The Assault on Gold

According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.

A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.

In other words, with naked shorts, no physical metal is actually sold.

People ask me how I know that the Fed is rigging the bullion price and seem surprised that anyone would think the Fed and its bullion bank agents would do such a thing, despite the public knowledge that the Fed is rigging the bond market and the banks with the Fed’s knowledge rigged the Libor rate. The answer is that the circumstantial evidence is powerful. …

Do the authorities have the metal with which to cover shorts? I do not know. However, knowledgeable dealers are suspicious. Some think that US physical stocks of gold were used up in sales in efforts to disrupt the rise in the gold price from $272 in December 2000 to $1,900 in 2011. They point to Germany’s recent request that the US return the German gold stored in the US, and to the US government’s reply that it would return the gold piecemeal over seven years. If the US has the gold, why not return it to Germany?

The clear implication is that the US cannot deliver the gold.

Andrew Maguire also reports that foreign central banks, especially China, are loading up on physical gold at the low prices made possible by the short selling. If central banks are using their dollar holdings to purchase bullion at bargain prices, the likely results will be pressure on the dollar’s exchange value and a declining market supply of physical bullion. In other words, by trying to protect the dollar from its quantitative easing policy, the Fed might be hastening the dollar’s demise. …

How in the world could this be a surprise to anyone?  The central banks’ business model is to create “money” (that is, money as defined by law) out of thin air and “loan” it at interest to the government.  The purchasing power of this “money” is dictated by its ability to purchase real things, like clothes, food and housing, vs the ability of competitive currencies like gold to purchase those things.  The dollar price of clothes, food and housing has been rising steadily for years, despite clinton’s fake CPI numbers.   In that respect (the most important respect) gold is a superior currency that could put a severe dent in the central bankers’ business.  The dollar price of gold has been carefully managed by this cartel for at least 30 years (certainly since the closing of the “gold window” by nixon in the ’70s), by selling naked shorts and, when necessary, by looting sovereign gold hoards (like fort knox) and “loaning” it to scamsters like goldman sachs which then sell it on the open market at the prevailing (managed) price.   But make no mistake, the insiders know the physical metal is leaving the market at an increasing rate and those gold “loans” will never be repaid at anywhere near the current price.  When the vaults are empty, the next gold short that demands delivery of the metal will force a drastic revaluation of gold.  They have already positioned themselves with their looted caches of the metal.  Meanwhile, gold is moving from western sovereign vaults to china, where it will be used to leverage their buyout of the american physical infrastructure.  No wonder they’re so anxious for obama’s gun control program to move forward. ( )  They remember mao’s dictum: “Political power grows out of the barrel of a gun.”

All of this would be irrelevant if the federal government exercised its power to manage the money supply as provided for in the constitution by passing the american monetary act (   The depression would disappear practically overnight and this country would become an economic powerhouse once again.  And war would no longer be central to the business model of the ultra wealthy masters of sovereign debt (the real masters of war).

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