Chile Forum

Andres wrote:

Another Joe wrote:Gotcha covered. In a word, manipulation.

It is helpful to know gold, silver and other prices are being manipulated . . . which some would be too blind or stupid to see or acknowledge . . . but the much more helpful questions to answer would be "who is doing the manipulation?" and "why are they manipulating?".
Any ideas anyone?

Andres wrote:

Another Joe wrote:Gotcha covered. In a word, manipulation.

but the much more helpful questions to answer would be "who is doing the manipulation?" and "why are they manipulating?".
Any ideas anyone?

Another Joe wrote:...
Gold is an independent source of wealth that cannot be eradicated. It allows freedom from the controls that fiat currencies offer. Control the currency and you control the masses. There are variations on the idea, but they all basically follow the same sort of reasoning, as eu noted.

<in part...>

Why Gold and Silver are Collapsing

Gold is down more than $300 or roughly 16% in the past few weeks. Silver has lost nearly 40% in the same time period and the mining companies have also been hit hard. This decline in precious metals has been driven by funds scrambling for liquidity, the CME hiking margin rates and a stronger U.S. dollar. Many also suspect that the banks helped to manipulate the price lower in order to cover as many of their underwater short positions as possible. JPMorgan and their cohorts control the paper markets and can use their leverage to manipulate the spot price to whatever level they want in the short term. This is done via “stuffing” trades and using a variety of other methods to make the markets believe that there is considerably more selling pressure than actually exists. This is particularly profitable as options expiration is this week and the current smack down will leave most options expiring worthless, in addition to providing an opportunity to exit short positions.

But despite the apparent manipulation, JPMorgan has been woefully unsuccessful at suppressing the price in the long term. After all, gold is still up 25% and silver 40% in the past 12 months!

Parting Shot

Investors have to determine whether we are entering a new deflationary chapter that will result in a prolonged period of depressed prices for gold and silver, or whether this is another short-term correction and buying opportunity. While I am usually quick to view these dips as excellent buying opportunities, any number of events could push the global economic system over the edge. In such a scenario, investors will likely continue to dump precious metals and mining shares, throwing out the baby with the bathwater in a panic. But the monetary metals are likely to bounce back quickly and the downside risk at this point seems rather limited.

If the market does not fall apart quite yet and the Bernank decides to announce another massive stimulus, gold and silver are going to spike to new highs in no time. This is the scenario that most investors have been waiting for, although the electorate has lost their appetite for such bailouts and the political will has all but dried up. Still, more QE and bank bailouts will be necessary to avoid financial collapse in the short term, so my bet is that we will continue to see quantitative easing, even if it isn’t announced officially by such a name.

No matter how our central economic planners decide to deal with this ticking time bomb, I’d rather be holding gold and silver than any other asset class. They have been money for thousands of years, have held their purchasing power under a variety of adverse conditions and have proven to be an effective safe haven asset.

With extreme volatility across markets globally, including gold and silver, here are some key points the Godfather of newsletter writers, Richard Russell, wrote about in last couple of commentaries, “Gold -- Here we have a pattern breaking down but gold is still trading ABOVE its 200-day moving average. I think a lot of gold has been sold to cover losses and margin calls. MACD is deeply oversold, and RSI is becoming oversold. That should slow the decline in gold. The big picture that is affecting everything is massive world debt, de-leveraging, and nobody knows how or can agree on halting deflation.”

http://kingworldnews.com/kingworldnews/ ... _Fiat.html

In this video, a reporter tells the anchor that gold has moved down in part because people may be getting suspicious of the yellow metal since it isn't "backed" by anything. She then goes on to explain that US Treasuries and the dollar itself are backed by the United States government and by the industry and manufacturing efforts of the entire American people. Therefore, the US dollar and Treasuries are a good deal safer than gold (or silver, presumably).

Andres wrote:

Another Joe wrote:Gotcha covered. In a word, manipulation.

It is helpful to know gold, silver and other prices are being manipulated . . . which some would be too blind or stupid to see or acknowledge . . . but the much more helpful questions to answer would be "who is doing the manipulation?" and "why are they manipulating?".
Any ideas anyone?

How central banks might have smashed gold and silver down
2011-09-28
Dear Friend of GATA and Gold:

...Patrick A. Heller of Liberty Coin Service in Michigan speculates on the possible mechanisms of central bank market manipulation that sent gold and silver prices plunging just as the eurozone was about to break down.

"First, it is entirely possible that European central banks of nations in the eurozone could be liquidating some of their gold reserves as a desperate move to beef up their fiat currency reserves to stave off default on their debts. If this is happening to any degree, that could help explain the why short-term gold and silver lease rates have recently turned negative.

"Second, it is possible that the U.S. government may have informed the Chinese government in advance that is was preparing a major intervention to suppress gold and silver prices and asked the Chinese to refrain from jumping in to purchase physical metals until the market had been pushed near the bottom.

"Last week a longtime reliable source told me that there were massive quantities of Asian buy orders placed in the London market to execute if spot prices dropped to $1,760 all the way down to $1,715. I have every reason to believe that at least a sizable percentage of these buy orders may be have placed by the Chinese government as this would be consistent with their trading activity since 2003. If the Chinese were alerted that they could have the opportunity to purchase gold even cheaper than their standing buy orders, it would be reasonable for them to cooperate by putting their buy orders prices in the $1,700s.

"Third, it is possible that the U.S. government may have directly intervened in suppressing prices, through one or more agencies that are not drawing close scrutiny from Congress or the public. The prime suspect would be the Exchange Stabilization Fund, which was established in 1934. The ESF is an emergency reserve, not subject to congressional oversight, normally used to intervene (manipulate) in foreign exchange markets. In 1970 its mandate was changed by Congress to allow the secretary of the treasury, with the approval of the president, to use funds in the ESF to 'deal in gold, foreign exchange, and other instruments of credit and securities." Thus it would be possible and legal for the U.S. government to surreptitiously manipulate the gold market. The reason I consider this to be a plausible reason that gold and silver prices were suppressed is that the major beneficiaries of lower prices would be the U.S. government, its trading partners, and allies."

Andres wrote:

Another Joe wrote:Gotcha covered. In a word, manipulation.

It is helpful to know gold, silver and other prices are being manipulated . . . which some would be too blind or stupid to see or acknowledge . . . but the much more helpful questions to answer would be "who is doing the manipulation?" and "why are they manipulating?".
Any ideas anyone?

For those who own and know why they own, it was merely a hickup

eeuunikkeiexpat wrote:Better yet, if you can't take the heat of wide price swings and sleep at night, then you have no business speculating and investing in the precious metals.

I hear stocks, bonds and developed world real estate are ultra safe though.