2013: A Successful Year of Price-Suppression (Part I)
There must certainly be times when regular (and objective) readers ask themselves if it is not me who is “living in fantasy-land” rather than – as alleged again and again in these commentaries – the drones of the mainstream media. There was an example today of an item from Bloomberg (and the “statistic” it contained) which might create such doubts in readers’ minds.
Wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years, showing companies face little pressure to charge more… [emphasis mine]
Where is the “hyperinflation” which I (and John Williams, and others) insist is already ‘in the pipes’ of the global monetary/financial system? While readers have seen a chart (on numerous occasions) showing U.S. money-printing in an exponential spiral – a near-vertical line, to be precise – we see wholesale prices actually moving in the opposite direction.
How is this possible? Or, put another way, who is telling the truth? To answer these questions; let me ask an additional and more specific question. Why do precious metals prices not reveal the hyperinflationary pressures which are alleged to exist? Regular readers and knowledgeable precious metals investors would have no difficulty answering that question in a convincing manner: price-suppression.
Over recent years; readers have been supplied with overwhelming evidence of price-suppression/manipulation in precious metals markets, and in a variety of different forms:
- Bullion-leasing fraud
- Regulatory malfeasance
- Falsified data/statistics
- Outrageous ratios of paper to bullion in markets
- The collapse of global inventories of gold and silver
Overlaid on top of this; we have the daily price-action in these markets: endless, repetitive examples of vertical lines, as prices “gap” lower (and sometimes) higher in these large, global futures markets. Here readers need to know the history (and math) behind these futures markets.
Why do we even allow these fantasy-markets, where the paper traded by the banker-gamblers of the 21st century exceeds the actual commodities they are trading by fantastic ratios, in the case of bullion, ratios of greater than 100-to-1? Because these very same banker-gamblers assured our governments and (supposed) regulators that these futures markets would bring much greater “liquidity”, and thus near-perfect “price discovery”.
Translation? Futures markets should never gap higher or lower, with the rare exceptions of truly momentous events which can/could cause legitimate surges or plunges in price. The daily trading of the bankers themselves is empirical proof that these markets are being constantly manipulated. The outrageous/indefensible Pied Piper trading algorithms which these banksters use is the “smoking gun” which provides the unequivocal means to perpetrate such market crime.
Thus do we have my broader answer (and rebuttal) to the original questions. Wholesale prices (and the commodities prices which underpin them) do not reveal the enormous hyperinflationary pressures created by the money-printing of our central banks because of the constant price-suppression of the One Bank – across virtually all commodity markets – which depresses the prices which should be indicating those pressures.
Fortunately, there is equally compelling evidence to support my allegation that the same price-manipulation we see on a daily basis in precious metals markets extends across the entire spectrum of commodities. Once again; it is the daily trading of the banksters themselves which provides us with absolutely conclusive evidence.
While one could splash chart after chart of prices in various markets in front of readers’ eyes, this isn’t necessary. We are now all conditioned to watching our markets move in lock-step, every day. Every morning the daily batch of “news” and “data” (i.e. propaganda and lies) is released, and then we watch as all of our markets move up, or all of our markets move down.
These lock-step moves in price are also nearly identical in terms of proportionality, subject to the different degrees of price-volatility in different markets. For example; the silver market is much, much smaller than the gold market (by dollar value), so as a simple fact of arithmetic the same amount of “push” will produce a larger, proportional move in the silver market than the gold market.
Such near-perfect price correlation could never occur in “free” (i.e. legitimate) markets. It has never happened at any time in the entire history of human markets, prior to the One Bank introducing its Pied Piper algorithms. To borrow some of our courtroom jargon; this alone is “proof beyond a reasonable doubt” of the constant manipulation of all markets.
We no longer have markets, only crime scenes; or, in my own vernacular: Hostage Markets. Zero connection between prices and actual market/economic fundamentals. Zero legitimacy. Zero “freedom”. In the One Bank’s 21st century paradigm of saturation manipulation; 2013 was a very, very good year.
Indeed, because we are not capable of perceiving “change” except when it occurs very rapidly and/or dramatically; it may appear to readers that this paradigm of manipulation could go on indefinitely, and that (in the world of markets) the One Bank itself is nearly omnipotent. Such is the illusion of change.
In fact; while the One Bank may have unlimited power to commit crimes because our Puppet Governments have ceased to maintain the Rule of Law, it is powerless to prevent the consequences of those crimes. Just as in the (mathematical) realm of physics; in the (mathematical) realm of economics actions always produce reactions.
Here regular readers already possess knowledge of the principal “action/reaction loop” to which I’m alluding when it comes to precious metals markets specifically, and commodity markets in general. As the One Bank suppresses prices; this over-stimulates demand, depresses supply, and (inevitably) leads to the destruction of inventories as supply and demand are thus perverted out of balance.
Readers have previously seen charts showing the destruction of gold inventories, and the destruction of silver inventories. They may have also seen a chart (used once before) showing that this inventory-destruction extends across the most important of our commodity markets: global grain/cereal stockpiles.
[chart and data via the UN Food and Agriculture Organization]
Here we see that the pattern of inventory destruction is different than with the precious metals sector. Specifically; we see inventories stable (in size), but with supply and demand spiraling above those inventory levels – for the first time in history.
What has caused this dramatic shift in proportions between inventories and supply/demand? What is the mathematical significance of this chart? Why do the parameters behind these numbers guarantee some future food-inventory cataclysm (i.e. starvation catastrophe), just like we expect some kind of bullion-default event in precious metals markets?
These questions will be answered in the second part of this piece. Along with that; it will become apparent why this current paradigm of commodities-manipulation is entirely unsustainable, as is the case with virtually every other facet of our Ponzi-scheme economies – another byproduct of the endless financial crimes of the One Bank.
Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers/investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.