Not all of my readers are fans of Ron Paul, but he hammers away at the important issues that I address in this newsletter. Here is an excellent link to an interview that you should probably explore. Thanks to our friend Bill L. for calling this to our attention:
Well, my comments in yesterday’s daily on Conspiratorial vs. Non-Conspiratorial views on gold and silver drew a lot of comments from our readers. I published a few of them in the Mail Box section, including an excellent reply from our friend Trader David R. My wife Susan tells me that the first thing she reads in my newsletter every day is my introduction and then the Mail Box section, which she thinks is very educational.
There really are a couple of ways to examine this. First, there is the issue of whether or not JPMorgan, HSBC and the other bullion banks actually have the gold and silver on hand that they use to back their mega-shorting purposes. Bill Fleckenstein told me that they do. Trader David R. says yes, they do. (Read his comments in the Mail Box section.) Before you let out a groan (I am sure our friend Ranting Andy is falling off of his chair as he reads this), consider the following comment on this subject from as credible a source as you will find, Jim Sinclair. Jim said the same firms that are short will also be the firms that are long, as the price rises. Jim expects gold to rise well into the thousands, perhaps even as high as $10,000, so he is, to say the least, very bullish on gold. Just as JPMorgan is raking it in now with their short position in the metals, according to Sinclair, they will be the ones raking it in as the bull market moves forward. It sure sounds to me like Trader David R and Mr. Gold, Jim Sinclair are on the same page here.
The other question is what are the motives behind all of the “manipulation”? There is little doubt that there is manipulation going on here. No one covers that topic better than Ranting Andy and you read about it every day in this daily. But is the manipulation for PROFIT or is it part of a deep, dark plot by the central banks and the major governments of the world, in concert with the bullion banks, to keep interest rates low and investors in dollars instead of gold and silver? Trader David R says the former and Ranting Andy shouts the latter. Could it be a little of both? The bullion banks would have every reason to go along with this for profit motives alone. Wouldn’t you? If you had access to all of the gold you wanted at interest rates of 1% or less, of course you would jump at the chance to take it, and sell it, and invest the proceeds into other products that you could sell for many times the interest you paid for the gold. That’s what profitable businesses do. JPMorgan’s metal trading department is hugely profitable! So it comes down to whether or not the central banks leased out their gold to support their currencies and interest rate policies, or whether they are just plain stupid, like the Bank of England (who sold half of their gold 10-years ago, at the very bottom of the market). David R says they are that stupid! But, as you have noticed, lately the central banks are no longer selling their gold; they are buying it back and reducing their Forex position in dollars.
Then there is the question of whether we still have our gold in Ft. Knox or whether we have sold and leased most of it out to support Robert Rubin’s “strong dollar policy” and low interest rate policies. Let me put it this way – personally, I would be shocked if we still have the gold (otherwise, why has the government stonewalled every request to have an independent audit of the gold since the 1950’s?). If it is gone, we are screwed, and that is another reason why I own gold. When the time arrives when it becomes public knowledge that our gold is long-gone, just imagine how much the gold you own will then be worth? Pick a number… and it will be low!
I pick up Andy Hoffman at the airport today at 12:30. I will have more to say about this in tomorrow’s daily.