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The Two Sides of Precious Metals Propaganda

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As we witness another “sudden”, “unexpected”, and temporary reversal in the prices of gold and silver, no doubt most precious metals bulls are surprised  by this lurch lower in prices. In this respect, I will claim to be less surprised than most of my peers – as I had been noting the “clues” as to how and when the next “sell-off” (i.e. ambush) of gold and silver would occur.

Sophisticated gold and silver bulls are attuned to the bearish/negative propaganda released by the anti-gold banking cabal (through their “emissaries” in the mainstream media). While we are not influenced by it, we take note of it in order to determine how gold and silver are being manipulated lower, and when gold and silver will turn higher (or rather what condition will trigger that move).

What most in the sector are not aware of, however, is that these propagandists put in almost as much time and effort on their “message” on days when gold and silver are surging higher – and no anti-gold/anti-silver propaganda is plausible. The reason is simple. Propaganda is a form of control. To maximize that “control” it is just as important to dominate the bullish commentary on precious metals as it is to “lead the choir” on the bearish side. Thus the propagandists are highly motivated to get you to believe them about what is “causing” gold and/or silver to go higher on days the metals are rallying.

The particular case in point is highly illustrative. Any reasonably knowledgeable precious metals bull understands the primary “driver” of gold and silver prices: the out-of-control (and soon hyperinflationary) money-printing of global central banks. It is the simplest arithmetic to observe that if most/all of the paper “money” is being diluted at a rate of 10% (or more) per year, while the supply of “good money” (i.e. gold and silver) is only rising by roughly 2% per year that you only want to hold gold and silver.

As I have explained in the past the concept of diluting currencies through money-printing is identical to the dilution of a company’s share structure when it prints-up a lot of new shares. Only an idiot would hold shares in a company which recklessly/continuously reduces the value of those shares through serial-dilution.

Because this is the most important driver of gold and silver prices, and because the banksters will never reduce the rate of their money-printing (since that is how they steal from us), one of the most important functions of the anti-gold propagandists is to never connect rising gold/silver prices to excessive money-printing. If the average investor ever understood the simple “equation” of the rapid dilution of fiat-paper versus the minimal dilution of gold and silver, the precious metals juggernaut would immediately become unstoppable – and the collapse of the fiat currencies to their true value (zero) would occur much sooner. Since that event also coincides with the annihilation of the banksters and the eradication of their paper “empires”, this gives us a glimpse into their desperation.

It is important to understand, however, that there is a second equally important purpose behind the efforts of the propagandists to control the bullish “message” about gold and silver: to set-up the market for their next “ambush”. In this respect their tactics are totally transparent. Whenever possible, the fiction they invent to “explain” the rise in gold and silver prices will be a temporary event. Obviously if the propagandists can get the sheep to believe their “temporary” explanation of rising gold and silver prices, then when that temporary event subsides, the sheep are now perfectly set-up to follow these Pied Pipers as they lead gold and silver prices lower.

In the latest example, day-after-day as gold and silver prices surged higher, the propagandists remained perfectly “on message” every day: gold and silver prices were rising because of “fear” over the Euro debt-crisis, and the ridiculous debt-ceiling tango being acted-out by Republicans and Democrats. Paying close attention to this propaganda, I knew precisely how/when the latest rally in gold and silver would end, and what would be the pretext for the price-reversal: announcing some “solution” to either the Euro debt-crisis or the U.S. debt-ceiling farce.

It is here we can (again) note the desperation of the banksters and their minions in the mainstream media. Not only did they find it necessary to “solve” both of these crises simultaneously (in order to provide them with the maximum leverage to push gold and silver prices lower), but when we actually read about these “solutions” we realize that absolutely nothing has changed. In fact there has been no “solution” at all (on either side of the Atlantic) – merely “optimism” that some deal is imminent.

In the case of the Euro debt-crisis, the banksters are clearly gripping a two-edged sword – by the blade. Because the U.S.’s economic terrorism against Europe is sabotaging those economies faster than the EU can cobble-together economic “band-aids”, the EU has literally announced dozens of “solutions” for the various economic crises plaguing the debt-sinners.

