To successfully keep your head above water during this economic crisis, it is not an option, but a necessity to convert your fiat digital currency into something tangible and real like physical gold and physical silver. To be successful in this game, one must understand the paradigm in which these two precious metals operate. The reasons why interest is so incredibly low in buying gold and silver among the general masses when they are screaming bargains, and why the general populace’s interest in PMs only perk up after prices have moved much higher, or worse yet, never at all, is a testament to the disinformation campaign waged by the bankers against the people. Many among the general populace still fail to understand that when banksters create fraudulent futures markets backed by a woefully small percent of physical metals to control paper prices of gold and silver, the dynamics of this fake market vastly differ from the dynamics of the tangible real physical gold and silver market. Furthermore, and more importantly, the general masses fail to realize that the negative perception of gold and silver prices the banksters create through their false paper markets will ultimately fail when confronted by the reality of tighter and tighter physical supplies of gold and silver. People often make critical mistakes when buying gold and silver because they do not take the time to learn the bankster-manipulated paradigm in which both of these PM operate. Thus they enter the game blindly, merely following the advice of talking head puppets on television, engaging in the absolute worst form of decision-making possible.
The general populace misinterprets volatile short-term corrections as confirmation that banker trolls calling for a gold and silver bubble popping were correct, even though long-term charts below demonstrate no evidence of a bubble. Gold and silver bubbles will form in the future due to the deliberate Central Banker campaign to destroy fiat currency valuations, but we are not remotely close to either a bubble in gold or silver yet. However, a complete collapse of the Euro, the USD, or some currently bankrupt international bank that is fudging its balance sheet, could definitely condense the timeframe to a gold and silver bubble. Today, banksters continue to steer their misinformed clients away from gold and silver and into stock markets even though stock markets have woefully underperformed gold and silver for the past 12 years. Furthermore, most gold and silver bugs that truly understand bankster manipulation games have been analyzing gold/silver behavior for nearly a decade or longer. Thus, though the media has a proclivity to paint gold and silver bugs as the perpetual cheerleaders that one so easily finds at commercial investment firms in the form of financial “advisers”, this simply is inaccurate.
The majority of true gold and silver bugs are intelligent enough to understand that gold and silver will exhibit high volatility every year due to the bankster manipulation of paper markets and further understand that volatile markets must be assessed to identify low-risk, high-reward entry points to mitigate the risk of artificial volatility in gold and silver prices as well as gold and silver mining shares. Yet, though very few gold bugs or silver bugs ever advocate the bogus commercial investment industry strategy of “buy and hold for 10 years” in regard to Precious Metal (PM) mining stocks, many in the banking industry falsely attempt to create a perception that gold and silver bugs state that anytime, all time, every hour, every day, every year, is a good time to buy all gold and silver assets. Obviously as you can see below, from the performance of the maalamalama Crisis Investment Opportunities newsletter as compared to the XAU Philadelphia Gold & Silver Index, for the past five years, we have strategically opted to exit the gold and silver market at times, and despite an admittedly off-year last year in 2011, we have still outperformed the XAU by 140.51% (in a tax-deferred account), a feat that would literally have been impossible if we constantly stated that gold and silver were a buy 24/7 for 365 days as the media tends to misleadingly and duplicitously portray all gold and silver bugs.
It is important to realize that the banking propaganda machine controls its clients into making poor decisions about gold and silver through two mechanisms:
Creating artificial short-term volatility that is specifically designed to further the lie that gold and silver are risky to prevent people from buying them; and
Creating false perceptions about “gold and silver bugs” as irrational people when in fact, it is only the commercial investment industry that sells the kool-aid laden strategies of diversification and buy and hold, to their clients.
For example, I will use one of my own articles that I wrote before market open on May 17, 2012, Fear & Panic are the Banking Cartel’s Weapons V. the Gold & Silver Bull, to illustrate my point. In this article, I wrote, “For the record, I believe that we are much closer to the bottom of this gold and silver correction right now than we are to a repeat of the [2008 gold and silver crash].” In the charts below, I have marked the May 17th date for the HUI gold bugs mining index, and for gold and silver prices.
