Written by Jeff Nielson Thursday, 20 June 2013 13:31
As we see gold and silver prices plunge lower (again) today; it becomes an especially good idea to step back, and look at the Big Picture of these markets. Why? Because nothing happened today.
What is the official propaganda today from the Corporate Media on why precious metals prices have fallen?
…Federal Reserve Chairman Ben S. Bernanke said stimulus may be reduced later this year as the economy recovers.
The problem here? B.S. Bernanke (aka “The Boy Who Cried Exit Strategy”) has been saying this every day for 4 ½ years. There was literally not one word that was new. It could have all been copied-and-pasted from one of his 2009 scripts. Simply calling this “news” is a perversion in and of itself. So nothing happened today in bullion markets.
With today’s price-action having no connection with the real world, and with any Bernanke “prediction” of an Exit Strategy having no connection with sanity; it behooves us to look at the actual supply/demand dynamics for bullion markets – something never attempted by the Corporate Media itself.
Here we see yet another fundamental contradiction by the “bears” of the propaganda machine. While we have these Chicken Littles relentlessly making absurd price-predictions for the gold market; these bashers are simultaneously spreading at least as much doom-and-gloom on their “predictions” for the mining companies which supply these metals.
Herein lies the contradiction. You can’t (rationally) be “bearish” on both the price of gold and the supply of gold. If one is low; this implies the other will be higher. More emphatically; you can’t be bearish on both the price and supply of gold at a time when there is already a 1,500+ ton per year supply deficit in this market.
Let me explain the mechanics here, for any/all readers to whom this is not obvious. Let’s start with plummeting prices; precisely what the Banksters have manufactured in bullion markets today. What is the consequence of these lower prices?
To get that answer, we need only refer to the propaganda from Basher Central; more commonly known as Kitco:
…“Everyone thought at $1,600, $1,800 and $1,900 (that) all the mining companies were making profit hand over fist, but the reality is that the capital costs of construction had escalated so signficantly that the margins of production and the margin of operation were still tight,” Gray said.
“$1,300 is not a sustainable gold price…”
Let me translate that remarkable statement. When all of these very same gold-bears were writing their drivel about “a gold bubble” for the past four years; they were all lying. Gold priced toward $2,000/oz was nothing more than the minimum price needed to sustain some semblance of health in the gold-mining sector.
And having gotten that much of a mea culpa, we get the remainder of the confession: $1,300/oz is not a “sustainable” price for gold today. Thus we have a collection of Serial Liars acknowledging that informed investors should not have listened to anything they were saying about the gold market over the past four years (at least).
Now these same Serial Liars are “predicting” many dark days (and even lower prices) ahead for the gold market; because the Boy Who Cried Exit Strategy has cried “exit strategy” for the 1,000th time. And we’re supposed to be convinced by this “prediction”; from these esteemed analysts?
But let’s assume that they were correct. In fact, let’s assume that the King of the Buffoons is correct and the price of gold will be manipulated to $1,000/oz. What then?
If the gold-mining industry isn’t sustainable (at all) with gold priced at $1,300/oz; what would happen with gold at $1,000/oz? A collapse in supply…in a market which already has a greater-than-1,500 ton per year supply-deficit. A deficit already 60% greater than annual mine-supply.
Written by Jeff Nielson Monday, 17 June 2013 12:15
In wading through the mainstream drivel written on the gold and silver markets; it becomes increasingly difficult to reply to such material without the word “desperation” creeping in again and again. Indeed, the quantity of gold-bashing itself is simply overwhelming.
In the years I have covered this market, I have never seen as many mainstream articles written about the (supposed) “bear market” today as were written during the 12 years in which the mainstream (grudgingly) acknowledged the bull market in precious metals.
This, of course, is entirely atypical behavior for a propaganda machine notorious for worshipping “winners” and shunning “losers”. When a particular company/sector falls from favor as a hot place for financial gambling, there is a brief frenzy of dancing-on-the-grave of the former darling – and then it is forgotten forever.
Not so with precious metals. Indeed, the more rabidly the mainstream propagandists insist that the precious metals sector has entered a “bear market”; the more obsessed they become in “covering” the sector. The lady doth protest too much, methinks.
This perverse behavior of the mainstream media is only one utterly obvious indicator giving lie to claims of a “bear market”. Global demand for physical gold bullion spiked to an all-time high around the world following the Great Paper Liquidation, which drove down prices in the phony paper-fraud markets for bullion in New York, London, and Shanghai.
The propaganda machine has never attempted to “explain” how/why you can have record demand in a “bear market” – because it can’t. High demand is the definition of a “bull market” in the real world. Bulls stampede. Bears hibernate.
Once upon a time the Drones in the mainstream media could understand at least this simple truth of market fundamentals, but apparently no longer. The lie of a “bear market” is fundamental to all the other gold-bashing mythology, and so it remains in their shrill rhetoric – despite its perverse absurdity.
Because of this mythological bear market; we have a growing herd within the mainstream media “predicting” another wave of gold-hedging from the world’s largest miners. Prices are low; so why doesn’t everyone lock-in (and forward-sell) years of their production at these give-away prices?
In any other sector, forward-selling years worth of production with prices at the lows of a “bear market” would be met with howls of laughter, but this is the gold sector. As noted in recent commentaries; the world’s largest gold miners are nothing but a collection of banker sycophants. Their banker Masters command, and they obey.
Currently those Sycophants are in India, trying to persuade the world’s largest buyers of gold to buy less gold – at the request of their Masters. So getting the management of these miners to engage in more forward-selling of their gold is about as difficult as twisting the arm of Gumby. The problem for the bankers trying to induce another wave of hedging is in getting the shareholders of these Sycophant Miners to embrace another, massive gold give-away – and thus the waves of propaganda predicting such a trend.
Of course to even partially justify “hedging” at rock-bottom prices, it’s necessary to add additional mythology: that this “bear market” will persist for an extended period of time. And so we come to the next, major propaganda initiative aimed at the gold market: yet more talk of a B.S. Bernanke “exit strategy” for the Federal Reserve.
How ridiculous is this propaganda? We’ve been promised an Exit Strategy by Bernanke every six months since the imaginary U.S. Recovery began. This particular lie has worn so thin that no one in the Federal Reserve or mainstream media or U.S. government will even use the words “exit strategy” – for fear of immediately setting off a chorus of laughter. And so they say exactly the same thing, but now use the word “tapering” instead.