To understand the price action in gold and government bonds it helps to compare it to what is called ‘price tagging’ in some circles. And I’ll get to the definition of this in a minute.
Focusing on gold and silver: the way it works is this, whenever real cash buyers emerge for gold and silver in India, Russia, China, and amongst hard money advocates in the West - Wall St. and the City of London dump hundreds of tons of ‘naked-shorts’ on various futures exchanges (counterfeit futures contracts) that kills the price in the short term.
Conversely, even though the central banks and their Wall St. friends are floating trillions in government bonds, the prices for these bonds are currently trading at 300-year highs. Never in America’s 237-year history or, if you go back in British history 300 years, do you find government bonds trading as high as they are now (i.e. record low interest rates).
Historic demand for gold and vanishing supply is driving the prices lower while record supply of bonds with no natural demand only fabricated ‘quantitative easing’ demand driving prices higher. This is a complete repudiation of the laws of supply and demand that is not only unsustainable, but causing immeasurable hardships and now many cases of suicide as well.
Price tagging’ is a good comparison to make when grappling to understand what’s happening in the gold and bond market these days. Price tagging refers (http://en.wikipedia.org/wiki/Price_tag_policy) to the practice on the part of Israel, whenever the international community pressures them on illegally expanding settlements into the occupied territories, they kill some Palestinians.
That, we are told by the Israelis is the ‘price tag’ for insisting on compliance with the law.
The price tag for cash buyers of gold and silver - who want to escape the matrix of the US dollar and the financial hegemony that comes with the dollar’s role as world reserve currency - is to suffer the ordeal of having Wall St. (principally JP Morgan) dump hundreds of tons of paper gold ‘naked-shorts’ on to the market to crash the price and destroying economies around the world.
We shall overcome. Eventually, the cash buyers of gold and silver will triumph over the paper ‘price taggers’ and their pathetic schemes and the world will be a better place.
Max Keiser, the host of RT's ‘Keiser Report,’ is a former stockbroker, the inventor of virtual specialist technology and co-founder of the Hollywood Stock Exchange.
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