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The Dow-Gold Paradox

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Published : February 07th, 2013
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Category : Gold and Silver

Read the Tuesday Afternoon Wrap-Up for 2/5/2013 and the Wednesday Morning Commentary for 2/6/2013

For the entiretyof my “TEN YEARS OF HEAVEN AND HELL” – soon to be eleven – I have endured the ignominy of Cartel PM attacks.  Starting with “SUNDAY NIGHT SENTIMENT” raids, to the KEY ATTACK TIMES of 3:00 AM EST, 8:20 AM EST, 10:00 AM EST, and 12:00 PM EST; and more recently, 2:15 AM EST and 7:00 AM EST – I have seen it ALL.  Sadly, such “operatives” are becoming more frequent andintense; as TPTB realize the END GAME of fiat currency collapse is rapidly approaching.

On a daily basis, it appears PMs are ALWAYS down; morning, noon, and evening.  Nearly EVERY time I walk into the gym, down they go; or anytime I jump into my car; or look at my screen.  Just watch CNBC in the morning; and you’ll see that nine out of every ten times “gold” pops up on the screen, it immediately ticks down.  Moreover, ninety-nine times out of a hundred, when I click on my Kitco app, gold and silver immediately decline.  And perhaps 999 times out of 1,000; when gold re-opens in the ultra-thin “Globex” electronic market at 6:00 PM EST, the first tick is down.

Thus, it seems quite the paradox that gold and silver are the WORLD’S BEST PERFORMING MARKETS over the past 12 years; rising, on average, by 17%-20% – and in gold’s case, NEVER having a down year…

despite the fact that during New York trading hours – when 99% of ALL significant price moves occur – gold is net DOWN over this period.  FYI, the 10:00 AM EST WATERFALL DECLINE in the chart below represents the afternoon “P.M. Fix” in London; when PHYSICAL trading ends for the day, and (naked shorted) PAPER trading dominates…

Conversely, the “DOW JONES PROPAGANDA AVERAGE” appears to ALWAYS be higher; no matter the news or time of day.  For the past decade, I estimate Dow futures have been called higher or barely lower on 99% of all trading days; compared to no more than 50% for PMs – despite the aforementioned bull market.

Despite the “perma-green” status perpetrated on the Dow by the “President’s Working Group on Financial Markets,” the WORLD’S MOST WIDELY VIEWED INDEX has barely risen in the past 12 years.  Moreover, if you exclude the survivor bias of deleting bankrupt or reorganized companies like General Motors, AIG, Citigroup, and Eastman Kodak, the Dow would likely be down over this period…

Of course, if you adjust the Dow for INFLATION, it is down significantly; by 28% utilizing the government-published CPI Index, or 35%+ including GM, AIG, C, and EK…

…and an astonishing 67% (or 75%+ including GM, AIG, C, and EK) when incorporating TRUE inflation statistics, as measured by John Williams of ShadowStats.com

…per the chart below; perhaps one of the most important you will ever see…

It’s difficult to comprehend how the PPT can keep the Dow higher nearly all the time without it meaningfully rising.  Conversely, PMs nearly always appear to be down; yet, year after year, end up higher.  Thus, the “DOW-GOLD PARADOX”; which defines the TPTB’s strategy of keeping investors away from assets that PROTECT them, and in investments that HARM them.

So long as you realize their “Achilles Heel” is the lack of available PHYSICAL gold and silver (utilized to suppress prices), you will NOT fall prey to this trap; and thus, be SAVED when other assets – government-supported or otherwise – FAIL.

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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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