PRESIDENT TRUMP, “MAKING AMERICA GREAT AGAIN”, THE GOLD STANDARD AND A 230% INCREASE IN PHYSICAL GOLD BAR DELIVERIES – ALL CONNECTED?

February was an extraordinary month…

President Trump was busy issuing executive orders and reversing those issued by his predecessor. Gold prices have been steadily climbing. The secret Obama executive order, which must have opened the US gold reserve to the banksters, does not appear to have been reversed quite yet. When it does happen, it should spark some mild price fireworks, as the manipulators dump remaining short positions. In the meantime, in all likelihood, the manipulators are loading up on as many physical gold bars as they can, at the lowest possible prices. It is, I believe, an indirect courtesy of the US government, thanks to the actions of the previous President.

It would appear that America’s treasure continues to be drained away at a fantastic rate, although as we will discuss later, there is a hesitancy to commit to future orders growing fast in London. In spite of the delay in reversing Obama’s executive order, gold’s price and timing continue to follow the pattern I described in an article in November. Probably, that’s because although it isn’t closed yet, the US Gold Reserve could be closed at any moment.

The price attacks will continue but are temporary and opportunistic. They will be geared more toward the collection of a few quick bucks and/or the collection of some discounted physical gold bars than trying to make a long-term impact on gold prices. Most likely, that’s because the recent updraft in gold prices is driven by physical demand. Physical buyers are thrifty people who stop buying when prices go up too fast. Their resistance doesn’t last forever, but they do need to get used to significant price hikes.

We know that physical buyers were ready to pay much more for gold just a few years ago. Based on the gold market of 2012, the point at which physical supply and demand balances in the longer term, was somewhere within the $1,500 – $1,600 range. Since nominal earnings are universally higher now than they were 4 years ago, it shouldn’t take too long for people to get used to the higher prices. The willingness to pay a much higher price has already been demonstrated. Downward biased manipulation can only be partially effective without government subsidies and support.

The recent price attacks can safely be viewed as the transient events that they are. It appears that the banksters are simply attacking highly leveraged get-rich-quick schemes for the short-term benefit of doing so. Such speculators are fools, who face bankruptcy from small price movements, and must run at the slightest negative price pressure. If they think gold will go down, they quickly take the opposite side from their usual bullish view and try to get rich quick that way. The problem for them is that they are being tricked. The manipulators want to buy physical gold bars at rock-bottom prices and transient price attacks in paper-based futures markets helps them do it.

The manipulators are being careful not to push gold prices below the hard physical buying orders. Manipulators piled on last Thursday, for example, with staggeringly large waves of short selling designed to torpedo prices. Gold and silver tend to follow the similar patterns of manipulative activity, and the exact numbers have actually been already documented in the silver market. Approximately 151 million troy ounces of paper silver were “sold” in a space of 45 minutes from 11:25 am to 12:10 pm, almost four times the amount of silver produced by the top mining company in an entire year! The net effect was a steep price decline and a great deal of cash to fill the pockets of manipulators. We can presume that the same thing happened with gold. Then, on Friday, the very next day, prices went right back up.

In spite of the effort being put in, Thursday’s manipulation event has no legs. By April, the folks who did it will have slowly bought back all the short positions they took on to do it. In contrast with the way they torpedoed prices, they will buy back the shorts in a slow and orderly manner that affects prices as little as possible. They will then likely stand for delivery of gold they purchased at rock-bottom prices from a shell-shocked market filled with hapless non-connected hedge fund managers. The hedge fund managers and their clearing brokers will scramble around searching for physical gold to meet delivery obligations. Overall, the process will help keep prices moving steadily upward over time.

If the manipulators play their game right, even as hard physical buyers raise their bids, the artificial price of gold will be kept just a little bit above the physical bids. The risk they face is only from miscalculation. For example, some unanticipated event could happen that creates a sudden and unexpected willingness, by physical buyers, to raise their bids. Thus, there is always an element of uncertainty.

Recent dramatic events at COMEX futures exchange, however, increase my level of confidence in my current forecast. As I reported last month, we saw a 729% increase in the demand for delivery of physical gold at COMEX during off-month of January 2017, year over year. This month (February) was a major delivery month, and there was another 230% increase in the delivery of physical gold bars. The huge increase in gross demand for actual physical gold bars is impressive. However, it is not the amount that was purchased but, rather, who was doing the buying that is the most important factor.

The biggest banks in the western world continued to be the biggest physical gold bar buyers during February. In many cases, their own customers are being called upon to deliver the bars to them. In total, about 18.66 metric tons worth of physical gold bars were delivered on COMEX in February. That compares to 7.99 tons delivered in February 2016. The net increase totals out to be 233% year over year, which is enormous.

HSBC, in particular, was the biggest single buyer this month. HSBC bought just over 10.62 tons worth of physical gold bars. Neither it nor its customers delivered much gold to speak of. As was the case when it made massive purchases in 2015 and 2016, these gold bars are now an asset of the bank.

J.P. Morgan was also one of the huge buyers this month. It didn’t buy quite as many gold bars as it did, last month, but it purchased about 2.4 additional tons. In contrast, J.P. Morgan’s customers were called upon to deliver about 10.95 tons, perhaps part of which went into the bank’s own asset base. As the customers scrounged around to find gold to deliver to the banks, they probably propelled gold prices upward in February.

As was the case last month, Scotia Bank was also a big net buyer. It bought about 1 ton of physical gold. Last month, it purchased 3.82 tons.

Oddly, CME, Inc. was also a significant buyer. It has consistently been a significant gold bar purchaser throughout 2016. Like Goldman Sachs, HSBC, J.P. Morgan, Scotia and others, it has been stocking up. The exchange operator didn’t buy as many gold bars as a “too-big-to-fail” megabank, but its purchases were enormous, and way out of line from a historical perspective. Remember, the futures exchange operator is not a bank, a hedge fund or an independent investor. It has no obvious reason to buy physical gold bars — except one which we will discuss in a moment.

CME, Inc. bought about 1/3rd of a metric ton in 2016. This past month, it purchased another 62 kilograms. In comparison, it bought only 5 gold bars in all of 2015. The exchange is contractually liable on any default in delivery by clearing members. There hasn’t been any default yet. However, the fact that the company is now buying so many gold bars implies that it is preparing for that to happen. It seems to be planning on weathering a major supply disruption.

If some of the COMEX clearing members end up defaulting on delivery, the exchange is on the hook to supply either gold or the cash value of that gold at the time of default. It is perfectly legal for the exchange to pay customers cash, instead of the gold they contracted for, BUT if the company does that, COMEX will be discredited as a forum for price discovery. Its usefulness for market manipulation purposes will end forever. All of which brings us to the celebrated London-based metals market whistleblower Andrew McGuire…

Mr. McGuire has a history of accuracy in his description of what is going on behind the scenes at the London precious metals market. In a recent public interview, he stated that a huge crisis is in the offing. London gold dealers don’t have enough gold to meet demand. Most of the “gold” controlled by LBMA banks is actually not theirs. It is all “stored” under “non-allocated” storage contracts. These contracts give banks the right to use the gold in any way they want, including selling or leasing it.

Apparently, they’ve been selling and leasing the gold they don’t own for many years. All of it is spoken for, and there isn’t any left. With no stockpiles of their own, and facing the prospect of being cut off from the US Gold Reserve, they seem ready to default on metal delivery obligations. McGuire says that the banks are on the verge of declaring a cash settlement of all gold obligations. Because of the clever lawyers who wrote the contracts, however, this will not equal a legal default.

All the non-allocated storage contracts have a clause that allows for the “substitution” of cash in settlement of gold obligations. If McGuire is right about an oncoming crisis in London, and a cash-based “reset” is about to happen, what CME, Inc. is doing makes perfect sense. Most smaller COMEX dealers refuse to tie up cash on vaulted gold and simply wait until the last minute to buy gold to make deliveries. But, after the de facto default in London, physical gold will be unavailable at any price. These firms will be unable fulfill COMEX delivery obligations.

An educated guess would be that CME, Inc.’s motive, in buying so much physical gold, is to prevent collateral damage to the COMEX exchange’s reputation. Meanwhile, the big banks’ motivation may also revolve around an expected London default. Most of the same players operate in both NYC and London, but COMEX is the more critical market for price manipulators because it is there that world prices are set. The same people who now manipulate gold prices downward will probably turn to upside biased manipulation once the government’s subsidy ends. To profit from price manipulation, they must be able to control prices.

