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A Simple Experiment to Disprove the Alleged Gold/Silver Price Suppression Schemes
As long as man has lived, man has always been keen to commit
grand acts of deception on his fellow man. Joseph Goebbels, Hitler's Propaganda
Minister said, "The bigger the lie, the more it will be believed."
The theory of global warming caused by carbon emissions is likely to be another
one of these great lies. Over the past several years, as the global monetary
crisis has unfolded, men that have repeatedly been caught in a web of their own
lies, deceit, and gross misrepresentations include the most prominent of all
financial leaders - Alan Greenspan, Tim Geithner, Ben Bernanke, Robert Rubin,
Sandy Weill, Lloyd Blankfein, Henry Paulson et al. But the greatest big lie of all, in my opinion, is our global
monetary system and the suppression of gold and silver prices that aid and abet
this lie.
The beauty of the argument between the believers and non-believers
regarding the price suppression of gold and silver is that non-believers can
discredit those they view as gold/silver conspiracy buffs and put a rest to
this argument with a simple little experiment that will require very little
time or effort. But more on that in just a little bit.
Over the years, my interest in this topic has led me to
conduct my own research regarding this matter, a very small portion of which
has been outlined below.
IMF Gold
Sales v. the Alchemy of Gold Futures – What’s the Impact on Gold Prices?
Feb 18, 2010
Gold and Economic Freedom, Reinterpreted for the 21st
Century, May 8, 2009
Bankers and Economists Say Gold is a Bubble. Here’s Why You
Should Ignore Them, Dec 28, 2009
The GLD and
SLV: Legitimate Investment Vehicles or Not? July 15, 2009
Is Gold Expensive at $791 an Ounce? Why Gold Will Continue
to Soar Much Higher., November 2, 2007
Gold’s
Speculative Stigma is Unwarranted, Sept. 11, 2006
The lies about gold and silver bandied about by bankers and
gladly disseminated by the mass media have persisted for years. Even when gold
was trading at $500, $600, $700 and $800 an ounce over the past several years, at
each one of these junctures, the mass media disseminated numerous stories that
quoted “metals experts” from various global financial institutions about gold
being a bubble just waiting to pop. And of course, the next time gold steeply
corrects, and it will, the same “metals experts” will be quoted by the mass
media again that proclaim the “end of the gold bull” without a peep of the
behind-the-scenes actions taken by the big bullion banks in the gold/silver
futures markets in London and New York to manufacture these steep declines.
Of course, this discussion would be incomplete and near irreverent without a
mention of the tireless efforts of GATA’s Chris Powell and Adrian Douglass to
uncover the most damning available evidence of government-directed bullion bank
price suppression schemes. GATA, of course, is the OG of
the gold/silver price suppression scheme theories, having sorted through
mountains of documents to find evidence of a banking cartel that artificially
suppresses gold/silver prices in order to convince the world to continue
subjecting itself to a fraudulent fiat currency monetary system that is led by
the US dollar:
GATA Chairman Murphy rebuts defense of gold lending, April
7, 2010
If everything's manipulated, does that make it OK? April 1,
2010
A London trader walks the CFTC through a silver manipulation
in advance, March 25, 2010
Can't manipulate Treasuries market? But that's the point of
rigging gold! March 25, 2010
Adrian Douglas: More Fed minutes document gold market
manipulation, March 14, 2010
Gold is decade's best-performing investment
Most recently, Zero Hedge chimed in with a criticism of CPM
Group Managing Director Jeffrey Christian’s take of why the gold futures
markets exist:
Jeffrey Christian Has A Second Chance To Disprove The Gold
Ponzi Scheme, Fails, April 10, 2010
Given that the number of non-believers far outnumber the
number of believers regarding gold and silver price suppression schemes despite
the growing-by-the-minute mountain of evidence, here is my challenge to the
non-believers, many of whom own considerable dollar/euro/yen amounts of unallocated
(and allocated, for what that’s worth) paper gold and silver certificates and
gold and silver paper ETFs. Over the years, as I educated myself further
regarding certain topics, my views regarding some widely-accepted theories have
radically changed, including my views regarding the carbon-emission based
theory of global warming (I have long stopped believing this particular theory).
