Gold price volatility made to shake out gold investors

When the establishment doesn’t like views that disserve its own interest, one of the tricks used most often to keep the masses from exploring an idea distasteful to the mainstream is to simply label it as a “conspiracy theory.” Simply labeling an idea as “conspiracy theory” is enough to keep 99% of the population from looking further. The Gold Anti Trust Action Committee (GATA) has been labeled a conspiracy group from its inception. The only problem is that sometimes, in fact I would suggest more often than we know, conspiracy theories are not theories at all but well-founded investigations of what is transpiring out of sight and (hopefully from the establishment’s point of view) out of mind. For example, when soon after his election President Trump said he was convinced he was being spied on by the CIA and the FBI, CNN and CNBC and most news outlets suggested that was a crazy conspiracy theory and that it proved the President was out of his mind. The only problem with that is that we now know that the CIA and the FBI, with the blessings of the Obama Administration, were selling lies to the FISA courts to do exactly what Trump’s conspiracy theories were suggesting.

More directly to your editor’s daily concerns, GATA headed by an honest newsman (Chris Powell) has been establishing evidence that a cabal of bullion banks, tied very closely to our government, has been manipulating the price of gold through various means including leasing the same gold several times in some cases and also by bombing the price of gold when it begins to threaten confidence in the dollar-based monetary system.

Given GATA’s undeserved reputation, I’m sure that what I’m passing along to you from GATA will be received the way much of their work has been received. Simply labeling GATA as a conspiracy-driven organization, most people who don’t want to work too hard to discover the truth simply pass on to another topic. But as a believer in the diligence of Chris Powell and others of the GATA team, I would suggest gold manipulation is a topic you should pay attention to because as these times become more and more chaotic, you can expect the need to suppress the price of gold from time to time will become acute. In that regard I would pass along the chart on your left to show how the price of gold traded during the German hyperinflation.

On June 6, GATA put out the following verbiage that it claims is from “a European friend” well known to them who prefers not to fall under even more surveillance in his own country. This friend sent along some observations quoted below for which Chris Powell, the secretary/treasurer of GATA, took the responsibility to share them along to GATA’s subscribers. Chris pointed out, the main point from Mr. Anonymous was that:

huge volatility will be injected into the gold market to facilitate government intervention elsewhere in the world financial system echoing the cable sent from the U.S. embassy in London to the State Department in Washington on the eve of the creation of the gold futures market in New York in 1974.”

Chris went on to say that:

The cable noted the London embassy’s consultation with bullion banks about the futures market and provided the following evaluation:

“The major impact of private U.S. ownership, according to the dealers’ expectations, will be the formation of a sizable gold futures market. Each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison.

Also expressed was the expectation that large-volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long-term hoarding by U.S. citizens. The cable can be read here:

Chris then passed along comments from Mr. Anonymous:

 “I’ve no real idea of who is doing what in the gold market, but the shenanigans in the last two weeks have all the hallmarks of a managed retreat by the forces seeking to control the metal’s price.

“Clearly Friday’s U.S. jobs report was an exercise in trying to paint a picture of the possibility of a fast economic recovery, but I’m not sure it had huge credibility after its initial impact on the markets. The U.S. Federal Reserve and Treasury Department have a really big problem of needing to keep interest rates low while procuring massive new funds. A few weeks ago they got a 20-year bond away at a yield around just 1.22 percent, and the gold price was under pressure as they were doing it. That’s no coincidence, in my view.

“I think we now can expect gold to be attacked whenever a major government fundraising is being arranged or some big economic news is being presented. President Trump will support all this as he appears to be heading for defeat for re-election in November. Given his record, I imagine that the positive official spin on economic news will become even more remarkable.

“Attacks on gold will keep investor interest in the monetary metal and gold-mining companies relatively subdued. It’s much harder to maintain a position when prices are so volatile.

“Gold investors expect that suppressing interest rates can be successful only if vast amounts of dollars are created and that it is impossible to do this without gold going much higher, especially since official gold holdings have been depleted by years of price suppression. I would never rule out a gold revaluation or debt jubilee as some have suggested.

“But to quote Clint Eastwood in “The Good, the Bad, and the Ugly,” where he talks about the stash of buried gold just before the final shootout, “We are going to have to earn it.”

“Gold investors should expect chaotic swings in prices in the next few years unless or until gold returns to anchoring the monetary system. But the underlying trend should be up, up, and away.

“These are very strange times.”

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CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
[email protected]



About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.