Continuing the credibility of the COMEX futures market, in spite of a massive London default, will enhance its dominance in price discovery. COMEX has always been the key to controlling the price of gold, in spite of the fact that the London gold market is five times larger. The London price and the world price of gold are primarily set by banks and hedge funds fighting with one another at the futures exchange. If the futures exchange allows a large scale default, it will end up as discredited as the LBMA in London.

Here is the bottom line. When the appropriate time comes, LBMA obligations can be cashed out, and the organization can be closed down. But, if COMEX is discredited, the primary profit-making vehicle will be lost forever. In contrast, by preserving COMEX in spite of the collapse of the London market, attention can be quickly shifted toward upwardly biased manipulation activities, and profit can be preserved. Meanwhile, in the shorter run, there is the prospect of selling gold bars to the hedge funds and smaller COMEX clearing members around the time of the London default. Thus, buying gold bars now, for later sale, is going to be an extraordinarily profitable gambit.

In the face of the oncoming massive upward “reset” in the price of gold, I am reminded of a recent article in Forbes magazine. The author urged President Trump to bring back the gold standard in order “to make America great again.” According to the article, there are only three choices open to President Trump.

First, muddle along under the current “dollar standard,” a position supported by resigned foreigners and some nostalgic Americans—among them Bryan Riley and William Wilson at the Heritage Foundation, and James Pethokoukis at the American Enterprise Institute.

Second, turn the International Monetary Fund into a world central bank issuing paper (e.g., special drawing rights) reserves—as proposed in 1943 by Keynes, since the 1960s by Robert A. Mundell, and in 2009 by Zhou Xiaochuan, governor of the People’s Bank of China. Drawbacks: This kind of standard is highly political and the allocation of special drawing rights essentially arbitrary, since the IMF produces no goods.

Third, adopt a modernized international gold standard, as proposed in the 1960s by Rueff and in 1984 by his protégé Lewis E. Lehrman …and then-Rep. Jack Kemp.

Of course, to bring back the gold standard, the price of gold versus the US dollar must be reset much higher. If Mr. McGuire is right, however, the implosion of the London gold market will do just that. It will also bring the role of gold as money back into the world’s consciousness. A massive one-off price reset will happen, dramatically devaluing cash currencies including the US dollar. Going back to the gold standard might end up being enough to offset the enormous debts built up under decades of incompetent economic management.

__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOKSELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

JP Morgan Silver Manipulation Lawsuit Revived By Appeals Court!

On June 29, 2016, US District Court Judge Paul Engelmayer dismissed a lawsuit against JP Morgan Chase & Co. which alleged that the bank had engaged in extensive manipulation of the price of silver, in violation of both state and federal  antitrust laws. The plaintiffs appealed. On February 1, 2017, the US Appeals Court for the 2nd Circuit Court of Appeals held that their complaint contained sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This reverses the lower court and revives the lawsuit.
.

In other words, JP Morgan is now back on the “hot seat”. The most important result of this important decision is that the bank will be forced to face the process of “discovery”. Lawyers have a number of tools with which to ferret out the truth. JPM will face interrogatories, subpoenas, depositions and requests for documents. That means internal documents will be pried open.

Is JP Morgan the sole entity responsible for silver price manipulation? We don’t know that. Furthermore, our system of law and justice tells us that everyone, even mega corporations, are innocent until proven guilty. That having been said, the evidence that both the gold and silver market is being heavily manipulated is very strong.  A lot of fingers have pointed to JP Morgan but, in my view, much more than one bank is responsible. There are a number of other banks that are already being sued in other lawsuits.

The results of discovery may further implicate other banks and brokerage houses. It could make it possible to extract trading information from the Commodities Futures Trading Commission (CFTC), which improperly closed its own investigation of silver trading. The same issues are now being investigated by private sector lawyers who have no interest in cashing in on the possibility of future employment with the bank.  Maybe, this will help to drain the swamp.
.
You can read the appellate court decision, in its entirety, by clicking the link below.
.
__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOK SELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

JP MORGAN GOBBLES UP A MINIMUM OF OVER 31 TONS (POSSIBLY UP TO 186 TONS!) OF PHYSICAL GOLD!

Back in August 2015, I noted that Goldman Sachs and HSBC had taken delivery of a huge tonnage of physical gold, probably purchased near the lows. Physical bars of gold are, by definition, a very long term investment in the yellow metal. At the time, the two banks were telling clients and others not to buy gold, even as they were loading up on it, themselves.

Let’s fast forward…

Starting in December 2015, JP Morgan began buying tremendous quantities of physical gold, as opposed to paper/electronic gold futures, forwards, ETF certificates etc. From December 1, 2015 to December 29, 2016, the big bank purchased and took physical delivery of over 31 metric tonnes worth of bars of the yellow metal for its house account at COMEX alone.

In other words, it now has a physical gold pile which, at minimum, is worth over $1.1 billion at $1,140 per troy ounce, and it is an asset of the corporate bank. By May, 2016, unlike the actions of GS and HSBC in buying while advising clients to sell, analysts at JP Morgan were beginning to encourage customers to buy gold also.

Let me repeat that the enormous purchase of 31+ tonnes of traceable physical gold occurred at New York’s COMEX exchange. The so-called “OTC” gold market in London is five times larger than the gold market in New York City, and if they were buying at COMEX, they were probably buying in London also. The problem with London is that the “LBMA” is not a formal exchange with disclosure rules and regulatory oversight. It is simply an informal collection of banks who operate by agreeing to a common set of rules of engagement. Transactions are secret.

We will never know how much physical gold has been purchased in London by JP Morgan, HSBC, Goldman Sachs or anyone else. However, if JPM’s purchases happen to be synchronized to market size, with New York’s COMEX, they will have purchased another 155 metric tons, for a total of 186 tonnes of gold. Either way, JPM is now in the realm of a sovereign sized gold holding. Most countries hold less than 31 tonnes of gold. Only a handful own more than 186 tonnes.

Why would a commercial bank, like JPM, make such a huge investment in physical gold bars? Is it just opportunism? Is it because they know that gold prices are going to rise dramatically? Do they know this because, as many have alleged, the company houses the most important or some of the most important people who run the gold price manipulation scheme? That’s fun to say but it makes no sense as a explanation for the purchase of so much physical gold. JPM may or may not be a gold manipulator, but that fact is irrelevant with respect to this question.

Generally speaking, the idea behind gold price manipulation is to mint a quick paper profit. If you can convince a foolish and incompetent American President to subsidize your front-running operation, by claiming that it is a way of “stabilizing the value of the US dollar”… all the better. Getting a government subsidy increases profits and reduces risk. But, there is no good reason to choose physical gold as your avenue of manipulation and every reason not to. For one thing, it is a non-leveraged investment. For another, it is more difficult to trade than shares of GLD, other ETFs, gold futures contracts, and mining company shares. All of the latter are far more efficient investments so long as the question of being able to get the real thing doesn’t come up.

In fact, all the big banks, including JPM have bought significant stakes in various gold mining companies over the last 2 years. Why spend money to store and insure physical bars of gold when it is more efficient to mint your profits by simply buying more mining company shares? That’s why the purchase of so much physical gold is puzzling. It seems to me that something bigger must be going on behind the scenes.

JP Morgan is the US Treasury and Federal Reserve’s most important proxy in financial markets. For example, it manages the Fed’s entire mortgage bond portfolio. Physical gold is not normally something that is on the top of the trading floor’s list of preferred products. These purchases are now tying up a significant percentage of the bank’s capital. In order to put so many resources into physical gold bars, JPM’s top management would have had to approve the action. That means the purchases must be supported by some very good underlying reason.

Top JPM management knows a lot more about the inside story about what is going on, behind the scenes, than we know. Is something big about to happen that will dramatically raise the value of real physical gold bars, above more convenient forms of gold ownership? I can think of only two scenarios that would make a large pile of physical gold bars the best corporate investment for a big bank (as opposed to its customers).

