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The Lies of Nouriel Roubini and Gold
On December 15, 2009, when gold was trading at $1122 per troy ounce, Nouriel Roubini stated, "Since gold has no intrinsic value…there are significant risks of a downward correction rather than a rapid rise towards $2,000, as today’s gold bugs claim” and gold “looks suspiciously like a bubble”. A 35% drop after a bubble bursting is a reasonable fall for “bubble” talk, which would have sent gold into the low $700s per ounce. A month earlier, Roubini had declared, “gold at $1,500 is utter nonsense.” So how did gold perform after Roubini hawked his “gold is a bubble” message all over the news? Not only did it never retreat back to $700 after Roubini ranted against gold, but it never retreated back to $800 or even $900, and in fact it soared to above $1,900 an ounce less than two years higher, a 69% surge higher that not only crushed Roubini’s “gold at $1,500 is utter nonsense” declaration, but made Roubini’s prediction of gold’s future price behavior utterly wrong by more than 100%.
After Roubini was so ridiculously wrong and seasoned gold advocates were right back then, one would think Roubini would think twice about opening his mouth again when making predictions about gold. But nope. He’s back at it again, as his only purpose in the media and in the institutional educational system seems to be to serve as a shill for the banking elite. This week Roubini claimed that gold would retreat back below $1,000 once again, just as he did four years ago and the reasons he provides are as illogical now as they were back then, including sophomoric ad hominem attacks against gold bugs that lack any factual support whatsoever. One would think that if the media were to grant someone that made such a horrendously wrong prediction about gold just a few years ago the spotlight again, that they would discuss his past erroneous predictions to provide some context to his present predictions. However, as I explained in this article, “Independent v. Mainstream News: A Choice of Being Informed v. Being Re-Educated”, mainstream media has evolved today to behave as the propaganda division of the fascist corporate banking –government conglomerate. Today, financial journalists employed by mainstream media typically just repeat what they are instructed to tell the world by their employers without any foresight, critical thought or journalistic introspection.
So let’s take a look at Roubini’s arguments for sub-par $1,000 gold. Roubini states six primary reasons “why gold prices are likely to move much lower, toward $1,000 by 2015” even though all six can easily be dismissed as falsehoods simply by looking at the facts and ignoring Roubini’s unsubstantiated rhetoric. So let’s analyze all 6 of his statements:
(1) "Gold prices tend to spike when there are serious economic, financial and geopolitical risks in the global economy."
This statement implies that there are no serious economic financial and geopolitical risks in the global economy, an incredulous statement if one merely looks at the facts and ignores various banker and politician declarations of economic recovery buttressed by falsely compiled economic statistics. Economic growth in India is the lowest in a decade, economic activity in the Eurozone has declined for 6 consecutive quarters, in Greece, Spain, Portugal and Italy, youth unemployment rates vary from 40% to nearly 63%, the May US Manufacturing ISM report was the worst since mid-2009, but yes, according to Roubini, there are no serious economic risks anywhere in the world today.
(2) “Gold performs best when there is a risk of high inflation, as its popularity as a store of value increases. But despite very aggressive monetary policy by many central banks…global inflation is actually low and falling further.”
According to whom? According to the Bureau of Labor, “official” inflation inside the US is only 1.1%. But anyone that actually is concerned with facts and knows that the US government has drastically and aggressively altered the inflation formula to strip away all components of inflation over the past three decades will realize that this statistic is a complete lie. But not Roubini, who believes the 1.1% inflation statistic is accurate and truthful. It’s downright scary that he is molding impressionable young minds at NYU. But then again, Roubini is just fulfilling the Rockefeller funded General Education Board’s mission in the 1900s of having young students “yield themselves with perfect docility to our molding hands.”
(3) "Unlike other assets, gold does not provide any income."
