first majestic silver

Taylor on Gold

October 8, 2001

I lead a panel discussion on gold at the Cambridge House in Calgary last weekend. On the panel were Bob Chapman, Bob Bishop, David Tice and Ian Gordon. The panel's views on gold ranged from mildly bullish (Bob Bishop) to rabidly bullish (Bob Chapman). For the sake of the discussion, I had to assume a "devils advocate" posture as an anti-gold pro-fiat currency establishment person. Doing so was quite amusing, especially since I have probably been more outspoken in my belief in the legitimacy of GATA than any of the panel members. When the notion of a gold conspiracy was brought up by one of the members, it was quite an experience for me to suggest that the boys from the Gold Anti Trust Action Committee (GATA) were nothing more than a group of extremist conspiracy nuts.

What a turn around as far as the gold panel was concerned. Last January in Vancouver the Cambridge House gold panel at that conference were in fact suggesting in all seriousness that Bill Murphy and his crowd might have some mental problems. GATA's allegations of a gold conspiracy were thus laughed off the stage. The only person on the Calgary panel that was on the Vancovuer panel in January was Bob Bishop. In all fairness to Bob, he did not bad mouth GATA in January, though he was decidedly less committal on the issue of a gold manipulation then than he was at the Calgary show.

Of course, Bob prefers to use the word "intervention" rather than manipulation. Intervention is the more respectable word the government prefers to use too. But, I wished someone could tell me the difference in the meaning of the two words, especially when, as in the case of the government current activities in the gold market, which it goes to extreme efforts to conceal. Were it to openly admit it is suppressing the price of gold as it did in the late 1960's, I could accept the word intervention. But when such activities are carried out in a clandestine manner, as GATA has proven they have been under the Clinton Administration and now under the Bush Administration, how is that not manipulation?

Joe Martin, who heads up the Cambridge House Conferences is sending me the sound track next week. I hope to type up this 40 Minute discussion and pass it on to you for the fun of it. But in any event, as I recall from memory, the panel's forecast for the price of gold one year from now was something like the following:

* Bob Chapman - $1,000 to $2,000

* Bob Bishop - $325 to $425

* David Tice - $700

* Ian Gordon - $600 to $800

I may be off a bit on these gold price predictions. I did not jot them down when I was at the podium. When I review the sound track I will get it right for sure and pass it on to you. But suffice it to say that I have never witnessed a more gloomy viewpoint with respect to equities in general or a more bullish attitude toward gold than I did at the Calgary conference.

HOW LONG CAN THE MANIPULATION LAST?

As Bill Murphy has pointed out this past week, the line in the sand drawn by Hannibal Lector (a.k.a. Goldman Sachs and/or J.P. Morgan) is $292 gold. So far they have been able to hold that line time and time again.

Why $292? That price seems to represent a level above which if the yellow metal were to rise, the bullion banks and their gold mining clients, many of whom are the victims of Hannibal Lector, would start to suffer major losses form their gold carry trade business. We understand Cambior could again begin to lose big amounts of money as the price rises above $292 because of their enormous short positioned encouraged by the bullion banks for the sake of their own profiteering madness and in playing their role as fascist crony capitalist friends of the Clinton Administration. Of course, as we have noted, the rigging of the gold price has been a cornerstone of the big dollar lie.

By slamming gold prices to ever lower levels, the notion of a strong dollar was sold to Americans and investors around the world. But that lie is now reaping enormous destruction to American agriculture, mining and manufacturing. Just ask the California farmers who are seeing produce from Australia push them out of their own markets because thanks to the dollar which is driven to absurd heights, it is cheaper to haul fresh produce on a 747 aircraft half way around the world than it is for California farmers to sell into their own markets! And this dynamic is significantly depressing all areas of those activities that produce REAL wealth in America.

So the bankers and politicians, for the purpose of their own selfish gains are damning America! A real case can be made that our bankers and politicians are the real terrorists because the damage they are doing to Americans over the long run may well be far greater than what we recently suffered in the New York and Washington tragedies. When our economy implodes thanks to the over expansion of credit, combined with productivity and gold price lies, I shudder to think about what that will mean not only to the wealth and comfort of our citizens, but also to civil order in America. I hope and pray that I am over dramatizing this problem, but truthfully what will happen as America enters the Kondratieff winter is anyone's guess. During the last such period of time in the 1930's a large percentage of Americans lived on farms and could raise their own food. With that no longer the case, how will starving Americans react?

Anti Gold Price Fixing Case Moved to November 5, 2001

Judge Lindsay has ordered the hearing on the defendants motion to dismiss Reginald Howe's anti-gold price fixing court case to November 5th from the previously scheduled October 9th date. Is this a favorable or unfavorable development as far as truth is concerned? The ever optimistic Bill Murphy suggests it is a positive development. He reasons that the judge needed more time to properly study the complexities of the case and that if he were inclined to throw it out, he would simply do so and get it over with. Bob Chapman on the other hand, believes "we gold bugs are simply being jerked around" and that we are most likely not going to get a fair hearing on Reggie's suit.

We shall see. But one thing is for certain, Mother nature cannot be fooled for ever. The clandestine nature of the current gold price manipulation by our government may have kept more investors in the dark for a longer period of time and thus allowed markets to become far more dislocated than during the 1960's when our government last manipulated the gold market. But as James Turk points out, our government may very well be running out of gold and doing so at a fairly rapid pace. What happens when the public learns about that and when millions of Americans, who still believe our currency is informally backed by gold suddenly understand that the gold is no longer owned by the United States, seek to buy the yellow metal with increasingly worthless paper? The answer is obvious. Gold will be headed to the moon.


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