The ONLY Variable That Matters To The Price Of Gold

Sprott Money's picture

The ONLY Variable That Matters To The Price Of Gold

Written by Jeff Nielson, Sprott Money News

 

There are all sorts of positive fundamentals when it comes to the price of gold. There are the positive supply/demand fundamentals. The gold market is in a supply deficit. Mine reserves are at a 30-year low. The price of gold is below what is necessary to sustain the gold mining industry.

 

There are the positive geopolitical fundamentals. The world’s two most-unstable leaders – Kim Jong-un and Donald Trump – have been constantly trading threats and insults. And both of these people have nuclear weapons at their disposal. There is the endless “War on Terror”.

 

There are the positive economic fundamentals. Western real estate bubbles in major urban centers are at never-before-seen levels of insanity. Western markets are generally also at bubble levels, with U.S. markets representing bubbles on steroids. Western governments are bankrupt.

 

In relative terms, none of these fundamentals count.

 

There is one more important fundamental for the price of gold. Not only is it the most important fundamental, but it involves a variable which dwarfs all other fundamentals in magnitude -- combined.

 

Regular readers have heard many times before that gold (and silver) is “a monetary metal”. The definition is simple. Gold is money. Therefore the price of gold must change proportionate to changes in the supply of other forms of “money” (i.e. currency).

 

This is not a theory. It is a function of simple arithmetic. An elementary numerical example will illustrate this principle.

 

Suppose (in the entire world) there was a total of 10 ozs of gold. Suppose also (in this hypothetical world) that there was a total of only $10,000 U.S. dollars. And in this hypothetical world, the price of gold is $1,000/oz.

 

Let us suppose the supply of U.S. dollars increases by a factor of five, and thus there are now $50,000 USD’s. What happens to the price of gold? All other things being equal, the price of gold must increase by a factor of five (in this case, to $5,000/oz), to keep our hypothetical world in equilibrium.

 

Now let’s return to the real world. What happened in the real world? The supply of U.S. dollars did increase by a factor of five. This was the most reckless money-printing binge since Germany’s hyperinflation during the 1920’s. Regular readers know this monetary orgy as “the Bernanke Helicopter Drop”.

 

 

Over a span of 50 years from 1920 through 1970 (while we still had a gold standard), the supply of U.S. dollars was virtually unchanged. In five years, 2009 – 13, B.S. Bernanke quintupled the U.S. money supply.

 

Did the price of gold quintuple? No, not even close. At the time that Bernanke began his money-printing orgy, the price of gold was roughly $800/oz. That was right after, the price had been driven roughly 30% lower by the banking crime syndicate. And even before that point, the price of gold wasn’t close to reflecting its full value.

 

At a minimum, the Bernanke Helicopter Drop should have propelled gold to $4,000/oz (USD), concurrent with that money-printing. Arguably, the price should have gone much higher than that. In actual fact, as we all know, the price never even reached $2,000/oz: less than half of the absolute minimum price.

 

That should have been the base price for gold in 2013: $4,000/oz USD. The supply of U.S. dollars has never shrunk. Forget about “tapering”. It never happened.

 

How do we know? B.S. Bernanke told us so. From 2009 – 13, virtually every week Bernanke boasted about “the wealth effect” from his money-printing: how U.S. stock markets were being pumped higher and higher and higher.

 

Obviously if quintupling the supply of U.S. dollars pushed U.S. markets up to their bubble levels, then withdrawing dollars would cause those markets to fall from their all-time highs. What have we seen? Instead, the bubbles have gotten bigger and bigger and bigger.

 

Obviously the U.S. money supply hasn’t shrunk, it has continued to grow. Bernanke and the Fed lied when they claimed they were reducing the supply of U.S. dollars. And as we also all know, the Federal Reserve absolutely refuses to allow any outside auditing.

 

Nobody knows what are on its books, we only know what the Fed-heads claim is on their books. And what they claim is not remotely plausible.

 

The U.S. market bubbles keep expanding, ergo the U.S. money supply keeps expanding. There is no other possibility. Yet the price of gold isn’t at $6,000/oz. It isn’t at $4,000/oz. It isn’t at $2,000/oz. It has been falling for most of the last six years.

