How High Would Gold & Silver Prices Go if GS, JPM and HSBC Were Barred from Participation in Gold/Silver Markets?

Back on May 17, 2010, I granted an interview to Lars Schall of MMNews Germany, in which I stated, “if U.S. regulators stepped in and said Goldman Sachs, HSBC and JPMorgan couldn’t participate in the gold and silver futures market for three weeks, I really think you would see the gold and silver price more than double in that time.”

Though HSBC is the principal manipulator in the gold futures markets and JP Morgan the principal manipulator in the silver futures markets (always manipulating price downward), I included Goldman Sachs in the above stable of PM manipulators for GS’s notable and likely deliberately-executed lies about gold that unfortunately influence global purchases of gold worldwide. For example at the end of 2007, Goldman Sachs listed shorting gold as one of their top 10 trades for 2008, after which gold promptly rose about 18% in less than three months. Though gold barely closed 2008 higher than where it started, the price of gold immediately dropped right after Goldman’s announcement, at which point I suspect that they bought more gold for their proprietary accounts.

In September of 2009, Goldman Sachs released the following statement about gold:

“On a relative basis, we believe gold equities will underperform other cyclical equities. We believe the price of gold is likely to be range bound for the following reasons: One of the key drivers, its defensive status, is no longer attractive given the backdrop of a recovery in the global economy. The US dollar, another key driver, has dropped 13% from its recent high, which is largely priced in, in our view. We forecast the price of gold in 2010E to be US$964/oz.”

Deliberate disinformation of the type regularly released by Goldman Sachs about gold plays a critical role in suppressing gold prices. During my interview with MMNews Germany in May, 2010, Mr. Schall asked of me the following question:

As you know, one organization that tries to expose the rigging of the gold market for years, the Gold Anti-Trust Action Committee (GATA), faces huge problems to get “air time” since its founding in 1999. Why do you think that especially the US and British media is so silent about what GATA has to say? Isn’t it an indicator among others that journalism itself is in a profound crisis of its own?

My response was as follows:

Yes, I believe it is. I believe that investigative journalism is almost dead. You have better investigative journalism regarding the financial markets on financial blogs today and in independent newspapers than you ever would receive in the mass media. I think that’s an indictment of how far mass media journalism has fallen from its once lofty perch.

I should know more about media outside the United States, but I know within the United States, the bankers have always made an effort to control the media. I know that the Rockefellers, for example, have in the past thanked Time Magazine for its silence about some of their financial initiatives, stating had it not been for their silence, that they wouldn’t have been able to accomplish the vast majority of their financial objectives. And in the US, I do know as well that there are only a handful of companies that control 90% of all media -that’s all TV, radio and newspapers.

So I think either the truth is outright censored or there is actually a concept in journalism that is called self-censorship. Journalists learn by the pattern of promotion within the newspaper, the Radio station, or TV station they work for, what they can or cannot say. They actually self-censor themselves over time as well, which is a shame, but that’s just the way it is.

Since September, 2009 the HUI AMEX Gold Bugs index has risen more than 56%. Furthermore, Goldman Sachs is known to be one of the traders that has artificially suppressed the prices of gold mining stocks by staking out massive short positions in gold mining stocks while holding long positions in gold futures. The underperformance of gold/silver stocks over the past several years has undoubtedly also prevented investors in gold/silver stocks from purchasing as much physical gold/silver as they may have had gold/silver stock prices not been artificially suppressed as well (underperformance in as much as gold/silver stocks typically leverage the price of the PM to significantly outperform the performance of the underlying PM). This past week, we saw the effect that public KNOWLEDGE regarding fraud can have upon markets. Since CFTC Commissioner Bart Chilton released an official statement in which he stated, “there have been repeated attempts to influence prices in the silver markets”, in the ensuing 7 TRADING DAYS, the price of silver has risen an astounding 11.93%! I still contend today that if regulators barred just Goldman Sachs, HSBC and JP Morgan from any type of participation in the gold/silver markets (futures, mining stocks, and releasing deliberate disinformation), that gold/silver prices would double in less than three weeks as gold/silver would be relatively free to reach their free market prices.

One month ago, on October 6th, I wrote an article titled, “Gold & Silver, This Time it IS Different” in which I stated:

While is true that gold/silver are heavily overbought now and PM stocks are either in heavily overbought territory or rapidly approaching heavily overbought territory, during strong runs in past gold/silver bulls, the underlying metal prices and stock prices have remained in overbought territory for months on end. This alone is not a reason for a correction as Central Bankers have been fighting the fundamental weaknesses in their fraudulent global monetary system daily for quite some time now. When bankers legalize fraud through the legislation they sponsor/endorse, technical analysis is insufficient to ascertain the short-term direction of not only stock markets but also gold/silver markets. One must understand the history of Central Banker engineered attacks and price suppression schemes against gold and silver to estimate the probabilities of short-term corrections in addition to the use of technical analysis.

Today, Central Bankers are increasingly having a more and more difficult time suppressing the price of gold and silver. This is a marked departure from years past, even as recently as 2008, when they engineered a gold/silver crash to coincide with their engineered stock market crash. Though they still have the power to engineer short-term corrections in gold/silver markets, their power to do so has been fading this past year. They must resort to more and more trickery to engineer these collapses. If they decide to engineer a strong rapid decline in major US indexes in the near future, you can be sure that they will use this event to also use all of their abilities to engineer a simultaneous sell-off in gold and silver. Still, any correction we receive in gold/silver markets before the end of the year will be likely to be very short-lived as various global players will step in, stop the decline with buying, and continue the rising trend in gold/silver prices.

Now that the price suppression schemes against gold and silver are gaining mainstream recognition around the world, I believe that the type of frothy price action we have just witnessed in the PM markets since Mr. Chilton’s announcement will serve as a sneak peak into the massive leaps higher in gold/silver prices in the years to come as the criminal banking cartel loses its grip over gold/silver prices.

About the Author: JS Kim is the Founder and Managing Director of SmartKnowledge Pte. Limited, a fiercely independent investment research & consulting firm that seeks to protect Main Street from the fraud of Wall Street. A $1,000,000 portfolio invested in the maalamalama Crisis Investment Opportunities newsletter portfolio on its launch date on June 15, 2007, portfolio, has now grown to $2,444,088 as of November 3, 2009 (in a tax-deferred account).

Republishing rights: The above article may be reprinted on other website as long as all text and links remain unchanged including the author acknowledgment above.

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