Will Market Manipulation Stop Gold and Silver from Rising?

By Greg Hunter’s USAWatchdog.com

There are plenty of folks flocking to the internet these days to tell the world why gold and, particularly, silver are finished as an investment and wealth protection opportunity.  Some are even screaming to sell now before gold and silver prices tank.  To give you an example of what I am talking about, I want to share a comment with you from a reader named Michael.  Last week, he wrote me and said, “You are incorrect that gold/silver will go up in value like you have stated on your site. There is too much manipulation going on behind the scenes to ever let it go too much past where it is. And the same goes for housing. Will interest rates go up? Yes, but not leading to a housing collapse. It will lead to regrowth.  For you and all of the others that think gold/silver will shoot up much higher, I feel bad for you. You have normalcy bias towards this and your mindset is too rigid to see the truth…which is the market manipulation that goes on behind the scenes that will continue indefinitely IN SOME FORM OR ANOTHER that you nor anyone else can predict!”

My answer to Michael said, “The Fed bailed out the world to the tune of $12.3 trillion. More than $12 trillion in liquid assets are held outside the country. The days of the U.S. dollar being used as the world reserve currency are numbered. These are just a few of the reasons gold will rise in price relative to the dollar. With all due respect to you, I do not have normalcy bias. I have facts and they all point to a currency crisis in the U.S. dollar. . . . It will go much higher regardless of the manipulation that will not be able to counter the overwhelming trend. Your only argument against gold and silver is “there is too much manipulation behind the scenes to ever let it go up much past where it is.” There was no manipulation in the markets before this year? I think not, and you offer a very weak argument on this point. Please don’t feel bad for me. Feel bad for yourself for missing a heck of a run so far.” (Click here to read the comment section from the original post.) As far as housing is concerned, if the Fed wasn’t artificially suppressing interest rates, home loans would be closer to 9% instead of 5%.  When rates go up, you will not see “regrowth.” You will see prices come down even more than they are right now.

To get into a bit more detail as far as gold, let’s not forget the $600 trillion in over-the-counter-derivatives lurking around the globe.  These investments (that some experts say are nothing more than debt bets) include things such as mortgage-backed securities, credit default swaps and interest rate swaps, to name a few.  This is mostly a huge unregulated market with little or no guarantees or standards and is not traded in any public market.  Some experts say the true size of the OTC derivative market is well over $1,000 trillion.  Whatever its size, it is a very big and dark pool of potential trouble.  Last week, Bob Moriarty at 321gold.com wrote an excellent article about where the world stands with this dark pool of investment mud.  Moriarty said, “The irresistible force is the $600 trillion in derivatives. The immovable object is the $60 trillion world economy. Basically a $60 trillion economy cannot support a $600 trillion bucket of used lottery tickets that everyone wants to pretend still have some value. They don’t.  The only real question is just how much actual money is left and I suspect the answer is “near zero.” That’s the ticking time bomb. . . . Spain and Greece both used non-transparent derivatives to improve their financial books so they could enter the EU. The cooked books are now pretty obvious and Germans are objecting to having to work to the age of 67 so Greeks can retire at 50. Tick. Tick. Tick.” (Click here to read the entire 321gold post.) Until the derivative problem is totally resolved, there is no way on God’s green earth gold and silver are finished rising in price.  Sure, there will be corrections and sell-offs, but the pattern of higher highs and higher lows are firmly in place and will stay that way for several years to come.

Jim Willie at GoldenJackass.com recently gave 50 reasons why gold will move higher in the future.  I am sure Mr. Willie (who holds a Ph.D. in statistics) would agree that many of the reasons for gold’s rise also apply to silver.  Now, please keep in mind that silver is the peyote popping, tequila swigging, crazy cousin of gold.  Meaning, it will be more volatile than the yellow metal, but both will go up, more or less, in tandem.   (Click here to read Mr. Willie’s complete list of 50 reasons for gold’s assent.)

There has also been talk recently about the U.S. going back on a gold standard.  Respected financial insiders such as Steve Forbes, James Rickards and Peter Schiff have all commented publically on why the U.S. dollar will one day be backed (in some way) by gold.  Some say the time line is 5 years or less.  In a post last week, Peter Schiff said, “As J.P. Morgan famously said to Congress in 1913, “gold is money and nothing else.” Morgan meant that gold was unmatched in its effectiveness as a store of value and medium of exchange.  Given that his namesake bank started accepting physical gold bullion this past February as counterparty collateral, why should the trend of a widespread return to gold be considered only a remote possibility? On the contrary, it should be expected – if for no other reason than every other currency is fundamentally dismal.” (Click here to read the complete Schiff post from Euro Pacific Precious Metals.)

Finally, U.S national debt and liabilities are another big factor in the price of gold and silver.  All told, the U.S. taxpayer is on the hook for at least $77 trillion. Last August, Boston University economics professor Laurence Kotlikoff said, “U.S. is bankrupt and we don’t even know it.” By his calculations, the U.S. debt and liabilities total $202 trillion.  (Click here to read the complete Kotlikoff Op-Ed post.) No matter what the debt and liability you think is correct, there is no way that bill gets paid in anything resembling the buying power of today’s Federal Reserve Notes.