 

During those six years, no one in the mainstream media (and very few in the Alternative Media) has made any mention of the gigantic disconnect with U.S. money-printing and the price of gold. The reason why the mainstream media propaganda machine has ignored this fundamental is obvious. Their job is to suppress the price of gold.

 

Why have practically no commentators in the Alternative Media been banging the drum on this subject? Ignorance. Sadly, few of these gold “experts” have a correct understanding of gold market fundamentals. They dwell on trivia.

 

Look at what we see around us today. These self-proclaimed experts debate whether or not the price of gold should rise above $1,300/oz. They point to North Korea. They point to incremental changes in demand for some of the major gold-consuming nations. Irrelevant.

 

The fact is that thanks to the success of the banking crime syndicate in discouraging the buying of (real) gold in the Western world, total gold demand hasn’t increased by that much. The largest, single incremental change was the switch by central banks from being net-sellers to net-buyers of gold. That was a very significant change, but it has flattened out and there is no indication that this will change further over the short term.

 

The fact is that (despite all the rhetoric) there is very little chance of any actual hostilities between the United States and North Korea. Discounted for this small probability, this is not a major driver of the price of gold.

 

The most ludicrous influence – and distraction – to the price of gold has been U.S. interest rates. High interest rates are a negative driver for the price of gold. The reasoning goes like this.

 

If savers can obtain a positive interest rate on their savings then they have an incentive to hold paper instead of gold. What is a “positive interest rate” in this context? If the interest rate on their savings is higher than the rate of inflation, then that is a positive interest rate.

 

If the savings rate is lower than the rate of inflation, savers lose money by putting it in the bank, and they are much better off holding gold instead.

 

Are current interest rates high? No, they are the lowest rates in history. This is despite the fact that B.S. Bernanke and all the other central bank liars promised to immediately normalize interest rates in 2009 – meaning in the range of 3% - 5%.

 

Today, after nearly nine years, the U.S. interest rate is at 1%. Meanwhile, real U.S. inflation has hovered between 4 – 8%, according to John Williams of Shadowstats. U.S. interest rates would have to rise by at least another 3%, just to begin to be a negative driver for the price of gold.

 

Current interest rates are a mildly positive driver for the price of gold. Otherwise, for the last nine years, everything said and done by the Federal Reserve with respect to U.S. interest rates has been totally irrelevant to the gold market.

 

If we combine every other variable that influences the price of gold, even put together they don’t come close to equaling the impact of the Bernanke Helicopter Drop. The U.S. dollar is now worthless.

 

It is backed by nothing. It has been diluted more than any other major currency going back a hundred years. The U.S. government is bankrupt. The U.S. dollar is currently being phased out as reserve currency – meaning the demand for U.S. dollars is shrinking to a fraction of previous levels.

 

What is the price of gold (or any hard asset), denominated in a worthless currency? The price is infinite. What is the current price for gold, denominated in worthless U.S. dollars? $1,300. The Crime of the Millennium.

 

For those readers who are still not convinced, just listen to Bernanke’s own words.

 

U.S. dollars have value only to the extent that they are strictly limited in supply.

- B.S. Bernanke, November 21, 2002 

 

Strictly limited in supply.


According to the former Chairman of the Federal Reserve, the Bernanke Helicopter Drop rendered the U.S. dollar worthless. That is why the Federal Reserve has falsified more recent versions of the chart above – to hide the dollar’s worthlessness. The phony chart produced by the Federal Reserve today bears no resemblance to what has actually happened to the U.S. dollar.


The U.S. government, the Federal Reserve, and the mainstream media pretend that the U.S. dollar still has value. They pretend that the price of gold should be at $1,300/oz (or less).


Ignore the trivia. Ignore the liars and idiots in the media. Ignore the Federal Reserve and all of its utterly pointless “meetings” about the U.S.’s irrelevant interest rates. Follow the money. It leads up – way, way up.

 

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

 

The ONLY Variable That Matters To The Price Of Gold

Written by Jeff Nielson, Sprott Money News

 

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Gordon_Gekko's picture

The stronger the bull, the more riders it will shake off. Considering the epic no. of riders it has shaken off during the past 5-6 years, the rise (in purchasing power terms, not meaningless fiat dollar terms) in Gold will be insanely epic too. Among the most fun I'm looking to have is when crypto-retards have the Wile E. Coyote moment (even more than the stock market fools).