One scenario is that JP Morgan knows we have reached the end game and are on the cusp of the long anticipated collapse of the synthetic gold market (ie: gold futures, forwards, “unallocated” storage, maybe GLD etc.). If the gold derivatives market collapses, people will accept only physical gold for a very long time afterward. That would make a physical gold hoard far more profitable than even shares of a mining company. Remember, it takes time to mine more gold. But, the holder of a huge pile of existing bars can sell them, right away, when the level of panic is extreme, at the very top of the market, when demand (and prices) are at their highest.

Another scenario involves being at the cusp of a massive change in the world’s monetary system. If JP Morgan’s top management knows that physical gold is going to be a key part of what replaces the fiat US dollar as the international standard of exchange, and if that change is not very far in the future, it would make perfect sense to buy physical gold. Again, the holder would be in an excellent position to sell the gold bars to third parties (mainly, I suppose, to other banks and even nations) at the very top of the market.

The scenarios I’ve listed, above, are the only ones that come into my mind at the moment. That is not to say that the list is complete. Are there any more possible scenarios that provide a logical answer as to why JP Morgan is investing so much of its capital in such a huge number of physical gold bars?

__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOK SELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

STRONG GOLD STANDARD ADVOCATE STILL CONSIDERED FOR TOP CABINET POSITION

NEWS FLASH!!

Written by: Avery B. Goodman

On November 29, 2016, I wrote that John Allison, retired CEO of BB&T Bank and the libertarian think tank, CATO Institute, was being considered for appointment as the new U.S. Treasury Secretary. That was music to the ears of many people including me. The man is a real banker, as opposed to a bankster, and his bank concentrated on real lending, the way a bank ought to, rather than opportunistic gambling and manipulation. He spent his life running an institution that supported American business. That, of course, supported good jobs that sustain communities.

In fact, BB&T Bank was one of the handful of major American financial institutions that remained very well capitalized during the 2008 financial crisis. It didn’t need any help from the U.S. government, although it was forced to take the “help” anyway. Allison opposed “TARP” and was sharply critical of the bailouts. His bank was pressured into accepting the money because it was thought that if banks like BB&T didn’t, the truth about the insolvency of a majority of American banks would be forced out of the closet.

Mr. Allison believes, as do I and most clear thinking people, that the world would be better off returning to a strict gold standard. He also believes that the Federal Reserve makes the swings in the business cycle more severe, and that the central bank ought to be closed down. It was very disappointing when I found out that former hedge fund manager, Steve Mnuchin, was awarded the US Treasury Secretary position, instead.

It seemed like Allison was going back to Winston-Salem, NC, empty handed. That was a sad shame considering how well-qualified he is. More recently, however, I learned that it isn’t over, and I wanted to share that with you. Mnuchin may be getting the coveted Treasury Secretary position, but Allison is still being seriously considered for “other administration positions”. In an interview in his hometown newspaper, for example, he disclosed that the 90-minute discussion with President Trump was only partly about the possibility of becoming U.S. Treasury Secretary.

Allison was actually being vetted for a number of other top positions. At the moment, he refuses to say which ones. But, he did mention that the idea that he join the Trump administration came from Vice President-elect Mike Pence. Mr. Pence had read his book about the 2008 financial crisis, and asked him to testify about it while he was still a Congressman. According to Allison:

“He thought my book was one of the best explanation of the crisis. As such, he was kind enough to inform the president-elect of my qualifications to serve in his administration. It was flattering to have been asked to meet with (Trump), and if I had been asked to serve in an administrative position, it would have required some significant thought and consideration.”

Oddly, although he says he wants to close it down, Allison is particularly interested in serving as Chairman of the Federal Reserve when Janet Yellen’s position expires. He says that he is willing to do that even though his real goal is to end the Fed. That’s because, in his opinion (and he is probably right) it is going to be politically impossible to close it down abruptly. His compromise is to, at least, end the central bank’s interest rate discretion. He wants to force the Fed to strictly comply with the “Taylor Rule”, which is a formula that determines what the interest rate should be, based on other economic factors.

Clearly, adherence to the Taylor Rule would rein in the Fed, because the basis for determination of the prevailing interest rate would be openly disclosed.  Since everyone would have equal knowledge and automatically know what the interest rate would be, members of the FOMC could no longer tip off their friends and colleagues at the banks they once worked at. It would eliminate the insider’s advantage, and destroy the incentive to place Trojan horses on the Fed’s interest rate setting committee to the benefit of certain trading firms.

As to going back to gold, the best alternative is not necessarily to “end the Fed”. Rather, it is better to simply return gold to “legal tender” status. The Federal Reserve should be allowed to continue printing its notes. Paper and electronic dollars would continue to be used, alongside gold, to the extent that people wanted to use them. Both dollars and gold would be legal tender for payment of all debts, public and private. In order to stabilize the value of gold (and of the dollar), leveraged trading would become illegal.

By monetizing gold, we would have the best of both worlds. There would be an automatic one-off increase in the money supply without resorting to confidence-destroying measures like money-printing. The increase probably wouldn’t be used for speculation in the stock market. That’s because the primary dealers would not be able to  borrow it at the Federal Reserve’s daily loan windows. As “better money”, most of it would disappear from circulation, based on Gresham’s Law. That, however, is a very good thing. As people’s savings, rather than a medium of exchange, gold could serve as the buffer that stabilizes against the big booms and busts induced by the fiat dollar economy.

________________________________________________________________

Buy Synod

“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!

WILL INDIA REALLY HAVE MUCH IMPACT ON GOLD PRICES IN 2017?

Written by: Avery B. Goodman

There seems to be some new, seemingly crazy, action by the PM Modi administration in India every day. Last month, for example, they capriciously demonetized the primary forms of cash used commercial transactions in India. It was a stupid thing to do. At the least, it was carried out in a very incompetent manner. It led to chaos, as banks and citizens ran out of cash. Some truckers were even unable to find sufficient cash to pay for fuel and had to abandon deliveries. It was a bit crazy… and economists now expect the demonetization of 86% of India’s money supply to cost several GDP percentage points. Not the smartest way to a run a country. Certainly not a wise method of developing one.

Once someone gets a bad reputation, like that, it is easy for people to believe the worst about him. Whether he deserves it or not, Indian PM Modi has gained the reputation of a madman, or a fool in some western business circles. Naturally, therefore, that has made it easier to plant stories in the business news media hyping up some additional alleged madness. The Indian Finance Ministry, in a show of determination, stated on December 1st that new rules would require that gold be purchased out of income disclosed on prior tax returns, or using exempt income that isn’t taxable (like agricultural income), or using reasonable household savings, or must be “legally inherited from explained sources.”

Contrary to the hype, the supposedly “new” rules actually change nothing. No doubt, the Indian government will become more aggressive in enforcing the law. However, the “new” rules are merely a restatement of old rules that already existed. It has never been legal to defraud the Indian government of taxes. It has never been legal to buy assets, be it gold or anything else, with the proceeds of tax fraud. The newly announced rules are essentially a “press release”, a public relations notice, designed to appeal to less wealthy Indians, who have long been irritated by the ostentatious displays of wealthier neighbors.

In truth, the Indian government has added protection that didn’t exist before. For example, each married woman is protected from being required to show how she managed to get up to 1/2 kilo of gold, worth about $18,000. That’s a huge amount of money in India. Each unmarried woman has the right to not be questioned about up to 1/4 kilo or $9,000 worth of gold, also a huge amount for the country. Each man has the right to keep up to 1/10th kilo or about $3,600 worth. No questions will be asked about such amounts, even if the stuff really was bought with black money. On top of that, an unlimited amount of inherited gold can be kept, free and clear, and tax policemen now have the discretion to “look the other way” at even higher amounts.

Obviously, the Modi government cannot hope to win reelection if it terrorizes the whole Indian population. Even if it wanted to do that, India’s constitutional protection against illegal search and seizure, while not as strong as in the USA, is still substantial. The government does not have an unfettered right to invade people’s homes, businesses and safe deposit boxes simply because it wants to. It faces the same problem as tax authorities in the USA and elsewhere. It must justify such a search and obtain a warrant in all but the most unusual situations.

