GO GATA!!!!!
I have no intention of doing many Sunday MIDAS commentaries, but there is so much happening now and so many are a bit perplexed, I thought one more might be useful.
The bottom line is the financial world is a mess … due to a myriad of factors, not the least of which has been the longstanding rigging of the price of gold. For years numerous folks refused, or were too much in the mental midget category, to appreciate what motives a Gold Cartel had in rigging the gold price. The answers were always the same … to keep interest rates lower than they would have been; to support the dollar; to keep capital flowing into the US bond and stock markets; and to take away the widely watched inflation/crisis barometer from the investing public, that being the price of gold.
The Gold Cartel and other market managers set up complacency among the investing public and a penchant for greater than usual market risk taking among the public (buying homes), Wall Street firms, and hedge funds (via complex use of derivatives and financial instruments) … as well as by various corporations in many industries who desired to "keep up with the Jones."
You can read enough of this now all over the internet, so I will keep my further comments on a gold focus.
The big picture has been laid out in this column for years. No change. Recently, The Gold Cartel has been doing all it can to keep the gold price from exhibiting the anxiety dominating the financial/investing world. It is a Band-Aid prescription for deadly market ills, which really require long term therapy and care. All the gold price suppression scheme has done is increase the widely talked about "moral hazard."
As the Gold Cartel inspired financial market disease spreads, more and more people will GO TO GOLD for the obvious reasons. Don Cox puts is quite well in his weekly conference call to institutional investors Weekly Webcast:
http://events.startcast.com/ev…B0002/code/eventframe.asp
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In this Webcast he states:
"All exit roads lead to gold."
Then he goes here re gold:
Question 3 (Robert Russett): There was a story that was running around earlier this week talking about Spain’s foreign reserves have really plunged in recent months and quarters and that they had to kind of shore up their reserves and they were selling off gold earlier in the week and they were selling off 80 tonnes of it. Have you heard that?
DC: Yeah, there’s no question that what they did - it was almost magical that the unloading of the reserves there came when gold was once again heading up to $700. And to me, I have a feeling that the Basel Brandy and Cigars club sort of suggests, at any given time when they are getting worried about what’s happening, that it might be nice to have a member of the club who for one reason or another needs some cash, to jump in there.
I mean, we had the fact that the firsttime gold ran to $700 Ben Bernanke manages to get this article published - in the journal that he himself edits - which leads to a policy decision by the Bank of Japan to take 30 trillion Yen out of the market and pulls gold from $700 down to 550. And then we come back up this time and now we have these other factors.
So, I’m not alleging conspiracies here, I’m simply saying that for central bankers it is extremely inconvenient to have front page stories about gold going to a new high. And that doesn’t mean that they’re going to line up all the guns, but it does mean that they can just as chums - there’s a lot of collegiality among that group, say "Well it might be a good time if you were going to gold selling anyways and you are getting some squeeze, it might be very helpful to us all if you sell right now." Does that make sense? RR: Yes it does. Okay, thanks
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...expect the unexpected !
