Surviving and Thriving in a Growing Fascist Economic System

gold monthly

As America has evolved away from a nation of laws toward a nation of a ruling elite—namely, those who control the Federal Reserve Bank—investing on the basis of economic laws and the reality of markets has become much more difficult. By the very act of creating money out of debt, the Fed has greatly destroyed the efficiency and prosperity of capitalism. It is a simple truism that by interest rate manipulation, all manner of markets becomes less efficient because the natural price of capital itself is not allowed to be revealed. Capital is not only falsely priced by Federal Reserve gods, but in the process, capital is greatly misallocated to areas in the economy that, if properly priced, would not receive any or as much capital as it does under an artificially low price for capital.

By definition, when the money markets are manipulated, all markets are manipulated. When an artificial amount of money is created it results in distortions of all markets away from the efficiency of free markets toward the aims and desires of the elite, who decide to expand or contract the money supply. We know, based on the work of former Treasury Secretary, Lawrence H. Summers, and Professor Robert B. Barsky, that both men understood that when real interest rates are manipulated to lower levels—especially to negative real rates—a lid must be put on the price of gold, lest citizens and investors flee, from the fraudulent money created out of nothing by governments, to real money—gold. In the event that happened, the manipulation game by the Fed and its ruling elite would be over. And so, as GATA and David Jensen have so extensively documented, the major money center banks that are also major shareholders of the Federal Reserve System, manage to falsify the price of gold with massive paper short positions against the yellow metal in the spot and futures markets. Meanwhile, geopolitical adversaries of the U.S. and NATO have been taking advantage of the massive decline in the gold price to build up their gold reserves in order to compete economically and financially against the petrodollar that is coming under increasing pressure due to low oil prices as well as America’s loss of influence in the Middle East.

In fact, I am firmly convinced, based on numerous reports at Zero Hedge, that the U.S. is in reality supporting ISIS, which is allied with Saudi Arabia and Turkey, while at the same time rhetorically calling ISIS the enemy of the U.S. The reason for this big lie from America and NATO is that ISIS is a tool to destabilize the Middle East so that NATO and the U.S. can reshape the Middle Eastern map around the oil rich countries of Saudi Arabia, Iraq, and Iran. At this point, both Iran and Iraq seem to be moving more into the sphere of Russia and the BRICS while Saudi Arabia supports Turkey, as Turkey, a NATO country, continues to fund ISIS through the purchase of oil from ISIS. Indeed, it was only after Russia recently hit ISIS oil caravans that Saudi Arabia provided intelligence that enabled Turkey to shoot down the Russian fighter plane a few weeks back.

Only God knows where all this will lead and in His infinite wisdom He is not telling me so I can’t tell you. But God is in charge of the universe and I put my trust in Him. But, as far as our investments in gold are concerned, these geopolitical factors being dictated by the ruling elite are very harmful to the portfolios of those who value free markets and free people and invest accordingly.

It is clear that when Standard & Poor’s downgraded U.S. Treasury debt in 2011, the major bankers went to work against gold with massive paper shorts. And as the world needs less dollars gold rangenow because (a) the oil price declined by more than 50% and (b) more of the world’s oil is being sold for currencies including gold rather than dollars, there is even more reason to push down the real value of gold and to build up the value of the dollar. While some will argue that the gold markets are too small to matter, the fact of the matter is that if the price of gold had continued to survive in 2011, people would have finally been enabled to know the truth—namely, that the dollar is not as good as good. Thus the need to trash gold. Of course with the BRICS now competing against the dollar with currency wars that are evolving into a hot war—even possibly World War III—how this plays out remains as I say in God’s hands.

Now look again at the monthly average gold price in the chart above. I had hoped that the price of gold would stabilize at or around $1,200, which is the level that it seemed to comfortably rest at after the major smack down in 2013. But as you can see that range was significantly broken in November and again this month, much in compliance with a Goldman Sachs prediction that gold would fall to around $1,000 before the end of the year. Indeed, we are not far from that range. And if possible, the powers that be will try to smash it still lower. Whether they succeed or not remains to be seen. Indeed Michael Oliver’s structural momentum models suggest we are building a base at or around current levels. Michael stated in his Dec. 19 issue that he sees a major momentum bottom for gold’s net price trend and expects it to break out along with its relative performance, probably in Q1 or Q2 2016. Michael’s work suggests that if gold can break above $1,158 on a monthly close, it will be “blue sky” for gold.

In the meantime, outside of the gold markets, there are some very exciting companies in a host of energy and technology plays. My technology plays have always been about reducing the cost of items you need for staying alive, such as food, water, energy, and medicines. Chen Lin’s excellent work provides a resource for your editor that I am beginning to share more with you. Even this week Chen has found a niche market in the battery storage space that looks like a tremendous opportunity for major profits ahead. And there are still some very exciting and solid stories building in the gold mining space as well. For example, Novo Resources remains my number one pick, and that company may well become a profitable producer of gold in 2016 even if gold does decline to $1,000 or so. Also Dynacor Gold Mines continues to generate solid and growing profits even as it explores what could be a monster gold-copper porphyry deposit at its Tumipampa Property.

While I am disappointed in the ability of gold to hold at or around the $1,200 level, as we approach 2016, I am very excited about prospects for major profits in the energy and tech space, and 2016 may very well also be the turnaround year for gold. Stay tuned!

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.