Gold since 2001 has risen more than 460%. Obviously with this type of enormous appreciation against the USD and similar appreciation against all global fiat currencies, there has been more than ample opportunity for profit taking and gains to be taken along this journey if one desired. Again, an anti-gold argument that has zero merit if you are a logical person capable of independent thought.
(4) "Gold prices rose sharply when real (inflation-adjusted) interest rates became increasingly negative after successive rounds of quantitative easing. The time to buy gold is when the real returns on cash and bonds are negative and falling."
As of May 31, 2013, 5 year treasuries, constant maturities, were yielding 1.05%; 10 year treasuries 2.16%. Shadowstats.com, which complies inflation statistics as they were compiled in 1980 before the government systematically altered the inflation formula to strip out components of inflation from the price index, states that current inflation in the US is about 8.5%. That means for a 10-year investment in US Treasury bonds, you presently have a very substantial real negative rate of return.
(5) "Some argued that highly indebted sovereigns would push investors into gold as government bonds became more risky. But the opposite is happening now. Many of these highly indebted governments have large stocks of gold, which they may decide to dump to reduce their debts. Indeed, a report that Cyprus might sell a small fraction – some €400m – of its gold reserves triggered a 13% fall in gold prices in April."
Here, Nouriel transitions into full propaganda mode with the above statement. Reporting that the speculative Cyprus sale, and not the 400 tonnes of paper gold dumped into the futures market within 30 minutes, was responsible for gold’s 13% drop in April is not only irresponsible, it’s factually incorrect. To counter Roubini’s propaganda, note that back in April, that the plan to have Cyprus divest of a portion of its sovereign gold was not a plan of its own suggestion but one that was forcibly shoved down its throat by ex-Goldman Sachs banker and ECB President Mario Draghi. Furthermore, this announcement was made without ever consulting the Central Bank of Cyprus.
(6) "Some extreme political conservatives, especially in the United States, hyped gold in ways that ended up being counterproductive. For this far-right fringe, gold is the only hedge against the risk posed by the government's conspiracy to expropriate private wealth. These fanatics also believe that a return to the gold standard is inevitable as hyperinflation ensues from central banks' "debasement" of paper money. But, given the absence of any conspiracy, falling inflation and the inability to use gold as a currency, such arguments cannot be sustained."
Here, Roubini transitions from full propaganda mode into full shameless ad-hominem attack-mode. Note his very careful and deliberate selection of words: "extreme", “far-right fringe”, “conspiracy”, and “fanatics”, in an attempt to marginalize the truth with zero factual evidence whatsoever. Talk about an unsustainable argument! If the best argument one can come up with is one full of sophmoric name-calling devoid of any factual evidence, then one needs to take a re-fresher course in logic. If Roubini had taken just ten minutes to study the data of physical gold and physical silver sales worldwide during this banker executed paper-raid on gold and silver prices, he would realize that he was labeling nearly the entire Eastern hemisphere of Asians as lunatic fringe conspiracists.
Fully more than half of the economists I read about in the mass media, if they were forced to accurately dress their role, would have to wear a big red foam nose, oversized shoes and some clown face paint, as they serve no other role in this continuing global economic tragedy other than that of a Shakespearean jester who must distract the people from the truth. Because of shills like Roubini, this is why I still claim today, that “Everything I Learned About Succeeding in Business, I Learned Outside of the Institutional Academic System". One would also be wise to avoid mainsteram academic economists and the mainstream financial press to learn the truth about the current state and dynamics of gold and silver markets. (Copyright: 2013 SmartKnowledge Pte Ltd. You may republish the above article only in its entirety and with all links intact, including proper attribution to the author as described below.)
About the Author: JS Kim is the Founder & Managing Director of SmartKnowledgeU, a fiercely independent research & consulting firm that uncovers the best ways to buy gold and silver and focuses on the realities of this current global economic crisis v. the propaganda of the mainstream financial industry.