Let me finish by answering the question that is also the title of this article—not a chance!

Comments
  1. Glenn

    Michael is not seeing the big picture here. Central banks and the general Chinese population are purchasing and hording gold like there’s no tomorrow. Sooner or later, one or all worthless fiat currencies will be backed by either silver or gold. God knows governments can’t back it up. It’s been suggested by some that if the greenback was to return to a gold standard, gold’s price would be in the range of $5,000-$6,000/oz. Short term, I feel gold and silver have room for a mild retreat before its next trend in just one direction, and that’s up Michael. See you in the rear view mirror.

    • Greg

      Good analysis Glenn. Thank you for adding to this post.
      Greg

  2. Ambrose

    Greg,

    I agree with you. I don’t think market manipulation will stop the price of gold and silver from rising. If you have to choose between gold/silver and toilet paper printed by the US Treasury, the choice is pretty obvious. There are more and more people (and countries) feel insecure with the US Dollars.

    Ambrose

    • Greg

      Thank you Ambrose, Jim and Art for your analysis and comments.
      Greg

  3. JiminGA

    Greg, as usual you put forth facts when countering people who put forth assumptions. Actually, there is ample evidence that the big banks can no longer manipulate gold/silver as before because they were short on PM’s. Those contracts have expired long ago which is a primary reason for the natural rise in PM prices. We also need to remember PM’s are valued in dollars which continue to depreciate.

    The major manipulation by the big banks is now focused on the equity markets through HFT (High Frequency Trading) and Fed POMO activity, proven by the investment banks’ contunual daily profitability. How else could an investor make money EVERY SINGLE DAY in a quarter? The equity markets are now no place for the small investor, hence the flight to PM’s and TIPs.

  4. Art Barnes

    The invester class & elite are afraid of gold because they are not heavily invested in it but are still relying on the greenback an sitting on worthless derivatives bundles which can’t be converted to gold because of their lack of value. That is why the main street media continues to argue for federal reserve notes and people like Buffet has made statements that gold “will be the next bubble”, etc. Slowly people are moving to gold and as you mentioned Chase Bank as an example of movement, and this will continue as it can’t be stopped, which will continue to help make gold rise in value.

    What is really scary is your numbers of worthless derivatives, simply staggering. I had no idea there was that much worthless paper out there. How in the world can the derivative problem be solved? The only way as I see it is to change to a new currency, a new world currency if you will, and give the elite value for their “mud” holdings (derivatives), which if I can think of it you can bet they have. Please offer if you can a solution of this derivative issue because it won’t go away, but you can bet the invester class is working behind the scenes to fix it to their advantage and leave more poor working people to hold the bag again for their fraud.

    • Oldguy

      Back in the early 1960’s I left California (Orange County) and moved to Wisconsin. Mainly it was due to the tremendous influx of “hippies” that were trying to stay out of the draft by entering California’s low cost school system. I saw the writing on the wall. As I was driving across the states, I heard, via the radio, that Orange county filed bankruptcy. It seems their treasurer, (or comptroller general), was investing heavily in derivatives and O.C.’s treasury was empty. He was promptly jailed.. Shouldn’t this be done to our failing “super banks” and those who use worthless paper as collateral?

  5. markm

    Greg,

    Good job. I feel for the Kool-Aid drinking Michael. He has invested too much faith in a failed religion. His high-Priest has no clothes.

    markm

    • Greg

      Thanks MarkM for your support.
      Greg

  6. Davis

    Don’t know if I posted this before but it may be worth repeating if I have.

    Why I Buy Gold and Silver.

    Gold and silver values (not prices) are only a reflection of the rapidly evolving new reality.

    There will always be those who will deny that the entire western financial system is F.U.B.A.R. You know the term, denying it, finger pointing or making excuses for how we got here won’t change the facts. There is no intention from any of the politicians or bankers of doing anything to fix the problems at their root cause, OTC derivatives. The European Union has outlawed naked CDSs (credit default swaps) which is at least an indication that they are trying to do something. Whether it will prove too little, too late or not, time will tell. The chances of anything like that happening in the US are absolutely ZERO.

    To say it is very late in the game is a gross understatement.

    The times of any kind of normal conditions, however you might want to define them, are gone and they’re not coming back any time soon. One needs only look at the FACT that before the crisis of 2008 the Federal Reserve was buying between 10% and 15% of US Treasuries, now they are virtually the only buyer and by this action alone they are consigning the Dollar to its doom.

    Only by adjusting our attitudes and actions to this new reality is there any hope for getting to the other side with any semblance of intact wealth and security. This applies at both the individual and societal level

    The system has already failed, act accordingly. There are no political champions waiting in the wings with the will or ability to fix it. Even if there were, there exist no means that could be applied that would not in the short term cause an even more severe economic dislocation than we are already faced with. Even if there were some practical solutions left (and there aren’t), neither the banks nor the politicians would allow them to be applied because it would diminish their power.

