May 8, 2017
Evidence is mounting that the Deep State (DS) is starting to
lose the dirtiest financial war in history: their War on Gold. More deeply, it
is a war against something the Deep State profoundly loathes: personal
financial liberty. The War on Gold, which has raged for 37+ years, has
generated more than $1 trillion in criminal profits for the Deep State
plunderers, while costing the worldwide owners of physical gold multiple
trillions of dollars. All of this is coming to an end.
Due to its criminal hyper-manipulation, gold’s price has
become a paradox: its weakness actually reflects its strength. With everything
that has been thrown at it, it is astounding that its price is anything north
of zero. The fact that it has been resilient at around $1,200.00 per ounce
should concern the manipulators, because if this is as low as they can take it
despite their full-spectrum, multi-billion dollar assault against it, then it
is defeating them. Which is not surprising. By every conceivable, objective
financial and monetary measure, gold is one of the most underpriced assets on
earth. It is not going to stay that way. (Most of the dynamics we will discuss
also apply to silver, but to streamline this article, we will focus on gold.)
The Deep State’s first strategic objective in the War on
Gold has been to steal as much money as possible by conspiratorially rigging
its price. They have perpetrated this crime in the full knowledge that it will
never be investigated or prosecuted, because it is state sponsored. The Deep
State is the state, and never prosecutes itself for its own crimes, no matter
how flagrant and egregious they are.
The second, broader strategic objective has been to
discredit gold as a monetary asset and safe financial haven throughout the
west. The Deep State realized at the outset of the war that it would be
impossible to achieve this in the east, which has a deep, cultural affinity for
gold, so they have confined this gambit the west.
There are eight primary tactics in the War on Gold. Seven of
them are generally known by those who study the gold market; one of them is
little known or appreciated. The unknown tactic is actually the most important
and effective tactic of all, while also being the Deep State’s Achilles’ heel.
The tactics in the War on Gold are:
1) Randomly and unpredictably attack the gold price
in the futures markets, producing large price whipsaws, investor losses, and a
generalized spirit of price uncertainty, danger and concern; over time, make
existing and prospective investors view the market as a corrupt casino rigged
against them, causing them to capitulate and leave the field;
2) Employ the most advanced, covert “Black
Psychological Operations” (PsyOps) methods, customized for the financial sector
by the CIA’s Division of Psychological Warfare, the Fed, the Treasury, the ECB
and the BIS, to destroy gold sentiment in the west. As part of this campaign,
use the Mainstream Financial Media (MFM) to conduct a continual propaganda
campaign denigrating gold in every respect, destroying interest in it;
3) Fraudulently overstate official holdings to
create the illusion of massive supply overhang;
4) Sterilize investment funds by steering them into
non-auditable paper proxies (e.g., ETFs);
5) Weaken, then destroy the dealer network by
killing product demand, spiking dealer costs (e.g., required hedging against
relentless price volatility), causing large unhedged losses, demonizing dealers
as money launderers and crooks, and wiping out profitability / business
6) Financially weaken miners via crushed prices,
making them dependent upon bullion bank (DS) financing and debt, and forcing
them to comply with bullion bank orders;
7) Paint phony price charts that enable the
“financial services industry” (stock brokers, investment advisers, bankers,
etc.) to make gold investing appear stupid, and talk people out of buying gold,
particularly in physical form; if this fails, sterilize investment funds by
steering them into phony, paper gold;
8) Create a marketing blackout throughout the west
(which is the Achilles’ heel).
Tactics #1 and 8 are the subject of this article, because
they are inextricably linked. It would be impossible for the Deep State to
employ Tactic #1 if it were not for their simultaneous use of Tactic #8.
As we know, Tactic #1 has been carried out by years’ worth
of massive, unpredictably-timed, electronic, naked-short price attacks
primarily conducted on the Comex, the Deep State’s captured and non-regulated
Command and Control Center. GATA has long documented in exquisite and laudable
detail the gold price-rigging scandal, and Deutsche Bank’s admission in late
2016 that they and numerous other major banks manipulated the gold market for
years ended, once and for all, any possible doubt about gold market corruption.
As is typical in Deep State-sponsored financial crimes, none
of the Deep State criminals ever goes to jail; instead, they simply pay fines
to the Deep State itself. Deep State criminality is a closed system of plunder
from which the profits never leave; they merely circulate from one Deep State
pocket to another.
Tactic #8, the complete lack of industry-sponsored gold
marketing throughout the west, is a crucial component of the War on Gold. Without
Tactic #8, the Deep State would be incapable of employing Tactic #1, because
the criminalized, fractional reserve gold exchanges, primarily the Comex, would
no longer exist. They would no longer exist because they would be unable to
source even the minimal amount of physical gold required to create the false
illusion of legitimacy, which would fully expose them as being nothing but the
paper metal frauds they already are for all intents and purposes.
