Monday, June 03, 2013

Gold Market Update - More Fun To Come?

Isn’t it ironic that those who own all of the gold or those with very large investments in gold are those who want to use it to control our monetary or financial system?   Do we see something wrong with this picture?  Those with all of the gold are its largest advocates for its use as a monetary system as has been the case since the beginning of time.  Gold is like politics.  They are both systems of control from a time gone by that serve no purpose in a free world.  Gold was first used as money at a time when class, title and birthright privilege ruled through violence, exploitation and predation.  Those same forces are the drivers of gold markets today.  And because class ruled the world, human achievement, expression and advancement was beaten into submission.  Gold was used as a primary tool to accomplish this.   Historical dark ages or times void of human progress were defined by class tyranny.  During those times the value of money was derived through scarcity in order to control people.  The effect was to stifle human expression and ingenuity and enslave humanity into a culture of work.  Sound familiar? 

In a free world, we understand that money derives its value by being abundantly available to all people so that we may monetize all positive human achievement, science and expression for the betterment of humanity.  Gold itself has no meaning in a free world or a free mind.  In a free society or free world, we must understand gold has no value beyond that which is economic.  ie, Electronics or whatever purpose science, necessary utility or human-progress-based innovation derives.  But the existing legacy system of class-based control still tries to value gold as money for the same reasons it has always been valued.  By the way, gold is prohibitively expensive to ecosystems, local economies and the environment to mine.  It makes coal strip mining look like paradise as noted on here before.  (Do you want them doing this in your back yard?  If you own gold, you should be taking responsibility for creating misery and economic catastrophe in impoverished mining communities.) Gold mining corporations go around the world and destroy local economies and ecosystems in order to satiate this corrupt system’s demand for gold.  Gold ownership is driven by a belief system based on a tyrannical history that now translates into a modern-day belief system where scarcity is supposedly going to provide some level of economic hedge or “honest” money as gold advocates like to tell us; completely made up  beliefs based on propaganda and deceit. 

The one thing I have learned in life is how much cultures and people in those cultures delude themselves with what they believe.   There is very little incontrovertible truth in this world.  Almost none of it is derived by cultural beliefs.   Nothing is more indicative of this than the gold market.  The gold market is a religion.  It is an institution of the ego that is therefore ideology-driven just like nearly everything seems to be in a world that has become fanaticized by bureaucrats, politicians and hierarchy. (all institutions of the ego)   Most gold advocates and advisory services are run by religious zealots and fanatics.  Let me be frank.  They delude themselves with endless bullshit and nonsense that is neither true nor accurate.   And their flock of brainwashed Kool-Aid drinkers, who outsource their own thinking, eat it up.   Gold pumpers are just like mainstream financial pumpers in a world gone mad; gold money is the only true money and it’s always a good time to buy because the next bull market is just around the corner.

Now the gold fanatics, ideologues and high priests are caught with their pants down; not exactly an unusual position for this crowd.  What are they going to tell their flock now that gold has imploded again?  They were wrong and they take responsibility for causing investors to lose their asses?  Of course not.   Instead the gold community is abuzz with conspiracy.  It’s someone else’s fault; the perfect deflection for the endlessly victimized and endlessly unaccountable ego.  The devil made me do it.  The Federal Reserve being the causational factor seems to be the most popular conspiracy. 

Buying gold is making a deal with the devil or the existing corrupt culture.  You have to be in the system or culture to be an owner of gold.  It may be “counterculture” to own gold but what the gold bulls clearly don’t appreciate is that being counterculture is still part of the system.  Counterculture is not based on truth.  It is based on resistance to prevailing culture.  That resistance is in response to, and would not exist without the existing culture.  Resistance and counterculture are reliant on prevailing culture. But one of my long-time theses is that the existing system or culture is finished.  Whether that is a culture of private banking and private money creation, political corruption, the corporate state or corporate capitalism, they are all intertwined.   Therefore, counterculture gold is almost certainly not a safe haven…..   Counterculture will disappear if existing culture disappears. 

Buying gold as a hedge or as “money” is based on a belief that the existing system is going to re-adopt gold as money or that gold is a form of money (Which it is clearly is not.  It used to be when the state recognized it as such.) that will protect “investors” or, frankly, rentier capitalists, from the debasement of a paper currency.  Gold investors don’t appreciate the blind spot in that belief system.  ie, They don’t understand their investment is tied to the continuation of this culture or system.  Or frankly, that the concept of financial “investor” itself is part of the existing predatory culture.