Each of these “solutions” is more precarious/dubious than the last – and thus each has a shorter and shorter shelf-life. This means that the big problem in using a “solution” of the Euro debt-crisis as a “weapon” against gold and silver is that the periods of time where the sheep consider the problem solved grow ever shorter, while the chaotic intervals where “Chicken Littles” run amok (and gold and silver soar) grow ever longer.

Obviously this is a weapon which can be used against the anti-gold cabal more often than it can be used by them. The fact that the propagandists cannot find a better propaganda-weapon to wield against gold and silver is another clear indication of the futility/desperation of their position.

With respect to the U.S.’s debt-ceiling tango, the theatrics are even more absurd. As the world’s biggest deadbeat, with the world’s biggest structural deficits, the United States has two “choices”. It can raise its debt-ceiling substantially, or it can put a gun to its head and pull the trigger. You don’t have to be a “psychic” to figure out how this is going to end.

What is far, far more ridiculous however is that once Republicans and Democrats have finished their posturing for the cameras and actually announce a done-deal this will be proclaimed as somehow having “fixed” the U.S. economy. Back in the real world however, any “solution” will be no different than how an alcoholic “solves” his own “problem” when he finds the key to his liquor cabinet.

More debt (for the largest deadbeat the world has ever seen) means imminent bankruptcy just as surely as more booze for a hardcore alcoholic means an early grave. Even more absurd, authorizing more debt means B.S. Bernanke will immediately crank-up his printing press and churn-out Bernanke-bills at an even more reckless rate.

In short, any rational analysis of these economic parameters means that it is utterly impossible to construe any bearish implications for either gold or silver. Instead, the opposite is true. In keeping with their addictive behavior, any/all “solutions” of these debt-addicts always involve more debt. Since none of these deadbeats (on either side of the Atlantic) can actually finance more debt, each and every incremental increase in debt corresponds to an identical ratcheting-up of their reckless money-printing.

In other words, every “solution” proclaimed by these charlatans directly makes gold and silver more valuable. This means that when we see gold get knocked back by $30/oz, and silver get pushed-down by roughly $2/oz in this scenario (both of which are now small moves in percentage terms) we again have conclusive proof of “manipulation”. The actions of U.S. and European officials have unequivocally made gold and silver more valuable – and yet the paper-pirates in New York have been able to push bullion prices lower.

The “last laugh” will always belong to the gold and silver bulls. With the banking cabal running out of plausible anti-gold/anti-silver propaganda just as quickly as they are running out of actual bullion, their capacity to manipulate the market through “jawboning” alone continues to diminish. Simultaneously, their leverage and vulnerability (on the short side) is exploding exponentially as their minimal reserves of bullion continue to dwindle.

Standing against this (paper) house-of-cards is an ever-swelling army of bullion-buyers – ironically now led by the central banks themselves. When the “gamblers” start to bet against themselves, you know the “game” is almost over.

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Jeff Nielson
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written by Jeff Nielson, July 22, 2011
Boneafide, with respect to U.S. markets, I'll defer to "veterans" such as Jim Sinclair and Dan Norcini. They are CONVINCED that massive shorting of these miners REGULARLY takes place - for precisely the reason you gave.

(http://traderdannorcini.blogsp...r-and.html)

The miners are supposed to "validate" a legitimate precious metals rally by LEVERAGING the gains in the price of bullion. So when they are successful at forcing-down valuations in the miners, this ALSO helps them push bullion prices lower (or at least restrain the gains) by pointing at that supposedly "bearish" indicator.

In Canada, after the Crash of '08, Canada's banks cut-off ALL credit to the gold and silver miners (despite the profitability of the sector) - and then SHORTED the miners relentlessly.