Indian law can be summarized as follows:

“Legislative intrusion [into the right of privacy in India – AG] must be tested on the touchstone of reasonableness as guaranteed by the Constitution and for that purpose the Court can go into proportionality of the intrusion vis-à-vis the purpose sought to be achieved. (2) So far as administrative or executive action is concerned it has to be reasonable having regard to the facts and circumstances of the case. (3) As to judicial warrants, the Court must have sufficient reason to believe that the search or seizure is warranted and it must keep in mind the extent of search or seizure necessary for protection of the particular State interest. In addition, as stated earlier, common law did recognise rare exceptions for conduct of warrantless searches could be conducted but these had to be in good faith, intended to preserve evidence or intended to prevent sudden anger to person or property.”

Under Indian law, like that of the United States, people are deemed innocent until proven guilty.  The state must prove that black money was used to buy gold before it can be permanently seized. Don’t get me wrong. I have little doubt that Indian tax police will target and be unfair toward certain people, especially ostentacious rich ones who support the opposition. It will also target businesses that are washing demonetized notes, especially those exchanging them for gold. But although the flamboyantly rich, and black market traders, buy what seems like ridiculously large quantities of gold, the vast majority of gold demand comes from tens of millions of average middle class people. The government won’t be bothering them. It also won’t be bothering rural farmers who purchase about a third of the gold imported into India each year. I might add that the income of the farmers is agricultural income and exempt from tax.

Indian tax authorities have always sought warrants to search and seize gold from targeted people. It has been doing that for decades. For example, all the way back in 1996, under the now-opposition Congress Party, it seized 28 kg. worth of gold, allegedly purchased with black money acquired through bribery. The gold bars were in possession of the ostentatious widow of the late Tamil Nadu chief minister J Jayalalithaa at the time of seizure. The case is still pending in the very slow Indian court system.

The idea that the Indian government will terrorize a lot of middle class Indian families, looking for illicit gold, is ridiculous. The announcement is being intentionally used for its shock value and has been deliberately misconstrued. Remember, misinformation is one of the most powerful tools used during major market manipulation events. Misinformation can and is used to panic people, especially over-leveraged gamblers. If they swallow the nonsense, and it appears gamblers in NYC and London are swallowing it right now, the open interest in gold derivatives can be reduced at a minimal cost. That lowers the exposure of casino banksters to higher gold prices.

Once you look at the what is really going on, you see a very different picture from the one that is hyped by naive western speculators who spread the stories, and the manipulators who invent them. In truth, India recently scrapped disruptive requirements that required 20% of all imported gold to be re-exported. According to a highly placed Reuters’ source, they will scrap other gold import limitations next week. It will soon be considerably easier to import gold into India. If not for the demonetization that reduced the money to buy with, demand would immediately rise. As it is, demand will still rise, though it may fall marginally in the short term. Let’s face it, after the recent actions of the Indian government, few law abiding (or non-law-abiding) people are going to be saving rupees.

It is important to take the trouble to carefully calculate the true Chinese gold demand, because once you do that, everything becomes crystal clear. You need to correct for the intentional or unintentional, but nevertheless massive, multiple under-count errors made by GFMS. Once you do the numbers, you’ll find that the end result is a huge gap between worldwide gold demand and supply. It is so large, in fact, that not even the complete elimination of the 800 tons of gold that India might normally be expected to buy this year, would fill it.

In other words, even if India somehow didn’t buy one more ounce of the yellow metal, there would still be an unfilled gap of nearly 1,000 tons at prices below $1,200 per troy ounce. Notably, this demand calculation does not include the possibility of increased demand for gold in Turkey. Its citizens have just been instructed by their President Erdogan to “buy gold and lira”, not foreign currencies. The numbers also exclude next year’s probable increase in Islamic gold demand now that the “Shariah gold standard” has finally been set. No consideration is also given to the probability that instability in Europe, especially due to the upcoming election in France, could massively increase demand in that nation.

Gold prices will begin to climb sharply once the current manipulation event runs its course. An objective look at the real numbers makes it clear that some entity has filled a huge and growing supply gap for at least 4 years running. That not-so-mysterious entity, in all probability, is the US Treasury, which is accomplishing it mostly through arrangements with the Bank of England. There is little question that very large swap liens, taken against gold reserves held at Fort Knox, have been deployed to fill the gap.

Things are changing. First of all, even if the willingness to piss away America’s gold were still there, at the current burn rate, the entire gold reserve will be gone within a maximum of 2-3 years. However, the new Trump government includes several highly placed gold standard supporters, most notably the man who is shaping up to be the single most powerful influence on President-elect Donald J. Trump, Vice President-elect Mike Pence. The speed by which casino bankers lose unfettered access to America’s gold will be based primarily on how fast Trump can reverse the Obama era executive orders.

The quasi-secret order, allowing access to America’s gold reserves, was probably signed on April 11, 2013. As soon as they get to it, it will be reversed. The Obama era, during which our golden treasure was foolishly pissed away in profit-making schemes, concocted by NYC and London banksters, is now over. That is the fact that will dominate pricing in 2017 and beyond, not whether India changes its gold imports by a few 100 tons of gold, more or less. It is impossible to know the exact bottom in a market manipulation. However, now or soon is the time to buy, not sell. For a more detailed explanation of what is happening with respect to the Trump administration and our gold reserves, click here.

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!

THE MOST INFLUENTIAL PEOPLE IN THE TRUMP ADMINISTRATION TURN OUT TO BE GOLD STANDARD FANS

Vice President-elect Michael Pence is currently the most powerful single political influence on President-elect Trump. Among other things, he is in charge of the transition team. He will also be in charge, after the inauguration, with dealing with Congress. For leftists, hostile to gold, that is a problem. However, for those of us who believe that the only way to solve our long-term economic problems is by a return to honest money, it is a godsend.

The editor of the New York Sun realized this quite a while ago. He wrote, back in July, about the wise choice of then-Governor Mike Pence as a running mate:

“Donald Trump’s choice of Mike Pence for vice president would — if it is confirmed tomorrow — be a promising pick for those of us who see a restoration of sound money as the essential precondition for returning America’s economy to a trajectory of jobs and growth…

Why did the paper write this? Left-wing economists and politicians have a long standing case of aurophobia. They hate gold because it inhibits both corporatist and government control over the economy. Don’t bother telling them that the dishonest system of “debt money” enslaves the very people they claim to protect. Don’t bother pointing out that debt based money favors the accumulation of capital by a narrow portion of society who receive the money first. I am, of course, talking about the bankers on Wall Street. Don’t bother warning them that the constant inflation, inherent in debt money, will eventually destroy the hopes, dreams and savings of the middle class. They don’t want to listen.

In contrast, Vice President Elect Mike Pence views gold from the standpoint of a person who does not want the large corporations and government to have complete and detailed control over the economy. His view, therefore, is diametrically opposite. He believes that gold is important to the system because it provides a base against which other things can be measured. In a speech at the Detroit Economic Club in November 2010, he said, and I quote:

“…My dear friend, the late Jack Kemp, probably would have urged me to adopt the gold standard, right here and now in Detroit. Robert Zoellick, the president of the World Bank, encouraged that we rethink the international currency system including the role of gold, and I agree. I think the time has come to have a debate over gold, and the proper role it should play in our nations monetary affairs. A pro-growth agenda begins with sound monetary policy…”

President-Elect Trump, himself, can be said to be a bit of a gold bug. He bought the yellow metal in the 1970s at about $185 per ounce, and sold it at $780. After that experience, the taste for gold never left him. During the campaign, he stated:

“Bringing back the gold standard would be very hard to do, but boy would it be wonderful, because we’d have a standard on which to base our money.”

In contrast, starting with a not-so-secret executive order, signed on April 11, 2013, President Obama seems to have authorized a raid on American gold reserves to bolster his administration’s claims of economic success. The banksters’ scheme was designed to control the chirping “canary in the coal mine” (rising gold prices) because it was singing too loudly of failed economic policies. It was also designed to put a lot of private profits into banker’s pockets. Thankfully, things are going to be different.

The new administration is looking very gold-friendly. Neither Pence nor Trump have outright stated that they intend to restore the gold standard, although Pence did hint at it. Does that mean it’s going to happen? Probably not. The stupidity of the Obama  administration, in giving license to the banksters to drain away America’s gold reserves, has made it nearly impossible. The only way would be to institute an secret program to buy back the gold. Issuing new dollars in exchange for gold would increase the money supply, a form of economic stimulus, so it might fit into the new President’s plans.

