operations.
Getting back to that "pressure" notion, the odds are that upon breaking that key resistance level, the price will go bonkers, as complacent silver buyers scramble to secure physical supply. The upward price action ought to be much more volatile than when silver last went to $50 an ounce in 2011. Don't be surprised if silver's price action isn't often compared to what a bitcoin has done. IMO the bitcoin price action is a road map for what is coming for the silver price.
As for GATA and what we are doing to expose an end to the reign of The Gold Cartel forces. It has been some 20 years…
-- We have held 4 international conferences -- in South Africa, Alaska, Washington, D.C., and London.
-- Been to Washington numerous times to meet the likes of the speaker of the House, Ron Paul, monetary committees, etc.
-- Organized letter campaigns to Congress.
-- Appeared on various cable television financial shows.
-- Collected and published evidence of The Gold Cartel's wrongdoings. Chris here and Indiana's James McShirley, a lumber company CEO who has extensive futures experience, have done yeoman work in this area.
-- Presented at conferences, such as this one.
It has been some journey.
Most gratifying of all have been the great people we have met over the years, such as yourselves -- many of whom have financially supported our efforts.
Unfortunately, we learned that the gold and silver industry as a whole will never do anything about dealing with the most important factor in the gold and silver world. Yes, to do so would mean dealing with some permitting issues by governments and financings by bullion banks. Yet, any other industry would form an organization to deal with, or correct, the problem, so they could not be individually blamed. Not this one, who has The World Gold Council refusing to anything about the devastating issue.
Then we have the issue of a financial market press which is not free or fair. During that trip to London we were told by the veteran Bloomberg gold reporter that she was not allowed to mention GATA. No matter what Chris sends to the press, they refuse to run with it. And even when they do, GATA is routinely cut out.
Just a few months ago, thanks to Chris, I spent hours dealing with a Wall Street Journal reporter who was doing a story on the Fed and gold. Introduced her to various individuals in the GATA camp and must have sent her 70 emails. This led to a front page story on the subject. But, guess what! Katy Burne, the reporter, got back to me with an, "Oh no, GATA was cut out!"
Dealing with the mainstream financial market press for nearly two decades reveals a no-hoper in that regard. And the reason is simple. GATA is taking on the richest most powerful people in the world and exposing wrongdoings. The press does not want to take the risk of confronting them in any way. Heck, as Chris will tell you, these reporters are too scared to even ask them questions. And then when individuals do, as GATA supporter Ware Smith did with New York Fed President Bill Dudley in Virginia last year, they refuse to answer the question.
So why carry on? Because one day what The Gold Cartel is doing will lead to the biggest financial market scandal in U.S. history and the story needs to be documented and told. And that day will come after the gold/silver prices go berserk following tremendous financial market/economic stress in this country… partly as a result of making gold, that barometer of U.S. financial market health, being dysfunctional. Think of it as a doctor taking away a thermometer to judge the health of a patient.
Other scandals come to mind such as Enron and Bernie Madoff. And then we have something quite comparable with the latest one on Hollywood Mogul, Harvey Weinstein. For many decades he sexually abused women and has even been accused of rape. The fact he was doing so was well known, even joked about at an Oscar Ceremony. The point is everyone was afraid to take him on because of his connections and role with the rich and powerful. Those connections included the Clintons and other well known Democrats.
Heck, my own sister, Kris, was a model in New York decades ago and she had to deal with him in a New York hotel room. Nothing happened in the end, but she was terribly frightened.
The point is, now that this "monster" has been exposed, the evidence of his wrongdoings is coming out of the woodwork as is this epic scandal. Weinstein did his thing for decades and got away with it just as The Gold Cartel is doing their thing.
The general commentary is that Weinstein must face the music and be dealt with so this sort of horror doesn't occur again. And this is a major reason GATA carries on.
We want The Gold Cartel to face the music too, which they will some day. Unfortunately, it most likely only will occur after enormous damage is done -- just like Weinstein is being exposed after so much of his damage.
So GATA carries on until that day comes. In the meantime, in my opinion, the most important fact to know about the gold/silver prices is to understand how artificially cheap they are because of The Gold Cartel's constant operations. And that one of these days something will occur that sends the gold/silver prices to the moon. When that happens, fortunes will be made.
Thank you.
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