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The Gold (Real Money) Markets

August 28, 2001

Gold came off a bit last week as the manipulators continued to bide their time. Given the ridiculous levels to which the dollar has risen, manufacturing, mining and farming in America are all in deep trouble. Thus, with the real producers of wealth grinding to a near death status, even Goldman Sachs, who made billions of dollars from the Clinton strong dollar policy, have had to call for the orchestration of a weaker dollar, though they have indicated this should take place gradually.

Given Goldman's role in rigging the gold price downward as part of the Clinton strong dollar policy, which also worked very nicely in generating windfall profits for Goldman and their clients, one must conclude that at least one major reason for Goldman's emphasis on the "gradual" decline in the dollar results from its need to cover their short gold positions. A sudden rise in the gold price that would result in a sudden a violent decline in the dollar would not provide ample time for the what Bill Murphy terms "Hannibal Lector" to get out of their short gold positions without loosing huge amounts of money. So they work with the government to orchestrate a slow and steady decline of the dollar. So much for the notions of free markets in America.

Last week we published James Turk's well constructed argument that they U.S. may have dishorded up to 87% of America's gold supply. As a follow up to Mr. Turk's excellent revelation, Michael Bolser confirmed James was definitely correct in his assertions.

In an article published by GATA , Bolser drew on more publicly available government information contained deep in cyberspace for reaching the following conclusion. "We can now confidently state that the ESF's depleted SDR account, shown below in the associated chart, represents a depleted gold account since the new owners of these transferred ESF SDRs have a valid claim against ESF gold.

Not only did Bolser find confirming evidence that the Exchange Stabalization fund has been dishording U.S. gold, but he also found evidence that the IMF has been violating its own policy in allowing itself to be used to dishord gold. We believed in the conspiracy theory from day one when we first heard Bill Murphy speak on CNBC. (So far he has never been invited back. I wonder why? But the evidence being of a conspiracy now being exposed by GATA is getting so strong and obvious that it is hard to see how the mainstream media will be able to ignore it much longer, especially as the October 9th trial dates draws near.


No one would know better that the handwriting is on the wall for the gold manipulators than Goldman Sachs and the other defendants named in Reginald Howe's lawsuit because they seemingly hold positions of privilege and inside knowledge that Ivan Boesky could only have dreamed of. These are the ultimate insiders. They are America's version of "crony capitalists." As such it seems logical that they are always given advanced knowledge of major turning points so that the American tax payer and citizens as a whole are constantly guaranteeing their success no matter how bad their decisions.

One of the most obvious and blatant signals provided to the defendants in Reggie's lawsuit was handed to them by Mr. Greenspan when in 1998 he said "central banks stand ready to lease gold in increasing quantities, should the price begin to rise." From that point on the gold cabal knew they would not need to worry about covering their shorts when they played the gold carry trade. They were handed a no lose windfall profit opportunity. All evidence being assembled by GATA suggests this inner circle of privileged bankers took full advantage of the signals given to them by Mr. Greenspan.

The propaganda from Goldman Sachs and the other defendants in Reginald Howe's lawsuit as well as paper money apologists like "Barron's" Chery Strauss Einhorn and most all other financial writers in the main stream press is predictable. As they begin to buy gold to cover their short positions, you can count on these establishment puppets trashing gold as an investment even as these inner circle banks are buying the yellow metal to cover their short positions. This of course would be completely consistent with the same behavior by sell side Goldman analysts who continue to pump technology stocks on CNBC which they wish to unload to a highly vulnerable public.

So, what Ms. Einhorn and the conspirator analysts will be telling the world is that gold is a terrible investment. To prove their case they will point to the yellow metal's pathetic reaction to a weakening dollar. Will they in a fair minded manner tell their readers about the mounting evidence that the gold markets are rigged? Don't be ridiculous they say! Would they ever look closely at the fundamental strength of gold such as Frank Veneroso has which demonstrates a fair market value for gold would be somewhere around $600 - without a run on the dollar.

And these media puppets can be counted on to simply mimic the propaganda put out by the major bullion banks, without even thinking to question the legitimacy of those positions, these falsehoods get played over and over again in the press so that the big lies is perpetuated. So, like lemmings, vast numbers of Americans will continue to be misguided away from gold and toward paper assets of one kind or another, be they stocks or bonds or money market instruments. This I believe will result in disaster for millions of Americans and folks around the globe as the Kondratieff winter unfolds.

China has only 2% of its Total Foreign Reserves in gold.
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