    We have embarked on a third war in the Middle East and it will be impossible to disengage as the chaos spreads. Kind of reminds one of the Uncle Remus story of the Tar-Baby. It is utter madness and no good can come from it. The revolutions and wars in the Middle East are not pro Western and not pro democracy, they are anything but.

    Look back at what the price of commodities were 2 years ago and what they are today. By the time we reach the next election they will look like bargains by comparison.

    If you are holding physical bullion and food stocks hold on to it as it will be the only insurance you will have and you’re going to need it. Show some pity for those who would deride you for holding insurance, they will be the first victims of their own hubris, but be careful, for as the rug is pulled out from under them they will blame you for their situations and many of them can and will resort to violence.

    It is not a question of if the prepared will prevail. We already have prevailed. Our holdings will be the only discount to the hyper-inflation that is already written on the pages of history, nothing can or will stop things from being turned to that particularly ugly page. But we have to get to that page before we can move on to the next chapter.

    For those of you who remain skeptical, get a clue, neither the Democrats nor the Republicans have the courage to admit what’s really going on, even if they do, nor do they have the slightest inkling of what to do about it. Their loyalists will be the first to be abandoned when the S.H.T.F. One more thing to keep in mind as things unravel: Ideological purity and political loyalty are the first things dissolved in the churning acids of an empty stomach.

  7. Josh

    great article……I do have a question that looms however, that is, what happends to rest of the world when the US can no longer prop up the other countries GDP’s with our excessive spending and purchasing power?

    Does this keep other countries vested in the dollar to keep it’s buying power worthy, since we buy their goods?

    thx-Josh

    • Greg

      Josh,
      I think we are headed for a global crash in terms of the U.S. dollar. This probably will not happen right away but what we are seeing is a slow-motion train wreck that will eventually derail. Thanks for the question and comment.

      Greg

  8. Norm Ezzie

    The real question should be: When will they demonetize gold and silver? What? Ya don’t think that’s part of their global scheme-? After all,where’s most of the gold and silver left these days? Answer is: On people’s fingers,wrists and necks(!) and guess what….they line up at those “Gold Stores”- and do what? Sell their precious metals for worthless paper! Again,the brilliance of globalization is truly beyond words here…..in the end,its all about control,total and complete control!

    • Greg

      Thank you Norm and Brian for weighing in.
      Greg

    • droidX-G

      Not sure how they can demonitize Gold when it has been money for 5,000 years. Not to mention the number of central banks buying Gold.

  9. brian

    As the Germans have discovered in the realization that they must now feed another nation too lazy to feed itself (if thats not a reason to declare war I dont know what is), so we all will soon know that these gimmicks and games that go on behind the scenes do nothing to impact the reality that someone has to get up at 3 am to bake the bread and some other poor schmuck has to get up at 5 am to deliver it a bunch of helpless fools.

    If you keep monkeying around with the medium of exchange you will eventually completely destroy the will of those who get up in the morning to bake that bread and bring it to your door.

    Am I to assume then that our gracious leaders will then step up and call us all to the trough like swine, or will we all go feral and brutally do what needs to be done to keep hunger at bay?

  10. Craig Ardolino

    I think it all comes down to when is anything NOT a wise investment? Gold and Silver can still drop in value as it has in the past. At what point is it not worth buying because the return on the investment will not be worth it? I think we must also look into how easy or hard it is to cash in your gold and silver, and what is the cost to have those gold bars re-evaluated so it can be sold. In this economy people have very little if not no liquid money as it is. How can the average person afford to purchase gold and silver and only let it sit in the closet for a later date. Again, the rich will make the money because they will sell the gold and silver at prime rates. The poor will buy it too late and suffer the loss. To me it seems the same as the real estate market, just with metals instead.

    • Greg

      Craig,
      The metals are not the same as the real estate market. Real estate for most people is a leveraged asset. Meaning, you take out a mortgage and take 30 years to pay it off. Gold and silver (I recommend coins for both.) on the other hand are not leveraged. There is no counter-party risk because you own them outright. I think having some exposure to physical metal in your portfolio is more wealth preservation and insurance than a profit or trading opportunity.
      Thank you for your comment and supporting this site.

  11. Catch22forFED

    Greg:

    Fed and its status quo goon squad are between a rock and hard place.
    1.If they increase interest rates, then they will stop the gold/silver/commodity surge – strengthen USD but will also incur MAMMOTH losses on the balance sheets of their banking institutions (the real owners of the FED).
    2.If they leave interest rates unchanged, then prices will continue to surge until the masses hit a breaking point with gas at $9 a gallon. Better be ready for this scenario….
    3. combination of increase of interest rates, money printing, megabank Japan type cosolidation to buy bad debts. The theory of seigniorage is reaching its useful purpose like it did so many other times in history for other fiat currencies.

