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I have commented on the $30 drop in gold when 4200 contracts hit the market in 100-milliseconds on January 6th.  Well, guess what – Market data provider Nanex produces proof that Monday’s smash down in the gold futures market was not a mistaken “fat finger” trade.  It was the product of a high-frequency algorithm trading program deliberately designed to take the market down. Nanex’s report, with great charts, is here:

Ongoing Research – Market Events and Phenomena
Zero Hedge also commented on this obvious market rigging.  The real question is where are the regulators?  This would be funny if it weren’t so sad.

Proof Gold’s Latest Slam Was Not A “Fat Goldfinger”
In case you are wondering why we live in Miami for half the year, check out this YouTube video.  Living in Minnesota all of my life, I have personally experienced all of this!

The People vs Winter
The UK Royal Mint has already run out of gold Sovereigns.  The Perth Mint reported record sales last year.  The U.S. Mint sold a record amount of Silver Eagles last year too and stopped selling them well before year’s end.  So how can it be that demand for physical gold and silver is so robust and the “price” keeps falling?  Chris Powell (GATA) is right – there aren’t any markets anymore, just interventions.

People who buy physical gold and silver coins and bars are stepping aside from the rigged game.  All markets are rigged, not just precious metals.  The longer you stay in the game the more certain your “winnings” will be left behind.  It’s like Las Vegas, where you see people winning at the tables and the slots but eventually few go home ahead.  Only those who know when it’s time to cash out their chips and leave keep their winnings.  In Las Vegas or the stock market, it’s hard to do.  It goes against our basic nature.

For the last few decades, people with money have been conditioned to “invest” their money.  It started with IRAs and money managers and financial advisors.  With inflation running around 4.5%, based on 1990 calculation methods, (not 1.5%) leaving your money in a 5-year CD for 1.5% or 2% is a losing proposition.  The stock market is no longer undervalued but it seems to be the only game in town.  The Fed has every reason to keep investors focus off of gold and silver – and into stocks (which I expect they are also manipulating UP). I prefer to buy gold and sit and wait.  Gold and silver will be the “last man standing.”  It is still the best form of safe wealth accumulation.  I can wait a few months or a few years, if necessary.  I will not be drawn into the allusion that wealth is calculated in dollars.

John Williams just released his new 2014 Inflation Report, HYPERINFLATION 2014: THE ENDGAME BEGINS.  I will discuss it tomorrow.

Meanwhile, be sure and read Darryl Robert Schoon’s THE END OF THE BEGINNING in the Featured Articles section.  It fits well with John Williams Inflation Report (which I will discuss tomorrow).  These two reports, taken together, will give you a pretty good idea of where this is all heading – and no one should be in a hurry for their gold and silver to soar.  The rise will not be in a vacuum.

Do you think I am a pessimist?  Or an optimist?  Actually, I am a bit of both.  I am optimistic on gold and silver’s future and pessimistic on the economy and the dollar.  Most Americans are optimistic on the economy, the dollar and the stock market and pessimistic on gold and silver.  We are therefore the same, just opposite.

My view of where we are headed is similar to John Williams and Darryl Robert Schoon’s.  2014 will not end well – and hyperinflation will start this year.  All we can do is hope we are wrong.  When all we have is hope, (not meaningful changes in our fiscal policies) we’re screwed!

Owning gold and silver will cushion the blow.  Those of us who own the metals will hold onto our wealth.  You stock market, bond and dollar guys, well, you will be in for a big surprise and an even bigger disappointment.

French Curves

Early in the 2000s while gold was powering ahead and no one seemed to know where it was headed, Jim Sinclair stressed the predictive accuracy of French Curves.  He explained how they worked and even provided his readers with information on where to buy them and how to use them.  (You can check them out on Google.)  He said he wouldn’t do the work for his readers, but he showed them how to do it for themselves.  I last wrote about it in 2008.  Here is a section of the KWN interview with Rob Rosen:

“As I have previously mentioned to you, the S&P will lose a stunning 2/3 of its value. On the flip side, gold has bottomed and it will take off to the upside in a huge explosion. Everything I’ve learned over 60 years of following the markets tells me this is exactly where we are.

“So the peak is in or will be in within a matter of days or weeks for the Dow, and the corrective bottom for gold has been completed. Gold will not break the recent lows because nobody can turn back the tide, not even the Federal Reserve. The chart below shows gold’s advance since the start of this century. Notice the powerful ‘French Curve.’ This is why the bottom for gold is already cemented in place (see chart below). ” … Ron Rosen in a KWN interview

King World News, January 7, 2014

Here is the latest from John Williams from Shadowstats.com:

Extremely Difficult Circumstances in the Year Ahead: Confluence of Economic and Systemic Crises Should Intensify

With Global Confidence in Dollar Rattled by Uncontrollable Fiscal and Monetary Excesses, U.S. Government and the Federal Reserve Have Limited Options to Address Panics

Heavy Selling of U.S. Dollar Remains Likely Proximal Trigger for Inflation Pick-Up

Developing Hyperinflation Would Push Ongoing Recession into Deep Depression

Physical Gold Remains Primary Hedge for Preserving Wealth and Assets

Shadowstats.com, January 7, 2014