The Slog was out on something of a limb a few years ago when I began tracing daily ‘gold dumps’ in New York. For fully nine months in 2008, the East bought everything it could get hold of (85 degree upward curve overnight) and at 10.01 am every day, the Feds in the West dumped tons of it, creating the same curve downwards.
Being 280 years younger back then, I assumed the US was defending the Dollar. I hadn’t as yet caught on to the reality that the Fed had much greater fear of a collapsing Stock Market, and was planning a dirt-cheap Buck to reduce its real debt anyway.
While a relatively commonsense Grade II observer of all bollocks financial, I am a fully trained black-belt when it comes to supply and demand as the driving factors in every market in history. If these laws aren’t being obeyed, then trust me, dirty deeds are being perpetrated by those who always insist that market forces must prevail.
This is the way it is with Gold. The paper price dives, and then hits a false ceiling. Meanwhile, outside the bubble, you can’t buy the stuff for love nor money.
Nobody has audited the contents of Fort Knox since 1961. But even if the Americans have in there what they say they have, their debt is still over forty times more than its value. The standing joke on Wall Street is that the Knox security arrangements (and BTW, they are higher than anything the Pentagon has) is not to protect the gold, but rather the secret that there’s no gold in there. My theory is that there are 80 billion packs of B&H Special Filter in there: either that, or Terry’s All Gold.
In the end of course, the US must accept defeat and realise that a stock market collapse is inevitable: a past President by the name of Abe Lincoln holds the key to this certainty with his shtick about fooling all the people all of the time.
When this happens – and this is purely my own personal view, not a recommendation – gold will sky-rocket again. Problem is, nobody knows the ‘when’ thing.
4/18/2012
John Ward – The Gold Price : How Long Can They Keep The Lid On? – 16 April 2012
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