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Mainstream Financial Press Prepped in Advance of Gold Drop
I am beyond surprised when major participants in the gold and silver physical market bemoan the completely compromised nature of the futures markets in the United States in conversation, yet when it comes to a mainstream media microphone, they’re all “weak economic data” this and “signs of recovery” that, or my personal favourite “technical indicators predicted”. Is the futures market for commodities a rigged game or isn’t it?
The reason for the reticence to indict publicly anything to do with US regulators was explained to me by none other than Eric Sprott after I’d interviewed him at the Reuters studios in New York in December 2011. I had been trying to get him to say in the interview that he believed the futures market was operating on the basis of deficient regulation in a fraudulent environment. And he wouldn’t say it. Though he assured me that this is what he believed he said he wasn’t prepared to state anything on the sort in an interview because he had “deep pockets”.
Thus, when it comes to lobbying for recognition of the fact that the futures markets are operated fraudulently to ameliorate the fiscal and monetary decisions of the United States Treasury and Federal Reserve, there will be no outright agitation for such on the part of major industry participants with “deep pockets”, because they have, to put it succinctly, an obligation to their investors and unit holders to protect their own financial interests from unwanted attention from US regulators.
Prior to the onset of gold’s spectacular price collapse that started Friday, there was a sudden spike in headlines warning of an impending gold price correction as early as Monday of last week.
The first volley of the financial media’s perception management assault on gold investors was fired by the Wall Street Journal’s ‘MarketBeat’ blog at 10:05 a.m. ET with the title “Goldman Sachs: Short Gold!” Just like that. With an exclamation mark.
An excerpt from that article:
“Goldman points out worries about Cyprus and weaker-than-expected economic data normally would’ve pushed gold prices higher, as the precious metal has typically behaved as a safe-haven play.
But that hasn’t been the case recently.
“Despite resurgence in euro area risk aversion and disappointing US economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning,” the Goldman analysts say. “With our economists expecting few ramifications from Cyprus and that the recent US slowdown will not derail the faster recovery they forecast in 2H13, we believe a sharp rebound in gold prices is unlikely.”
There were some problems with that statement that made no sense to me when I read it. Worries about Cyprus? The tiny 1% of Eurozone GDP Cyprus? Nobody’s worried about Cyrpus. Except the holders of physical gold who breather a sigh of relief and went and counted their gold again when the government stole up to 60% of depositors holdings to bail itself out.
Disappointing US economic data? Why, I thought the recovery was well established in the United States and that was why we were seeing record stock market closes?
But after that little media seed was planted, a tree of disinformation quickly took root across multiple publications demonstrating that there was clearly somebody busily tilling the fertile soil of other financial publications.
CNBC, theStreet.com, Seeking Alpha…the bandwagon by lunchtime in New York was standing room only.
But then, once the assault on the gold price was underway, there was suspicious harmony to the key point of all mainstream financial press interpretations of the causes of the event. Unmistakably, the prime perception management message that we are expected to absorb and respond to is that “Gold is not a safe haven”.
Bloomberg, Wall Street Journal, New York Times
Here we catalogue the permutations of wilful ignorance by such vaunted publications as Bloomberg, the Wall Street Journal, and the New York Times, to name but a few, that fail to even mention the profound interest the United States has in suppressing through any means possible, the prices of gold and silver.
Mind you, the press can to some degree be forgiven. They are, after all, merely reporters, and they base their reports on interviews with “experts”. An expert, in their view, is anyone who has written a book on any given subject, or manages an extremely large capital pool or fund. The logic in the latter case flowing from the idea that if investors trust their billions to such individuals, they must certainly know what they’re doing.
I think you can be an expert water-skier, or an expert chess player. But when it comes to predicting the future, or even accurately identifying the causes of events past or future, there are no experts. That’s because as a predictor of future events, or as an interpreter of past ones, your perspective is irrevocably coloured by your position in society, you place in time, and your position on the global map.
A fund manager, when asked to interpret the events surrounding a catastrophic collapse in a commodity price, is going look out from his glass tower, and prioritizing the safeguard of his position in society, will pontificate on causes that all emanate from a perspective born of these conditions. He will say nothing to earn the wrath of a government regulators, he will fail to incorporate the elements of the event that can only be known much further in the future when all data has been considered, and he will elucidate his beliefs from his data-fed office.
So what we end up with in the mainstream financial press, is essentially “information without representation”, where there is nobody who is given a voice in the mainstream press who’s interests are aligned with those of the common people.
Thus we end up with misleading and just plain wrong interpretation of events by major media outlets backed up by vapid statements from ivory-towered ‘experts’ who are absolutely clueless about (or else colluding with) the AMSCAM (American Syndicate of Collusion and Manipulation) who, through a futures market with no regulatory limit on number of contracts for future sale or purchase of gold, protect the interest of the United States’ ability to create money at zero cost.
Some examples:
Bloomberg:
“Why is gold plunging? The most important factor is that global inflation is falling, reducing gold’s value as a hedge against rising prices. Gold bugs who were betting on an outburst of inflation are scrambling to reverse their bets and exit their gold positions at any price.”
Gold bugs are not betting on an outburst of inflation, nor are they scrambling to reverse their bets. Inflation, for those of you who don’t buy gasoline or bread, is undeniably here. And if you can find me one single self-proclaimed ‘gold bug’ who has reversed his position based on yesterday’s events, the please, trot him on out. The fact is that ‘gold bugs’ are unanimously proclaiming this a buying opportunity, and are howling from the rooftops more stridently than ever that this is the time to buy gold and silver.
Also:
“Anybody who did some buying before this big drop is probably in some pain,” Donald Selkin, who helps manage about $3 billion of assets as chief market strategist at National Securities Corp. in New York, told Bloomberg News. “The perception is that gold is not really needed as a safe haven. People are looking at the stock market, and they’re stunned, and there’s no inflation. So people are saying, ‘What do we need gold for?’”
Gold is not needed as a safe haven? Well, in the current position in time, where the United States dollar is pounded into the world money supply at the rate of a minimum $85 billion a month, it might not appear that gold is needed as a safe haven. But lets just wait and see what happens when Russia, Japan, Germany, the UK, Italy, China, France and Spain decide that they can just print money to pay their debts. Japan has already started, as has the UK and China…
From the New York Times article of April 15:
“Gold prices tumbled 9 percent on Monday, the sharpest drop in 30 years, heightening fears that investors’ faith in the safe haven has been shattered.”
Reuters article from today entitled “Rout Tarnishes Gold’s Lustre as Safe Haven:”
“I don’t think anyone thought we’d see the enormous move and volume of selling that we did see. It’s done a great deal of damage to investors’ confidence,” said Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland.
Corrigan added that gold’s perceived efficiency as a safe haven had been declining for some time, as the factors that would normally send the market higher had failed to do that – the crisis in Cyprus being a case in point.”
What is truly remarkable about all this is that if you search google for gold and safe haven prior to April 8th, when George Soros came out and said “gold has been destroyed as a safe haven”, you will find that all of these news outlets make reference to gold’s positive performance in the week’s prior as “investor’s buying gold as a safe haven”.
Amazing how the entire herd switches gears at the same time and on cue, isn’t it?
Is it more naive to suggest that collusion and market manipulation exists, or to suggest that it does not?
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The post Mainstream Financial Press Prepped in Advance of Gold Drop appeared first on Midas Letter.
2013-04-16 11:07:41
Source: http://www.midasletter.com/2013/04/an-unpopular-opinion-on-gold-1304161/
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