    There are no good choices. Maybe Bank of Japan scenario is where this is all headed. I just hope when they consolidate the mega banks that they take the fabricated wealth away from the goons that caused this problem and throw them in jail to bring confidence back to the system. I agree that we will see silver/gold reach levels higher than most people think. Yes, like all cycles there will certainly be a crash in the metals/commodities – UNFORTUNATELY – we are quite some ways off from that happening. Starting in May 2011, physical silver is already selling 20%plus over Wall Street’s price so Wall Street in essence has already shut itself out of that market.

    Only fools hold paper metal ETFs.
    http://www.youtube.com/watch?v=7GSXbgfKFWg

    • Greg

      Catch22forFED,
      Good stuff man. Thank you for sharing your analysis.
      Greg

  12. ncdirtdigger

    Is the value of gold/silver going up? Or is the value of fiat currencies coming down? In the case of silver, an industrial metal that is consumed, I’d say both.

  13. M SMITH

    Greg, I am with you! Here are some sourses folks should read & re-think just how well they are prepared for the unknown events that shall unfold & we have been warned of. If americans think we are safe from these events they are living a life of lies. Here are links to start you off. http://news.goldseek.com/InternationalForecaster/1307277000.php. Bob Chapman has spent his life exposing those that have been planning to destroy our nation while helping others to be prepared for what has already taken place. The proof is all around you, all you have to do is look at the true facts the government does not want you to know. They use every tactic to keep you away from the real truth & the only thing we have is the internet to help us get at the real truth where people like Mr Chapman & others expose the facts of high crimes & treason committed against the people of USA & the world. These groups of wealthy families & their agents are talked about in detail by the next link I list that is 63 pages long.

    To understand the rest of his writings you must first read the ‘biography of Martin Armstrong’ to get you up to date of the events that took place & why the “Club” went to great lenths to silence him which you will find here & keep in mind the names of all involved because you have heard of them before in the MSM spin zone. http://www.scribd.com/doc/56804421/Martin-Armstrong-Biography-May-2011. Please keep in mind the details composed in the 63 pages could be any one who refuses to join the “Club” who has deep knowledge of their inter circle in the USA & many forgien nations. I also want to point out Martin could have easly said yes & joined this evil group of ‘so called icons of the investment giants from the USA’ who have made fortunes off of US Tax Payers but he chose to say no and he was made to suffer as the ‘Club’ made use of the corrupt federal court system who protect their own. Many members of congress knew of Armstrongs fight for his life & were to scared to go against the Club.
    You also can find more writings at http://www.armstrongeconomics.com/writings.

    Next up is http://www.thedailybell.com. A. Wilie did a story on Yemen date 6/4/2011. This story puts a light on why this tiny nation earns your attention as it is a place where not much is said of but it will be soon. A reply post by(Huge,6/4/11,8:31AM) put up 2 links that are about the fed & IRS both that got roots in the USA in 1913. Both are about the federal reserve & more that goes deep into what has & is going on since 1913. It’s not for the faint of heart. The dailybell.com shares a wealth of data from around the world that I would add to my ‘must read list.

    Last is http://www.jsmineset.com, he has been & still is one of the best at telling it like it is. He offers free content from many sourses that has been beacon of hope to those of us who wanted to learn how to protect yourself, your family & friends from what the group of banksters & corrupted politicans have done to not only the USA, but the world. I found Greg’s site there & it has changed my life. I may not be rich, but I know what ‘real insurance is’ & have slowly added to it when possable. You soon realise it adds up & befor you know it you can sleep better at night knowing you have done your best by taking actions they keep you ahead of what ever the gov & banksters do. Setting back & doing nothing ensures servere needless pain & suffering while those with PMs have fighting chance to break the chains the owners of the fed & central banks of Europe will have locked on you for life. Thanks Greg for all you do!

    • Greg

      M Smith,
      Thank you for the comment and content.
      Greg

  14. Hoppe

    There is another possibility that no one seems to be talking much about anymore.

    The re(de)valuation of the currency by way of a new currency. I believe this will happen on a quickly roving world wide basis.

    There was a lot of talk some years ago about the “Amero”. That is the most likely place to begin.

    How much would an ounce of gold be worth in Ameros, when the replace the US dollar on a 1 for 2 basis?

    How would North Americans purchase bullion?

    • Greg

      Hoppe,
      You may be correct. If things get bad enough who knows what would happen.
      Greg

  15. TheDevilsAdvocate

    Great post, as always.
    But just to play Devil’s advocate, since no one else is trying to make sense or see logic in Michael’s questions/assertions, one should note that the alleged manipulation in silver is still going on, the alleged manipulation in gold is still going on and I am not sure what else to call QE, but alleged manipulation of the stock market.
    Let me explain:
    Without a doubt, Silver and Gold have enjoyed tremendous moves over the last decade and have been pedestaled back to their true position: true money and holders of value. But, without the manipulation, is it not a fact that when accounted for with TRUE inflation numbers (courtest of http://www.shadowstats.com), we come up with exchange rates (not prices for gold and silver, they are money – so only exchange rates and not prices) for gold and silver that are many multiples of the existing exchange rate? Does that not indicate that there is alleged manipulation that ACTUALLY IS WORKING?
    Now onto the stock markets: Does anyone really need proof (the charts displaying this can be found on pretty much ANY website that does the good work of speaking the truth) that the markets have moved in tandem with the announcements, start, end and announcements of ending QE. Is that not manipulation? And that also indicates that it is working.