So here is a simple experiment that I challenge all
non-believers to engage in that will not hurt you in the tiniest of manners yet
provide a massive benefit if your current beliefs are proven to be wrong.
If you currently own any of the physical gold or silver
paper ETFs, if you are long in gold/silver futures contracts, and if you own
paper gold/silver certificates, sell just a small portion of these holdings
(10% or so) and replace them with physical delivery of that gold and silver
instead. For this experiment to
work, you must encourage every single person you know that is in this same
situation (holding a derivative gold/silver product or paper certificate as a
proxy for physical gold/silver) to also convert a tiny 10% of these holdings
into physical gold and silver. If this simple experiment can spread across the
globe, we will discover if those of us that endorse a gold/silver price
suppression scheme are right or if those of you that endorse holding paper ETFs
like the GLD and SLV as a sound financial practice are right.
For example, if the holders of all paper gold and silver followed
Greenlight Capital David Einhorn’s lead and converted just 10% of their paper
gold and silver into physical gold and silver (actually we’re not asking you to execute the same actions
as Einhorn as he converted 100% of his paper GLD holdings into physical gold
last year), and this caused the price of gold to increase significantly, then
this would prove that the gold futures market contributes absolutely nothing to
the free market price of gold in which supply and demand leads to price
discovery.
If the banking cartel has not set up a fractional reserve
system for gold and silver that they use solely to manipulate prices, and if
most paper gold and paper silver is 100% backed by physical gold and silver as
they claim (sans the futures markets), then the conversion of 10% of all paper
gold and silver into physical gold and silver should not cause any increased
demand in the physical supply of gold and silver that would send prices higher.
In fact, the conversion of 50% of all paper gold and paper silver into physical
gold and physical silver should have a negligible effect as well if indeed
bankers have set up an honest system for gold and silver in which supply and
demand currently set prices.
However, if this act causes an increase in gold
and silver prices, then one should question the very purpose of paper gold/silver
derivative products. If such a small act can create a huge disturbance in
gold/silver prices, and physical supply and demand for gold and silver are not
the market forces that set prices in today’s gold and silver markets, then what
is the very purpose of the gold/silver futures markets in London and New York? (for even though the futures markets allow producers to hedge against future fluctuations in the prices of the commodities they produce, the hedging action shouldn't be so skewed in one direction that it massively skews the price from the price a free market would determine for a sustained amount of time, aka years and years).
The more significant accompanying question then becomes this: If the prices set
in the gold/silver futures markets in London and New York are not determined by
physical supply and physical demand of gold and silver, then are the prices not
being set in these markets entirely fraudulent?
So take the Gold and Silver Challenge, non-believers. Take physical delivery of just 10% of your paper gold/silver derivative products and encourage everyone you know to do the same. Even if
you consider yourself the greatest skeptic of all regarding gold/silver price
suppression schemes, you have absolutely NOTHING TO LOSE and EVERYTHING TO
GAIN from participating in this simple experiment. And if it just
happens that you discover that your faith in gold/silver paper ETFs and
derivative products was wrong, well, you may just make this discovery in time
to exchange these paper products for physical gold and silver before it is too
late.
»
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Paper gold and silver is convenient for my Roth IRA, mostly trade in and out of SLV. For long term wealth preservation, 100% physical no paper silver or gold to convert. Only paper FRNs get converted now.
Silver under $20. is going to be looked at the same as when gold was under $300. is looked at today.
Did you know you can hold physical eagles in your IRA?
Here is a custodian that does it:
http://www.mtrustcompany.com/
The follow-up articles should be:
(1) 'How to take delivery of a COMEX contract'
This is not as easy as it seems. It is very difficult to find a broker that will take the cotnract into delivery. It would be helpful to have a list of brokers that will.
(2) 'Where to store precious metals'
This also is not as easy as it appears. Where do you put it? A safe in your home putting the family at risk? Alternatively, to what extent do you trust a safe deposit box? Where can one obtain a list and contact information for bullion vaults and depositories? Is it possible or wise to insure against theft/loss/fraud?
I have searched for this information but it is not easy to find or is incomplete. If you want to encourage people to take delivery of physical then some in-depth articles on the process would be helpful. This would make for an interesting series of pieces which GATA might consider writing and maintaining on their website.