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A dime-a-dozen NYJoo professor
I read Roubini's comments the other day. They were so transparent and wrong that I could not even bring myself to comment. I thought it was obvious the guy was completely full of nonsense. Roubini should not be actively participating in markets or giving advice. His knowledge is limited and biased.
he is a member of the esteemed circular firing squad of well paid banking industry shills that serve the financial interests of that industry (being generous) ... like the goebbels did for another reich ... the shills think its okay because they are not gassing ppl to death in chambers and are non-discriminatory in whom they destroy thru their financial war games and propaganda.
Roubini's latest piece on gold was the price of an invite to next year's Davos forum.
Champagne, Caviar, pontificating and dancing....until the music stops. (loud sound of phonograph needle being dragged across vinyl)
I just avoided a pile of dog "nonsense" on the side walk that reminded me of Roubie.
Nouriel Roubini is just another poor insipid fool who thinks that he knows something about Economics. I was exposed to him for a few years at his Blog and it was obvious that he repeats the consensual nausea of those he wishes to impress, probably for his own meal ticket agenda. Your article is appreciated as are your concluding remarks. It is sad that these people like Krugman, Roubini, Keen, Bernanke, et al, and most if not all Institutional Economists are imposing their ignorance on the global humanity and not one seems to be worried at the Dark Age that will arise from this carnage which is growing and accelerating.
And, it is Bank driven while people have lost their grip on reality and reason. US leadership, bureaucracy, MSM, Economists, Bankers and Academics appear to live only for the lust of murdering women, children and the old, around the World. They can't win a War, they cannot tell the Truth, they can only destroy while now, now they feed on themselves. The Manning Wikileaks Trial is a discraceful sham; the Prosecuters should die of shame; this is not Law, this is not Truth; this is no humane; this is evil and disrespectful. There are no values here at all; only pure evil.
And the Economic Theory being used to justify the actions by the US and its supporting Nations are political expediency whatever the cost! Nothing else matters except lies and theft.
The Global Collapse is accelerating and cannot and will not be stopped. For this you can thank the Insitutional Economist for it is they that provide the cover by way of smoke and mirrors.The USA is dead meat; it has run out of the resources upon which it was built and thrived; It has reached Maximum Entropy. To survive it must re-invent itself and to do this means new "leadership". This will not happen and therefore it must and will burn.
http://verbewarp.blogspot.com.au/2013/04/to-be-or-not-to-be.html
Your mileage may vary.
http://verbewarp.blogspot.com.au/2011/08/delusional-economics.html
Ho hum
Is that you, Peter JB?
I, too, spent time with Roubinni's blog 4-5 years ago befroe migrating to ZH. It was a great blog for a while, but seemed to change almost overnight. It felt as though Roubinni had been co-opted suddenly by the establishment he had formerly railed against.
I signed off as Independent Contractor, and someone there always signed off with Ho hum.
Anyway, I am much in agreement with your post today, ans see no way out of the rot we are mired in. Short of a violent revolution, that is, the outcome of which would very possibly be something even worse. For America to reach the boiling point, it would be from some major, triggering event, or series of events, that gave rise to immense anger. It almost certainly would not be because the general population suddenly became educated and went to battle against the true causes of the misery. No. If it happens, there will likely be some strongman who emerges....and benevelant strongmen are few and far between. Don't expect the likes of George Washingtom and Thomas Jefferson to come to our resuce again.
Yes. He took on banks as clients.
"it has run out of the resources upon which it was built and thrived; It has reached Maximum Entropy. To survive it must re-invent itself" ...
I disagree with that statement, the resources are all there. What the US has lost is any semblance of leadership and justice. The financial crimes continuing without interruption are evil yet the US 'leadership' and justice system turns a blind eye to it all...
Yeah Mish tore him apart as well...
http://globaleconomicanalysis.blogspot.com/2013/06/nouriel-roubini-serio...
Tolerance
Over the last fifteen years or so, I have become increasingly tolerant of views that I do not share.
