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Precious Metals Hammered, Illusions Shattered - Jeff Nielson

Precious Metals Hammered, Illusions Shattered - Jeff Nielson
By Jeff Nielson 3 years ago 25957 Views 4 comments

October 5, 2016

Gold at a 3 ½ month low.

Gold and silver step over a cliff.

One can almost see the smirks, and hear the chuckles of glee, as the mainstream flock crows their news.
What is missing from all the gold (and silver) bashing is one, small detail: a reason. Yes, sift through the Corporate media muck, and one will see explanations: “a stronger dollar” or “fears of a Fed rate increase”. Infantile nonsense.

A stronger dollar? Gold was down over 3%. Silver was down over 5%. The dollar gained no more than a fraction of 1% against international currencies, except for the pound, which is currently in the Brexit penalty box. That’s not a reason.

Fears of a Fed rate increase? That’s not a reason, that’s not even a good joke . “The Fed promises a rate increase”? That happens every day. The Fed actually raises interest rates? That’s happened once in eight years. Can you say “token increase”? Why not just write that gold and silver are lower because of fears of a sasquatch attack? The two events have roughly equal probability.

As has been stated in these commentaries before; there is only one way we will ever see the Federal Reserve engage in a meaningful increase in interest rates (i.e. more than once every eight years). That will be if their Masters at the One Bank give them the command – and the purpose of that command will be to torpedo the asset bubbles which this crime syndicate has spent eight years inflating.

Gold and silver have fallen off a cliff. The price of gold is at a 3-month low, and there is absolutely no reason or explanation for this latest ambush. Sound familiar? It should. Investors in this sector spent more than 5 ½ years watching days like this – and listening to the non-reasons from the mainstream drones. That period was previously dubbed Hostage Markets .

Many commentators in the Alternative Media will now start to proclaim that “the rally is over.” Few will acknowledge that it never began. This was the correct explanation when readers first began seeing the term “fake rally” in these commentaries seven months ago. It is the obvious explanation today.

Equally obvious is the reason for this fake rally, i.e. an upward price-fixing operation. The asset bubbles across the Western world are already so grossly over-inflated, and so rancid with age that only the near-omnipotent market manipulating machinery of the One Bank has been able to hold them intact this long.

Western equity markets and bond markets are at obvious bubble levels. U.S. bond and equity markets are at simultaneous all-time highs – and that’s not even supposed to be theoretically possible.

There is no more money to be made by this crime syndicate prolonging the life of these asset bubbles any longer. The vast majority of the ‘money’ in these markets belongs to the One Bank itself, the mountains of counterfeit funny-money which it has needed to deploy to first create these impossible bubbles , and then keep them inflated beyond any iota of rationality.

The Next Crash must occur soon because it is “good for business”: the business of organized crime. When that scheduled crash occurs, it is an absolute imperative in the minds of the banking crime syndicate that precious metals prices must simultaneously fall, as well – lest they be perceived by Western sheep as the safe havens which most of the world knows them to be.

But you can’t “crash” markets which are already at rock-bottom prices, thus the necessity of the Fake Rally: a small climb before a big fall. The Next Crash must happen, equally a Fake Rally had to precede it. That upward price-fixing operation is now over, leaving two scenarios moving forward.

The first scenario is that (finally) the detonation of the Next Crash is nigh at hand. Gold and silver prices will now bounce steadily lower, either slightly preceding a broader crash, or simultaneous with it. The other scenario is that we could see some ludicrous holding pattern, if (for some reason) the banksters still aren’t ready to sheer the Sheep.

In the second scenario, we’ll see gold and silver prices (pathetically) inch higher most days, but then we will see periodic ambush-days like today, where all the price gains of several weeks are erased in one day. Indeed, given their Machiavellian tendencies, we might even see the banksters play this game for several months – just to see how long the chumps in the Alternative Media continue to call this “a rally”.

There have never been any sound reasons to characterize this upward price-fixing operation as a rally. After the price of silver had been driven down by roughly 75% from its 2011 high, and the price of gold had been driven lower by more than 40%, silver has recovered about 20% of that lost ground. Gold recovered only about 1/3 rd of its lost ground.

