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This article identifies and analyzes the realities that have been, and are, affecting the
gold market unlike any other article you have ever read on the subject. Get truly informed to better understand what has happened and why and what the future holds for the price of gold and why. Read on and enjoy.
The edited excerpts below come from the newsletter* of Goldrunner entitled “PIVOTAL MOMENT FOR GOLD – PART II” (WHERE WE HAVE BEEN, AND WHERE WE ARE CURRENTLY) and are posted here (without charts) with permission.
[The following article is presented by Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Supply & Demand Realities
There really is no physical gold market. What we have is a paper gold futures market as a false pricing system that allows the supply and demand of paper Gold set the price. That is how the Fed Banks “manage the price of Gold.
The paper gold market is mostly settled in paper money, and only has a sort of side mechanism where historically small amounts of Gold are actually taken delivery of. Thus, if you want to take delivery of Gold from the paper futures market, one must buy a lotto ticket in terms of price and time, and then wait to see if your ticket is in the money on expiration day.
Physical gold supply and demand make little difference if the Fed’s Banks are expanding the supply of paper gold – both in the futures market and in terms of OTC derivatives.
The true fundamentals of supply and demand for physical gold will rule in the end. The fact is that the Fed needs gold to be vastly higher in the end to balance the budget.
Paper Futures Market Reality
…In reality, the paper futures markets are just a false pricing systems to allow the Fed complete management of price in the markets. The Fed cannot allow Gold to go into free-rise prematurely. The fact that the Fed Banks are now leaving the physical side of the Gold market appears to be a sign that we are near a crucial pivot point where Gold will go parabolic to balance the budget. The Fed Banks will still be involved in paper gold to allow management at crucial junctures.
U.S. Dollar Index Reality
The Fed Banks only seriously took control via paper gold once Glass-Steagall was repealed right around 1999/ 2000 into the window where the Fed knew that they would be aggressively printing Dollars. The cycle timing is analogous to the false pricing “Dollar Index” that came into being in 1971, just before the Dollar was going to be aggressively printed. Similarly, the Euro Zone was born around 1999, probably to tie the European currencies together as a means of control under the paper currency indices. Suddenly, about 60% of the ratio…[component] of the U.S. Dollar Index was tied together conveniently in the false pricing system for the U.S. Dollar.
Quantitative Easing Reality
The talk over who the next Fed Chairman…[will be] is unimportant. The Fed’s board is almost entirely made up of European Banking cartels. They make all of the decisions. They have huge risk both in the States and in Europe if they do not continue to aggressively print. The bottom line for all Western Countries is that either they print and devalue their currencies, or they face the wrath of Deflation. They will print.
PM Stocks Valuation Reality
A rating agency came out and said that they never raised the expectations for the PM Stocks because they never raised the expectation for earnings above a $1300 level for Gold. The Street does not raise expectations for higher Gold prices until Gold has retraced back to its “last high.” Nowhere in the markets do you see anything like this except in the Precious Metals Sector. Boy, are they going to be dead wrong one day in the near future. Once Gold goes parabolic, the price valuations for the stocks will start to reflect reserves more than earnings, anyhow.
Price Movement Realities
Per the 70’s, we had expected the rise in Gold up to the $1920 top with a subsequent decline in price per the late 70’s Gold Chart. The 70’s analogy suggested that after that decline the Fed would remove their clutches on Gold to allow it to start a more aggressive rise to equate to the late 70’s first true parabolic run, higher. We expected to see Europe start to aggressively print to allow the Fed to ramp up the Dollar printing as the Fed Banks defaulted on the European Bank Debt OTC derivatives yet Europe stared into the face of austerity without printing. This left the Fed’s Banks suppressing the price of Gold via paper gold. Central Banks came in to heavily accumulate physical Gold at the bottom. In the end the Fed Banks took Gold down rather than to risk Gold busting up into free-rise. No doubt they used the move to cover their shorts.
The above suggests that Europe not printing was the issue, solved via paper gold supply. Thus, there is no real road block to Gold moving sharply higher with the Fed’s Banks short positions out of the way when Europe ramps up the printing presses.
Related Articles:
1. Goldrunner Offers Clarity On How Banking Realities Affect Gold Price
Frankly, I cannot see how one can distinguish the Fed from the European banking system and looking at things in this way provides a very different picture of the international landscape. The Fed is dependent upon euro printing in order to ramp up dollar printing, yet they are both one and the same. All of the GS boys running over to Europe after the Fed banks defaulted on the OTC derivatives takes on a new light in retrospect. It was a family reunion! Read More »
2. Goldrunner: Fed’s Review of Banks Trading In Physical Commodities A Pivotal Moment For Gold
Gold has busted up on the open to take out the $1300 resistance. This article explains the reasoning for that move, why it is so pivotal in nature and what to expect in gold pricing action over the short term. Read More »
3. Goldrunner: Gold Complex So Underpriced Reward Is VERY High & Risk Is VERY Low
4. Gold’s Future: 10 Article Summaries of the Best-of-the Best
There are so many articles on gold & silver it’s hard to know which ones are worth taking the time to read. Hopefully this post will save you time choosing which of the best-of-the-best to read. Below are introductory paragraphs and links to 10 of the “best of the best” articles on gold (and silver) for you to choose from. Each article has been edited for the sake of clarity and brevity to ensure you a fast and easy read. Read just one or read them all. Enjoy! Read More »
One thing I believe and that is that those that are supplying the numbers being used in Charts are gaming them in order to make the charts look better than they should!
The Central Bankers are playing US day by day and the longer we continue to “wait and see” the further into debt we all will be while they shift ownership of PM to themselves at ever lower prices because they are now “forcing” US to sell our PM holdings in order to use their paper money (which is being printed at ever increasing rates) to conduct business and/or live…
This is why I say that then the reversal happens it will be DRAMATIC and I expect to see most Countries to devaluate their Currencies at the same time (say at a rate of 100 to 1), which will then allow all of them to juggle their books while at the same time reduce what they pay out in what used to be called “benefits”!
I’m guessing that $100 USD will become about $1 U$D (US New Dollar).
Expect to see the talking heads saying “that two decimal places is not that bad, especially since many other countries currencies 3 or more decimal place…”.