MASSIVE ADDITIONAL SHORT LIQUIDATION BY BANKS FORETELL A BIG RISE IN ALL PRECIOUS METALS PRICES

July 17, 2017

In my most recent commentary, “RECENT GOLD PRICE DECLINES = THE CUSP OF A MAJOR UPWARD MOVE”, I explained how stop-loss and margin call selling can help catalyze a huge decline, in highly leveraged markets like gold, silver and other precious metals.  Quick, massive and seemingly senseless price declines shell-shock market participants and facilitate the unloading of legacy short positions on the cheap.

Last week, I showed you how the CFTC’s “Commitments of Traders Report” corroborated the fact that the big bullion banks used the big sudden decline on July 3rd to massively reduce their long-standing legacy short positions. I predicted that the big decline on Friday, July 7th was going to be used to do more of the same. Now, we have the proof that this is exactly what happened.

I don’t have space to cover the entire process by which price falls are catalyzed. For a fuller understanding, I suggest that you read both last week’s article (and my other previous articles) as well as the novel, “The Synod” (eBook) (paperback).  Suffice it to say that the big decline on July 7th was used to close the book on yet an even more enormous number of legacy short positions, this time concentrating on silver and platinum, but also in gold.

The latest Commitment of Traders Report’s statistics were tabulated as of the close of trading July 11, 2017. As of that moment, the bullion banks had closed 2,823 platinum short contracts (141,150 troy ounces of platinum); 9,560 silver short contracts (47,800,000 troy ounces of silver) and 19,392 gold short contracts (1,939,200 troy ounces of gold.

The amount of platinum shorts they closed may seem very small, compared to what they did in silver and gold, but remember that it is a much smaller market. Platinum mines produce only 1/20th the tonnage each year as gold mines, and 1/180th the tonnage of silver mines every year. The numbers, with respect to all the precious metals, each represent a massive percentage of the total short position held by the banks. What makes it even more noteworthy is the fact that it comes on top of the massive percentage they closed last week!

The bottom line? The most knowledgeable people in the world must believe that precious metals prices are going to be rising fast and hard in the next few months. Otherwise, they wouldn’t be fleeing from short positions they’ve rolled over for years! Just take a look at the report…

Frankly speaking, no one in the world has a better handle on what is really going on in the precious metals markets than these bullion bankers. Don’t expect, however, that they are going to tell you the truth. Their analysts won’t be writing about how stocks of physical metal are growing perilously low, nor will there be any discussion of the massive excess of demand over limited supply. It simply isn’t in their interest to do so. They want profits, not losses. If they told you, instead of helping get rid of the short positions they are running away from, you would be helping to bid up the price. They are not ready for that. They need to jettison more short positioning first.

Look at what they do, not what they say. They are fleeing from long-standing downside bets they’ve rolled over, year after year, for many years. Some clueless hedge funds (the so-called “managed money”) are taking them over. They will pay an enormous price for doing that. Come mid to late August, for example, some of them are going to be forced to deliver real gold they don’t have. By October, some will be scrambling to source gold bars for delivery. Others will get out sooner than that, but they will pay a very heavy paper money price to do it.

_____________________________________________________________________

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!

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ALSO AVAILABLE AT APPLE iBOOKKOBOBARNES & 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!

 

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!

COMEX PHYSICAL GOLD DELIVERIES RISE 729% YEAR OVER YEAR!

Written by:  Avery B. Goodman  (01/29/2017)

The price of gold has been generally following the predictions I made on December 9, 2016.  So far, so good…

A lot of non-connected hedge funds and other speculators are now heavily short gold. That includes many people who are writing negative comments about the metal, and paying others to write negatively.  They have been drawn in by entities who know better, and who are heavily connected to the US Treasury, Federal Reserve, Bank of England, ECB, etc. The latter have likely closed most of their unhedged short positions even as the speculators have increased theirs.

The well-connected have known the gold jig is up for a very long time. They have engaged in what appears to be an attempt at a very organized and deliberate position change. A number of big banks, such as J.P. Morgan, HSBC, Goldman Sachs and others, for example, made huge purchases of gold bullion banker’s bars. They still have big problems from their past activities, but not so much on futures and forwards markets. The remaining problem comes in the form of a huge uncovered “short” position via massive tonnages of  gold inside London-based “unallocated storage” schemes.  It is possible that the unveiling of the new so-called COMEX “spot” silver and gold contract, as well as the huge physical gold purchases by big banks has been designed to shift this remaining risk.