Pathetic. Ridiculous. In any real rally, the price of gold and silver would already be hitting new highs, or at least closing in on those numbers – as the first step toward rational prices for these metals. A previous commentary calculated how long it would have taken gold and silver to reach fair/rational prices, at the rate of the current “rally”: about 25 years.

It would take gold and silver nearly 8 years just to get to the minimum prices which these metals should have reached, by 2014. Sadly, it has been so long since we saw anything close to a real rally in this sector that (apparently) few analysts even know what a real rally would look like.

Equally, for the last three months we have seen a decisive change in the slant of most of the mainstream propaganda (for lack of a better word). The unabashed, and unqualified enthusiasm for gold and silver has long disappeared. In its place is exactly the same gold-bashing (and silver-bashing) propaganda which we saw during the 5 ½ years of relentless, downward manipulation.

The Fed is going to raise interest rates.

Even if these Liars finally kept one of their promises, the Federal Reserve is starting from (literally) near-zero. Every week that interest rates remained at ultra-low/ultra-insane levels, gold and silver prices should have been catapulting higher – catching (and quickly passing) valuations of the bubble-markets.

This is what we were told by the bankers themselves, year after year. “Low interest rates are good for gold.” Well, interest rates have been the lowest in history (in the West) for eight years, and during two thirds of that time, precious metals prices have been steadily falling.

There was never a reason for the really rally that ended in 2011 to have ended, at all. The Bernanke Helicopter Drop was still in full swing (the official helicopter drop). Interest rates were/are frozen at near-zero, 0%, and now negative levels. A real rally couldn’t begin today in precious metals until gold and silver surpassed their 2011 highs, and then began to catch up on the six additional years of rising prices which we should have already seen.

The only way to characterize as a rally the anemic rise in precious metals prices in 2016 is if one knows nothing at all about precious metals fundamentals. This latest ambush was as severe and irrational as those we saw again and again and again from 2011 through the end of 2015. Any spectators who did not already recognize what was really going on in these markets should have had their rose-coloured glasses ripped off today.


Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.


The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

Lenn 3 years ago at 10:49 AM
Jeff,
You're right again. As much as I would have liked to believe otherwise, your commentary of the last several months always rang true and I'm I'm glad I paid attention. As a PM investor and believer, I HATE that you're right but you are. I wish the over-optimistic PM bulls would be quiet. All they accomplish is giving the criminals another reason to demonstrate just how "in charge" they are. They can do anything, cross any uncrossable line, obliterate any rules of engagement ever known and why? Just to prove a point.
Jeff Nielson 3 years ago at 4:50 PM
Yes Lenn, it gives me no joy at all to write pieces like this. However, it would be much worse to let the rally-pumpers create their false hope -- ahead of an upcoming (current?) take-down.

And just to remind people; the "message" here is not to wait for better prices to buy gold and silver. The message is buy NOW, because when prices are driven down to some ludicrous, fantasy level, most likely there will be no metal available at those prices.
Jared 3 years ago at 6:14 PM
Have you seen Elliott Wave analysis on gold prices? I have seen analysis that shows 2011 as the end of an impulse and this year's rise in prices as part of an expected correction (with further downside expected.) I am having a hard time being convinced there is manipulation when I see the EW waves playing out. Is there any smoking gun evidence that might convince me of manipulation?
David Young 3 years ago at 11:30 AM
I really like Jeff. I find him to be far and away the most realistic and credible PM advocate.

That said I'll lay out my cards on the table. TA tells me the PMs have another substantial wave down and the DXY has another substantial wave up. I don't care for gold in fact I don't even think gold is scarce. I do like Silver however and plan on adding to my stack certainly below $16 and even perhaps around $12.

The most important thing in my humble view however is to DIVORCE from the marriage to stacking PMs and consistently exchange Federal Reserve note debt in transit for Bitcoin. Yeah, yeah I've heard it all before. Let's check in with each other every five years and compare which is more useful and which has more purchasing power vis a vis any fiat on earth: Bitcoin or the PMs.

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