Perhaps this is why most prefer the ease and simplicity of ETFs -- the alternative is often suggested but poorly documented.
@smartknowledgeu
+1 on Riley's comment.
The comments about gold are weird and oddly naive here.
Rather than moan and groan endlessly about the COMEX manipulations, you'd be better off reading jsmineset.com (which is never mentionned here, surprisingly). Everything you've ever wanted to know about the big picture in gold is there. Including of course the COMEX conspiracies - but in much greater detail. You are just repeating things...not so elegantly.
PS: the point about metal futures is not different from other futures. Originally, it's about production hedging, and there is nothing wrong with that, even in metals. It's a totally separate fact that such or such market is subject to intense manipulations. It's clearly illegal - but it doesn't mean the particular market has no genuine purpose.
Gus
gus//
good [point sinclair has been spot on for ten years .
most fade him. for reason that their understanding of gold is childs play ,
sinclair called the 1980 gold spike 6 years before it happened
he has called this gold play since gold 260. written books in fact
he has given the five pillars of golds ascent , most ignore lol
he has been in gold for years ,, his family background were involved in the California gold rush
just book mark his page on mine set .
get the monetary skinny from a person who has been there .
rather than some zit faced kid or gold wanna be's
my opinion.
but why invent a new wheel when the path is marked out back some years ,
i look at Goldspeculator daily. they and zerohedge update often.
Global Perspectives has AM and PM audio on the market each day. That fella has a great voice and tells it like it is. Good site.
thunder....i have no wish whatsoever to convert the physical i have into paper. None. That's the mistake you're making. No one is actually selling any physical, or has any desire to part with what they have.
We that have the real thing, are keeping it till after the troubles. Go Silver.
Lies and shemes all fall apart eventually. I have never been more glad that i am poor, simple but entirely honest. And gratefull i bought some silver just in time. In a world of lies its every man for himself.
I am also extremely gratefull for the various sites and bloggers , as well as responders from who i have learned much. Thank you all. Due to all that i now have a fair idea how to prepare and what to expext. Further my mouth and fingers have helped to pass this on to family ,friends, neighbors and others in my community.
I hope there are many others like me across the country. Utubers are being taken down one by one of late. certainly we all are on someones list.
It seems we are at war with ourselves. This sucks.
you invest in gold by buyng, well, gold. those who buy gold futures or ETFs, do not really invest in gold, they're traders and/or speculators liek other traaders of futures and ETFs. They have no reson to take phusical delivery. They have no clue if theigold is in the vault , or not. All they care about is whether or not someone else will buy the paper that they have from them at a higher price.
All this excitement created by the folks who have physical, and would like to cash out or mark up their gold's value may be disappointed to say the least when they find out that major specualters have no reason to convert to physical. As a matter of fact, they are the least likely to do so, becasue that would expose their paper as mostly worthless
I have physical (and nothing but physical) gold - and whatever little I have now would give me a nice, tidy 20%+ profit over its purchase price.
I don't care what the big guys are doing with their paper thingie - just keeping an eye on the physical price is enough to make me very happy indeed. And if it goes down, I'll just buy the dips and add quite a bit more to my stash.
Also, don't forget that the biggest physical buyers are Asians. And these guys want the physical metal, not the virtual paper kind. When these buyers demand physical delivery, and they will, watch the fireworks. THAT will expose the paper speculation as physically worthless, indeed.
well, they are working -- trying to start -- a waterfall in silver literally as we type.
anyone who wants to watch JPM in action should watch silver RIGHT NOW....should last a couple of hours on and off.....buying just after the Comex close is usually a good move.
Sorry can't help with that - I already converted 100% in physical ;)
If I remember correctly, you need to be a pretty large holder of GLD in order to take physical delivery. Maybe we need Soros, Paulson and China to step in
Any derivative will do. Even the FRN, but I think he means cash them in, (GLD, shares, bank holding account IUOs etc, and buy physical. The gold will have to come from somewhere. Who holds that gold? AT 10% fractional reserve, there will be hell to pay.