The temporary downturn in gold prices, last week, is meaningless. It seems quite clearly to have been orchestrated by a few big options sellers. These smarmy folks always use automated trading software, around options expiration week, to trigger stop-loss orders and margin calls. It is done to temporarily push down paper gold prices, for the purpose of avoiding payouts on call options. Generally speaking, gold speculators buy many more gold calls than puts, so paying out on a rise in gold prices usually costs a great deal more than paying out after a fall in gold prices. The incentive to manipulate prices to prevent options from ending “in the money” is huge.

COMEX February options expiration day was the 26th of January, and it was the day of reckoning when buyer and seller determined how much, if anything, was owed on the matured options contracts. It is also my understanding that many of the privately negotiated “calls” at the various London’s LBMA member banks expired on the 27th. If the options dealers had not launched a coordinated attack on gold prices last week, a huge number of their “call” options would have expired heavily “in the money”. That would have meant billions paid out. Naturally, since casinos always make sure that the house never loses, the payouts won’t happen, thanks to the manipulations.

The most important thing to realize is that price manipulations, around options expiration, are always pure paper plays, and have no legs. However, they won’t end simply because access to the US gold reserve is cut off.  Such activities will continue until gold options are made illegal, or the people responsible are criminally prosecuted. A change in Presidential administrations may bring a lot of macro-level reform, including replacement of the people at the very top of the totem pole. However, regulatory staff members remain the same, as do the attorneys who work for the Department of Justice. So long as men and women continue to enter and exit federal agencies through a revolving employment and “consulting” door, into banks and brokerage houses, no serious prosecution is ever going to happen.

Far more important than the temporary manipulation of options dealers, however, is the physical market for real gold. January is an off-month for deliveries at COMEX. However, the number of gold futures contracts that stood for delivery this month resembles an active delivery month. That is interesting because COMEX has always been primarily a paper based exchange. Physical delivery is the exception rather than the rule. Delivery has always been theoretically possible, but it has been rarely done. In January 2016, for example, the holders of only 172 COMEX futures contracts demanded physical gold. In comparison, by January 27, 2017, the holders of 1,254 COMEX futures contracts held them to maturity and demanded their gold! That is a whopping 729% increase yoy!

We’ll see what happens in February. There are already an unusually large number of February contracts remaining open on Friday, a day before the first notice day. Monday is the first notice day for the February delivery month, which has always been a major one. This month is shaping up to be mildly historic in size. The overall delivery size looks like it will be at least as big as December, 2016, even though December is normally the largest delivery month by far. One thing is clear. As of Monday morning, holders of matured futures contracts are going to have to put up or shut up. They must either deposit sufficient cash to pay for the gold in full, or face involuntary liquidation.

No matter how massive the physical delivery demand may be, there is always the possibility that dealers will try to attack prices early in the month. They often do this. I believe that the reason revolves around the desire to buy physical gold bullion, from mining companies and others, at a rock-bottom price. They will do everything they can to create a fake price so long as it doesn’t cost them too much. The trouble for them is that, this month, it may cost them more to do it than they save from the results.

There always seem to be a number of “stragglers” among the contracts that are open on the first day of delivery. These speculators cannot afford to pay for their gold, but seem to foolishly hold onto their contracts anyway. They end up involuntarily liquidated and that process will always facilitate downward price manipulation. Because of the prospective size of February’s physical delivery (which is probably mirrored at the LBMA in London), however, gold prices should be resilient to this type of manipulative activity.

I think the rise in gold prices will begin, in earnest, somewhat earlier than usual this month. It should occur, at the latest, by the middle of the month, or even a lot earlier, as opposed to the typical late-in-the-month price rise that often occurs during big delivery months. The massive and very unusual physical demand in January is likely to have exhausted many of most easily accessed supplies, which will make it particiularly difficult for banksters to maintain such shenanigans.

