Taylor on Equity & GOLD Markets

August 21, 2001

The strong dollar is destroying the American economy and with it American society. The banking industry, which has more than any other industry a say in how our country is run, loves a strong dollar because it draws capital into the U.S. and capital is the "material" which it shuffles about and in the process "earns" obscene profits.

To fabricate the myth of a strong dollar, the Clinton/Rubin/Summers team engaged in a market manipulation of the one currency that is superior to the dollar, namely gold and then spun a U.S. productivity myth that seemed to legitimize a strong dollar.

The productivity fib is now being exposed by the biggest quarterly decline in profitability in American history. S&P now estimates that the drop in the second quarter was about 28%. "Business Week's" second quarter survey shows profits down 52% and the "Wall Street Journal" shows profits down 67%." As Richard Russell said on Monday, "What ever is happening is happening fast, faster than I've ever seen before." And given Richard's age (he is somewhere in his 70's) that is saying something.

The low gold price was another "lie" told by the Clinton Administration that also seemed to justify a strong dollar. The gold lie, created by market manipulation, is being exposed now by GATA. Their case is getting stronger and stronger by the day. As James Turk noted in a discussion I had with him this past week, less than one in a million Americans know or believe what is being revealed by GATA. All that may begin to change at 3:30 p.m. Tuesday, October 9, 2001. It is then that a hearing on a motion to dismiss Reginald Howe's anti-gold price fixing lawsuit against some of the most famous and powerful institutions on the face of the earth is scheduled to takes place. The judge might have summarily dismissed Reggie's lawsuit, but so far has chosen not to do so. Perhaps, under pressure from the bankers he still will. But if plans move forward as now announced by the court, it means Reggie and the GATA team will have a chance to tell their story to a world. And if that happens, GATA should begin to receive the respect it deserves for its work in revealing evidence of a major financial and political scandal. And, assuming GATA's powerful evidence of a manipulated gold market is made public by the establishment press, it is hard to see how the price of gold will not be affected to the upside, and perhaps sharply so. The lawsuit brought by Reginald H. Howe, was against the Bank for International Settlements, the U.S. Federal Reserve and Treasury Department, and several large bullion banks.

An actual hearing, even if only on the motion to dismiss, should begin to get the main stream media's attention and hopefully get the world to begin to seriously focus on GATA's allegations. As that happens, the world should finally begin to understand that the dollar has been strengthened not because of Clinton's great economic policies, but because of manipulation of markets. And in the process, the gold price lie, used to bolster the strong dollar myth as well as the true bullish fundamentals for the yellow metal should come to light. If that happens, all bets will be off with respect to the depths to which the dollar may decline given the enormous levels of dollars held by foreign interests. Likewise, to the upside, all bets will be off with regard to the potential for gold.

The news that at least the motion to dismiss Reggie's lawsuit will be given a hearing was the first of two major pro GATA events that took place last week while I was in Paris. The other major bit of news was evidence disclosed by James Turk that indicates the possibility that despite denials from our government, as much as 87% of the U.S. gold supply may have effectively been sold or at least encumbered by other nations. The combination of these two events could trigger a huge move for gold.

As we have frequently noted, the ability to orchestrate a continuously lower gold price was a cornerstone to the Clinton Administration's strong dollar policy. But by rigging the gold prices to ever descending levels, the Clinton folks may have sold American down the drain not only by ridding our coffers of our very basic monetary foundation, but also by putting American industry, mining and agriculture out of business.

How ridiculously overpriced has the dollar become? Let me give you an example. According to reports I have received from Dr. John Whitney, CEO of Itronics, Inc., Thanks to the strong dollar, California orange and avocado producers are no longer able to compete with orange and avocado production in Australia and New Zealand. It seems that when exchange rate for the dollar is factored in for producers in those countries, they are able to load that produce on 747 aircraft and fly it half way around the world and sell it more cheaply in California than farmers producing the same fruit right in the California! The point is that American prouders are being run out of business by a rigged dollar market. The dollar has been artificially strong thanks to capital flows into America which have taken place as a result of a rigged gold market and lots of spin and downright lies about productivity.

But what do the bankers care? At least up until now, they have made a killing moving fiat money around, which with gold out of mind, they have been free to create with little or no restrictions. Then the get to profit from it again as the $1 billion per day trade deficit re-enters the U.S. market because of profitability assumptions based on fabricated falsehoods. Obvioulsy such defiance of the natural laws of markets cannot last for ever. Signs are abounding that a major change for both gold and the dollar may indeed just now be getting underway.

A one-ounce gold nugget is rarer than a five-carat diamond.

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