Maestro Maestro's picture

Worse than the bankers rigging gold and silver prices and not having the gold that they sold you (or selling gold that they don't have via fraudulent LBMA unallocated paper spot contracts or COMEX Futures contracts) is the fact that we don't even have MONEY today.  Therefore all financial transactions and economic numbers predicated on the existence of money are FRAUD and FORGERIES presently.

Electronic digits and paper fiat currencies in use today are NOT money, according to the law of the country that issues the reserve currency of the world, the US Dollar (Article 1, Section 10 of the US Constitution); or by the tenets of the science of Economics (i.e., fiat currencies are not money because they are not a store of value nor a unit of account due to the fact that NOT ONE fiat currency's value is actually determined or stipulated in concrete legal terms).  Dollars and Euros and Yens are not even lawfully DEFINED as to what they all are exactly; what their economic worth and transactional value is. Hence, fiat currencies simply cannot constitute the legal foundation of any lawful contract!

(Also, there cannot be either inflation nor deflation in the ABSENCE of money.  Both inflation and deflation are monetary events which cannot take place where there literally is no money.)

What we have today is massive GLOBAL FRAUD mascarading as a monetary system based on the (fraudulent) US dollar because all fiat currencies are basically only a derivative of the US dollar, including the Euro, the Yen, the Yuan, the Rouble, the Shekel and the Riyal.

Furthermore,

Why do a few people get the right to print fake fiat money out of nothing and buy your goods and  services with it whereas you have to WORK to obtain the same worthless money created out of nothing?

THAT is the question at the heart of the matter.  That the bankers manipulate interest rates or the price of gold via fraudulent Futures trading (by selling gold that they don't have) with fiat money is a moot point.

To put it differently: why do the bankers get to have anything that they want without working for it and you, you don't?

All this talk about market rigging, monetary theory and fraudulent (paper) gold trading is a cover-up for INJUSTICE.

The US Constitution FORBIDS the use of debt as money; the US Constitution proscribes (debt) notes which is what the US dollar is presently.  Think, all other currencies are just another name for the US Dollar.

What passes for money today is a CRIME, no more no less.

 
People,

You are all aiding and abetting this crime every time you buy, sell, pay or get paid.

And then you ask, Why our leaders, the politicians, the bankers, and our military men and women are EVIL?

The answer is, because they are just like YOU. They are your sons and daughters.

Tapeworm's picture

Give me a break, the aboveground gold supply is good for thirty-five years at minimum.

 It is only valued as money. All of the bellicose screeds as this will not pump the value.

fazsha2's picture

Evidence free assessment.

Aquarius's picture

For the record, and no matter what you think or say, Humanity, the whole of Humanity, IS on a Gold Standard and it has always and will always be so. It is Integrity without which, Humanity cannot endure. Ignore it and it will not go away; it is Truth and it is the only Universal Standard known to exist of Earth.

Ignorant non-conscious "economists" are just doing "God's Work" for the Big Banks and have chosen to destroy the Social Order and Fabric so to Rule. 

For me: "I don't wish to Rule, nor do I wish to be Ruled." (Read both Aristotle and Plato et al).

Gold is pure and ultra-refined Energy /  Force.

https://verbewarp.blogspot.com.au/2011/08/delusional-economics.html

https://verbewarp.blogspot.com.au/2016/11/skepticism-in-risk-to-be-being...

galant's picture

The “Ignored Elephant” here is China’s reported plans to buy imported oil with yuan instead of dollars and for the exporting nations to then be able to exchange that yuan for gold on the Shanghai Gold Exchange.

If the Nikkei Asian Review report is correct, gold will be restored to international commerce at a level not seen since Nixon killed Bretton Woods in 1971. The move away from the petro-dollar is under way already and if the rumors are correct the gold phase is not far off.

Suddenly we are talking about economic balance between huge quantities of oil and a relatively small amount of gold to pay for them, and the effect this will have not only on the value of gold, but the US dollar and yuan in particular.

 The China "Oil for Yuan” plan might not happen as advertised but China and Russia have made it clear -- they are done with the US dollar. Gold will be behind whatever monetary system ties together the nations of the OBOR trading world.