    Even I have to disagree on Michael’s regrowth theory, but I think he makes some very valid points on the extent of alleged manipulation. Heck, after the Fall of 2008 and Spring of 2009, does anyone believe that economy is growing? That we are in good shape as country? Then why does the stock market (a fairly good barometer of the country’s wealth and economy) continue to soar? Hint: QE

    The US$ makes new lows. Yet the exchange rate of gold and silver are still well below what they need to be considering REAL inflation (why do we not get real inflation numbers? Hint: alleged manipulation?).

    Just being a devil’s advocate. Intellectually, its a good exercise and it will bring out better critical thinking in all of us. And finally, isn’t that exactly what Greg is doing with this excellent blog. Great job Greg and great job by everyone on the comments. Much to learn on both sides.

    • Greg

      TheDevilsAdvocate,
      Good points and all are welcomed. Thank you for the kind words and comment.
      Greg

    • droidX-G

      At some point, all Ponzi schemes reach critical and fail. Regardless to manipulation.

  16. Diane Carol Mark

    Hi Greg,
    Last week I was in a conversation with a gold skeptic. He felt strongly that there’s a tremendous amount of unmined gold and silver worldwide. He cited the Chinese sitting on huge reserves as well as others, and believed that they’d flood the market (at the opportune moment) with more gold and silver thereby lowering the price. He believed gold would hit $2500, but then start a decline.

    Kindly comment on this angle.
    Thanks!
    🙂 Diane

    • Greg

      Diane,
      We are witnessing nothing less than a major change in the definition of money. I don’t know where gold will end up but it will be much higher in price than it is today. As JP Morgan once said “Gold is money and nothing else.”
      Greg

    • droidX-G

      Hi. China does mine gold but they do not export it. And they are big buyers. I think that might mean that we are headed back to a gold standard.

  17. MasterLuke

    Greg 1 Michael 0

  18. nm

    From Zerohedge:

    At this rate of withdrawal and “adjustment”, there will be no physical silver left in the entire Comex in about 5 months. At that point, even one delivery intention will send the price of silver to previously unseen levels.

    http://www.zerohedge.com/article/comex-physical-silver-drops-fresh-all-time-low-288-million-ounces-3-drop-overnight-30-drop-s

  19. Baja Bryan

    Murray Rothbard listed seven necessary qualities for money during a History of Economic Thought lecture at UNLV back in the fall of 1990. For a substance to be used as money it must be (1) generally marketable, (2) divisible, (3) durable, (4) recognizable, (5) homogeneous, and have a (6) high value per unit weight and (7) fairly stable supply.

    Gold happens to meet the test of all seven attributes. With or without manipulation, the logical choice is gold!

    A famous quote by Norm Franz sums it all up…“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.”

  20. Mell

    Comex Physical Silver Drops To Fresh All Time Low Of 28.8 Million Ounces, 3% Drop Overnight, 30% Drop In Six Weeks

    Reads the Headline at a site today – what will they manipulate when there is none to Manipulate – Basically just paper control??

    And(sorry Grammar) also a recent article from a Guru who has been right many times calls for the Stock market to drop very strongly on June 13th, so when men and woman lose money in the market where will they put money?? There is a TREND under way that small investors are Forcing their Brokers(who make no money on the Gold or Silver ) to invest their nest egg in it to make sure a portion is safe. Heck look at the University in Texas that just spent a Billion on Gold – through their Trust, so what happens when there is none to buy – well people will spend more to get it, and people will demand higher prices to sell it so….

    Gee what was the song by Simon and Garfunkle about the signs on the wall?

    Sorry to over use the slogan but GOT GOLD? Granted you can’t eat it and there will come a time to sell it – even scripture says so. Right now though, there is no rapture – if you have Gold then get food.

    Peace

  21. Michael Weinstein

    Greg –

    I am glad that my comment inspired you to write an article. I feel good about that.

    And I also do get your point in your post. Up to the beginning of this year, I would have said YES…YOU ARE 100% RIGHT, but I see the truth now and you still don’t. Same goes for everyone else that doesn’t realize the following.

    PM’s have always been and will always be manipulated, so I guess we actually do agree on that.

    What I don’t feel good about is the fact that you nor many of your readers (judging by their comments) still don’t get where I am coming from.

    Silver, as you are aware, is also an industrial metal. Do you really think that the US Government and ‘Big’ industry will in any capacity allow silver to trade over a certain level in turn making ‘Big’ industry pay more????

    Let’s be clear here. We are not talking about Mom and Pop shops, we are talking about major global companies that dictate policies and set the standards that all the sheeple globally must follow…aka everyone in the world.

