by Stewart Dougherty, Gold Seek: In 1980, the Financial Deep State realized that there existed an extraordinary opportunity for serial plunder and profiteering: the manipulation of the gold and silver markets. They immediately mobilized to exploit it.
During the subsequent 37+ years (we are now well into the 38th), the Deep State manipulators have criminally looted the gold and silver markets, pocketing astronomical profits for themselves in the process, all of which have come from real victims on the other sides of their fraudulent trades. While literally billions of people worldwide have been financially damaged by this crime, many of them severely, not one of the perpetrators has spent so much as ten seconds in jail for the global looting spree they have conducted. This is because precious metals price fraud is a state-sponsored crime.
While in this article we will concentrate on gold from here on, the exact dynamics we describe also apply to silver. The only difference between the two is that the price carnage in silver has been far worse than it has been in gold, on a percentage basis.
As a consequence of the unrelenting gold price manipulation, gold has been thrust into two severe bear markets that have lasted for more than 27 of the past 37 years, or more than 72% of the time.
The first bear market ran from 1980 until 2001, during which the gold price was savaged from $850 to $250 in nominal dollars, a plunge of 71%. Inflation-adjusted to today’s dollars, the carnage was even worse: it collapsed from $2,674 to $344, an 87% implosion.
In 2001, in the midst of unprecedented (at the time, but far worse now) economic, financial and monetary pressures, gold embarked on a ten year rise to a nominal (although not inflation-adjusted), all-time high of $1,925. The Financial Deep State had its hands full then with other, more pressing matters (such as keeping its global financial and monetary Ponzi schemes from disintegrating), and was forced to take its eyes off of the gold ball. It is impressive what gold can do when it is freed from the chains of greed, looting, and official corruption.
By 2011, after employing its signature techniques, including rampant counterfeiting and reporting fraud, the Deep State had returned the errant financial genies to their poison bottles, and was able once again to focus its attention on its favorite, most profitable crime: precious metals price rigging.
For the 6+ years since, gold has been slammed into a second major bear market, during which its price has been crushed from $1925 to $1050, a collapse of 45%. It has recovered somewhat to $1210 at the time of this writing.
During the entire 37+ year period, and particularly during the 27+ years of outright price annihilation, the major gold miners have done precisely nothing to expand the market for physical gold via advertising, direct marketing or any of the other proven demand-creation techniques. They have also done nothing to support gold’s price in any way, or to take action against the criminal price manipulators.
The industry’s sole innovative effort during this period was to have its association, the World Gold Council, get behind a gold ETF, GLD. The management of this ETF was placed in the hands of the Financial Deep State, the exact people who have manipulated the gold price for 37+ years. Worse, the ETF was set up so that its physical reserves are immune to audit. Very few people, all of them members of the Financial Deep State, know what actually goes on behind the closed doors of the gold ETF.
GLD was supposed to open the floodgates of demand for physical gold, and resuscitate its price so that it would at least keep up with inflation, which, at the very least, is what gold is supposed to do. But this did not happen.
Inflation adjusted to today’s dollars, gold hit its all-time high of $2,674 in January, 1980. (We are using U.S. government inflation statistics, which are deliberately understated.) As of July 7, 2017, it was $1210, down 55%.
From its inflation adjusted high of $2095 in 2011, it is now down 42%. (The reason we use the 1980 and 2011 gold price highs for these comparisons is that the market was relatively free from interference at those times, and the price was heading toward its natural level in both cases. According to more than a dozen objective metrics we could cite, the current gold price is a fraction of what it should be, which means that the referenced “high” prices are actually conservative.)
As we can see, GLD has failed to deliver on its promise, most likely because any gold that might be in its inventory is used by the Financial Deep State for multiple, conflicting purposes, such as leasing and hypothecation. Such machinations would further pressure the gold price. There are numerous additional problems with the ETF from a market development standpoint, but they are beyond the scope and purpose of this article. The simple fact is that the gold industry’s singular market development innovation in nearly 40 years has been a total flop, which is proven by the ceaseless and ongoing price decimation of gold. A flop is exactly what the Financial Deep State intended and designed the ETF to be.
As we pointed out in detail in a previous article (“The Traitors Aiding and Abetting the Deep State’s Dirty, Dying War on Gold”), gold is the world’s pre-eminent and most historic consumer product.
At the same time, gold is unique in the history of global consumer commerce in that its price is set neither by its producers nor its marketplace.