2008 Script To Be Used AGAIN With Precious Metals by Jeff Nielson, Sprott Money
Over the past several months, readers have received several warnings in connection with the fake-rally in precious metals. The nature of these warnings can be easily summarized.
The Next Crash is almost here. Another one of the Big Banks’ eight-year, bubble-and-crash cycles is coming to an end. Even many of the talking-heads in the mainstream media are now echoing that U.S. markets (in particular) are ripe for a crash .
According to a recent interview, Corsair Capital's founder Jay Petschek did not plan to be a hedge fund manager. After holding various roles on Wall Street, Petschek decided to launch the fund in January 1991, when his family and friends were asking him to buy equities on their behalf. He realized the best structure for Read More
When the Big Banks (and their owners) deliberately detonate these bubbles, just like they did in 2008 , precious metals markets will also be taken down hard, in order to make it appear that the world’s premier, safe-haven financial assets are not “safe havens.” Today, we see the mainstream media duplicating this warning …sort of.
Another reason for gold to see a sharp, albeit short-lived fall is that in times of financial stress, it can be used as a source of cash to cover losses elsewhere.
Sharp declines in equities, for example, could push investors to liquidate gold positions to free up capital.
Gold fell to a near 14-month low in September 2008, at the height of the 2008-2009 financial crisis, and was for a short time positively correlated with riskier assets, as liquidity dried up.
This was the script for the Crash of ’08. Gold (and silver) was one of the few asset classes – in a world of paper – which retained value during that crash, and thus (according to the propaganda) its price is supposed to fall during any such financial crisis. Note how the propaganda machine took one paragraph, and broke it up into three, separate paragraphs, just to make sure its absurd message was read and understood loud-and-clear.
Note also the perversity of this propaganda. Precious metals retain value during a financial crisis (as the safe havens that they are) so their price is supposed to fall in a crisis: “to be used as a source of cash to cover losses elsewhere.”
Really? The only assets which investors could use in 2008 to “cover losses elsewhere” were their gold and silver holdings – even though only a microscopic percentage of investors held any precious metals, at all. What about U.S. Treasuries?
Unlike gold and silver, U.S. Treasuries prices went straight up during the Crash of ’08 (as interest rates went straight down). This means that U.S. Treasuries could have been liquidated “to cover losses elsewhere” at a handsome profit, rather than selling gold and silver into a falling market.
Total holdings in U.S. Treasuries exceed the entire value of precious metals markets. Furthermore, we’re told that “everybody loves U.S. Treasuries” even though they pay no interest, because holding them makes people feel so “safe.” So, apparently, most or all of these investors could have liquidated their U.S. Treasuries holdings (at record-high prices), because while hardly anyone was holding gold and silver at the time of Crash of ’08, supposedly everybody was holding U.S. Treasuries.
If the propaganda machine’s nonsense-explanation had any validity to it, at all, we should have seen a dramatic liquidation of U.S. Treasuries to “cover losses.” We did not see that. Instead, we saw a “sudden liquidation” of an asset class which nobody was holding .
In a more recent commentary , readers have been informed that the fake-rally in precious metals is now over, and the propaganda machine has returned to the same, vacuous gold-bashing to which we have become accustomed over the past 5+ years. This was also confirmed, in the same piece of Reuters propaganda.
Gold’s sharp gains on uncertainty over Britain’s European membership are likely to come to an end, regardless of whether Britons vote to leave or remain in Thursday’s referendum.
Translation? “Heads”, gold loses; “tails”, gold loses. All roads lead to lower gold prices, just like we heard every day from the propaganda machine, for five, long years. But not for long. As Reuters also reminds us, the take-down in precious metals markets which was engineered by the Big Banks during the Crash of ’08 did not last very long.
[Gold] later increased sharply in value, reacting to central banks’ cutting interest rates and devaluing currencies. [emphasis mine]
This is almost exactly what readers have been told in previous commentaries :
We also know what will happen after this manufactured crash – the price which the banksters will be forced to pay for their even more vicious and more extreme suppression of precious metals markets. We will see another, explosive rally in this sector.
Furthermore, the price suppression of gold and silver has been much more extreme in the years prior to the Crash of ’16 than it was in the years prior to the Crash of ’08. Even without factoring in additional depletion of inventories, we would expect the Rally of ’17 to exceed the Rally of ’09.
Putting aside the mainstream media’s omission of the downward manipulation of precious metals prices which took place during the Crash of ’08, there was one extremely interesting detail in its “explanation” for rising precious metals prices from 2009 into early 2011: “ devaluing currencies.”
Here, once again, the lies of the bankers (and the media drones who parrot them) contradict each other. Precious metals prices rose in 2009 and 2010, the Liars tell us, because our currencies were devalued after 2008. There is just one problem with this explanation. The central bankers have insisted, vehemently, that there was no devaluation of our currencies at all during this period of time.
Devaluing currencies = inflation. When you reduce the value of any currency, all prices rise, because of the reduced purchasing-power of that paper. That is what we call “inflation.” The problem here is that the central bankers have all told us over and over that there was “no inflation” in 2009 and 2010, during “QE I.”
To support this lie, the central bankers smugly point to the fraudulent inflation statistics produced by our puppet governments. According to these puppets, inflation was near-zero throughout 2009 and 2010, meaning that officially there was no “devaluation” of our currencies during that period of time. Indeed, it was because of the lie that there was no inflation/devaluation resulting from QE I that the Federal Reserve then inflicted “QE II” upon us. After insisting that there was still no inflation/devaluation from QE I and QE II, we got “QE III”. And still the central bank liars tell us there is virtually “no inflation.”
Meanwhile, back in the real world, there has been all sorts of inflation. From 2009 through to the present, food prices have nearly tripled, housing prices (in some jurisdictions) have doubled. Making the central bankers’ “no inflation” lie even more egregious, we already have the written confession from the most (in)famous of these central bankers that there is no escape from the demon known as “inflation” – and its voracious devouring of our wealth.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.
– Alan Greenspan , 1966
“No way.” And this is true under normal circumstances. What sort of devaluation/inflation (and theft of wealth) should we have expected following the Bernanke “helicopter drop”: QE I + QE II + QE III?
Readers have already heard the answer to that question, in numerous, previous commentaries . The hyperbolic expansion of the U.S. money supply is the graphical/mathematical depiction of hyperinflation. The USD has already been hyperinflated to worthlessness.
The obvious question which follows the statement of this fact is: why has the U.S. dollar “risen in value” (versus other currencies) instead of plunging to worthlessness, according to its monetary fundamentals? Readers have also heard the answer to this rhetorical question on many occasions. Go ask the convicted currency-manipulators of the Big Banks, who have been criminally convicted of manipulating all of the world’s currencies , going back to at least 2008.
Out of one side of its mouth, the propaganda machine has (finally) stated the obvious: the hyperbolic expansion of the U.S. money supply following the Crash of ’08 has resulted in the devaluation of the U.S. dollar. Yet, out of the other side of its mouth, the propaganda machine insists there has been no devaluation/inflation. Indeed, the bankers and media mouthpieces can’t stop themselves from gushing in awe about “the strong dollar.”
Lies and currency manipulation.
Now these liars, currency manipulators, and market manipulators are warning us, in their own twisted manner. Markets are going to crash. Precious metals prices are going to get slammed lower. The central bankers are going to devalue our currencies (again) – and rob us with their inflation (again) – via more of their criminal money-printing.
But you heard it here, first.