Looking further out, as I have said before, other precious metals prices in 2017 will also be driven upward, by being cross traded with gold, as a result of the closure of the US gold reserve. A vast majority of the people surrounding President Donald Trump are not inclined to allow continued drainage of America’s golden treasure. Incoming Treasury Secretary Mnuchin has given lip service to the “strong” dollar policy, but both he and President Trump have stated that the US dollar is now overvalued. The impact of lower exports and higher imports on GDP has already showed up in dismal GDP performance numbers.

Political cooperation with bankster driven gold price manipulation has always been primarily driven by a desire to stabilize and/or prop up the exchange value of the US dollar. Since America’s leaders now want the dollar down, not up, giving access to the US gold reserve makes no sense. It will be cut off as soon as Obama’s gold-related executive orders come to Mr. Trump’s attention. That should happen a few days after the new Treasury Secretary is confirmed.  I have no doubt that the dealers are acutely aware of the fact that Obama’s not-so-secret orders, opening up the gold reserve to gold location swaps and other access, are now history. Downward price manipulation, at the current low pricing point, will become difficult or impossible. In the absence of the US Gold Reserve, prices must rise substantially before highly profitable manipulative activity can begin again.

The reversal of Obama’s executive orders are likely to be as much of a secret as the executive orders themselves were. I don’t expect any formal announcement as such. When it does finally happen, however, there should be a sudden price surge. That doesn’t mean gold is suddenly going to rise to $5,000+ per ounce. That will eventually happen. However, normal markets do not rise like rocketships. Prices may rise by $75 to $100 over a week or two. That is healthier than a massive $300 overnight skyrocket. Massive quick increases in any asset price, in the absence of some unusual major outside event, is the result of upside oriented market manipulation.

We will eventually see a lot of upside manipulation in gold prices (followed by repeated short price collapses) as manipulators turn their attention to profiting, in a different manner, from price volatility. The key point is that when gold prices finally move above the equilibrium point between supply and demand, they can be pushed upward, and then allowed to fall, without any need for physical gold. Until that change in orientation, however, we will see prices driven upward solely by the continuing excess of physical buyers over sellers.

Note that physical precious metals buyers, unlike futures market speculators, are thrifty people who don’t like overpaying. This won’t stop the early stages of a fast price rise, but it will begin to put downward price pressure, in the short run, if prices go too far too fast. Physical buyers stop buying when prices rise very fast. They will resist purchasing until they get used to new prices. The process requires time. That’s why gold price destabilization, rather than price suppression, is the primary goal of gold market manipulators. I expect the price of gold to rise slowly but steadily back to its prior supply/demand equilibrium point (somewhere between $1,500 and $1,600 or a bit higher).

If major upside manipulation events begin or a major outside event occurs, like a major default on corporate and government bonds, widespread insolvency of pension plans and/or the demise of the Euro currency, the sky will be the limit. Evidence of fiat currency instability will be so high, once the Eurozone collapses, that a much higher floor will be put underneath precious metal pricing.

__________________________________________________________________

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!

 

DEBUNKING THE MYTH OF THE “P/E RATIO”

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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.

__________________________________________________________________________________

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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

 

The Price Movement In Gold Told Us Trump Would Win A Week Ahead Of Time – Now It Reveals The Future Again!

federal-reserve-gold-vault-with-bar-pallets-showing

Written by:   Avery B. Goodman

Recently, almost all prognosticators were predicting that Donald Trump would lose the 2016 election and that Hillary Clinton would be our new President. A lot of people were, and still are astonished, at the fact that I was certain that Mr. Trump was going to be our new President, a week before the election, at a time that all the polls said he was sure to lose. Indeed, if by some miracle Trump happened to win, almost everyone said the price of gold would soar. When Mr. Trump defied all their expectations and did win, it did soar, but only for a few hours. After that, it was downhill all the way. Many people continue to be perplexed. The confusion comes from the fact that, even though most people now realize the price of gold is rigged, they don’t fully grasp what that means.

It really is amazing what you can learn about the world around you, simply by carefully watching the machinations of market manipulators. Those of us who look closely at gold price manipulation knew that Donald Trump would be the 45th President of the United States. We already told our friends about it, and they’d all already had their full of laughing at us. We said it didn’t matter what the polls were reporting. We knew the public polls were lying. We had much more reliable pollsters working for us. The best thing about it was that banksters were the ones who paid for those pollsters. We didn’t pay one red cent!