Note that with gold and with gold mining stocks, as of today, May 17th still marks the very bottom of these two asset classes. Silver actually headed slightly lower than its opening price in the days that followed, but still, its May 17th price was very, very close to its bottom for this current correction as well. Note that since then, all three charts have been very volatile, moving significantly higher, significantly lower, and significantly higher again. Banksters have used this volatility to reinforce the false perception that gold and silver are risky to prevent more people from buying gold and silver assets. On an anecdotal level, banking industry trolls used the volatility that bankers deliberately create in gold and silver futures market to often falsely attack the calls of those that maintain that gold and silver’s uptrend is still very much intact during periods of weakness. Again, as the purpose of trolls is to prevent the masses from learning the truth about how their manipulated financial world really works, they have a tendency to never stick to facts and to always misrepresent the statements of sound money advocates to distort our message. For example, if you read the article I posted on May 17, 2012, which is easy enough to do since it is posted on my blog, you will note that I stated my strong belief that “a major bottom [was] imminent” in gold and silver prices. This is a very different declaration than stating that a rapid rise in gold and silver assets is imminent.
Bottoms in PMs can and do linger, and the fact that we have yet to fall below the May 17, 2012 levels for gold and gold mining shares and never significantly violated the May 17, 2012 levels for silver and silver mining shares means that this bottom is still holding up. Interim volatility, no matter how massive it may be, does not invalidate the comments I made on May 17, 2012. Yet, banking industry trolls used the subsequent volatility that arose after May 17th to attempt to discredit my May 17th call and the calls of anyone else that stated the gold and silver bull were still intact by trying to use the volatility to induce fear of an “impending collapse in gold and silver prices”. Now, if gold and silver assets reverse in price, crash through the May 17th lows and head much lower, then, and only then, will I be happy to admit being wrong with my May 17 calls. Though I have ignored all comments from banking trolls in the past, I have somewhat changed my mind about ignoring trolls. The reason I have chosen to discuss these points today is because I am increasingly realizing how important it is for everyone to understand how bankers use the very volatility that they inject into paper gold and paper silver markets to falsely discredit the people that try to expose the truth of their artificially managed markets and to also cause indecision and paralysis in people’s decision-making processes by injecting them with excessive, irrational fear about gold and silver (as you will see below, banksters themselves, for their own internal uses, are defining gold as an asset risk-weighted at 0%!). On the flip side of the volatility equation are the US stock markets. Bankers remove volatility from the US stock market (the VIX is currently at 5-year lows) to lull investors into a false sense of complacency that everything is fine in the broad stock markets when in fact, it is fragile as it has ever been at the present time.
Returning to my point about banksters using artificial volatility in gold and silver to buttress their anti-gold, anti-silver campaign, look at a recent sampling of comments by financial “journalists” about gold and silver thus far in 2012.
The Financial Times reports that “investors are losing their enthusiasm for gold as signs of improvement in the U.S. economy tempt them away from the traditional haven.” And if it’s made the financial press, you know the bubble has really started to deflate in earnest. — J. Patrick Coolican, Las Vegas Sun, March 24, 2012.
Yoni Jacobs, author of Gold Bubble: Profiting from Gold’s Impending Collapse, believes [ ]one thing: “a gold bubble has formed and will collapse very soon.”
James Paulsen, chief investment strategist at Wells Capital Management, writes, “[gold] is an investment which today seems far too popular among the masses, appears extremely overvalued relative to most other asset classes and faces a challenging environment should economic confidence slowly improve in the next several years.”
“Gold is now behaving like a risky asset,” said Capital Economics chief global economist Julian Jessop in a research note.