Gold is not and has never been democratic money.  Gold’s scarcity has always been used by those who have it to deny those who don’t.  And that has the effect of making those who don’t to run faster on the hamster wheel to get it.  That pleases our masters who enrich themselves when their servants run faster on the hamster wheel.  ie, Lords, masters, kings, thugs, dictators, banking criminals, dickheads, corporate capitalists and psychopaths love gold.  And by denying their servants gold (or money in today’s world of undemocratic money, economic slavery and private banking), they focus everyone’s primary intent on ways of getting their hands on it to stay alive; work harder, cheaper and more hours. (beg, borrow and steal)  Gold, just like private banking and privately-created money, is the money of class who use its lack of abundance to maintain power and control over those who don’t have it.   The only thing worse than private banking is private banking backed by gold.   Nothing would please the status quo more than the lock in their looting gains created by massive inflation by returning to hard money policies created by a gold standard.  Policies that would send our economy into depression as far as the eye can see.  The status quo certainly may try to return us to this type of criminal system as noted before.  In other words, don’t be surprised to see central banks or politicians advocate a return to gold money because it would benefit those who have stolen the world’s wealth.

Democratic money is abundant money.  No person in democratic society who is willing to participate, give back or work, ie, in some way consciously being personally-responsible and accountable, should never be denied access to enough money (resources) needed for shelter, food, healthcare, etc or Maslow’s basic human needs.  That is democracy and democratic money.  That is freedom.  If you think gold is where our monetary system should be going, then you have outsourced your beliefs to looters and predators and the gold culture they have created that is used to deny people their economic freedom.  You are part of the existing culture.  Even if you consider yourself counterculture. 

The one percent effectively owns all of the world’s gold.  The one percent is who controls the trading in the physical and paper gold market.  The one percent is responsible for levering gold derivatives and futures up to what has been estimated to be over 200,000%.  Gold has gone up because a corrupt financial system and the one percent who control it drove the price to the moon with huge leverage and free central banking money.  All while money is denied to countless tens of millions of Americans and billions more around the world.  Dealing in the gold market is dealing with the “devil”.   Without that devil or corrupt culture, gold leverage and prices will collapse.   As I’ve noted before, if you think central banks and the one percent are going to solve this crisis and maintain their levered control over the ninety nine percent, you should own gold.  Because central banks and the one percent who mooch off of the treasury through central banks control almost the entire supply and demand of the world’s gold.

Gold has already told us what it is going to do without being propped up by central banks and the one percent moochers, parasites and looters.  It told us in 2008 when it collapsed.  Still, the gold bulls kept buying.  Then MF Global tanked and took quite a few high profile gold bulls money and gold with it.  Still, the gold bulls kept buying.  Commodities, including gold, peaked in 2011 and early 2012 and have been falling ever since.  Still, the gold bulls kept buying.   Fundamental demand for gold peaked almost two years ago as noted on here.  Still, the gold bulls kept buying.  Liquidity was draining out the global economy at an unprecedented rate in the last year, and as noted on here, gold is proxy for global liquidity.  Still, the gold bulls kept buying.  Gold stocks peaked almost two years ago and had been falling substantially ever since.  Still, the gold bulls kept buying.  Gold positions in the futures and derivatives market had fallen more than 50% as noted on here sixteen months ago.  Still, gold bulls kept buying.  And, my gold volatility index hit a sixteen year low as noted on here sixteen months ago.  I wrote specifically this was very bad news for a bullish story regarding gold.  Still, gold bulls kept buying.   As noted on here many times, central banking monetary actions were not saving the global economy or pushing enough liquidity into the real economy and that was bad for gold.  Still, the gold bulls kept buying.

Now that gold prices have seen a massive tanking and gold stocks have been obliterated, we are told by gold bulls it’s all a conspiracy by secret forces hell bent on destroying honest gold investors.  Hahaha.  Honest?  You have to be a fool to have been buying gold over the last sixteen months based on the facts discussed on here.  Facts.  Not ideology or religion.  It’s not a conspiracy.  The markets were telling us what was going on.  You can’t be a fool and make money.  Well you can when credit markets are working but they aren’t.   So, what this recent fall in the price of gold has done is separated the fools and forced them to be accountable.  And, what do they do?  They tell you it’s someone else’s fault.  I’m being pretty hard here to make a point.  Quit outsourcing your belief systems to other people and learn to believe in yourself and the world will work out just fine.   

Gold went up based on corruption and it certainly is going to go down based on corruption.   That many people believe buying gold is a way to hedge or invest against a system of corruption is more than a little representative of the ego’s unconscious shadow and its blind spots.  The gold market is and has been rigged by the ruling class who owns all of the world’s assets just like stocks, bonds, commodities, real estate, elections, politics, corporations, the military-industrial complex, the economy, etc have been rigged.  If you made money on gold going up, you made money because the system is corrupt.  You were benefiting from corruption.   If  the ego tries to bargain with a corrupt system, someday it is going to pay the consequences.   There is no bargaining with evil or corruption.  As an aside, that is why politics is such a dirty profession attracting evil people.  Politics is an institution of the ego.  ie, It has an intent of control and subverting truth.  So being an institution of the ego, evil gets to bargain and win in politics. 