    I don’t for the life of me get how you or anyone else can’t see this.

    How could you possibly think anything different Greg??? Come on now!

    Your normalcy bias to PM’s is unbelievable! Do you really not see that due to huge industrial use of silver, it won’t…let me rephrase that to CAN’T go up much more than what it is trading at right now due to what I said above.

    Gold has a similar fate. The savior for gold is that it is NOT an industrial metal, but nonetheless it is controlled by the wealthy and they will dictate its price and everyone else is a pawn in their game.

    I read your comment to me in the first post, read this post and read your links in this post and still don’t get what you can’t see the truth!!!

    I know, the links say it all…hogwash! Day after day, I see all of the so called PM gurus and geniuses retract their statements on how gold/silver will be (blank) by April, May, June and so forth…only to eat crow when it doesn’t happen time after time.

    Of course, these so called PM gurus all come out with a million reasons why gold/silver didn’t reach the numbers they said would happen and those reasons are often valid. BUT THAT IS MY POINT! There will always be valid reasons for it not happening. Did you get the last sentence?

    It’s the same BS like doomsday preachers. What happens when the world doesn’t end by such and such date? They come up with a reason for it not happening and then predict a new date that it will happen…just like PM gurus…hogwash! And you have bought into it hook, line and sinker!

    Please wake up now Greg and the same goes to all of the readers here!!!!!

    • Greg

      Michael,
      You do make a good point about industry, but you simply have not proven it. Where are your sources? By your logic silver should be $4 an ounce. That would be a heck of a deal for, wouldn’t it? Even after the big decline from around $50 per ounce, silver is still up about 25% for the year. So industry wants to by 25% more than last year, and that is a good fair price it can live with? There is no question that the price of silver is manipulated and for the reasons you have stated above. I agree with you, but the point you are making has no track record and you list no sources or research for your premise. Inflation adjusted, silver is cheap. According to economist John Williams of shadowstats.com, the 1980 high for silver of $49.45 would equal more than $450 in today’s money. Silver is cheap, and in 1980 money is is probably about $4 or $5 per ounce. Williams research is used by hedge funds and Fortune 500 companies around the globe. Williams is not PM guru, and has been quoted by in many mainstream media. He is an excellent source with impeccable credentials. You give some spirited comments and that has sparked interest and debate on this site. I am grateful for that and want you to know you are welcome comment in the future. Peace brother.
      Greg

      • John

        Hello Mr. Hunter,

        I am not taking sides here, but are you saying Greg that unless Michael has verifiable proof or real sources he can link to that backs up his statement that silver is not going up any further due to a huge industrial demand, his whole argument is without any merit?

        I’m not sure any news organization would be allowed to ever put in writing that big industry and the government are manipulating silver to protect and preserve big industries pockets while also ensuring they don’t raise costs on the products that require silver in the manufacturing process.

        Please advise.

        • Greg

          John,
          No, I am not saying his whole argument is without merit. I said,”You do make a good point about industry, but you simply have not proven it. Where are your sources?” If someone is going to make a claim that big, then I want to see sources, research and analysis. Michael is basically calling a top in silver and is not giving the readers here any factual information other than his opinion. On top of that, I find it a little irritating that Michael says things such as< "Please wake up now Greg and the same goes to all of the readers here!!!!!" and does not offer a single fact or source to back up his opinion. Every time I have answered Michael I have quoted sources and backed up my premise with facts. That is what I am seeking in return. Big news organizations have already been reporting that both HSBC and JP Morgan have been sued with allegations of silver market manipulation. Here is one of many I found on Marketwatch.com from October 2010: http://www.marketwatch.com/story/jp-morgan-hsbc-sued-for-silver-manipulation-2010-10-27 I have agreed with Michael that there is manipulation in the silver market, but I disagree that it will put a permanent top on the price. I have quoted sources and facts to back up my argument. Thank you for your comment, question and for being objective.
          Greg

        • Denarius

          Sorry to say, Greg, but you and Michael and John are leaving
          out the single most important fact about industrial silver =
          the price of industrial silver is INELASTIC, i.e., so little is used
          in each production piece that it matters not if costs $5 or $50
          per ounce. Whether it is the silver coating on electric contacts
          or the very thin conductors on solar panels, the cost of silver is
          no more than a fraction of one percent of an item’s total price.
          The same holds true for other precious metals, however used,
          as catalysts, corrosion protection, reflective surfaces, etc., etc.

          IN SPITE OF THAT, the “Silver Users Association” always had
          a primary objective to keep the silver price as low as possible.

          >>> mute the sound to avoid the raucous cacophony <<<
          http://www.youtube.com/watch?v=7951irEljR8

          Silver Users, Silver Abusers — Ted Butler
          http://www.silverbearcafe.com/private/abusers.html

          Remarks of Chairperson Brooksley Born at the
          Silver Users Association on October 28, 1998
          http://www.cftc.gov/opa/speeches/opaborn-39.htm

          Silver Users Association Voices ETF Opposition to SEC
          http://www.resourceinvestor.com/pebble.asp?relid=17119

          ON TOP OF THAT, Executive Order 11,110 got its author killed.