People who have had a different range of experiences in their lives will have a different viewpoint than my own. There have been many lessons in my life that demonstrated than one or more of my premises were wrong and consequently that led to a change of view. Reflecting on another's point of view before reacting to such goes a long way to preventing the proverbial; "foot in mouth" situations.
Listening to another and empathizing with their situation can lead to unexpected awareness or even friendships. Tolerance is a key component of the golden rule; however, it cannot extend to those who act with malice against others and espouse death and hatred to mankind.
In the past I have extended tolerance to those who act as apologists for the credit based money system and/or deny that the precious metal markets are manipulated. When viewed in the context of the harm that has been inflicted on humanity through credit based money and it's corollary; precious metals manipulation, such attitudes I can no longer find tolerable.
It is amazing how quickly financial types will rise to the defence of central banking and our current money system when it is challenged.
In spite of having some lofty educational backgrounds most display an astounding ignorance of fractional reserve banking and credit based money. One can often hear the same reaction from non professionals who fear that any questioning of the system would result in all their savings and investments becoming worthless. They can be forgiven for their ignorance for they are victims of the mainstream media and state education. There are those who do understand the system and fear the change that would result in it's termination. They are those who enjoy power and/or wealth through that system and have become so corrupt they would do whatever it takes to preserve it in spite of it's detriment to the public. They are not just disingenuous. They have become essential as have; the massive global OTC derivative positions, precious metal price suppression, unprecedented levels of financial malfeasance, judicial and political corruption, educational obfuscation and media indifference. All key components in the continuing perpetration of the greatest fraud in human history . How can one tolerate those who defend a system, be it through ignorance or self interest that is enslaving all humanity in a sea of debt?
Precious metal price suppression is a cornerstone in the edifice that is the facade of value our credit based money currently enjoys. To operate a confidence scheme it is vital to to restrain competing systems otherwise they may reveal the fraud for what it is. Protection of credit based money is the reason that the IMF prohibits the use of gold as money by it's member nations. There can be no standard with which one can compare the abject failure of the credit based money system to. It is the reason that Alan Greenspan said that central banks would lease increasing quantities of gold should the price rise. Rising gold prices create cognitive dissonance in those who view the system as sound.
In the past the price of gold was restrained through central bank leasing and sales as well as concerted action in the price discovery markets such as the LBMA and COMEX. In recent years we are seeing more central bank buying and thus the brunt of the suppression has fallen on the price discovery markets. Central bank activities are relatively opaque so one can be forgiven for failure to see the role they have played in the markets. Trades on the major exchanges are a matter of public record in spite of institutionalized obfuscation. The recent gold raid of mid April was so blatant that many gold (and other market) observers who had previously ignored collusion are now; to their credit, taking a second look. Those who maintain that the primary pricing factor in precious metals is free market based are either incompetent or disingenuous. In the past they may have made some worthwhile contribution to precious metals commentary. Their failure to see manipulation as the primary factor in precious metals pricing now makes their views irrelevant, intolerable even.
The suppression of precious metal prices has certainly harmed a great many people. Mining and related industry workers, especially in poor nations have likely suffered the most. Investors and the companies they hold shares in have been cheated as have those who recognized the case for holding specie in a paper world. Their suffering is almost insignificant when compared to that of credit based money. Our money system exists for no other reason than to put power and wealth in the hands of a select group. It is detrimental to the economies in which it functions and has corrupted our judiciaries, politicians, academics and the media so that they act to preserve it rather than protect their respective citizens from it. Wars have been waged to extend the fraud to other nations and wars have been made to draw attention away from it's failings. It is the foundation upon which all of the establishment rests and consequently it's disfunctionality is irrelevant. Money that is created by being loaned into existence has created so much debt that the intolerable,
My life has brought a great deal of unexpected joys that I would have never experienced had I not opened my mind to the possibilities. I like to view myself as a tolerant person, far more open minded than the days of my youth. There is a line however that I will not cross.
That line dictates that I show no tolerance for those ideas, values or actions that bring harm upon others.