Some people now say gold is a great buy.   Gold ETFs, commodity-trading firms and major banks with massive commodity holdings have been dumping gold positions by the tens of billions of dollars.  Is it now a time to buy?  That analysis is a simple-minded one based on the market being oversold.   These were the same people telling people to buy assets as markets kept getting more and more oversold in 2008.  More oversold than at any time in history.   Oversold became more oversold yet there was no rally in assets until markets were bailed out by tens of trillions in free money by global central bankers.  Oversold is not a reason to buy.

I measure gold demand in a few ways.  Not all of them are direct and two are very esoteric.   I’ve told you one of them.  That is the gold futures and derivatives market.  Gold buyers in the futures market were tanking sixteen months ago (the peak in gold prices) as I noted at that time.  They told you gold was almost certainly going to take a major hit.  Which it did.  My other three demand metrics were confirming the same sell signal.   Yes the market is wildly oversold today but it needs a catalyst.  It needs to be bailed out as happened when gold was collapsing in 2008.  It needs the one percent to step back in and become buyers again.  Being oversold means nothing without substantial demand.  I haven’t looked this past week but up until then there were still no large buyers in the gold futures market.  The current price is holding its own but without large buyers, buying any tradable asset is a fool’s game.  We may eventually see an impulse rally up to 1550 or so an ounce but that could very well be a setup for a greater fall down to $800-$850 unless factors and demand change. 

If you don’t know what you are doing, you are going to get your butt handed to you in financial markets.   It’s challenging enough if you do know what you are doing.  Financial markets, including gold, in this environment of extreme corruption and predation are not for widows and orphans.  More importantly, they are not for the uninformed, unsophisticated speculator or trader who doesn’t understand what they are doing.   If you bought gold at $250 an ounce in 1998, you are still raking in.   But then most people didn’t do that because they were busy speculating in stocks in the midst of the largest speculative bubble ever created in this nation.  The herd or existing culture is always late and wrong.  Buying gold and other counterculture moves were lucrative at that time because the culture or system was still functioning.

Now, back to the physical versus paper market for gold.  This is a favorite argument of the gold bulls.  They like to tell us the real or physical gold market is seeing vibrant demand.  And owning physical gold will protect you.  I specifically pointed out the flawed logic behind this nonsense almost two years ago.  The price of real estate in the housing bubble was driven by paper demand and leverage.  Just like gold.  People kept buying homes and banks repackaged the loans and sold them so they could sell even more homes.  This created massive leverage in the paper market that drove demand and price in the physical real estate market.  When that Ponzi scheme ended, physical real estate took it in the shorts.  Gold is no different.  As far as remaining physical inventory that is available to buy, is it scare?  In some places and in small lots it might be.  Who cares?  There are massive sellers in the large quantity market and the only buyers for that are central banks and the one percent.  The gold market is not a highly liquid, large market.  A handful of large inside players can distort that market substantially.  It’s no different than the Hunt brothers trying to corner the silver market 30 years ago.  With the global liquidity we have seen this cycle and the deregulation of global finance, being a Hunt brother in this environment is no great shakes.  Anybody with enough money or enough leverage can corner any market.  That is how Wall Street has manipulated financially-traded assets everywhere.  The moochers and parasites are manipulating everything.  This is what happens when you deregulate private, for-profit capital.  It will do anything to anyone without conscience or remorse.  Deregulated capitalism is perfectly psychotic.

I remember reading a handful of years ago there was a oil sheik who had figured out the London gold exchange had more gold paper contracts than it had gold.  So, he knew he could cause a “run” on gold prices by taking physical delivery of enough gold contracts that the exchange couldn’t cover.   What does that have to do with honest money?  That is the type of manipulation and corruption that drove gold higher.   The market for physical gold is reasonably small and can be reasonably easily manipulated by large buyers.  There may be people in the gold market who view themselves as honest but gold is and always has been a corrupt market.  Our egos are all capable of telling ourselves endless lies.  Mary and Bill running down to the  local gold exchange to purchase a one ounce gold bar with their $9 an hour job aren’t causing these distortions or controlling the gold market. 

No one really knows when or where gold will eventually go five or ten or twenty years from now.  There are too many unknown and future factors.  We could see gold run to $2,500 or $250 or both.  Or zero.  ie, If central bankers burn all currencies to the ground, gold will likely go with it being tied to the culture of money.   Or if class-based, private for-profit capital fails, gold will likely go with it.   Almost everyone who is a gold bull would laugh at that possibility.  You know, the same way the elites in Rome would have laughed at Rome’s coming collapse.  Or stock market bulls would laugh at the prospects of a market crash and a Great Depression just months before 1929’s fateful turning day.  Or the stock market bulls would have laughed that the internet bubble was going to collapse just a decade ago.   Not only did many of these people laugh, but they chided, goaded and mocked those who recognized a greater truth.   The future price of gold depends on how fast this class-based money bubble and this culture dies.  But given gold's massive leverage and reliance on a corrupt private capital culture, the counterculture ownership of gold seems likely to die with it whenever that fateful day arrives. 

posted by TimingLogic at 9:28 AM

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