According to the Mainstream Financial Media, gold is a
“commodity.” This deliberate mischaracterization of gold is intended to deflect
attention away from its unparalleled monetary importance, and make it appear no
different in nature from corn, natural gas or pork bellies. Rarely has a
greater monetary lie ever been perpetuated.
Gold is not a commodity; it is the world’s only natural and
universal money, and therefore its pre-eminent consumer product. From the time
of its discovery over 6,000 years ago, human beings have instinctively realized
that gold is incomparable as pure, honest, incorruptible, reliable, functional,
lasting, valuable, and true money and wealth. This is precisely why the Deep
State swindlers despise it. It is the antithesis of the immoral, baseless,
corrupt, predatory, fraudulent fiat currencies they endlessly and parasitically
counterfeit into oblivion at extraordinary profit to themselves and crushing
expense to their victims, the people.
Providers of consumer products and services know that their
offerings must be marketed. Not even the best of them sell themselves; they
must be sold.
In 2016 alone, corporate managements worldwide spent over $1
trillion to advertise and promote their goods and services. They paid this
astronomical sum because they know that marketing is indispensable to commercial
success. Marketing is not an expense; it is an investment in profit.
We all recognize the phrases marketers have created to bring
their products to life: “Just Do It,” “Don’t Leave Home without It,” “The
Ultimate Driving Machine,” “Everywhere You Want to Be;” “Good to the Last
Drop,” “Where’s the Beef?,” “Be All You Can Be,” “I Love New York,” “We Bring
Good Things to Life,” “Think Different,” “Like a Good Neighbor, …;” “When it
Absolutely, Positively Has to be There Overnight,” “We Try Harder,” “Diamonds
are Forever,” among so many memorable others.
There is only one consumer product industry we can identify
absolutely nothing to develop its market: gold mining. For
decades, the miners have refused to lift a finger to promote gold. (Their
appointment long ago of the World Gold Council as a marketing agent has been a
complete disaster, and its dreary saga could be an article all its own.) This
refusal constitutes a colossal rejection by them of the most important business
function of all and a total abdication of their fiduciary obligation to
shareholders. As a result of the miners’ persistent and indefensible refusal to
market gold, western consumer demand for it is a fraction of what it could and
We cannot find one senior gold mining corporation that
includes in its top executive ranks a Chief Marketing Officer, or any role even
resembling it. While we do find senior executives in: “Exploration,”
“Operations,” “Investor Relations,” “Technology,” “Corporate Development,”
“Regulatory Affairs,” Legal (“General Counsel,” “Compliance”), Finance (“Chief
Financial Officer”), “Mergers and Acquisitions,” “Tax,” “Sustainability,”
“Human Resources,” and “Strategy,” the marketing function is completely absent
throughout senior miner top management. This is unprecedented in consumer
The miners’ refusal to market their product is so idiotic
that it must be deliberate. It is impossible that such self-destructive
commercial stupidity could come naturally to even one senior mining executive,
let alone the entire set of executives in the senior gold mining industry, particularly
given its extremely negative consequences.
This begs the questions: What is going on here? Why do the
gold miners deliberately refuse to market gold, even though it is obvious that
market demand and price for it have severely suffered as a result? Why do they
deliberately destroy enterprise and shareholder value by ignoring the most
important function in consumer commerce: marketing? Why do they willfully and
knowingly repudiate their fiduciary obligations to shareholders, creating in
the process potentially serious legal liabilities for themselves and their
corporations? And why do all senior miners walk in such lunatic lock step when
it comes to their refusal to market?
Executives at the senior mining companies have a long
history of enriching themselves with lavish pay, benefits, pensions and stock
options while at the same time stabbing their shareholders in the back. For
example, their “forward hedging strategy,” conducted at the behest of and in full
collaboration with the bullion banks during the brutal, 22 year gold bear
market (1980 – 2001) savaged the prices of gold and mining shares. All the
while, rich, no-lose compensation packages for mining executives were written
around pre-arranged and hedged gold prices. The shareholders got screwed as the
executives got rich. As we can see today, nothing has changed.
The miners’ excuse for their multi-decade failure to develop
the gold market is that it is “just a commodity,” and no one markets those.
Even if we agreed that gold is a commodity, which we adamantly do not for the
reasons explained above, the excuse is not credible. In 1993, on a meager
annual budget of only $23 million, one of the most successful advertising
campaigns of all times was launched for a so-called commodity: “Got Milk?”
If creative advertising could make milk exciting, which it
did, imagine what it could do to increase interest in and demand for gold. So
what’s the problem here? Why is no one in the gold mining industry willing to
give marketing a try? What, possibly, have they got to lose, other than the
dismal gold price and multi-billions of corporate losses their marketing
incompetence has produced over the past 37 years? More specifically, what is it
about marketing gold’s incomparable monetary virtues that paralyzes them? It is
obvious that the senior mining executives are not working for shareholders. So
for whom are they working?