It’s not only the President and Vice President who like the gold standard. Dr. Judy Shelton was one of the two economists named to Donald Trump’s economic advisory team in August. She is now a member of the President-Elect’s transition team, and is a very strong gold standard supporter. Shelton first rose to prominence among economists when she predicted the economic collapse of the Soviet Union in 1989, two years before it happened. She says that many of the same issues are now appearing in the American banking system.  Her answer: reestablish the gold standard!

In an article in Fortune magazine, Dr. Shelton stated, and I quote:

In terms of gold being involved, some people may think of that as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it’s universal.

The pre-election statements of President and Vice President, as well as the opinions of their most loyal advisors, answer the question many worry about. Some worry that “too many” people associated with Goldman Sachs are being appointed to positions in the Trump administration. Perhaps. However, that does not mean that banksters will be given free reign to continue doing what banksters have done in the past. In this case, banksters will not be allowed to continue pissing away America’s precious gold reserves. Top Trump administration people will surely see the schemes for what they are — personal enrichment programs for the banksters that support them.

The “Gold Reserve Act”, passed by Congress in 1934, requires the consent of the President before the Secretary of the Treasury can authorize tapping into America’s gold reserve. That’s what the meeting with President Obama and the CEOs of the biggest gold dealing banks, on April 11, 2013, was all about. It took place one day before the biggest attack on gold prices ever undertaken. The fact that the meeting took place at all, however, indicates that even left-wing Barack Obama was questioning the wisdom of raiding America’s gold.

Donald Trump appreciated the money that Steven Mnuchin, his only well-connected Wall Street fund raiser, brought in during the Presidential campaign. It is natural to reward someone after something like that, and that is why Mnuchin is now going to be US Treasury Secretary. But, even if he wanted to, which is not at all clear, it is very unlikely that Mnuchin would be able to convince President Trump to leave Obama’s gold reserve blasting executive order intact. Remember, Mr. Trump took issue with the idea of spending $4 billion worth of easily printable paper dollars on several new “Air Force One” 747s. Do you think he’s going to be convinced by anyone to piss away gold reserves, which are very difficult to replace?

The decline in gold prices, during November and December has been designed to allow manipulators with large, long-standing short gold positions, to shell-shock markets, facilitating an orderly escape with minimal damage. The hyping of India’s tax law changes was part of that, and is part of the strategy used to demoralize long speculators. The truth, however, is that even if India stopped importing gold, entirely, given the current excess of demand over supply, demand would still far exceed mining and scrap refining supplies. With that gap unfilled, the price must rise substantially. For more information about the true supply/demand situation for gold, see this article.

Going forward, the unplugged gap between supply and demand will be closed by the real market, not from further donations from the American treasury. Prices will rise once the banksters see the prospective cutoff from access to America’s gold reserves come too close for comfort. At that point, which will probably come in late December to early January, they will spin off whatever small short position they still have left, at any price they must pay to do it, and the upward movement will begin in earnest.

Buy Synod

“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!

THE MYSTERIOUS CASE OF 186 TONS OF MISSING GOLD!

The British Office for National Statistics just admitted that it miscalculated British imports by some £6 billion pounds sterling! Guess what they missed?  That’s right. What else? You guessed right — gold!  It always seems to be gold. Hmmm…

Anyway, it depends on the exact day each ounce of gold was imported, but generally speaking, that money adds up to about 186 tons of gold bullion. The uncertainties of Brexit seem to have caused a massive surge in gold demand in a very short period of time. It’s a huge amount of gold, and it compounds the point I have been making for a long time. World gold demand far outstrips supply.

Is the U.K. destined to replace China as the world’s largest gold buyer?  Doubtful.  Tiny Britain, of course, is not normally a gold buying nation. It’s per-person gold demand has always been far smaller than countries like Italy, France and Germany. When the zombie Euro finally comes to an end in 2-3 years, and is buried, keep this in mind. If people in tiny normally gold-phobic Britain can buy 186 tons of the pretty yellow metal in just 3 months, can you imagine what is going to happen when the second biggest trading currency in the world ends?  There will be 340 million people suddenly stuck with national currencies they have no faith in.

What will they buy? You guessed right again!

As Europe moves further into perceived monetary instability, gold demand will skyrocket. I calculated in previous articles, that if the price of gold remained under $1,200 per ounce, the not-so-mysterious gold supplier of last resort would have been on the hook to supply up to 1,345 tons of gold last year. But, that’s not all, folks! The 2014 Society of Mining Professors report, using data from Credit Suisse, Morgan Stanley, Société Générale (SG), AME, and Bloomberg, determined that world gold supplies (from mines, scrap recovery, ETF sell-offs, and hedging) were about 4,476 in 2012, 4,850 in 2013, 4,155 tons in 2014, and will be 3,845 tons in 2015 and 3,585 tons in 2016.

Lets add 186 tons worth of this previously unknown British demand, and subtract 260 tons from supply. The result is that some “not-so-mysterious supplier of last resort” will need to pony up as much as 1,790 tons of gold to keep prices under $1,200 per troy ounce. All of this comes at a time when the banksters’ “Patsy” has just gotten a new papa. He doesn’t like the fact that she’s been abused for so long and he says as much. Whether it’s China or the banksters, this new papa ain’t nearly as dumb as the old one. They’ve abused the sweet thing, pretty badly, over the years and he isn’t gonna’ let her date them anymore.

To be fair, supply may be a bit higher or lower than was estimated and the same can be said for demand. I used the older numbers because I didn’t want to sit for an hour or two finding the most recent ones. You can use my prior work as a template, and update everything yourself, to get the exact numbers. But, any discrepancies are not significant enough to materially change the outcome or the point. There is an enormous gap between supply and demand which someone has been filling. When they stop, and they are about to do just that, prices will skyrocket. How far they will go is anyone’s guess, but up they must travel.

As stated, previously, once Donald J. Trump takes office, it is almost certain that the official US gold reserves will be closed off. Is it any wonder that the manipulators recently engineered a long squeeze in gold prices for the purpose of bringing down prices so they can exit less painfully? They want out and for good reason! There is simply no way to meet the kind of demand we are seeing for gold at its current price without further raids on the US gold reserves. Remember, the same banks that manipulate COMEX prices would also be forced to ship physical gold to buyers in India, China, Turkey and, yes, now the U.K.!  They can’t avoid it, because if they do, the whole rotten system will be discredited.

Conclusion? Gold prices are headed strongly upward in the near future.

________________________________________________________________

Buy SynodBREAKING NEWS!!

“The Synod” pierces “Top 100 Financial Thriller Bestsellers” list!

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!

WHAT HAPPENED TO GOLD & THE U.S. DOLLAR AFTER ITALY’S “NO” VOTE?

Map-Europe emphasis Italy

Written by Avery B. Goodman

If natural market forces were permitted to run free, naive folks would win the game. Insiders would lose a fortune, and independent gambling speculators would make a killing at the expense of well-connected casino operators (a/k/a derivative-issuing bankers). What possesses otherwise intelligent people to believe that this would ever be allowed? Was anyone naive enough to expect anything other than a major intervention by central planners to support the Euro?

There are always ridiculous excuses given. From technical analysis, to astrology to Elliott waves, it is all nonsense. What we saw was pure market manipulation and nothing but that. When you see the Euro rise when it should fall, you can bet that two institutions are involved. I am talking about the European Central Bank (ECB) and the Bank of International Settlements (BIS). I didn’t mention the U.S. Treasury or the Federal Reserve. No doubt, they had some peripheral involvement as they always do, but mostly, they were probably observers.

European institutions have the kind of open, obvious and blatant disregard for honest markets that no equally corrupt American institution could ever get away with. In fact, the BIS has gone as far as touting its gold and currency manipulation prowess! For example, back in 2008, it issued a brochure for consumption by central bank policy-makers, and on page 17, it advertised that “our products” include “Gold & Forex Services — Interventions”!  In other words, they blatantly offered to rig gold and currencies upon request! This document came to light only by virtue of the hardworking and ever-watchful sleuths at GATA.

That was a long time ago. Let’s fast forward to now. The Euro’s exchange value has moved upward in direct opposition to the real market forces that should be weighing it down. The “no” vote in Italy has serious ramifications on the continued existence of the Euro currency, and its exchange value should have dropped like a stone. Instead, it went up. In contrast, the exchange value of the US dollar and gold, to the amazement of some (but not my readers) went down.