Fractional reserve banking/credit based money have caused more human misery on this planet than all the diseases and pestilence our ancestors have endured and then some. Gold price suppression is a key component in sustaining confidence in that very system. How can any rational or decent person be tolerant of that?
www.jaxville.com
Quit wasting your time with MORONs like Roubini!
Investment banker Catherine Austin Fitts sums up the historic global financial problems by saying, "We have a group of people who have the power to act with impunity. They are above the law. They are centralizing and consolidating economic and political power. We have a political problem. We don’t have an economic problem." Fitts’ analysis shows, "We’ve been on a debt model, and now we’ve got to get the planet on an equity model. . . .You are going to do everything you can do to get people into equities. Slamming precious metals down helps do that." But Fitts says that won’t stop the gold bull because China and the rest of the world are buying the yellow metal. Fitts contends, "What that means is there is going to be a much more broad-based bull market in gold. . . I think it’s going to more of a sound money system, and gold is going to be a part of that." Not everybody wants to be brought into the so-called new world order. Fitts predicts, "Remember, to come out with a one world currency, you need everybody. There can be no leakage. There can be no exceptions. The Russians are determined to be the stinker at the party is what I think." Join Greg Hunter as he goes One-on-One.
Video Link
http://usawatchdog.com/us-back-to-a-gold-standard-catherine-austin-fitts/This is actually very simple economics: if a price is suppressed the result is shortages. If you genuinely think the price is being manipulated downward, then back up the truck and load up and wait for all of the inventory to be hoarded. Me, personally, I don't see any reason why the price wouldn't be manipulated in both directions - why would our banker friends give up half of their profits?
Since 1815 the monetary line has played second fiddle to the political line in the Anglo global model that is the blue print of today's world : Castlereigh and Metternich defined that new Euroworld order after Waterloo and Trafalgar.
What the British Navy and East India Company along with the Industrial revolution fueled, the money line of dominant City under Rothschild lubricated; as did the opium trade.
But Rule Britannia had a political vision as does Pax Americana today : NWO under their sway and under petrodollar and MIC guns.
Why did Rule Britannia decline ? It could not match the free trade model that it created worldwide, supposed to be coralled by its burgeoning empire; but which could not match the rush to technology and ressources producing more competitive giants : USA and Germany from 1870 onwards.
The same is true today; as the Pax Americana model has created a surrogate giant in China now unleashed as all those other BRICS.
No matter how powerful the fist might be, one can never contain a fistful of sand by squeezing it harder.
Freedom leaks.
I 100% agree with you but the only reason I write articles like this is because there are still so many people that listen to Roubini, Bernanke, Greenspan, Soros, etc so it is still worthwhile (in my humble opinion) to occasionally write articles to counter their disinformation.
IMO, you should lead off with his lying/misdirection propaganda before dissecting his faulty logic, as arguing theory with sophists only further legitimizes their ideas/stature in the eyes of their followers (a.k.a. "strengthens their resolve"). Given this is an emotional reaction, logic doesn't get very far in combating belief systems (especially highly abstract ones).
If you pull out the big guns right away though, clearly demonstrating his dishonesty, it will trigger another emotional response, which may or may not help diminish the influence of sophists like Roubini. I see it as one of the few ways to avoid further fueling the divide and conquer rhetoric they spew.
Otherwise, great article.
Great Rebuttal Mr Kim. Thank you!
Thank you for doing so. Disinformation which goes uncountered will eventually be believed as truth by the uninformed.
Me!!!
brilliant work as usual williambanzai7!
Supercalifractalistic!
"My apartment walls are covered with plaster vaginas!"
-- Nouriel Rube Beanie
It's all those vaginas that fuel his hubris to make such grand, idiotic forecasts. He likely walks around with a full-time erection, for himself!
my partner at Roubini Economics was Larry Summers
http://graphics8.nytimes.com/packages/pdf/politics/20090403whitehousefor...