I am going to use this article as a nice way to avoid having to repeat the same story to a hundred different people. I am going to tell you how I knew. To benefit from what I am about to share with you, cleanse your mind of all the preconceptions you came in with. Forget about the money supply, market sentiment, exchange rates, inflation, and inflationary expectations. Forget about the quaint notion that supply and demand (in the short to medium run) has anything to do with the price of gold. Most importantly, forget about technical analysis. Fibonacci is as worthless as an Elliott wave when the manipulators paint the tape. It’s all rubbish.

The pricing factors I’ve just rattled off, in the preceding paragraph, do affect gold prices at specific points of time. But, in determining the near-term price of gold, they pale to insignificance compared to market manipulation. A lack of supply, for example, will eventually cause the price of gold to rise over the very long term. This will happen mainly because western central planners have a limited supply of gold and want to conserve it. Accordingly, they may obey a political decision to slow down the hemorrhage of yellow metal from their vaults. That causes prices to rise. It’s probably the reason gold prices rose dramatically from 2001 to 2011.

Here is the bottom line: the pricing factors that pundits like to talk about eventually matter. They just don’t matter now. They will matter when the official gold reserves of the United States are exhausted or closed off to access by market manipulators for political reasons. Their closure, as a matter of fact, is about to happen next year, so you won’t have to wait very long. But, in the meantime, until Mr. Barack Obama actually leaves the White House, what matters most is what the market manipulators do. It’s that plain and simple.

Gold is under-supplied and over-demanded, and this has been true for a very long time. Since the Crash of 2008, this problem has grown exponentially. The gap between supply and demand is now enormous. As I pointed out, way back, at the end of the summer of 2015, the deficiency of supply meant that a minimum of 606 tons had to be pumped in to meet demand in 2015. By 2016, if they had not allowed prices to rise, someone would have had to supply something like 1,345 tons, in 2016, to keep prices below $1,200 per ounce.

Soon after I wrote the article, Goldman Sachs began buying physical gold like it was going out of style, even as they were telling everyone else to sell. About 6 months after they stocked up, prices began to soar. Asset prices often tend to move on that approximate timetable when Goldman is involved. But, the key thing to remember is that physical gold (unlike electronic futures contracts) cannot be conjured out of thin air. The hard yellow metal must come from somewhere. The most likely origin for the massive tonnage of gold that has backstopped market manipulation, for the last 5 years, is the United States Gold Reserve.

The Obama administration appears to have agreed to guaranty the banksters’ downside gold manipulations with “location swaps”. In a “location swap”, a lien is placed on bars of gold stored in an inconvenient location in exchange for bars of gold stored in a convenient location. The liens are assigned to a bank that has possession of easily deliverable bars of gold. It is highly likely that the Federal Reserve and Bank of England, which hold great quantities of gold on behalf of foreign governments, were assigned liens against US Treasury gold held at Fort Knox. Once in possession of the liens, the Fed and BofE delivered the gold bars from their vaults into the market via J.P. Morgan and other banks.

Can I prove this scenario with the required level of certainty in a court of law. No. It would be impossible. No private attorney could ever succeed in proving it. To prove it to a formal legal standard, you need the power to send agents to seize documents and things before the banks could destroy them. Only a determined US prosecuting attorney, or the Attorney General of the United States has that kind of power and because the issue is so sensitive that is unlikely to happen even under the Trump administration. Yet, the conclusions are so logical and so deeply supported by the circumstantial evidence and common sense, that they are almost certain to be true.

The CEOs of all of the major international banking houses that deal in gold paid a visit to the White House, at 11:00 am, the day before the biggest price attack in history was launched against gold in April, 2013. They didn’t go there to play checkers. Nor were they there to commiserate with Obama about the banking industry as the media reported at the time. The latter claim is just a cover story. The CEOs went there to talk about gold, and to urge Obama to release enough of it to silence the “canary in the coal mine” (gold price increases) because it was loudly chirping that his policies, which they supported, were failing.