Note the "bottom-line" however: it was that utter WIPE-OUT of the sector which set up the LARGEST "rally" in the miners in this 10+ year bull market. So while we may SUFFER when these "bear attacks" maul the miners, they ultimately form the "base" for the next BIG move higher (likely this fall).
boneafide
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written by boneafide, July 22, 2011
Jeff,
Do you think the banksters have also been shorting precious metals equities over the last year to brainwash the public into believing that the gold rally is not legit? The downward trend of the ratio of equities to gold can be a strong deterrent. If this is the case, what would be your prognosis of the precious metals equities market in the face of such heavy short positions?
Jeff Nielson
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written by Jeff Nielson, July 22, 2011
WaveDad, I don't think anyone can predict EXACTLY how the new Chinese exchange will impact the market, except in one respect: we can expect significantly MORE volatility in gold and silver from this point onward.

Previously, the "tug-of-war" in gold and silver prices was INTERNAL - within the London/New York markets. Now there will be an (external) official, COMPETING exchange to offset all of the paper-fraud in New York and London.

We could even see a "decoupling" in the bullion market occur via this new development. Every day, the closing quotes in New York/London would be lower than the closing quotes in China. Even though the trading TIMES would not mesh precisely (due to time-zone differences), the consistent pattern of lower prices in New York/London and higher prices on China's exchange is a near-certainty.

Thus all it would take for a "decoupling" to begin is for the price-discrepancy to get up above $20-$30/oz for gold, or $2-$3/oz for silver, and at that point if begins to represent an OFFICIAL decoupling. At that point, we will begin to see trading sessions where the HIGHEST prices in New York and/or London will be lower than the LOWEST price of the trading session in China.

At that point the world will have TWO, SEPARATE MARKETS for gold/silver.
paxjds
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written by paxjds, July 22, 2011
AuAg, I expect gold and silver to drop as much as 10% over the "happy days are here again" when Washingtons huslers raise the dept limit on or around August 2nd. The euphoria shoud be over after a week or so of invertors deeper inflections. Reality will set in, the Printing presses will be fired up again to the tune of 1 Trillion PLUS dollars a year. Precious metals will resume its upward march. Inflation will accelerate causing more jobs to be lost. Look for the government to magnify the lies over Unemployment rates and inflation rates. We are in for a nasty ride, just after the 2012 elections. Look for 2013 and 2014 to be record years for physical gold and
silver.

AS Jeff's article insinuates, Buy gold and silver, as the Banksters Game is going to crash the dollar which will send precious metals and other comodities upward to their true value.
Jeff Nielson
...
written by Jeff Nielson, July 22, 2011
AuAg, in manipulated markets, populated by IDIOTS, it's simply pointless making short-term price predictions - and ANYONE who claims otherwise is spewing B.S.

OCCASIONALLY, there will be moments in the market where a move is "telegraphed" by market conditions. However, you will NEVER see such a moment in the middle of summer - when trading volumes are lower, making manipulation even easier.

The bottom-line is that any TIME you are ABLE to buy silver: then that is a "good price". If we were to assume that (somehow) silver was going to be (briefly) pushed down to $10/oz. I would NOT tell people here to "wait" for that price - because you would never FIND any silver for sale at $10/oz.

Quibbling about price when there might not be ANY silver to be had (at all) in the very near future is not a good strategy. People SHOULD have been buying silver in the mid-$30's. Those that did not "load up" at that time should buy NOW - because the probability is that the price will only go UP from here.
Wavedad
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written by Wavedad, July 21, 2011
Jeff,
Comex's new challenges from China will be very interesting to see this played out...
http://www.minyanville.com/buzz/buzzalert/as-china-enters-silver-market/07/21/2011/id/139998?camp=syndication&medium=portals&from=yahoo
AuAg
...
written by AuAg, July 21, 2011
So what's the price outlook for gold/silver over the next couple of weeks, when the "problem" will be finally "solved" on August 2?

