How High Would Gold & Silver Prices Go if GS, JPM and HSBC Were Barred from Participation in Gold/Silver Markets?

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Back on May 17, 2010, I granted an interview to Lars Schall
of MMNews Germany
, in which I stated, “if U.S. regulators stepped in and said
Goldman Sachs, HSBC and JPMorgan couldn’t participate in the gold and silver
futures market for three weeks, I really think you would see the gold and
silver price more than double in that time.”


Though HSBC is the principal manipulator in the gold futures
markets and JP Morgan the principal manipulator in the silver futures markets
(always manipulating price downward), I included Goldman Sachs in the above
stable of primary PM manipulators for GS’s notable and likely deliberately-executed
lies about gold that unfortunately influence global purchases of gold
worldwide. For example at the end of 2007, Goldman Sachs listed shorting gold
as one of their top 10 trades for 2008, after which gold promptly rose about
18% in less than three months. Though gold barely closed in 2008 higher than
where it started, the price of gold immediately dropped right after Goldman’s
announcement, at which point I suspect that they bought more gold for their
proprietary accounts.

 

In September of 2009, Goldman Sachs publicly issued the following
statement about gold,

“On a relative basis, we believe gold equities will
underperform other cyclical equities.   We believe the price of gold
is likely to be range bound for the following reasons: One of the key drivers,
its defensive status, is no longer attractive given the backdrop of a recovery
in the global economy. The US dollar, another key driver, has dropped 13% from its recent high, which
is largely priced in, in our view. We forecast the price of gold in 2010E to be
US$964/oz.”


Deliberate disinformation of the type regularly released by
Goldman Sachs about gold plays a critical role in suppressing gold prices.
During my interview with MMNews Germany in May, 2010, Mr. Schall asked of me
the following question:

 

As you know, one organization that tries to expose the
rigging of the gold market for years, the Gold Anti-Trust Action Committee
(GATA), faces huge problems to get “air time” since its founding in 1999. Why
do you think that especially the US and British media is so silent about what
GATA has to say? Isn’t it an indicator among others that journalism itself is
in a profound crisis of its own?

 

My response was as follows:

Yes, I believe it is. I believe that investigative
journalism is almost dead. You have better investigative journalism regarding
the financial markets on financial blogs today and in independent newspapers
than you ever would receive in the mass media. I think that’s an indictment of
how far mass media journalism has fallen from its once lofty perch.

I should know more about media outside the United States,
but I know within in the United States, the bankers have always made an effort
to control the media. I know that the Rockefellers, for example, have in the
past thanked Time Magazine for its silence about some of their financial
initiatives, stating had it not been for their silence, that they wouldn’t have
been able to accomplish the vast majority of their financial objectives. And in
the US, I do know as well that there are only a handful of companies that control
90% of all media -that’s all TV, radio and newspapers.

So I think either the truth is outright censored or there is
actually a concept in journalism that is called self-censorship. Journalists
learn by the pattern of promotion within the newspaper, the Radio station, or
TV station they work for, what they can or cannot say. They actually
self-censor themselves over time as well, which is a shame, but that’s just the
way it is.


Since the Goldman proclamation in September, 2009 to sell gold stocks, the HUI AMEX Gold Bugs index has risen
more than 56%. Furthermore, Goldman Sachs is known to be one of the traders
that has artificially suppressed the prices of gold mining stocks by staking
out massive short positions in gold mining stocks while holding long positions
in gold futures. The underperformance of gold/silver stocks over the past several years
has undoubtedly also prevented investors in gold/silver stocks from purchasing
as much physical gold/silver as they may have had gold/silver stock prices not
been artificially suppressed as well (underperformance in as much as gold/silver stocks typically leverage the price of the PM to significantly outperform the performance of the underlying PM).

 

This past week, we saw the effect that public KNOWLEDGE
regarding fraud can have upon markets. Since CFTC Commissioner Bart Chilton
released an official statement in which he stated, “there have been repeated
attempts to influence prices in the silver markets”
, in the ensuing 7 trading
days, the price of silver has risen an astounding 11.93%!
I still contend today
that if regulators barred just Goldman Sachs, HSBC and JP Morgan from any type
of participation in the gold/silver markets (futures, mining stocks, and
releasing deliberate disinformation), that gold/silver prices would double in
less than three weeks as gold/silver would be relatively free to reach their
free market prices.

 

One month ago, on October 6th, I wrote an article titled,
Gold & Silver, This Time it IS Different” in which I stated:

 

While is true that gold/silver are heavily overbought now
and PM stocks are either in heavily overbought territory or rapidly approaching
heavily overbought territory, during strong runs in past gold/silver bulls, the
underlying metal prices and stock prices have remained in overbought territory
for months on end. This alone is not a reason for a correction as Central
Bankers have been fighting the fundamental weaknesses in their fraudulent
global monetary system daily for quite some time now. When bankers legalize
fraud through the legislation they sponsor/endorse, technical analysis is
insufficient to ascertain the short-term direction of not only stock markets
but also gold/silver markets. One must understand the history of Central Banker
engineered attacks and price suppression schemes against gold and silver to
estimate the probabilities of short-term corrections in addition to the use of
technical analysis.


Today, Central Bankers are increasingly having a more and
more difficult time suppressing the price of gold and silver. This is a marked
departure from years past, even as recently as 2008, when they engineered a
gold/silver crash to coincide with their engineered stock market crash. Though
they still have the power to engineer short-term corrections in gold/silver
markets, their power to do so has been fading this past year. They must resort
to more and more trickery to engineer these collapses. If they decide to
engineer a strong rapid decline in major US indexes in the near future, you can
be sure that they will use this event to also use all of their abilities to
engineer a simultaneous sell-off in gold and silver. Still, any correction we
receive in gold/silver markets before the end of the year will be likely to be
very short-lived as various global players will step in, stop the decline with
buying, and continue the rising trend in gold/silver prices.

 

Now that the price suppression schemes against gold and
silver are gaining mainstream recognition around the world, I believe that the
type of frothy price action we have just witnessed in the PM markets since Mr.
Chilton’s announcement will serve as a sneak peak into the massive leaps higher
in gold/silver prices in the years to come as the criminal banking cartel loses
its grip over gold/silver prices.

 

About the Author: 
JS Kim is the Founder and Managing Director of SmartKnowledge Pte.
Limited,
a fiercely independent investment research & consulting firm that
seeks to protect Main Street from the fraud of Wall Street.  A $1,000,000 portfolio invested in the
SmartKnowledgeU Crisis Investment Opportunities newsletter portfolio on its
launch date on June 15, 2007, portfolio, would have grown to $2,444,088 as of
November 3, 2009 (in a tax-deferred account).