          There appears no end to which price suppression will be driven.
          The greed for profits, no matter how small, becomes insatiable.

          • Greg

            Thank you Denarius for the comments.
            Greg

  22. Tim

    Hi Greg,

    I’m new here.

    I agree with you. There is no way the U.S. government can pay its future liabilities for Social Security, Medicare, etc. I read recently that if the U.S. government were to eliminate all discretionary spending, we would still have a budget deficit! In other words, current mandatory spending is greater than tax revenue. When the current fiscal year ends on Sept.30, it will be the third that we’ve had a budget defict greater than $1 Trillion. Is that sustainable?

    Another reason I believe silver will go much higher is that a major silver shortage is developing on the COMEX–it’s down to just 28 million ounces. The banking cartel’s days of manipulating the markets, at the behest of their masters at the Federal Reserve, are numbered.

    Tim

    • Greg

      Tim,
      Welcome to the site and the ongoing debate! Thank you for weighing in.
      Greg

  23. David

    GATA research clearly shows an orchestrated effort to manipulate the price of gold and silver through the Comex, leasing, swaps, etc. Of course they do it, they also have run up the stock market for two years, but nobody complains about that.They steal the wealth of the citizenry that they are supposed to protect through inflation and taxation. Our country is run by immoral sociopaths, there is no rule of law, (for them). However, since 2001 gold is up approx. 600% and silver 700%. If this is the best the manipulators can do, I will keep my gold and silver,thank you. As for the anti-gold crowd, they might benefit from learning a few things from the “Master Yoda” Jim Sinclair.

    • Greg

      David,
      All good points, thank you for making them here. I agree Mr. Sinclair is our “Yoda,” but he is much better looking.
      Greg

    • Denarius

      >> However, since 2001 gold is up approx. 600%
      and silver 700%. If this is the best the manipulators
      can do, I will keep my gold and silver, thank you. <<

      Everything changed in 1998-2000: Russian Bond Default, LTCM
      implosion, the euro, the sale of half of England's gold, the Central
      Bank Gold Agreement, and the spread of OTC derivatives across
      the planet since the early 1990s.

      What was not apparent then, but is now, is that the PTB shifted
      gears and started to allow natural market forces to push the PM
      prices higher, but only at a regulated rate. Why? Here is a theory
      I have pieced together from sources too numerous to tabulate.

      To counter the horrendous deflationary forces they could see in
      front of them (from cancerous OTC derivative growth & crash),
      the PTB needed to infuse inflation into the world-wide financial
      system. Greenspans inflationary bubbles of the mid-1990s and
      early 2000s were too localized and spread around the world too
      slowly. What was needed was a way to induce inflation into all
      countries simultaneously, to counter the looming deflationary
      crash of the ubiquitous OTC derivatives. Well, since by then all
      countries were on fiat money systems, the most efficient way to
      do that was to devalue all fiat money together. The only means
      to de-value all fiat currencies is to re-value their opposites, gold
      and silver.

      In the midst of this drama, a tremendous shift of gold from public
      vaults into private hands was accomplished through leases, swaps,
      and any number of other strategies of bookkeeping chicanery. That
      was mostly done by mid-2005, imo, just before the euro gold price
      began rising. But to what end?

      After a century of getting the whole world hooked on fiat money, it
      is time to reverse course and gain the advantage of being ahead of
      the crowd. Destroying fiat money will leave no choice but to put in
      place a quasi gold standard, a Federal Reserve Gold Certificate Ratio,
      as Jim Sinclair has named it in the USA. The route to that will be
      through the World Bank, IMF, WTO, U.N., and all the rest of the
      alphabet agencies. The Plan is for a New World Order (NWO) using
      a Universal Currency Unit (UCU) to authorize those who have the
      gold to make the rules.

      Regional and national currencies will become derivatives of the UCU.
      All gold and silver production will be nationalized. Not to worry, your
      sad little horde is nothing to those who can outlaw private usage on
      a whim. Besides, the amount of PM investments, world-wide, is in the
      range of a shocking 1% of all financial instruments. Fuggettaboudit.

      And that, gold and silver fans, is why PM prices in all currencies are
      rising now and into the future. By asset price deflation and currency
      price inflation, the PTB will become the Feudal Masters of all the land,
      "….. first by inflation, then by deflation, until their children grow up
      homeless in the land their fathers conquered."

      Michael, no offense, but did you know you write
      like a Fiat Bug? Heh, not even like a VW Bug!

      Still, I thank you for inspiring Greg to write a fine article and me
      to assemble my many scattered thoughts into a hopefully coherent
      theme. Many thanks to all the commenters who gave such intelligent
      and factual rebuffs to the position presented by Michael. This posting,
      comments, and the links to other articles will form the basis of my
      lunch presentation next week. All of you have done my research for
      me. Thanks again.

