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Yesterday gold has dropped $133 from last week’s close. Friday’s assassination attempt, which as the price of gold drop from $1,560 and ounce to $1475 per ounce, by futures market shorts is remarkable on two fronts. First is that there were 400 tonnes of (paper) gold sold, or one quarter of global annual production. In one day.
The second is that this was such an obvious short play – nobody but nobody could deliver 400 tonnes of physical gold in June if they had to – that it absolutely screams “collusion”. What’s more, the sentiment in the mainstream financial press before the assault began, led by Goldman Sachs, who on Thursday proclaimed it was time to short gold, was massively bearish.
This is the best example yet of how the U.S. Federal Reserve-sponsored, American Syndicate of Collusion and Manipulation (AMSCAM) operates. Its as plain as the false U.S. economic recovery, and anybody who can’t see it should consider a lobotomy. Soaring stock markets are the visible outcome of the continuous capital fabrication, and are the incentive to the banks to undertake the enterprise.
In a nutshell, here’s AMSCAM 101 simplified:
1. Goldman and its accomplice financial partners orchestrate the origin of massive short contract positions in the futures market (where they need only supply 5% of the cash for any contract), but don’t actually execute the trades. Its essentially a carve-up and battle plan, with provisions made for the losers to be made whole for any cash losses by Goldman and its band of merry thieves.
2. Goldman Sachs reaches out to the mainstream financial press and advises the world to go short gold because the United States is in recovery. The mainstream financial press dutifully broadcasts and amplifies the message across a thousand publications worldwide.
3. The trade is then executed, sending he price of gold plummeting, and (theoretically) inducing physical holders to rush to market to sell the gold they’ve accumulated at higher prices in a capitulation to the shorts, who then mop up as the market plunges.
Rinse and repeat. This pattern has been visible in multiple attacks on the gold price since September 2011 when the AMSCAM group realized they were losing the battle to destroy gold’s influence in world currency markets, and was seriously threatening the ability of the US Federal Reserve to continue kiting cheques to the US Treasury at extremely low rates. At that time, it was realized that in order for the destruction of gold’s perception as a barometer of fiat currency health to succeed, the price of gold was required to perform counter-intuitively to expectations in line with historic performance.
In other words, the price of gold would have to fall regardless of what headlines indicated.
With the successful throwing out of the position limits for speculative traders that was part of the Dodd Frank legislation that passed in October 2012, the way was paved for an unlimited buildup in short side contracts that, when due, can be rolled over to entities who are non-reporting, dark pool members whose ownership is therefore not public and whose balance sheets are hidden. Their creditors and shareholders are also hidden through offshore-domiciled ownership structures.
This is essentially the invisible home of the $600 trillion + in unreconciled derivatives trades that overhang the futures market. Brooksley Born was unceremoniously purged from Commodity and Futures Trading Commission chairmanship in 1999 for having the audacity to suggest that the absence of oversight by the Commodities and Futures Trading Commission of the financial institutions running the futures and derivatives markets posed a grave threat to the world’s financial system, and needed to be stepped up.
Then U.S. Treasury Secretary Robert Rubin forced her to quit, and that was the last time the CFTC had a serious shot at being a regulator as opposed to a facilitator. Bart Chilton, who is currently a commissioner of the CFTC, has somewhat famously yet utterly inconsequentially overseen the launch of formal investigations into illegal market manipulation in the silver market, and more recently, in the gold market, but to no avail. These investigations go nowhere, and produce nothing.
Worse than nothing, actually. In September 2012, when a U.S. judge decided in favour of the biggest commodities traders on Wall Street to strike the rule limiting futures position sizes, the CFTC failed to appeal the ruling or in fact, do anything about it. That was a key piece in setting the stage for last week’s AMSCAM assault on gold.
AMSCAM Getting Desperate
The sheer intensity of the Friday gold assault is indicative of the depth of commitment by the members of AmScam’s group to the destruction of gold’s price correlation to economic and currency health.
In an unencumbered gold market, the price of gold should have risen strongly on the news that Japan was going to mint another $1.4 trillion yen. It should have risen strongly on each announcement by the Federal Reserve that there would be a continuation of the $85 billion in asset purchases that is the gasoline keeping the U.S. stock markets firing on all cylinders, and probably underwriting the resurrection of the housing market in the U.S. It should have responded positively to the increasing instability and threat of war from Syria and now North Korea. It should be rising with every central bank’s purchase of its own ‘assets’.
But it doesn’t. The fundamental responses historically attributed to gold prices in reaction to economic metrics demonstrating rising or falling prospects for the world economy have been sterilized. The last market that has until now provided an immutable counterpoint to the folly of unlimited quantitative easing despite continuous interference from the AmScam group, is now the subject of a concerted, last-ditch full frontal assault by AmScam to silence the natural critic gold has always been.
Why would they be getting desperate? This latest attack on gold is a direct response to the Japanese launch of its intensified $1.4 trillion asset purchase program. The move by the Japanese has notched up the currency devaluation competition, and AMSCAM realized that this move would drive investors away from currencies generally and into precious metals. This is bald-faced attempt to destroy the appeal of gold as a safe haven against debased fiat currencies.
Recognize the Fraud
We’re at a critical juncture in modern history. The entire world financial system has been hijacked by a relatively small elite group whose interests run very much contrary to those of the global population. There is a competition for assets underway, and the ability to fabricate capital at will is the key tactic of the United States-ed effort to hobble and enslave every other country and its citizens to the U.S. dollar.
Within the United States, it is to be expected that the vast majority of Americans – moreso the higher up the economic food chain you travel – expect that the US should be the dominant economic force, and the data pointing to a recovery is accepted largely at face value. Nobody cares how it’s getting done. As long as the government and its affiliates are protecting the interests of the United States economy, regardless of whether or not its at the expense of the rest of the world.
What most poor ill-infomred Americans don’t understand is that the average family is just as much a victim of the fraud as are the citizens of foreign countries. The soaring stock market and the Zero Interest Rate Policy does absolutely nothing for the individual wage earner.
It is important that people recognize what is happening. The financial future is being hijacked by the elite. The attack on gold is just one visible element of that hijacking. Soaring US markets while the rest of the world’s crumble is another.
The financial crisis that began in 2007 culminating in the collapse of world markets in 2008 is about to resume with the added weight of trillions of additional dollars and yen and yuan adding to the downward momentum. The low precious metals prices will be a bargain for those with the conviction to see the opportunity.
Midas Letter is the Journal of Investment Strategy of the Midas Letter Opportunity Fund, a Luxembourg-based Special Investment Fund that specializes in Canadian-listed emerging companies in the resource sector with a focus on precious metals explorers and miners. James West is the Portfolio and Investment Advisor to the fund.
