The spot price of gold as quoted by NYMEX is no longer an accurate representation of the real price at which physical gold bullion is being traded. It is, in fact, a lie.
This is apparent by the great disparity between the availability of gold and the virtual shutting down of all sales operations related to delivery of anything denominated in one ounce units. Buffalos, Krugerrands, Eagles….you name it, you can’t buy ‘em.
The idea of “Futures” was originally established as a mechanism for price discovery, not price determination. Yet this very mechanism, first deployed as way for bankers to capitalize farmers in the spring with a relative degree of certainty as to what the farmer would reap in the fall, has become a tool for the manipulation of the gold market. In creating such huge short positions in the futures market, and driving the price down, the spot price suffers as a result of the physical short created to hedge against a paper long.
It is an elementary simplification to state that a thing is worth what somebody is willing to pay for it.
The fact that bullion dealers are paying and charging premiums to the spot price for gold is clear evidence that the spot price published each day is no longer an accurate representation of the price of gold, and its continuing publication as such must soon be identified as fraudulent, and corrected.
The likelihood of that happening, however, is contingent upon the admission by various U.S. government entities that they have participated in the suppression of the gold price, and that is simply not likely to happen in this lifetime. Just as front line MP’s and soldiers were court-martialed for the excesses of violence perpetrated on detainees from Iraq and Afghanistan, heads will likely roll in theatrical fashion to satisfy a media-moderated demand for blood.
The danger here is that we have several new bubbles building, and the massive inflation of currencies worldwide now underway, while acting temporarily to stave off the inevitable explosive correction, is steadily adding pressure to the chamber in which this monetary ordinance is being compressed. When the price of gold does finally erupt as the massive currency devaluation going on outside of the United States Dollar causes panic selling, the damage will again be amplified exponentially because of disingenuous misinformation distribution.
Interestingly, the campaign to undermine the global perception of gold is achieving a certain success. Even hard core gold bugs are capitulating and abandoning their heretofore staunchly defended arguments that, in essence, said, “when the crash comes gold will take off”, which at this point hasn’t happened. So now even gold bugs, to some degree, are abandoning their posts.
It is at this point in a war of attrition that men are separated from boys, those who fight with the courage of their convictions from those who follow the (albeit) contrarian herd, and battles are historically won against great odds.
In pursuing the development of a feature length documentary film that seeks to expose the pattern of fraud and deceit that has emerged in the fiscal and monetary policy of the last hundred years, many, including some who have traditionally written in support of such a position, have suggested that this is a David and Goliath match-up of biblical proportions that has a feint hope of success.
Obviously, all the goldbugs and GATA supporters and writers and analysts and traders and bloggers combined could not finance any sort of information campaign comparable to the mighty mainstream media division of the G7 perception management machine.
But to capitulate at this point, to accede defeat and abandon the barricades as it were, is either short-sighted or revealing of an absence of deep conviction in the first place.
This is the desired outcome of the global banking cartel’s campaign. In a brilliant emulation of Orwellian logic, the availability of gold has been increased from “as much as you’d care to buy” to “you can’t buy any”! And in the absence of such supply, the price has increased from $1,000 per ounce plus, to under $750.
Tokyo Rose would be hysterical with glee at such a coup of propaganda! Whole legions of otherwise sensible people are accepting the logic as distributed from the ivory towers, and hoarding US Dollars of all things, and abandoning the idea of gold as the historical store and measure of value. This is simply astounding!
People think the United States government is rushing to their defense with all these bailouts and stimulus packages. They refuse to see what is clearly the repetition of a pattern perfected during financial crises of the last century. The cherry-picking of the top assets in banking in tandem with the elimination of the competition for pennies on the dollar should be enshrined in a national festival, its so predictable. We could call it “Fleece the Sheep” week, or something.
Unfortunately, the period of asset re-allocation and concentration lasts more than a week…typically it’s a few years until the booty is divvied up and the system re-saturated with cheap money for another round of global asset piñata-bashing.
You can hold onto your U.S. dollars if you want to, though it is unlikely that those who can see the truth behind what is unfolding in front of our very eyes will change their tune just because it is increasingly fashionable to do so. Gold will emerge as the asset class and currency of the patient and visionary.