The reason is simple, and it has nothing to do with a sudden increase in confidence or desire to hold Euros. Just the opposite. However, a group of bureaucrats want the public to think otherwise. They want to bury the Euro on a schedule they create, not on the one that is determined by market forces. In order to do that, they hired some banksters, probably through BIS, paid them a lot of money, and watched as market “magic” was done. The exchange value of important non-Euro currencies, like the dollar and gold, suddenly came under attack. The now-zombie Euro, in contrast, rose against all odds.

This situation is a little more complicated than the usual manipulation. The same bankers are (were) engaged in inducing a dollar short squeeze not too long ago. The upward dollar manipulation has probably not quite run its course. It doesn’t matter. The juicy profits stemming from a day to a few days of government subsidies combined with an opportunity to front-run a sure-thing more than makes up for any delay. There is nothing like big covert private profits to go along with a fat payment for services rendered.

None of it should worry gold investors in the medium to longer term. Brussels does not wield the kind of market power that Washington D.C. does. It is a host of different nations, often jealous of one another. Each has its own, often conflicting economic view, and each has separate control over separate gold reserves. The European globalists don’t need to be as powerful or ambitious as their American counterparts. They don’t need to control the gold or dollar currency markets for very long.

Brussels’ bureaucrats simply want to keep their zombie currency going even in death, just a little longer. If they can just keep things moving long enough, the transition into what is coming will be smoother, and can occur at a time when well-connected players are ready for it. The banksters are those well-connected players, and a day or two respite from their dollar short squeeze activities doesn’t harm them. In fact, it gives short position holders a respite to make the mistakes that will soften them up for more attacks.

In a month or two, the dollar really will fall against the Euro. You may think that’s an amazing statement, given that I just called the Euro a zombie currency. But, none of it really matters until the very end. A zombie can still attack a living human and eat his brain. It doesn’t matter that the zombie is dead. These interventions are significant because they will convince folks that the Euro isn’t going away (even though it is). The Euro will disappear from the world in 2 – 4 years, but that doesn’t mean it can’t rise against the dollar beforehand. We’ll discuss that another day. For now, let’s just say there will be a lot of rising and falling before the zombie is buried.

What matters most now is market rigging. I don’t have space to describe how it’s done. If you are interested, read “The Synod” and find out.  Recommend it to friends and family. Lend your copy to others. Express your enthusiasm by leaving a review on the book’s Amazon.com and other book retailer sales pages, as well as by writing on blogs, Facebook, Twitter, etc. Word of mouth and the power of the pen all help to popularize ideas. A lot more people read fast-moving thrillers than intense financial articles like this one. Yet, everyone will be critical when it comes time to broaden the discussion of honest money and markets.

In any event, the recent “no” vote in Italy should have pounded the last nail into the Euro coffin. That hasn’t happened.  The ECB will now distribute sufficient new cash to keep most Italian banks from failing. However, it doesn’t have the resources to mount attacks on the yellow metal for long periods of time. Unlike in the USA, the constituent central banks of Europe are separate. Many are acutely aware that gold reserves will be critical to insure public confidence. European governments will not willingly sell their reserves. Financial Eurocrats, thinking about supporting the Euro by pissing away national gold reserves, should remember that Europe is the birthplace of the guillotine.

At any rate, the market manipulation of the euro’s exchange rate has been a success. The intervention was designed to prevent a sudden and complete collapse. It was not designed to make a long term impact on the propensity of investors to choose gold or even the U.S. dollar. The main factor in gold pricing, going forward, is going to be the closure of the US gold reserve as I discussed in my prior article. Gold prices should begin to rise by late December, 2016 or before, as the cutoff of US government gold draws near.

Going forward, remember that it is easier to manipulate the paper gold market upward than downward. That is because of the physical delivery that comes into play when you manipulate it below the equilibrium between supply and demand. Therefore, watch carefully as government-subsidized downward manipulation is replaced with privately financed upward manipulation. For example, if bullion banks know that supply/demand meets at $1,600 (a guesstimate), they may push prices to a $1,700 floor (where no deficit will exist) and then on to $2,100. Then, they can take short positions, letting prices plummet back to $1,700. Rinse and repeat, over and over, upping the floor and the top, depending on what their algorithms suggest, as the willingness to buy at higher prices deepens with time.

What should a person who is concerned about saving for the future of himself and his family do? We live in an uncertain world, and unless you are tightly connected to the powers that make big financial decisions, you should not engage in leveraged speculation in anything. Yet, amid the confusion, one certainty stands out. In the very long run, fiat currencies always devalue. Thus, a certain percentage of your savings should be in gold, silver and platinum, rather than in Euros or dollars. These assets should be bought after big price declines, not big price increases. Now is a good time to pick them up on the cheap.

________________________________________________________________

Buy SynodBREAKING NEWS!!

“The Synod” pierces “Top 100 Financial Thriller Bestsellers” list!

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!

Trump Considers Strong Gold Standard Advocate for Treasury Secretary!

stacked-gold-coins

Written by Avery B. Goodman

Some folks were skeptical when I said President-Elect Donald J. Trump is going to be a gold-friendly President. In my article, “Understanding Elections, Gold & The US Dollar Via Market Manipulation“, published on November 22, 2016, I suggested that the banksters now expect their access to the US gold reserve to be cut off. To understand how the banksters manipulate markets, read the novel “The Synod”.

Many patriots are disgusted by the corruption at the US Treasury and Federal Reserve, but have been downtrodden for so long, they find it hard to believe that things are finally about to change. But, they are! Yesterday, our incoming President met with John Allison, previously CEO of BB&T Bank and, more recently, President and CEO of the Libertarian think tank known as the Cato Institute. Like myself and other believers in honest money, he is a strong believer in the idea of reinstituting the gold standard. For example, in a piece published in the Cato Journal in 2014 he wrote, and I quote:

“We need a private, free-banking system based on a market standard such as gold. If the United States had continued with the classical gold standard instead of having instituted a government money monopoly in 1913, we would have learned through experimentation, as all markets do, and would have a radically better financial system and higher economic growth today.”

These are not the words of a corrupt bankster but, rather, of a true banker and patriot. They are music to my ears, and will be music for millions of Americans who have suffered for more than a century, under the tyranny of corrupt financial players. The banksters have ruined our economy and our social cohesion. The excretion of dishonest money (ie: paper & electronic dollars, euros, and pounds), controlled by no fixed standard, has triggered repeated booms and busts, allowing the well-connected banksters to profit while the rest of the population suffers.  Allison further wrote:

“Second, I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed. Sound money matters. When the Fed is radically changing the money supply, distorting interest rates, and overregulating the financial sector, it makes rational economic calculation difficult. Markets do form bubbles, but the Fed makes them worse.”

The fact that the President-elect is meeting with him doesn’t mean he is going to get the appointment. Nor does it mean that that the USA is headed to a gold standard. Remember, a large part of our gold is probably already gone. It has been pissed away by the current administration as described in my previous article. However, the mere fact that Mr. Allison is being given serious consideration for appointment as U.S. Treasury Secretary provides a deep insight as to how the incoming Trump administration views gold.  Does anyone still doubt that the bankster’s access to America’s gold reserves is about to end?

___________________________________________________________________________

Buy SynodBREAKING NEWS!! “The Synod” has pierced the “Top 100 Financial Thriller Bestsellers” list at Amazon.com!

Have you ever wondered how the banksters manipulate markets?

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

DEBUNKING THE MYTH OF THE “P/E RATIO”

stock-exchange-738671_1280

Written By:  Avery B. Goodman

Summary

The Price/Earnings Ratio is touted as a means of predicting stock price movement.

The Price/Earnings Ratio Has No Value in Predicting Future Stock Movement.

A stock price crash may be coming but the currently inflated S&P 500 P/E Ratio is meaningless.

The price/earnings ratio, or “P/E ratio”, is the current price of one share divided by the earnings per share of the company. Over the years, a lot of financial advisors and market gurus have pointed to this number as a method by which to determine whether a company’s share price will rise or fall. Others look at the P/E ratio as a way to determine whether stock indexes are susceptible to a big downturn.

