Central Banks Buying Gold At Levels Not Seen Since 1965

Up until a few years ago, Central Banks of the world were selling their gold because they didn’t think they needed the ‘barbaric relic.’  But with all the money printing activities plunging the value of all fiat currencies around the world to their intrinsic value (=0), they’re now buying gold in substantial amounts.  Here’s Simon Constable of the Wall Street Journal further explaining why they’re expected to be the buyers of at least 10% of the available gold in the coming years.


Wall Street Journal - Simon Constable

Central Banks Manipulate the Gold Markets: Chris Powell

Here’s Chris Powell of GATA explaining the motivation for central banks to keep the gold price under control. Powell also notes that potential gold investors should only buy physical gold, which they can actually hold in their hands. He estimates that 70-80% of all the gold people think they own doesn’t really exist!  The paper forms of ‘investment gold’ such as ETFs or unallocated accounts likely do not have the physical gold supporting all the paper claims.  Through rehypothecation schemes, gold leasing and swaps arrangements, there is simply not enough physical metal to back all the paper claims.


Operation Twist II & Rent Seekers

Here’s Jim Rickards explaining the Fed’s intentions behind Operation Twist, expectations on future gold prices, and the logistics behind the Currency Wars of the economic world today. Also, with Jamie Dimon & JPMorgan filling the latest headlines, Rickards gives his take on the parasitic institution of Rent Seeking, which has invaded both parties – Republicans and Democrats. Rent Seekers have taken the form of:

  • On the Democratic side, Public Sector Unions, who are inflating their latter years’ pay in order to retire earlier with better benefits than those in the private sector.
  • On the Republican side, Wall Street Bankers like JPMorgan and Goldman Sachs have been profiting from their proprietary trading and derivative schemes, while at the same time ensuring losses are covered by the taxpayers.
  • On both sides of the isle, though Rickards doesn’t specifically mention them, there are the Crony CapitalistsSolyndra, Enron, Halliburton to name but a few examples. As we slip into the future, the Rent Seekers are even able to manipulate the legal system, making it tougher to actually prosecute the cronies that are caught in the act (see MF Global).

Things are getting bad out there, folks. If you’ve worked hard all your life and have accumulated wealth, please see our Protect Your Assets series to learn how you can protect your wealth from being destroyed by this rigged economic casino.

US Government Allows JP Morgan to Manipulate Silver Market: Ted Butler

Finally, after years of analyzing the silver market and studying Commitment of Traders (COT) data, Ted Butler has concluded that the CFTC won’t prosecute JP Morgan for their silver market manipulation because the U.S. government is intentionally allowing the suppression of precious metals prices. (It’s about time! Glad to finally have you aboard, Mr. Butler!)

The Plunge Protection Team
Ben Bernanke - Chairman of the Federal Reserve Mary L. Schapiro - Chairman of the SEC Gary Gensler - Chairman of the CFTC Tim Geithner - Treasury Secretary
Ben Bernanke Mary Schapiro Gary Gensler Tim Geithner
Chairman of the Federal Reserve Chairman of the SEC Chairman of the CFTC Treasury Secretary

Specifically, the President’s Working Group on Financial Markets was created in 1988 by the Reagan administration in order to prevent another market crash like that seen in October of 1987.  This Working Group, sometimes referred to as the “Plunge Protection Team” consists of four members (today’s members pictured above): The Chairman of the Federal Reserve; The Chairman of the Securities Exchange Commission (SEC); The Chairman of the Commodities Futures Trading Commission (CFTC); The Treasury Secretary.

Their mission is to intervene in the markets whenever they feel it is in the best interests of the banking powers.  Strong precious metals prices mean a weakened U.S. dollar. The paper futures markets are used to suppress the prices of gold and silver in order to maintain the illusion of a stronger dollar. As Chris Powell of GATA always says, “There are no markets anymore…only interventions.

Butler noted that even though Chairman Gensler of the CFTC likely understands that citizens are “being screwed” by the manipulation, he’s unable to do his duties and enforce existing commodity laws against JP Morgan because this powerful Working Group has alternate goals.

Find more information about precious metals price suppression here.

Major Support At These Levels

Sprott Asset Management has issued a Gold Alert, showing six “key developments in the physical gold market” in the past couple weeks which indicate that there is strong demand for precious metals at these levels.  One of those developments is the huge increases of Hong Kong gold exports to China.

HONG KONG GOLD EXPORTS TO CHINA (KG)