Tuesday , 25 June 2024

The Decline in Gold & Silver Is Being Orchestrated By the Fed – Here’s Why

By its obvious and concerted attack on gold and silver, the U.S. government could not give any clearer warning that trouble is approaching. The values of the dollar and of  financial assets denominated in dollars are in doubt. For Americans, financial and economic Armageddon might be close at hand….

So wrote Paul Craig Roberts (www.paulcraigroberts.org) in edited excerpts from his original article* written back on April 4th, 2013 entitled The Assault On Gold — Paul Craig Roberts.

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Roberts went on to say in further edited excerpts:

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months [and] capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked.  With the U.S. dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger…

The Federal Reserve was concerned that:

  • its massive purchase of bonds in order to keep their prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver;
  • large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the U.S. dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices;
  • intelligent people could see that the U.S. government could not afford:
    • the long and numerous wars that the neoconservatives were engineering or
    • the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains.

They could see what was in the cards, and began exiting the dollar for gold and silver….

When gold topped $1,900:

  • Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.
  • The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets.
    • By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales….By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, [dropping 2.9% from its March 21st price of $1,614 to $1,553 on April 4th] and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

[Gold began immediately thereafter to work its way back up in price reaching $1,585 at the close on April 9th. Phase two of the smash in gold again went into action and by the close on Friday, April 12th, gold was down a whopping 6.6%!]

For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years….


The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.

The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.

By its obvious and concerted attack on gold and silver, the U.S. government could not give any clearer warning that trouble is approaching. The values of the dollar and of  financial assets denominated in dollars are in doubt. As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.

Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith….In 20 years the US will be a third world country. We are halfway there.

[For those so interested go here to read and/or hear an interview with Roberts entitled Former US Treasury Official – Fed Orchestrated Smash In Gold.]

Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

*http://www.paulcraigroberts.org/2013/04/04/the-assault-on-gold-paul-craig-roberts/ (© PaulCraigRoberts.org – My new book, The Failure Of Laissez Faire Capitalism And Economic Dissolution Of The West, is available at Amazon.com Click Here.)

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One comment

  1. I agree with the authors thinking and predict that by the end of the year the value of the dollar will be the one to plunge, while all the values of all the PM’s (including Copper) will make the prices they are now selling at, a “steal”.

    You can fool some of the people some of the time but you can’t fool all the people all the time!

    Shorting with printed paper money is like stepping on the gas when you are driving with your gas gauge on EMPTY…