The above statements are replete with misinformation, yet no one in the financial media ever points out the blatant lies that can be quickly and thoroughly debunked. For example, James Paulsen says gold is “far too popular among the masses.” However, as of February 2012, the amount of money invested in gold still represented less than 1% of the total aggregate value of global investments (stocks, bonds, money markets). Thus, if James Paulsen’s statement is to be accurate, then the university he attended must have taught him that a less than 1% market share qualifies as “popular”. Secondly, regarding economists Julian Jessop’s statement that gold is “behaving like a risky asset”, again his statement piggy-backs off the bankster created “volatility equals risk” myth that they have employed to perfection in the gold and silver markets to prevent the general populace from buying when prices are low and on sale. Again, just look at the 12-year charts of gold and silver below to understand that volatility does not equal risk as long as one manages the volatility properly by taking the time to understand how and why bankers manipulate and suppress gold and silver prices.
Furthermore, according to the banksters themselves, gold will soon be re-categorized as one of the safest assets in the world as a Tier One asset. The Bank for International Settlements (BIS), noted the following recently, in footnote 32, in its April 2012 progress report:
“At national discretion, gold bullion held in own vaults or on an allocated basis to the extent backed by bullion liabilities can be treated as cash and therefore risk-weighted at 0%.”
However, according to the banking propaganda mass media machine, an asset risk-weighted at 0% still fits the definition of “risky” asset.
Earlier this month, India’s Finance Minster P. Chidambaram stated, “there is a need to spread financial literacy to encourage people to invest in market instruments and not bullion”. Of course, as an agent of the state, Chidambaram is spewing rubbish, as one can see from the below chart of the Bombay Stock Exchange priced in gold, the utter failure of those that have taken Chidambaram’s advice for the past four years.
Just because bankers create volatility in PM markets to make gold and silver prices appear to be weak, this does not mean that these markets ARE weak. We are literally just witnessing the banker perception management game. China is a perfect example of a country that recognizes what the general populace does not. In 2009, they stated that they doubled their gold reserves and admitted lying about their gold purchases for six years. Even back then, I informed my clients that I believed that the doubling of gold reserves was a lie and an underestimation of their true gold reserve levels. It’s odd to me how everyone believed China’s declaration back in 2009. China lied for six years, then informed the whole world they lied, yet I did not see one journalist back then question the possibility that this “official” figure could have been a lie as well. Since then, China has all too willingly participated in the manipulation game as well to serve its own national interests. In late 2009, when the price of gold hovered at $1,200 a troy ounce, Deputy Governor Hu Xiaolian of the Bank of China hinted that gold may be a bubble and stated, “China will not continue to buy gold in an indiscriminate manner”. Given that we have just discovered that China has imported 383 tonnes of gold in 2012 year-to-date at prices considerably higher than $1,200 a troy ounce, we discover that China is not exempt from releasing propaganda to serve their purposes as well.
In conclusion, it is quite easy to debunk the propaganda of counterfeit fiat currency advocates that wish to financially enslave the people and prove up the logic of sound money physical gold & physical silver advocates. Yet, propaganda is all too often accepted as truth and facts are ignored by the people. As long as one understands the paradigm that has been created by banksters in gold and silver in which perception does NOT equate to reality, one will continue to take advantage of significant pullbacks in gold and silver markets to buy both of these PMs at low prices and eventually sell much higher. However, for those that fail to distinguish between the bankster-created artificial price suppression mechanisms of gold and silver versus the real determinants of future gold/silver prices, they will continue to make wrong, potentially fatal choices. No one for sure can determine exactly when gold and silver will take off to the races, as when they break through current resistance levels, they may slowly creep past current resistance levels and then take off, or they may smash through resistance levels very quickly. The one thing I can guarantee, however, is that when gold and silver finally make new highs, and they will, some of the ferocious moves higher are absolutely going to stun a lot of people as most of the general population never takes the time to understand the bankster gold and silver manipulation game and therefore never recognize the true dynamics of the physical gold and physical silver markets that are never reported by the bankers and rarely reported by the mass media.
About the author: JS Kim is the Managing Director of maalamalama, an independent research and consulting firm with a focus on gold and silver, that is dedicated to helping re-introduce freedom to the world through the abolition of Central Banking and unsound fiat currencies, and the reintroduction of sound money.