In short, American government has been supplying physical gold to back up gold price manipulation. I am not talking about merely supplying what is required to back up .4% of the futures contract buyers at COMEX who demand physical delivery.  I am talking about backing up the gap amounting to hundreds and even well over a thousand tons of the stuff every year. This is metal that must be delivered by the banks all over the globe — to China, India, South America, Europe and the Middle East.

For example, when gold was selling for less than $1,200 per ounce, some entity (whom I nicknamed the “gold supplier of last resort) supplied a minimum of 606 tons of gold (probably a lot more) in 2015. By 2016, that same entity would have had to deliver 1,345 tons more to keep prices at 2015 levels. If the supply gap had not been filled prices would have returned quickly to a minimum of $1,500 – $1,600 range where supply and demand converged back in 2012.

Let’s fast forward to late 2016. The price of gold had already dramatically risen since I’d written those articles about the shortfalls. As the prices rose, of course, physical demand fell. However, physical demand has never fallen low enough to completely relieve the pressure on US gold reserves. Higher prices simply reduced the pressure, but did not eliminate it. Had Clinton won the Presidential election, things would have continued the way the manipulators planned. They were slowly allowing prices to normalize toward an equalization of supply & demand, making a few million in profits along the way.

But, as the beginning of November began to unfold, the banksters got shocked by a surprise. The person “annointed” by them, to be the next President, was going to lose the election. They’d used their campaign contributions to control the Presidency for decades! But, in 2016, for the first time perhaps in history, hundreds of millions of dollars have been wasted. In spite of all the money they poured into the Hillary Clinton campaign, Donald J. Trump was going to win.

The public pollsters who work for the likes of the NY Times, CNN, NBC, et. al. weren’t about to let the American public know that, of course. But, the banksters knew better. They have their own private pollsters. Unlike the public polling companies that work for the mainstream media, the results delivered by these private pollsters are not contaminated by political distortion. The bankster’s private polling agencies are entirely impartial and accurate. They have to be. Billions of dollars in depositor cash were riding on it, all at risk inside the derivatives casino the banksters have created.

The key manipulators knew the truth… and it showed… several days before the election. Because they knew the truth, those of us who follow their antics also knew. All you had to do was watch what they were doing to the price of gold, toward the end of the week that preceded election day. Their actions clearly broadcast that Donald J. Trump would win the Presidency on November 8th.

Our new President-elect has often expressed an affinity for the yellow metal and even the gold standard. He is almost certain to reverse the executive orders, signed by Obama, that secretly gave the banksters unfettered access to pissing away America’s treasure. That’s why when they found out he was almost certain to win, they had to change their strategy dramatically. A Trump win meant that their use of US government’s gold was about to end, and they need that gold in order to carry out profitable price manipulations in the futures markets.

Just like they did prior to the British Brexit vote, the banksters acted ahead of time. They began attacking gold prices toward the end of the week before the election. Yet, no one can be 100% sure their pollsters are correct. Not even independent polls without bias can provide 100% certainty. Therefore, the manipulations of the week prior to the election seem relatively small-scale. I believe that they were primarily geared toward assisting individual banksters address private portfolios with an expectation about what they would do with public money afterward. The main part of the upcoming manipulation would be saved until after the election result was certain.

As news of Trump’s win became known to the general public, non-connected traders, who innocently believed that real market factors drive gold prices, believed that prices would rise if Trump became President. They began to pour assets into the gold futures market. That sent gold prices soaring. It was also music to the ears of the manipulators. It allowed them to take a lot of transient short positions at the highest possible prices. Having done that, they proceeded to attack the long buyers by bombarding the COMEX (where world gold prices are set) with a huge tonnage of paper gold futures contracts. Prices began to tumble in response to this wave of transient short selling.

Remember, to create gold futures contracts, you don’t need to possess any real gold. All you need are U.S. dollars to put down as so-called “performance bonds”. The well financed banksters have access to a virtually unlimited amount of dollars simply by tapping the Federal Reserve’s so-called “loan windows”. They stepped down hard, putting the pedal to the metal. They used their cash to back up performance bonds on thousands of tons of theoretical (nonexistent except on paper) gold bullion, targeting pre-existing stop-loss orders placed by the over-leveraged non-connected futures long buying crowd.