As Hugo Salinas Price has noted, “the Chinese are linking together both the world's real money, gold, and the world's most important commodity, oil, which is the fundamental motor of all the world's productive activity.”

This is the big gold story.

 

 

tangent's picture

Obnoxious article because there is more money out there than just USD, and in fact the USD market share seems to have topped off.

chickadee's picture

Why is he just considering the US's money supply? Isn't monetary expansion global?

Silver Savior's picture

As I understand gold and silver more and more the price in fiat terms has no meaning. I just think it's great I can purchase especially silver so low. Chump change for what's supposed to be the ultimate form of money. This is only for a limited time. Kind of like a quark. 

Future generations will look on this time in history and think why didn't stackers buy even more! 

Montana Cowboy's picture

There is a logical fallacy here. Mr. Sprott needs to explain something. If metals have been down-rigged to fire-sale prices for decades, why can't the supply ever get drained? Why has there never been a delivery default? With any other under-priced commodity, this would indicate an over-supply, a glut. If metals are exempt from these same dynamics, then please explain the exemption Mr. Sprott.

DjangoCat's picture

What about the German CB wanting back 300 tons.  The Fed told them they would have to wait 5 years.  Why?

They probably did not have the gold.

They had to buy it on the open market.  They made sure the price was fixed low.

China also has needed to increase its gold reserves to get a seat at the IMF SDR table.  Keep the price low while China loads up.  Regretably for some, Russia got in on the action too, stacking a pretty good pile at low prices.

Canada has none.  US, well Mnuchin going into Fort Knox with his trophy wife and hefting a bar does not constitute an audit.

All something to think about.

 

holgerdanske's picture

USA didn't have to buy it, The robbed it,

Montana Cowboy's picture

In the absence of an audit since the early 1950s, it must be presumed that the US probably has no gold. But so what? That doesn't mean there is global gold shortage. It doesn't mean that markets are rigged. It doesn't mean all that stuff that coin dealers say it means.

Dealers have their backs against the wall with the shortage theories. Because they are heavily invested in these theories, they now cover up their failed theories with false explanations. They will find any anomaly and then tell the public what that anomaly proves. Its all BS. Shortages of metal in consumer form is not evidence of metal shortages. Convictions and admissions of market rigging by traders to exit their positions profitably are not evidence of government or 'cartel' rigging to protect fiat. Pipi Malgram just retired as a Plunge Protection Team member. Her father was an adviser to four presidents. She is talking about what they do and don’t do – and they don’t rig metals.

Stop believing these miners and coin dealers. Remember, there is nobody with any financial interest in bringing you the other side of the story. They go unopposed. After decades of nobody opposing them, their bullshit has reached fantasy levels. Just demand evidence and use your logic. Investing in metal doesn't need to be a religion.

Reginald Blome's picture

Too much fluoride in the water in Montana

Montana Cowboy's picture

This is your best opposing argument? No wonder you are so easy to fool. Go learn what evidence is. Assertions don't become true simply because enough blind idiots subscribed to it - unless you are in church.

Latitude25's picture

"And they don't rig metals".  You're in need of an education at gata.org.

Montana Cowboy's picture

I agree that metals, and many other commodities are rigged all the time. Rogue traders spoof markets and trigger stops to exit positions profitably. No amount of these incidents supports the 'cartel' theory. This is where GATA fools you. They provide evidence of rogue traders to prove the cartel theory, as if these traders are cartel or government operatives.

JailBanksters's picture

Gold has a Finite Supply, but it will never default, never run out.

It's Fractional Reserve Gold Bars. Most Gold will never ever leave the Vault, and has many owners of the same bar.

The gold you buy at the local shop is just a fraction of fraction that is available to be taken home.

It's a sacrifice to keep the Illusion alive, that it really does exist.

Which is very different if you wanted to make a solid gold toilet, because you'd never get it at $1,300 an ounce, if you can get it at all.

 

Montana Cowboy's picture

Gold has a Finite Supply, but it will never default, never run out.

Nonsense. If ANYTHING with a finite supply is for sale at allegedly down-rigged fire-sale prices for decades, that finite supply must deplete. So either there is a permanent over-supply glut or its not really down-rigged to fire-sale prices. I know this doesn't fit the fantasy of stackers. And I know it exposes the coin dealers for their unsupported rigging theories. Sorry. I trade this stuff. And no amount of rogue trader rigging is evidence for the 'cartel' theory that rigging is to protect fiat. Maybe the cartel theory is true, but there is a total absence of evidence to support it.