Should I buy some now or hold out for when everyone is happy that all the problems are over and gold/silver take a bit of a hit?
Jeff Nielson
...
written by Jeff Nielson, July 21, 2011
Norbull, to put your remarks in slightly more general terms, when we look at the "leaders" of our so-called democracies (looking down on us from their ivory towers), it becomes SO easy to understand how Marie Antoinette could have believed that "a little cake" is all it would take to solve the problems of the little people...
Norbull
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written by Norbull, July 21, 2011
Great article. The situation in the UK is exactly the same: we print money and at the same time give Europe funds even though we're not in the Euro. Even some UK MPs are getting worked-up about the time the government is wasting on Murdoch & Co rather than looking at the debt problem (and the famine in Africa). I don't think the MPs really have any idea about the real financial problem. In the opposition party we have Miliband and Balls (both previously advisors to Gordon Brown) and they can only see more government spending as a solution to everything.... Keynes still has a lot to answer for!
Jeff Nielson
...
written by Jeff Nielson, July 21, 2011
Paxjds, I was just saying the same thing myself: "trimming" the U.S. deficit with the entire economy literally perched on the verge of bankruptcy is like 'spitting into the wind'.

GeorgeSilver, it's impossible to give you a precise answer - because of how severely "depressed" the silver sector was after the price was pushed to (in "real" dollars) a 600-year low in the mid-1990's.

Since that time, almost all of the silver mined has been either a "byproduct" of other mining, or esle EXCEPTIONALLY high-grade silver. NEITHER of those facets of production answer the question: what is the AVERAGE cost to deliver enough silver to the market TODAY to meet demand?

I can GUESS that the cost is somewhere between $10-$15/oz at the moment. However you have to realize that even THAT number is almost meaningless - because of the SPEED at which our fiat currencies are plunging toward zero.

You can't say "well, silver MIGHT go as low as $10-$15/oz" - for two reasons.

1) Inventories are near-zero. IF the price got anywhere NEAR that ridiculous number, the market would INSTANTLY implode - and the next day (or the next time silver markets finally OPENED again) the price would be somewhere ABOVE $50/oz.

2) Even over a LONGER term, by the time silver got anywhere near such a price-level, that "$10-$15/oz" is now $20-$30 oz - when EXPRESSED in the diluted paper of the future.

When the EARLY commentators to this sector were making their "long term price predictions" (most of which have ALREADY been passed), these pioneers weren't "wrong".

Instead, what has been happening is that since the beginning of the precious metals bull market, our "leaders" have been driving their currencies to ZERO even FASTER than precious metals prices have been rising.

Thus silver and gold are MORE "undervalued" today (at $40 and $1600 respectively) than they were a DECADE ago - with silver at $4/oz, and gold under $300.


You can't "predict the future" when our governments continue to MOVE THE GOALPOSTS every day...

georgesilver
...
written by georgesilver, July 21, 2011
A question to the experts::

Can anyone tell me how much it costs to produce a 1 ounce Silver coin? That's all the costs including digging the Silver out of the ground, refining it and producing the coin.

Just so that I know just how far the price can be smashed before nobody produces coins.
paxjds
...
written by paxjds, July 20, 2011
Our political brain trust here in the US is about as smart as a Mule's ASX. These brilliant IDIOTS are working on a deal to eliminate 4 trillion dollars over ten years in government spending, while reducing taxes mostly on the wealthy via rates and elimination of the Minimum Tax.They are therefore eliminating 400 Billion dollars a year from our current deficit of 1.6 Trillion a year. That still leaves 1.2 trillion Dollars a year DEFICT. The loss of 400 Billion dollars in government spending will cause the loss of a lot of jobs. Even Money says the tax breaks to the wealthy will be at Best will be a Push, or Break even. That still leaves a net Trillion dollars a year in deficit spending, which is why the Democrats and Republicans will Hail this as an example of Co-operation between the two parties, with them putting the Country first.
Expect the stock market to rise, a surge in the dollar as investors get sucked in as always, and the Fiat Ponzi scheme seems off its death bed. Gold and silver will drop while this frothing at feeding time continues a while longer. Meanwhile, similar games are played out in Europe and Japan to keep the Fiat Ponzi going worldwide. As Inflation follows the Banksters and Government continued massive printing, the Ponzi Fiat printing sidaster takes hold. The wealthier nations will end the dollar/euro/yen game and force a new world currency to replace the decapitated and delapidated dollar with a basket of precious metals, oil, gas, lumber and food to replace the worthless paper and ink they were sucked into dealing with.

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