Wednesday, November 14, 2007

Volatility Shows Manipulation in Gold and Silver

Debates rage around the net and in conferences that focus on investments and government policy as to whether or not the precious metals markets - specifically gold and silver futures and options traded on the Comex - are manipulated by a few deep pocketed and politically connected banks or agents. Without having to dig too much, the answer is boldly apparent.

Extreme volatility almost defines that manipulation exists in silver and gold. Not necessarily an indicator in stocks or bonds where the company supporting the security could have significant news that impacts the price either up or down, volatility in gold and silver ipso facto shows manipulation exercised by a few parties acting together agains the masses.

Gold and silver production neither jumps nor decreases dramatically day to day. Neither does demand for gold and silver jump dramatically day to day. While some days have more or less buying or selling when there is no manipulative force at play, the changes are moderate and trending up or down slowly in general.
Only when a central bank drops their gold inventory or a massive order comes through can the price escalate or drop dramatically. The nature of a mined commodity is that huge finds or sources are rare, demand tends to be steady, inventories are trackable, weather has minor and short term impacts, and baring the heavy weight of illegally concentrated short selling, a mined commodities price will increase with the level of fiat currency printed with a drag time, balanced by fundamentals of supply and demand.

So we could expect gold and silver to only move moderately in price over time. Instead, what we have are dramatic price swings like 5% up or down from one day to another!! Ask yourselves-

1. Are new mines being discovered that will bring demand online right away?
2. Is demand dropping off equivalently that day or is anticipated that day?
3. Did a mass of market participants randomly decide to liquidate their positions that day?

The answer to all the questions in case you are wondering...is "NO." Nothing changed fundamentally in the gold and silver market.

The heavy handed, illegal manipulation by a few deep pocketed, politically connected groups. Naming names - and this is all Ted Butler's research not mine - would be AIG or Scottia Mocatta, plus Goldman, and the other heavy hitters in the Comex.

This is all the more reason to get into this market because the manipulation always ends at some point. Then the prices rocket for the shorted commodity.

Until then, watch the volatility with disdain and know the origin of it. Pure illegality, pure manipulation, and pure corruption.

Invest with wisdom and watch the manipulation make you rich!

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