It's Fractional Reserve Gold Bars. Most Gold will never ever leave the Vault, and has many owners of the same bar.

Nonsense. This is more theoretical fairy tails coming from the coin dealers that are desperate for an explanation for zero delivery defaults and an endless supply. In order to qualify for allocated storage, metal must have a unique identifier (serial number). I have never seen any evidence of any serial numbered bar having multiple claimants. It is amazing how many people can subscribe to such a theory when there is a total absence of any evidence. Maybe its true. But evidence is required and it simply doesn't exist. If something is asserted often enough, people permit that as a substitute for evidence. Its not a consensus matter. It requires evidence and there is none.

The gold you buy at the local shop is just a fraction of fraction that is available to be taken home. It's a sacrifice to keep the Illusion alive, that it really does exist.

Just because it may not exist in the hands of the US government doesn't mean there is a gold shortage. I have never seen any evidence that Germany's gold was allocated storage. Gold is fungible, meaning that an ounce is an ounce. You don't make a cash withdrawal from your bank and demand the same serial numbered bills you deposited, unless you have a contract that promises that. In case you didn't know, Germany got all their gold back.

Which is very different if you wanted to make a solid gold toilet, because you'd never get it at $1,300 an ounce, it you can get it at all.

This is more bullshit coming from the miners and coin dealers. Those folks have been preaching the shortage theory for so long that their backs are now against the wall. It is impossible to have absolutely no delivery defaults amidst down-rigged prices for decades - and they know it. So they make up stories to explain it. Rob Kirby is a great example. He claims he deals tonnage of gold. I have never seen any evidence he even deals ounces. He claims large quantities are selling far over spot, as much as double spot. What bullshit. Think about it. It doesn't make sense. You can buy as many Comex contracts as you want and call for delivery. Before you tell me that Comex has no gold, first show me a single delivery default - just one. So you actually believe someone would pay double spot when Comex will deliver at spot? Wake up. Stop believing the coin dealers.

Nobody has any interest in bringing you this side of the story. Consequently, coin dealers and miners have gone unopposed in their preaching of bullshit. It is now at fantasy levels.

JailBanksters's picture

It would run out if one bar had one owner.

They may have 20-30 owners for the same bar.

As long as it doesn't leave the vault (the secure storage scam)

Hardly anyone takes delivery from the Comex, it's either rolled over or they settle for cash.

 

Montana Cowboy's picture

Did you require any EVIDENCE before you subscribed to this theory? If so, please show me cases of multiple registered owners of the same bar in any credible repository.

Thoresen's picture

Plenty of defaults. You get dollar value in payment instead of delivery.

Montana Cowboy's picture

Plenty of defaults? Just show me one default. Just one.

Why do people think the shorts are in default because they don't have the metal? The longs on the other end of those contracts don't have the cash. They are in on margin only. The shorts are mostly bullion banks that really do have the metal. The longs would need to file bankruptcy if they were required to perform. Who is really rigging the market? its much easier to make a case that the markets are up-rigged by longs with no cash than down-rigged by shorts with no metal.

SoDamnMad's picture

Tell me why there are all these huge contract dumps at times when the US market is closed and the seller doesn't get the best prices had they dumped in small amounts in times of worry (like shortly after when Rocket man sets off his bombs)

Montana Cowboy's picture

Its trader rigging to trigger stops and exit positions profitably. That doesn't support the 'cartel' theory. Maybe there is a cartel rigging gold, but no amount of these micro events support the macro theory.

Herdee's picture

It's a secret how many dollars are out because the government won't allow taxpayers to know what goes on within the ESF (Exchange Stabilization Fund). Most likely the Dollars outstanding are far, far higher. If that ever leaks out?

rex-lacrymarum's picture

He's right - approx. 90% of the "fundamentals" he lists at the beginning of this jeremiad indeed do not count. This is to say, they are simply completely irrelevant to the price of gold. And no, there is not just "one variable" that is important for gold, there are several - quite a few in fact, just not the ones he cites. This guy definitely doesn't understand the gold market. Mine supply? The cost of mining? Anyone who talks about this when discussing gold prices should be immediately disqualified and politely asked to pontificate on something else. And it's not a "crime" that gold trades at $1300, it's just a price - get over it. Not to mention, as one keeps reading, this guy comes across as completely unhinged. Where do they find these people? Is there a nest somewhere?