As always, they succeeded in triggering involuntary liquidation, which in turn triggered lower prices, triggering more stop loss orders, more involuntary liquidation and eventually triggering margin calls. The over-leveraged non-connected hedge fund managers did what they always do. They began panicking. The connected banksters continued to attack, eliciting more and more pain and panic, and it continued, as it always does, until the computerized algorithms determined that the process was no longer effective.

Then, in the midst of the shell-shocked “market” the banksters again did what they always do. They carefully and quietly coordinated with each other to cover both the transient short positions that induced the panic, and the longer term short positions they had been aiming to get rid of. The process of market manipulation, using futures markets, is not that difficult to understand, but a full description does require more space than this article allows. For a better understanding of how banksters induce artificial long and short “squeezes”, for fun and profit, read the novel “The Synod”.

Donald J. Trump is now President-elect. When he takes office on January 20th, the banksters will lose access to the US gold reserve. Without those thousands of tons of gold to offset ongoing supply shortages, the price of gold will rise dramatically. The banksters now need to escape from as many short positions as they can before that happens. To do it, they must induce involuntary liquidation and panic selling. That is what they have been doing.

Manipulators also want to escape from long positions in the US dollar. The non-connected hedge fund managers, innocent though they may be, were on to something. Under the Trump administration, the price of gold will rise sharply, and the US dollar will eventually fall. It just won’t happen for the reasons they believed or on the timetable that they assumed. The banksters are only slightly less concerned about escaping long positions in the US dollar as short positions in gold. So, they’ve induced the same type of involuntary liquidation and panic covering by short dollar speculators as with long gold speculators. In gold, they engineered a “long squeeze”. In the dollar, it’s a short squeeze… the exact opposite.

Since a rise in the dollar puts some pressure on gold prices, the two squeezes have a great deal of synergy. Each assists the other in accomplishing the ultimate goal, which is to assist the banksters and the connected hedge funds they control to shift their portfolio positioning, maximizing future profits while minimizing losses. It is even easier to panic dollar short position holders than gold long buyers. All you really have to do is hold up the specter of a Federal Reserve interest rate hike. Best of all, you don’t even have to worry about meeting delivery demand even for paper, let alone hard real metal. The dollar is now nothing more than 95% electronic digital notations on a banking ledger.

Like the long gold buyers, dollar short sellers are dramatically over-leveraged and under-capitalized, and cannot hold out against the slightest rise in exchange value of the dollar.  Price movement in the US dollar is even easier when you can warn that the incoming Trump administration will induce the repatriation of hundreds of billions of US dollars by American corporations overseas. The incoming President has promised a tax holiday to companies that bring money back to America from overseas. Uninformed hedge fund managers assume that the repatriation of dollars from abroad must result in a rise in the exchange value of the dollar. They would be right if the dollars were now being stored in the form of Euros or Pounds Sterling. But, they are not.

A vast majority of the funds that will be repatriated to the United States are already in the form of dollar deposits. The dollars are inside foreign banks but don’t need to be converted. For example, euro-dollar deposits can be easily transferred from Barclays branches in the U.K. and J.P. Morgan branches in Germany to those in the United States. All it takes is an electronic notation that says the money is now assigned to a branch in America rather than abroad. No currency conversion required. The dollars will even remain available for foreigners to borrow! In short, the net effect, other than the propaganda value in convincing non-connected hedge fund managers that the move is meaningful to markets, is meaningless.

The history of dollar repatriation further supports the fact that dollar repatriation has almost no significant impact on exchange rates. The last amnesty occurred during the Bush administration during the period 2004-05. At that time, multinational corporations transferred about $345 billion to the USA. The 2017 transfer will probably be bigger but it still won’t matter much because a vast majority of the funds are already dollar denominated. In 2004-05, the US dollar’s exchange value went up only very slightly for a very short time. Mostly, like now, it happened before the law became effective. Then, as will happen again, the dollar declined.

Historical facts don’t matter, however, because gamblers are not historians and generally pay no attention to history. They make decisions on the basis of technical analysis and their gut emotions. That’s what the manipulators count on. The process of moving asset prices up and down for fun and profit is all about inducing irrationality, panic and, on occasion, euphoria. It is certainly not about explaining real facts. The over-leveraged non-connected hedge fund managers do not understand the facts. But, you may… so here they are — our new President-elect has promised to bring manufacturing jobs back to a hollowed out US economy.  It will be very difficult to do that with a soaring US dollar. Trump’s new Treasury Secretary will not allow the dollar to soar, regardless of what the market gamblers now believe. A lot of non-connected hedge fund managers are about to lose a lot of money for their investors.