If the ratio is low, some claim that a company’s stock valuation is “safe” and share prices are likely to rise. In contrast, if the ratio is high, they say share prices are likely to fall. That seems simple and intuitively sound doesn’t it? A nice simple idea like that always excites people. Other gurus decided to expand on it. They applied the idea to the broad indexes of stocks, coming up with a P/E ratio for the broad stock market, most often using the S&P 500. According to them, if the ratio of the S&P 500 is “dangerously high”, stock prices are “susceptible to a bear market.” Conversely, when ratios are low, they believe that the market will rise.

Unfortunately, it isn’t true.

The interest rate manipulations of a central bank are far more important than any other factor in a myriad of ways, even beyond the subject of stocks and economics. When people asked me how I knew that Donald Trump would be the next U.S. President a week before the election, for example, I answered by writing an article, and explaining that my insight came purely from observing gold price manipulation. If you want to learn how this works, read the novel “The Synod”.

At any rate, I made offhand mention of the fact that the Obama administration has helped create the biggest financial bubble in history. It triggered an unhappy comment from a stock-loving reader, who assumed I was talking about an impending crash in stock prices. I was actually talking about the bond market, which has a value several orders of magnitude larger than the stock market.

However, his comment raised some issues that beg clarification. The commenter insisted that stocks cannot crash because the S&P 500’s current P/E ratio is not historically high. At slightly over 25 to 1, he is wrong. It is historically high. It is simply not inside astronomical territory. But, it is a bit on the high side. History tells us that crashes don’t need to be preceded by astronomical P/E ratios.

Thankfully, for current stock investors, generally speaking, P/E ratios don’t matter much to future bull or bear trends. The ratio is most useful for evaluating the ability of a company to pay a dividend and for nothing else. That doesn’t mean stocks aren’t about to crash. It simply means that a modestly high or low P/E ratio has no predictive ability, whatsoever, when it comes to the future of stock prices. It never has. Never once! Just the opposite!

For example, the decline in stock prices at the beginning of the so-called “Great Recession” began in Fall of 2007. The S&P 500 P/E ratio was only a bit over 19 to 1! By January 2009, one year and four months later, stocks declined a lot. In spite of that, the P/E ratio had still risen to about 71! That’s when the fastest decline began (between January and mid-March 2009).

The key point is that the 71 to 1 ratio in January 2009 was not a result of rising stock values. It occurred because most investors fell behind the curve. They hadn’t dumped stocks vigorously enough to force prices down all the way yet. Earnings had simply fallen faster than stock prices, but stock prices were already in a bear market!

When the dot.com bubble started to burst, back in March, 2000, the S&P 500’s P/E ratio was a bit over 28 to 1. By August 2003, in spite of stocks having dropped by a huge amount, the P/E ratio was still 26.57. Again, investors fell behind the price drop. Another classic example was at the beginning of the Great Depression of the 1930s. In the late 1920s, the Federal Reserve flooded dollars into the economy to assist the British central bank in managing a floundering post-war British pound. With a massive increase in the money supply, American business artificially boomed.

The so-called “Roaring 20s” were an era in which earnings and dividend payments increased quickly. Every investment seemed to pay off. Stock prices followed but not in excess of the rise in company earnings. Like today, people dreamed about getting rich quick trading stocks. Earnings were so good that by January 1929, the S&P 500 P/E ratio was only a bit under 17.76. That was in spite of skyrocketing stock prices.

By October, 1929, however, the P/E ratio still stood at 17.83. By February 1933, when stock prices had finally fallen to about 10% of their value in 1929, the S&P 500 P/E ratio was 14.88! Here is the bottom line… in spite of the 90% decline in stock prices, the P/E was not very different from when prices were 900% higher!

What does that tell you, my friends? Many may be wondering how this could be possible? Most of your adult life, or at least that part of it in which you’ve been listening to the propaganda from talking heads, University Professors, and business media writers, you’ve always been told that P/E ratios matter.

They do matter, just not to whether a stock is about to go up or down. They matter with respect to the ability of a company to pay you a certain level of dividends. With respect to everything else, forget all P/E ratios. In a perfect world conceived in unrealistic economic theory, the P/E ratio might matter. It just doesn’t matter in our world.

That’s because in a stable economy, earnings would be a measure of how well run a company is. But, we don’t have an economy like that. What we have are central banks who determine bull and bear markets, by flooding money in and out of financial markets. The efficiency of company management is a factor, but a small one, when you compare it to the overall financial conditions created by this central banking manipulative activity. That’s why, in our world, the P/E ratio has no predictive value.

In the real world, earnings react to the money supply just like stock prices. When the money supply goes up, and interest rates go down, earnings go up and so do stock prices. The situation ends up artificial and temporary but that is what happens. You can complain about it all you want. You should complain and try to change things. But, for now, it’s as simple as that.

That’s why P/E ratios cannot predict individual share prices in the future. It is also why they certainly cannot predict whether or not a bull or bear market is on the way. Remember, again, that the earnings of all companies ALWAYS go up when a central bank increases the money supply. That’s got nothing to do with the quality of the management team in any one company, or all the companies listed on the S&P 500 index.

The decisions of the central bank and the government are the primary things that determine whether stock prices crash or continue upward, but there are a few relevant questions you can ask. Once a lot of money has been printed, is the central bank going to significantly raise rates? Will they constrain liquidity? Will they narrow the loan windows from which banks can loan hedge funds and other speculators money? If so, there will be a crash.

How big the crash will be is determined by how big the preceding bubble was. But, if they never raise rates, constrain liquidity or close loan windows, the ultimate result will be a collapse of the currency itself. To keep a boom going you not only can’t significantly raise interest rates, but you’ve got to keep the money spigot open and flowing. The amount of time it takes to collapse is primarily determined by how clever and believable the countering propaganda is.

In practical terms, going forward, if the Federal Reserve allows interest rates to rise significantly, it won’t matter whether the S&P 500’s P/E ratio is high or low. Earnings will fall, and the P/E ratios will rise unless stock prices drop (which they will). The current P/E ratio will have nothing to do with that.

Don’t get me wrong. What I have just told you doesn’t mean stock prices are about to crash. It just means that you should not be relying on P/E ratio’s to determine whether there is “froth on the stock bubble”, as some pundits like to put it. Current P/E ratios have NO VALUE in predicting future P/E ratios and, therefore, no value in predicting price movement.

The fact that P/E ratios are not in the stratosphere, right now, will do nothing to stop or slow down a potential stock price crash. That’s why, in my opinion, the safest bet, right now, is not general stock investment at all, but rather precious metals and mining companies. I don’t come to this conclusion based on P/E ratios, but on the probability that the Federal Reserve will be raising interest rates, and the fact that there is an insufficient quantity of gold to supply the market, as explained in more detail here.

History tells us that it is more likely that stocks will decline if P/E ratios are astronomically high and prices have already been heading down. But, almost all major stock market crashes including the Crash of 1929, the dot.com Crash of 2000, and the “Great Recession Crash of 2007 – 09” BEGIN with very modest S&P 500 P/E ratios. Therefore, be careful to evaluate the future based based on what the central bank does, not on P/E ratios.

Appended, below, is a list of the S&P 500’s P/E ratio at all points discussed in this article.

__________________________________________________________________________________

Buy SynodBREAKING NEWS!! “The Synod” has pierced the “Top 100 Financial Thriller Bestsellers” list at Amazon.com!