The only logical answer we can provide is that the senior
miners are direct allies in the Deep State’s War on Gold. By employing Tactic
#8, the traitorous miners have damaged gold demand as much as the criminals who
use Tactic #1 have damaged its price.
The financial cost of the senior miners’ complicity in the
War on Gold is astronomical. From 1980 through 2016, excluding China and Russia,
approximately 79,000 metric tonnes, or 2.5 billion ounces of gold were mined. During
the 1980 – 2001 bear market, gold was virtually given away by the miners for
nothing, reaching dirt-cheap, double-bottomed prices of only $250 per ounce in
1999 and 2001. In the bear market that started in 2011 and continues to this
day, gold has plunged from an inflation adjusted 2011 high of $2,081 to today’s
price around $1,200, which is close to its average, all-in production cost. In
other words, 37+ years into the War on Gold, miners continue to give away their
shareholders’ gold for a pittance, when they could easily increase its price
simply by doing what every other consumer company does: market it.
If we assume that the Deep State’s War on Gold has only
shaved $100 per ounce off its price, the undervaluation of the gold mined from 1980
- 2016 is $250,000,000,000.00 ($250 billion). While this is an astounding sum,
we believe the actual cost is much higher. According to our analysis, the
underpricing of gold ranges between $1,000 and $3,000 per ounce, depending on
the comparative metric we use (e.g., global money supply; global debt; global
private savings; global GDP; global equities; inflation; and the like). By
other metrics, it is even more, but we will be conservative.
Therefore, the total undervaluation of the gold mined during
the War on Gold ranges between $2,500,000,000,000.00 and $7,500,000,000,000.00
($2.5 to $7.5 TRILLION). This is tantamount to theft from the owners of the
mined gold, namely, shareholders.
On a global basis, physical gold owned by individuals, businesses,
religious organizations and sovereign institutions is currently undervalued by
between $5.8 and $17.4 trillion dollars. This is the cost to the world, in gold
undervaluation alone, of the Deep State’s criminality, corruption and avarice.
Being the home and global headquarters of the Deep State, the United States is
the only nation in the world whose #1 export, in currency value, is financial
The War on Gold is suffering from the effects of the Law of
Diminishing Returns: it requires more and more Deep State price-rigging to move
the gold price down less and less. This is because available supplies of physical
gold are rapidly disappearing from west to east, where demand is unquenchable. Tactic
#1 is in trouble.
In far greater trouble is Tactic #8. When Indian Prime
Minister Modi announced his demonetization scheme at 8 PM on November 8, 2016,
the social media network throughout India went supernova within minutes.
Citizens who acted immediately were able to dump some or all of their
“extinguished” rupee notes for food, medicine, gold and whatever else they
could get their hands on from shops still open that evening. The next morning
was too late, as the fangs of the scheme deeply sank into the nation’s flesh.
Social media saved the day for those on the vanguard.
Similarly, when the people in large numbers sense that something has become
rotten in the state of their money and that their savings and financial well-being
are at extreme risk, they will take to Social Media in droves to both seek and
give advice on how to protect themselves. When this happens, decades’ worth of
Deep State fraud and senior miner traitorousness will be washed away in a
matter of hours. We already see in Bitcoin how “electronic currency” can go
viral even well before a full-blown financial panic. The current Bitcoin
phenomenon demonstrates that the people sense something in the air, and are
mobilizing. When the wall of propaganda against gold starts to fall, the people
will mobilize into it, as well.
As pure money, gold simply has no true competitors. Increasingly,
this will become self-evident to tens of millions of people in the west, who
will create new demand for it. The physical gold market cannot accommodate such
incremental demand at anywhere near the current price. At a certain point, the
market will not be able to satisfy physical demand at all, as people realize
there is no substitute for and hold on to it for dear life. Nothing on earth produces
a price frenzy like a no-offer market.
In our view, people will be richly compensated for front
running the coming monetary mass awakening, something we view as being
absolutely inevitable. Given the world’s exponentially compounding risks and troubles,
the fact that we continue to enjoy halcyon, actionable days can only be
regarded as an extraordinary gift from God, to all of us.
Stewart Dougherty is the creator of Inferential Analytics, a forecasting method that applies to events proprietary, time-tested principles of human instinct, desire and action. In his view, forecasting methods not fundamentally based upon principles of human action are unlikely to be reliable over time. He regards the current, intense mobilization of money, power, ideology and ambition to force agendas upon increasingly fractured and reactive peoples and nations as creating extraordinary, unprecedented risk. This risk must be managed personally and institutionally with advanced, strategic thinking and preemptive action. He is a graduate of Tufts University (BA) and Harvard Business School (MBA), has developed his strategic analysis expertise during a 35+ year career, has traveled to and conducted research in over 25 countries and has refined Inferential Analytics into a reliable predictive instrument over a period of 16+ years.
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, 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.