Watching the gold market carefully is particularly helpful in providing accurate predictions on both when a manipulation is likely to begin and when it will end. Typically, the gold “market” is subjected to heavy manipulation late in every month prior to major futures contract maturity dates. Since December is always the biggest gold delivery month of the year, it makes perfect sense that a lot of manipulation would take place leading up to it, especially given the election factor described above. Market manipulations will usually continue into the first part of the delivery month itself ending somewhere in the early to middle part.

Let’s use December as our illustration of the process. December futures options expire late in November. Huge sums of money are at stake if options expire “in the money”. Therefore, like at any other casino, the banksters change the odds inside the slot machines. The big derivatives writing banks appear to manipulate underlying futures prices to insure that the price, on expiration, results in a minimum payout. If the balance of the options purchases show that too many people will get paid at a certain price, they won’t allow the price to hit that level on the day of expiration. If minimizing payouts and maximizing profits requires upward manipulation, the price will go up. If it requires downward action, the price will go down. By the time they are finished, almost every time, the manipulators will have insured that their sponsoring banks pay the least amount possible to the gamblers who own the options.

Controlling the gold market, however, as previously noted, is more difficult than controlling a purely paper or electronic notation-based market, like that for a fiat currency. Control is limited by the willingness of the government to guaranty the delivery of physical gold necessary to back up the manipulations. The extent to which President Obama and his Treasury Secretary have allowed or restricted utilization of the U.S. Treasury-owned gold has determined its price for at least five years. That’s how we know that, once access to the reserves is cut off, the price of gold must go up.

Typically, downward (or upward on rare occasions) gold manipulation does not end with the options expiration date. Banks also need to make large deliveries of real gold during big futures maturity months. They want to pay as little as possible for that gold. They are buying a lot of it, indirectly, from the US gold reserve, but that doesn’t matter. Wherever it comes from, they always seem to have an eye on manipulating the prices to wherever they need to be in order to maximize profits. The December gold delivery month is usually the largest of the year, so the incentive to manipulate before and into December is always very strong, even without an incoming new President.

By now, you may be wondering how and when, if ever, the price manipulation will end? When will gold prices do what they are supposed to do?  When will they be allowed to rise? The answer is simple and I will repeat it, once more. President Donald J. Trump will take office on January 20th. After that, the banksters will be cut off from the US gold reserve. Gold prices may rise somewhat earlier than that, but they will certainly shoot up starting in January 2017. It is likely that the  price appreciation in 2017 will be significant.

Gold prices must rise to at least $1,500 – $1,600 per ounce, because that was the point at which, during 2012, supply approximately equaled demand, without injections from the US gold reserve. We might already be there, but for the US Presidential elections. We will now have to wait a bit longer but the payoff will probably be greater. Because the demand for gold is higher than in 2012, and the supply is lower, however, the two may no longer balance at $1,600. The price may have to shoot considerably further than that. It is a good idea to take advantage of the the current market manipulation to buy gold or related metals at a favorable price.

The dollar is a bit trickier. Its future course is no longer as easy to predict as the price of gold. So long as the Federal Reserve keeps its loan windows open, it will continue to be easily manipulated by banksters, regardless of who holds the White House. Also, it has been and will probably continue to be underpinned (somewhat) by weakness in competing fiat currencies such as the Euro. Nevertheless, the hedge fund managers who are buying it now, in the belief that it will rise dramatically above the current level, are going to lose a lot of money. The incoming President will not allow the dollar to soar, because it would destroy American exports.

Nothing I’ve discussed in this article addresses the thorniest issue of all. The Obama administration, working in conjunction with other western leaders and the major central banks, have created what is probably the biggest financial bubble the world has ever known. Specifically, I am talking about the bond bubble. When it implodes, it will be painful. Even if the new President’s policies are as successful as they can possibly be, it is hard to imagine how he can prevent the implosion of this unstable situation. If the bubble implodes, then all bets are off as to how high gold prices can soar.

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