I'm a big fan of gold, I think everybody should hold some  - in fact it may well be a good idea to be overweight gold, even though the fundamental picture is by no means unequivocally bullish right now (obviously that could change quite easily and quickly). It represents essential insurance against the eventual implosion of the bubble and by implication the money printing orgy that will follow in the wake of said implosion. But why has the metal become such a magnet for lunatics? Is it because it's shiny? Saints preserve us. 

BobEore's picture

But why has the metal become such a magnet for lunatics?

It's a kult - exactly like those Hare Krishna guys, decades back... dressed in orange, beating drums in the streets, chanting in unknown tounges...

jees keep on stacking,
keep on stacking..
stacking stacking,
keep on stacking...

foils for the $power, which sells them their ripoff coins,
whips up the troops with daily doses of pap like this,
makes out like a 'bankit' thru daily manipulations of fx
by which to ever-increase their own supply of the stuff...

as it drips ounce by ounce over to their new crime capital in the far east.

Meanswhile... the smart money err,,, "stacked",,, then got outta Dodge - for good, with saddlebags packed sufficiently full of "BAR METAL" FROM NON-TALMUDIST CONTROLLED SOURCES(HINT: no "5-eyes MINTS!)

then set back to watch the mind-controlled morons straggle along their highway to hell... dropping like flies, croaking my precious my precious....

Latitude25's picture

And just how do you verify the purity of bars Bob?  Coin purity is easily verified with a resonant frequency test.

Flankspeed60's picture

OK Einstein, please illuminate for the great unwashed as to why the actual cost of producing gold should have no bearing upon its fair price. It's certainly true of every other manufactured product - but somehow gold is different? I await your answer in breathless anticipation.

Montana Cowboy's picture

No, its not true of every other manufactured product. The cost of production doesn't ever dictate the market value of anything - anywhere - ever.

Metals have a particular problem that other commodities escape. Metals don't perish. Consequently, an over-supply can become a permanent problem. Many miners are going bankrupt while there are no supply shortages in sight. Sales are down dramatically. The three largest metal retailers are all in bankruptcy (Tulving, NorthWest Territorial, Bullion Direct). Price in that market environment is totally uninfluenced by a miner's cost to produce. Unfortunately, the glut in metals is not getting drained - even when prices have been allegedly down-rigged to fire-sale bargains for decades. All that stackers can hope for is that the other 99% reject their own religions and subscribe to the Church of Gold and Silver. Unless that happens, the glut will continue even if every miner shuts down. Also, fiat money isn't the only commodity that suffers a decline in value from an over-supply. Nothing exempts metals.

MrSteve's picture

Competition sets the price. All commodiities trend in price towards their cost of production because the cost of production is the floor cost to meet demand. If demand goes up, then price can go up until rising supply balances the new level of demand. Gold can go to the Moon because infinite demand is assumed under certain situations, such as umpteen brazillion US paper dollars being compared to untold zillions of mined ounces of gold. Just do the math and be a buyer or seller depending on your equation's results. My equation says when a Ford pickup truck is $50,000 USD, gold is a screaming bargain below $_, _ _ _. 00

Flankspeed60's picture

I've manufactured products for nearly forty years. Some of those products had NO competition, others with very little competition. Competition was not the driving factor.  The final arbiter for price has always been the customer's assessment of value. The difference between that and the cost of production determines whether or not that product will ever see the light of day.

BobEore's picture

No special 'genius' required....

moron. \just a simple grasp of the way things ...

really work - outside of kultburg.

Robert Blumen covered this issue decisively, years back.

http://www.acting-man.com/?p=38713 (danger: link to real world -stakkers... DO NOT OPEN!

Montana Cowboy's picture

"All commodiities trend in price towards their cost of production because the cost of production is the floor cost to meet demand."

Not true for gold and investment silver because they are never really consumed and are non-perishable. Supply does not need to come from production like other consumables and perishables. Consider gold. Every ounce ever mined is above ground and can be sold. Unless there is a newfound demand, it is possible that existing supplies could satisfy demand forever. Purchasing gold does not consume gold. It merely changes where it is warehoused. Like it or not, stackers are all just remote Comex warehouses because they don't consume.