  24. Sandy

    Back in 1913 when gold was fixed at $26/oz I’m sure no one believed it would be valued at 60 times that price 100 years later. Gold and silver should not even be looked at as having a price, they only reflect the preceived value of a currency at a particular point in time. That same ounce of gold from one hundred years ago is the same ounce that it will be one hundred years from now. Can you say the same about the dollar? To say that gold and silver can be manipulated, is to believe the fanasy that paper printed by central banks has real value.

  25. sILVERBUG

    Greg,

    It seems that when comments are made about minipulating it revolves around NY. What about China & India? They are opening up futures trading desks in there countries to reduce risk. The NY boys will not be in charge much longer as I see it. Cash will be………….Either you have or you don’t. I remember lines around the corner at coin shops in the 70-80’s. We are not there yet!

  26. Will

    Greg,

    Something is fishy about the anti-precious metals crowd. Why would anyone call you stupid a fool and asleep to the truth? I don’t recall you or anyone else attacking them for not investing in precious metals. A person does his research, maybe studies a little history and decides on a direction to persue. Maybe he believes, as Michael does, that there is no reason to gather gold and or silver, that’s fine but don’t call me asleep or a fool for the direction I have chosen to take. Each makes a decision and abides by it. I am willing to abide by the decision I have made, why are’nt they?

    • Greg

      Will,
      Very good point my friend!! Thank you for making it here.
      Greg

  27. nm

    Before WW2 America made everything, but since then, manufacturing has pretty much moved to Asia. So, the era of high wage paying factory jobs is over forever (& this is how the large American middle class was created — it was those well paying union factory jobs that created the world’s largest middle class).

    So, as I analyze the situation for myself, I just don’t see where these high paying jobs will come from, even if by a miracle, Bernanke sorts out the debt problem. The world has simply changed.

    So, for people like me, who still have 30 years of work ahead of us, what are we going to do? Should I be thinking about moving to some country in Asia?

  28. Pat

    The People’s Bank of China (PBOC), the central bank, announced today that it will issue more gold and silver commemorative coins featuring the giant pandas to meet soaring demands for precious metals!

  29. Scotsman

    I am thoroughly convinced that silver will rise like a Saturn V rocket. There are people in the metals field that have cashed out their 401Ks and bought silver anticipating a three or four-fold increase. Greg, when do you think the rise will start rapidly up again and at what dollar amounts would you stop buying physical silver and gold? Do you anticipate a fast rise in car prices while silver and gold shoot up into space? There did not appear to be any major price increases when silver reached about $50.00 an ounce. In fact, housing dropped quite a lot during the rise. It might be a good time to invest and hold then cash out when it reaches the stars and buy a new car or house.

    • Greg

      Thank you Scotsman and George.
      Greg

  30. peter ramsey

    These threads are most illuminating on the gold and silver prices continuing to rise, while the dollar (any ALL other fiat currencies) will continue to tumble. Speculators, investors, gamblers and confidence tricksters apparantly abound even in the worst of times.

    So the message is invest in gold and silver I presume, and that advice is to purchase bar gold and bar silver no doubt? So we end up in a middle ages scenario when we barter literally in bar gold and silver coinage, since we are lead to believe these precious metals have “intrinsic value”? Hallelulja, Amen.

    Well, if I became impoverished and financially wiped out due to a complete collapse of the fiat money system (can’t we just invent another one to build-up confidence like they have historically done?), I would place more “intrinsic value” on an acre of land and a bag of grain my friends. Ask the Jews who fled the Nazi regime (and we may be approaching a similar scenario soon) just how far their hoarded gold and silver reserves got them.

    And just how much bar gold and silver is there actually avaialable to buy? From doom and gloom predictors, the current mineable reserves of these precious metals is hardly enough to go round and such scarcity would serve to push up the gold price to be around US$ 10,000 an ounce. To bring the economy back into conventional margins of financial sanity, we are told by these “experts” that the gold price is grossly undervalued and should be US$ 20,000 an ounce. Providing the US$ remains stable that is. Which it ain’t. Otherwise it will be US$30,000 an oz next year and US$ 40,000 an oz the year after ad infinitum.

    Where can I buy good planting grain and an acre of arable land?

  31. Al

    There must be BILLIONS of really stupid people in China, Russia, India just to name a few countries, that are buying gold & silver by the HUNDREDS of tons. Why has the buying picked up fairly recently? Because the people in those places have lived through currency collapses. The paper currency [not money==fiat] became worthless, and they are informed in ways Americans are not—-YET. As proof we need to see how much value or purchasing power has been lost since the federal reserve begain printing U.S. paper currency in 1913-December. According to John Williams of Shadow Stats .com, the dollar has lost close to 98% of it’s value, or purchasing power since that time. How have gold/silver held up? LIKE A ROCK! Over time they hold purchasing ability and are infltion proof. Soon rather than later all paper money fails unless backed by hard assets ie gold,silver/oil/land etc. When the manipulation of Gold/Silver is stopped, it’s paper price will be shocking to see. Jim Willie has NEVER been more correct and Michael is dead wrong——

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