Friday, September 16, 2011

Anybody Still Believe That The Fed Does Not Manipulate The Price Of Gold?

Or at least try to?  Here's a quote from Paul Volcker from a 2004 interview, in reference to January 1973 when the dollar was devalued against the yen: 
That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.
- Paul Volcker, "Nikkei Weekly" 2004

And here's a famous quote from Alan Greenspan in 1998, when he was Chairman of the Fed:   "Central banks stand ready to lease gold in increasing quantities should the price rise."

Those two quotes should be plenty of proof that - as I said in yesterday's post - the ECB, SNB, BOE and Fed acted in concert to try and suppress the price of gold while the SNB devalued the Swiss franc and the group of central banks collectively put together a bailout liquidity facility in place to keep the EU banking system from collapsing.

At some point gold will have a "snap-back" reaction in its price that could be quite breathtaking.  The massive emergency funding programs being put in place will eventually have to be monetized by central banking printing presses and transferring liabilities from the banks to the Taxpayers - just like in 2008...Someone I know of who is in a well-connected position said this last week:  "Do NOT keep any money in money market funds."  (Money market funds - most of them - have heavy exposure to short term European debt - corporate and sovereign - they also have exposure to the rapidly deteriorating mortgage-backed paper in this country).

It's going to get really interesting over the next 3 months. Buy some more gold, make some popcorn and pull up a comfy seat - the entertainment value should be spectacular!

Have a great weekend.


  1. Identities of JP Morgan Silver Manipulators Exposed

    Identities of people involved in the alleged JP Morgan conspiracy to manipulate the price of silver have been exposed, along with the mechanisms of the manipulation of silver. I was contacted two days ago by key people familiar with this situation. This was described by an individual out of London who is very familiar with the lawsuit as, “The biggest news in a long time because these are actual people who are coming out and naming names of individuals who were involved in this alleged conspiracy with JP Morgan to actively manipulate the price of silver. People may go to jail over this. JP Morgan has all barrels pointing at them as traders are named in this suit, including senior traders at JP Morgan.”

  2. It's spelled Volcker. And while I know your site is dedicated primarily to the discussion of PMs, don't stop with the manipulation of gold by The Fed and the rest of the monetary authorities. They prop up shares-as opposed to knocking down gold- constantly.

  3. How much do you think silver will follow gold on the "snap-back"?

  4. (Dave)

    re silver: man, i have no idea...long term i expect the gold/silver ratio to move pretty close to 10 or even lower. For sure back to 16 is very undervalued, silver is even more undervalued. Gold is very manipulated, silver is even more manipulated. A good shorter term target for silver is a re-test of $50 and then maybe it gets thru there - but I wouldn't speculate on that view with options on SLV.

  5. Sometimes I wonder...Did you not read, they manipulate and control the price. This is going to continue until it can't. So then the next question is, I wonder where the price is going?

    The price is going to go wherever they want it to go until they lose control and the system crashes. Heads they win, tails you lose.

    It makes no difference how much gold or silver you have when they come and raid your home. They have corrupted the law, there is no objective right and wrong and for you to sit there and think the law will protect you when it crashes is complete stupidity.

    This country and the world is headed to war. What are you going to do when a bunch of hungry thugs see you spending your gold/silver while they starve? Do you think they are going to tell themselves..."I bet that guy worked hard and it's nice to see he has some money". No, they are going to raid and pillage you and there will be no one there to save your sorry ass.

    If you don't want this to happen, perhaps going directly to the CFTC and demanding they enforce the law might be on your mind. But they aren't going to just listen to a polite...excuse me, sir... But, I think that we are a bit to late. Nothing can stop what is coming.

    Nah, just playing. It's all good. Silver to the moon! Have a great weekend.

  6. "At some point gold will have a "snap-back" reaction in its price that could be quite breathtaking"

    Don't hold your breath, I can't give you the exact day, but November is the likely month.

  7. (Dave)

    I like the call!

  8. Latest Lame Obama Excuse: “Geithner Blew Me Off”

    Look at the spin: we are supposed to believe Obama wanted to be tougher with the banks and was thwarted by his Geithner. Does that mean we are also supposed to believe that Eric Holder also ignored Obama’s orders to prosecute?

    The only problem with this effort at revisionist history is that it is completely out of synch with other actions the Administration took in February and March 2009 that had to have been approved by Obama. And his posture before this supposed Citigroup “decision” and after, has been consistently bank friendly. Obama knew from the example of the Roosevelt administration, which he claimed to have studied in preparing his inaugural address, that the time to undertake any aggressive action was at the very start of his term, in that critical speech. March was far too late to start studying the question of whether to nationalize Citigroup.