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

________________________________________________________________________________________

PRICE/EARNINGS RATIO OF THE S&P 500 INDEX STOCKS
(Source: Schiller, Robert “Irrational Exuberance”
http://amzn.to/2fQ4kOV)

Date                  Value

11-25-16              25.46  (estimate)

Oct 1, 2016          24.53

Sep 1, 2016         24.82

Aug 1, 2016         24.98

Jul 1, 2016            24.72

Jun 1, 2016          23.97

May 1, 2016        23.81

Apr 1, 2016          23.97

Mar 1, 2016         23.39

Feb 1, 2016         22.02

Jan 1, 2016          22.18

Dec 1, 2015         23.74

Nov 1, 2015         23.67

Oct 1, 2015          22.68

Sep 1, 2015         21.45

Aug 1, 2015         22.15

Jul 1, 2015            22.40

Jun 1, 2015          22.12

May 1, 2015        21.92

Apr 1, 2015          21.42

Mar 1, 2015         20.96

Feb 1, 2015         20.77

Jan 1, 2015          20.02

Dec 1, 2014         20.08

Nov 1, 2014         19.75

Oct 1, 2014          18.50

Sep 1, 2014         18.81

Aug 1, 2014         18.68

Jul 1, 2014            18.96

Jun 1, 2014          18.88

May 1, 2014        18.46

Apr 1, 2014          18.35

Mar 1, 2014         18.48

Feb 1, 2014         18.06

Jan 1, 2014          18.15

Dec 1, 2013         18.04

Nov 1, 2013         18.15

Oct 1, 2013          17.86

Sep 1, 2013         17.88

Aug 1, 2013         17.91

Jul 1, 2013            18.12

Jun 1, 2013          17.80

May 1, 2013        18.25

Apr 1, 2013          17.69

Mar 1, 2013         17.68

Feb 1, 2013         17.32

Jan 1, 2013          17.03

Dec 1, 2012         16.44

Nov 1, 2012         16.12

Oct 1, 2012          16.62

Sep 1, 2012         16.69

Aug 1, 2012         16.14

Jul 1, 2012            15.55

Jun 1, 2012          15.05

May 1, 2012        15.22

Apr 1, 2012          15.70

Mar 1, 2012         15.69

Feb 1, 2012         15.37

Jan 1, 2012          14.87

Dec 1, 2011         14.30

Nov 1, 2011         14.10

Oct 1, 2011          13.88

Sep 1, 2011         13.50

Aug 1, 2011         13.79

Jul 1, 2011            15.61

Jun 1, 2011          15.35

May 1, 2011        16.12

Apr 1, 2011          16.21

Mar 1, 2011         16.04

Feb 1, 2011         16.52

Jan 1, 2011          16.30

Dec 1, 2010         16.05

Nov 1, 2010         15.88

Oct 1, 2010          15.90

Sep 1, 2010         15.61

Aug 1, 2010         15.47

Jul 1, 2010            15.72

Jun 1, 2010          16.15

May 1, 2010        17.30

Apr 1, 2010          19.01

Mar 1, 2010         18.91

Feb 1, 2010         18.91

Jan 1, 2010          20.70

Dec 1, 2009         21.78

Nov 1, 2009         28.51

Oct 1, 2009          42.12

Sep 1, 2009         83.30

Aug 1, 2009         92.95

Jul 1, 2009            101.87

Jun 1, 2009          123.32

May 1, 2009        123.73

Apr 1, 2009          119.85

Mar 1, 2009         110.37

Feb 1, 2009         84.46

Jan 1, 2009          70.91

Dec 1, 2008         58.98

Nov 1, 2008         34.99

Oct 1, 2008          27.22

Sep 1, 2008         26.48

Aug 1, 2008         26.83

Jul 1, 2008            25.37

Jun 1, 2008          26.11

May 1, 2008        25.81

Apr 1, 2008          23.88

Mar 1, 2008         21.81

Feb 1, 2008         21.74

Jan 1, 2008          21.46

Dec 1, 2007         22.35

Nov 1, 2007         20.81

Oct 1, 2007          20.68

Sep 1, 2007         19.05

Aug 1, 2007         18.02

Jul 1, 2007            18.36

Jun 1, 2007          17.83

May 1, 2007        17.92

Apr 1, 2007          17.48

Mar 1, 2007         16.92

Feb 1, 2007         17.49

Jan 1, 2007          17.36

Dec 1, 2006         17.38

Nov 1, 2006         17.24

Oct 1, 2006          17.14

Sep 1, 2006         16.77

Aug 1, 2006         16.67

Jul 1, 2006            16.61

Jun 1, 2006          16.82

May 1, 2006        17.46

Apr 1, 2006          17.77

Mar 1, 2006         17.80

Feb 1, 2006         17.80

Jan 1, 2006          18.07

Dec 1, 2005         18.07

Nov 1, 2005         18.01

Oct 1, 2005          17.64

Sep 1, 2005         18.44

Aug 1, 2005         18.72

Jul 1, 2005            19.00

Jun 1, 2005          19.00

May 1, 2005        18.93

Apr 1, 2005          19.02

Mar 1, 2005         19.84

Feb 1, 2005         20.11

Jan 1, 2005          19.99

Dec 1, 2004         20.48

Nov 1, 2004         20.05

Oct 1, 2004          19.25

Sep 1, 2004         19.35

Aug 1, 2004         19.03

Jul 1, 2004            19.51

Jun 1, 2004          20.17

May 1, 2004        20.14

Apr 1, 2004          21.23

Mar 1, 2004         21.62

Feb 1, 2004         22.46

Jan 1, 2004          22.73

Dec 1, 2003         22.17

Nov 1, 2003         23.15

Oct 1, 2003          24.75

Sep 1, 2003         26.42

Aug 1, 2003         26.57

Jul 1, 2003            27.65

Jun 1, 2003          28.60

May 1, 2003        28.24

Apr 1, 2003          28.05

Mar 1, 2003         27.92

Feb 1, 2003         28.46

Jan 1, 2003          31.43

Dec 1, 2002         32.59

Nov 1, 2002         32.03

Oct 1, 2002          29.24

Sep 1, 2002         28.89

Aug 1, 2002         31.53

Jul 1, 2002            32.46

Jun 1, 2002          37.92

May 1, 2002        41.41

Apr 1, 2002          43.81

Mar 1, 2002         46.71

Feb 1, 2002         44.57

Jan 1, 2002          46.17

Dec 1, 2001         46.37

Nov 1, 2001         43.62

Oct 1, 2001          39.72

Sep 1, 2001         36.90

Aug 1, 2001         37.85

Jul 1, 2001            35.46

Jun 1, 2001          33.67

May 1, 2001        32.02

Apr 1, 2001          27.96

Mar 1, 2001         26.10

Feb 1, 2001         27.81

Jan 1, 2001          27.55

Dec 1, 2000         26.62

Nov 1, 2000         26.90

Oct 1, 2000          26.50

Sep 1, 2000         27.34

Aug 1, 2000         27.97

Jul 1, 2000            28.05

Jun 1, 2000          28.16

May 1, 2000        27.49

Apr 1, 2000          28.50

Mar 1, 2000         28.31

Feb 1, 2000         27.76

Jan 1, 2000          29.04

Dec 1, 1999         29.66

Nov 1, 1999         29.74

Oct 1, 1999          28.66

Sep 1, 1999         29.99

Aug 1, 1999         30.89

___________________________________________________________________________

GREAT DEPRESSION ERA STATISTICS

Feb 1, 1933

14.88

Jan 1, 1933          17.29

Dec 1, 1932         16.63

Nov 1, 1932         16.40

Oct 1, 1932          16.18

Sep 1, 1932         17.96

Aug 1, 1932         15.69

Jul 1, 1932            10.22

Jun 1, 1932          9.35

May 1, 1932        10.40

Apr 1, 1932          11.63

Mar 1, 1932         14.75

Feb 1, 1932         14.19

Jan 1, 1932          14.07

Dec 1, 1931         13.84

Nov 1, 1931         16.23

Oct 1, 1931          15.30

Sep 1, 1931         16.90

Aug 1, 1931         19.04

Jul 1, 1931            18.86

Jun 1, 1931          17.56

May 1, 1931        17.48

Apr 1, 1931          18.66

Mar 1, 1931         19.92

Feb 1, 1931         18.90

Jan 1, 1931          17.00

Dec 1, 1930         15.99

Nov 1, 1930         16.29

Oct 1, 1930          16.59

Sep 1, 1930         18.39

Aug 1, 1930         17.62

Jul 1, 1930            16.98

Jun 1, 1930          16.68

May 1, 1930        17.87

Apr 1, 1930          18.19

Mar 1, 1930         16.51

Feb 1, 1930         15.38

Jan 1, 1930          13.92

Dec 1, 1929         13.29

Nov 1, 1929         12.94

Oct 1, 1929          17.83

Sep 1, 1929         20.19

Aug 1, 1929         19.67

Jul 1, 1929            18.86

Jun 1, 1929          17.43

May 1, 1929        17.34

Apr 1, 1929          17.32

Mar 1, 1929         17.66

Feb 1, 1929         17.60

Jan 1, 1929          17.76