by Jeff Nielson, Sprott Money:
Many previous commentaries have described and discussed the various ways in which the silver market has been manipulated in the past and is being manipulated today. What has been explained in years past, but missing from recent editions, are the reasons for the serial manipulation of the silver market.
Before getting into the basis for this systemic market crime, it is necessary to briefly identify this manipulation for the sake of newer readers. The parameters could not be more obvious.
Silver is money. Legal tender silver coins are still produced in the national mints of numerous nations – and these mints often struggle to keep the market supplied. Silver is jewelry. In many parts of the world silver jewelry continues to be widely fabricated, and even at its reduced/suppressed price, silver jewelry remains present in our societies.
Nothing has changed there. But over the past century, numerous important industrial uses have also emerged for silver. It is even more valuable today. Now look at the silver/gold price ratio . For over 4,000 years; this price ratio has gravitated around 15:1, virtually identical to the supply ratio between the two metals (17:1).
Despite being more valuable than ever, in the 1980’s and 1990’s the price of silver was driven to a 600-year low in real dollars. The silver/gold price ratio was driven to extremes as great as 100:1. Total perversion of market fundamentals.
This bankrupted more than 90% of the world’s silver mines and drove the silver market into a permanent supply deficit . The silver industry has never recovered because it has never been allowed to recover.
Why has the banking crime syndicate (the One Bank) found it necessary to not merely attack the silver sector, but to practically destroy it? Knowledgeable precious metals investors can supply part of the answer here.
Because precious metals are money; silver and gold function as the monetary equivalent of canaries in the coal mine. The supply of gold and silver money is practically flat. Thus when the bankers significantly inflate the supplies of their paper currencies (which they are always doing) the price of gold and silver must rise to reflect this relative change in supply.
A numerical example will illustrate this fundamental monetary principle: the Bernanke Helicopter Drop.
Between 2009 and the end of 2013, B.S. Bernanke ultimately quintupled the supply of U.S. dollars, from a monetary base of $800 billion up to $4 trillion. Thus denominated in U.S. dollars, the price of gold and silver had to also quintuple to reflect this supply increase. That then becomes the new base price for these monetary metals .
The prices of silver and gold were never allowed to quintuple, if you discount the fact that the price of silver was torpedoed by 60% immediately before Bernanke began his money-printing binge. Since that time, the supply of U.S. dollars has never decreased.
Yet despite the fact that silver and gold were never allowed to rise as far as monetary fundamentals dictated, the price of silver has since been driven down 70% from its temporary high and the price of gold has been driven down nearly 40% from its temporary high. More total perversion of market fundamentals.
However, this is only one reason that the silver market is subjected to an even greater degree of permanent price suppression from the Big Bank crime syndicate than the gold market. As an example of this oppressive manipulation, the permanent short position in the silver market (held by just four Big Banks) is roughly 4,000% larger than the short position in the crude oil market, in proportionate terms. Totally illegal.
The reason why the banking crime syndicate has a pathological hatred (fear?) toward silver is because silver is more than money. Silver is the People’s Money .
The banking crime syndicate manipulates precious metals in general terms in order to hide its relentless, reckless inflation (and dilution) of our paper fiat currencies. But why is the One Bank constantly inflating the supply of these paper currencies in the first place?
Bernanke’s predecessor, Alan Greenspan, explained the Big Crime of the Big Banks, in a quote now familiar to regular readers.
In the absence of the gold standard, there is no way to prevent the confiscation of savings through inflation.
- Alan Greenspan , 1966
When Greenspan uses the verb “confiscate”, he means “steal”. And when he uses the noun “savings”, he means our wealth. The banking crime syndicate inflates the supply of our paper currencies in order to steal our wealth.
But Greenspan’s warning is not entirely accurate. There is a way to prevent the bankers from stealing our wealth with their money-printing, even in the absence of the gold standard. Understanding this requires understanding how the theft takes place.
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