Richard640's picture

ONLY THE SHADOW KNOWS

 

 

The end is nigh, brother, the end is nigh! 

 

World markets are like a pie crust stretched across the roof of a volcano!

 

Fu Manchu is about to pull the lever to the trap door!

 

Warbucks signals the trusty  Punjab to cut the cords of the rope bridge!

 

 

Grease the skids! Happy tobogganing!

exartizo's picture

No don't be stupid and keep "stacking" while the price of gold plummets back to $1000, and likely below that, for an extended period of time.

the only thing moving gold is the control that the worldwide Banksters apply to it.

the only thing that will show the true underlying value of gold is a total collapse in the Bankster owned financial system.

very simple.

exactly like the last time this happened.

DjangoCat's picture

Bitcoin is the bankster killer.  They are moving into aggressive war against it by cutting off banking service to crypto exchanges..

Gold price may be manipulated by banks (you think so?), but the price is expressed in a fake currency, USD.  So it is easy to manipulate if you can come with unlimited free bucks.

Gold price in Bitcoin is a horse of a different color.  The banksters do not have a foothold in crypto, other than Ripple.

Gold markets need to provide a market for Bitcoin as well as USD and other fiat.  This would level the playing field.  Bankers will need to think twice before moving against the gold markets and cutting them off.

A deep and liquid market in BTC/XAU would provide a solid international value transfer mechanism, out of TPTB control.

 

Canadianbacon's picture

I think it is taking most of what they got just to keep the price stable. (1300ish)

No one(Bankster) wants to be the first one to kick out a pillar in the casino because we all live in the casino.

When the roof starts to fall PM charts will look like a Bitcoin chart.

So "keep stacking" the end is no more than 5 years off.

But i must say I am amazed how people refuse to to see what is right in front of them.

At the end of the day plain old math says all ponzies must fail no matter how big. Even global ones. Math never lies, believe in it and prepare.

J

 

 

bluskyes's picture

Contradictions are artificial constructs of faulty logic. They only exist in the presense of unknown factors/misunderstandings..

Conax's picture

The author doesn't appreciate the psychological damage done to the metals here in the states.  Not only is gold priced absurdly low, it is deemed to be merely a shiny bauble, a trinket, never a monetary instrument.

"It's price is what someone will pay you for it" is the mantra.

Those someones are now loaded with braim danage and just don't understand the value of hard money anymore. When this farce collapses as all Ponzis eventually do, there will be some changes to these attitudes vis a vis gold and silver.  Painful, abrupt changes.

And silver? I don't even want to talk about it, I have the braim danage, too.

Hongcha's picture

American women wear zinc jewelery.  The east asian and southeast asians that I see prefer 22k.  But of course we know better, having subverted 5,000 years of monetary history in less than ten years!  All hail the new order (while I accumulate).

GRDguy's picture

The fundamental reason why sociopathic financiers deny the manipulation of precious metal pricing is that their income depends on being able to lie-to and steal-from their own clients.  Thanks to their manipulations, their clients have no way of knowing how they are being lied-to and stolen-from.  No different than those followers of Jim Jones swallowing the poisoned kool-aid. It does end badly.

anarchitect's picture

"There are all sorts of positive fundamentals when it comes to the price of gold. There are the positive supply/demand fundamentals. The gold market is in a supply deficit. Mine reserves are at a 30-year low. The price of gold is below what is necessary to sustain the gold mining industry."

Sorry, all of this is pretty much irrelevant.  The potential supply of gold is the stock, and most of the gold mined over the past 6,000 years is still held as bullion, coins, or jewelry.  About 3K tonnes is mined annually, but the stock is more like 170K tonnes.  Eventually prices have to catch up, but it need not happen immediately.

Sure, there is obvious intervention in the gold market and the COMEX is a fraudulent casino.  But the above argument doesn't really cut it.

 

rex-lacrymarum's picture

You have just restored my faith in humanity... I was afraid no-one else had noticed. 

Dame Ednas Possum's picture

Just keep stacking. 

 

 

Thoresen's picture

Jeff Nielsen is one of the best writers on the economy.