Commodity Trade Mantra

Why Are Gold and Silver Prices Manipulated?

Why Are Gold and Silver Prices Manipulated?

Why Are Gold and Silver Prices Manipulated?

I promised yesterday to answer the question “why?” is it that silver and gold are manipulated.  Some people say “who cares?”  Some don’t believe it while others don’t even have clue that it’s happening.  “Gold bugs” for the most part are angry but I sense they are angry for the wrong reasons.  Many understand fiat money to be freely printable and without any real value but they are angry because “gold went down” or didn’t “go to da’ moon” yet.  They should be “rich” by now …the flaw of course to this thought process is counting your wealth in dollars and wanting to, hoping for and planning to “sell” which leaves you back again with DOLLARS.  My point to this paragraph is to show you how well the “why” gold and silver manipulation have worked so well!  Even many hard asset advocates still deep down “want” more dollars which is why they want their holdings to “go up.”

OK, so why has it been imperative to suppress gold and in particular silver prices?  Let me first say I will consider gold and silver to be the same for this exercise even though they are not.  Silver is a much smaller market than gold, there are no large stockpiles held at central banks and there is much more above ground and deliverable gold available than silver which makes silver the more rare of the two when looked at from a “stock” standpoint rather than “flow.”

“Why” gold and silver HAVE TO BE MANIPULATED is at the very central core of the global monetary system.  Global money today is ALL fiat, all creatable at will and whim by central banks and …have zero intrinsic value on their own.  Gold on the other hand “is” money.  It has value because it has a cost to create and people believe it has value.  Gold is the exact opposite of fiat, if governments could pass a law which stripped gold of “value,” they would have already but this would be akin to passing laws that outlawed the tides, bad weather or even death.

I guess the best way to explain this is if you are issuing a currency (especially the reserve currency) which has no intrinsic value and everything “financial” in the world is based off of or derives value from your currency… you must try to crush all competitors.  Do you understand the last sentence?  If you think about it long enough you will come around to understanding that euros, yen, pounds, rubles and all the rest are not really “competitors.”  No, they are all “partners in crime” whereas gold is THE competitor.  Gold is nothing more than “truth” if you will.  “Truth” as in getting paid for or paying something while making a true and real settlement, something for something rather than the current something for nothing scheme.

You may have read in my past writings where I call the current system of U.S. debt and FRN’s as a “never pay model.”  For instance, we import oil from Saudi Arabia and pay them in dollars, these dollars are then “invested” in U.S. Treasuries which promise to pay… more dollars.  They are giving us a finite and depleting asset and accepting payment of a currency which is freely printed and in unlimited quantities.  Gold as an “alternative” or competing money cannot be seen to be the better choice.  This is VERY important because gold itself is also a finite asset itself AND becoming harder and more expensive to produce.  By manipulating the price downward, the spotlight does not shine on gold and the human emotions of greed and “gold fever” are tempered.

You see, the reality is that gold is a thermometer or canary in the coal mine which serves as an early warning siren to bad, lax or faulty fiscal and monetary policies.  Gold is a lie detector which politicians and central bankers wish would just shut up and go away.  Gold as the anchor to a monetary system prevents politicians and bankers from issuing too much money for votes or favor.  They cannot make it just go away so they do the next best thing …they falsify the price.  Yes I know, we have heard so many people say “they would never do that”…to which I reply there is NOTHING that hasn’t nor will be done to retain power by trying to fool the masses, EVER!  All you need to do to know that this statement is correct is to read history.

Please understand THE most important piece of chewing gum that holds the entire financial system together is the dollar itself.  Everything is priced in and levered off of dollars and U.S. Treasuries.  I can hear it now, “Holter you are wrong, not everything.”  Think about what would happen if one day the world woke up to find out dollars have no value and collectively decided to no longer use them?  Nearly all pensions, banks, brokers, insurance companies, bonds and nearly all debt instruments would be hung out in thin air.  Also remember what lower gold prices mean to interest rates, it means a lower interest rate which allows for lower debt service and thus the ability to lever up further…which is why central bankers are born in the first place.

While I am on the subject of “why” (and yesterday wrote about “how”), I would like to ask a few questions.  If it turns out that the U.S. really does not have any gold left, what will this mean?  If it really turns out that the U.S. has in fact been leasing and or selling gold which we were supposed to be safekeeping for other governments (allies), what will this mean?  I could ask a whole bunch of other questions but what is the point?  The answer to all of these questions are the same, the U.S. “lied” and committed the fraud of running a global monetary Ponzi scheme.  Going all the way back to 1971 when the U.S. defaulted off of delivering gold to foreigners in exchange for dollars, we have run a “never pay” currency.

Before finishing I do want to mention the “attacks” have been well thought out and quite thorough.  The media constantly downplays gold, brokers discourage it and many will not even sell it to customers.  Ben Bernanke even went so far as to say (perjure himself in front of Congress) gold is held simply out of “custom” and no, “it’s not money.”  The entire process has been and still is a “psyop” if you will with the intent of keeping the financial fraud from being uncovered.  THIS is “why” gold and silver are attacked!

I will leave you with this thought.  Mayer Rothschild himself said, “Give me control of a nation’s money and I care not who makes the laws.”  He said this because controlling a nation’s money was and is the ultimate power.  For gold, silver or anything else to compete with this “power” is unacceptable …which again, THIS is “why” gold and silver are attacked!

Courtesy: Bill Holter

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