Gold is my chosen means for moving wealth from this currency system to the next. Silver is my savings plan; I buy some physical silver regularly. Gold and silver shares are, for now, my retirement plan. All hedged with a significant amount of cash and cash equivalents (MM and Treas MM). Relentlessly taking delivery of physical over time incrementally tightens the screws. My IRAs, for now, include PHYS, CEF and GTU, as I have been unable as yet to find a vehicle satisfactory to me for holding physical in an IRA account.
The fun part is: by slowly moving from the MM and Treas MM to the above, not only am I gradually removing leverage-backing liquidity from the banking system and selling Treasuries, but also putting pressure on the physical PM markets. It's fun! HEY GOVERNMENT AND BANKSTERS: PISS ME OFF AGAIN!
Except that it they are truly "non-believers" in gold and silver, these people do not hold any paper gold or silver, do they? Never mention physical metals.
They are probably invested in the stock market instead.
So, nice idea, but probably won't work.
Every day that passes, with every new story about the economy, the insane level of debt of different countries, and the brazen manipulation of different markets, I look back upon my decision to invest in physical PMs, late 2008, as one of the best I ever made.
most non believers here on zero hedge ..in my opinion .
are young . are in the most part living from edge to edge . and could not spring for the extra cash .. to hold in gold for any length of time . they must contually turn their small stash,, to make room for rent , credit card payments ,
as the ststistics bear out the very majority of americans have less than 2000 available for an emergency.
so my opinion is these gold bashers are mostly playing mental midjet time. giving out the same refrain they hear from others..,, like you cant eat, not enough , bubble, and are stuck in the learning process of the standard learning preocedure . monkey see monkey do lol
I may be wrong here, but I believe that a tremendous percentage of those that own GLD, SLV or other gold/silver ETFs and paper gold/silver certificate holders believe that holding these derivative products is the SAME as holding physical gold and physical silver. I've read quite a few articles online from gold/silver analysts that adamantly state that GLD and SLV contain 100% allocated gold and silver that cannot be claimed by another third, fourth, fifth party et cetera. So my experiment, I suppose, is directed more to present holders of paper gold/silver derivative products that currently do not believe that gold/silver price suppression schemes may indeed by upheld through the very sale of these derivative products. To this end, I DO BELIEVE that quite a substantial number of people worldwide would fall into this category for if they believed otherwise, my guess is that they would not be holding paper gold/silver as an acceptable proxy for physical gold/silver.
I think it's more likely that they believe that GLD/SLV is the same as gold UNTIL gold/silver hit certain benchmarks - like GLD 10k, etc... So right now it helps slow the rise of the metal - but the belief is that we get there eventually.
Well those are my thoughts anyways - it's the same until they lose control of the market.
I'd like to see these articles, since, as far as the LBMA is concerned, their prospectus states very clearly that settlement for cash instead of physical delivery is always a possibility. And this, as far as I know, has been the case for quite some time as well, at least for "unallocated" accounts, which, as I understand it, are the vast majority of accounts on the LBMA.
See, for instance:
Thanks for the input. Much appreciated. I've also thoroughly read through the prospectus of both SLV and GLD as you have so I am aware of what they state as well (please refer to my own referenced article that I wrote above in which I question whether SLV and GLD are legitimate investment vehicles). I've read a number of articles over the past several years that quote a lot of faith in the bullion-backed holdings of the SLV and GLD, some on the internet, and some in magazines, but haven't saved or kept them. However, with a quick one-minute Google search, here's one that doesn't fall into the "adamant that GLD and SLV contain 100% allocated gold" category, but is fairly close to that sentiment in my opinion. From, the below quote, the analyst obviously has a lot of faith the the physical bullion is there to back every dollar that has been invested in GLD. I've seen these types of articles over the years about GLD and SLV.
http://www.safehaven.com/article/11831/gold-etf-impact-4
In the article, the author states, "As of this week, GLD held an amazing 749 tonnes of physical gold bullion in trust for its investors! This is a staggering amount of the yellow metal and difficult to understand without context. Traditionally, the largest gold holders are the national central banks of the world. Around 100 countries own gold bullion. If you put GLD in this list of elite central banks, it holds more gold today than all but 7! And after it merely grows another 2.1%, GLD will overtake Japan to become the 7th largest gold holder on the planet."