12 April 2013

Today's Gold Smackdown Portrayed on a June Futures Chart, 5 Minute Intervals

Why would the government turn a blind eye to this?

Well, in addition to allowing your cronies to make boatloads of money by gaming the markets, there is a not so subtle message wrapped within this chart from the financial engineers of the current banking system.  This is all a part of the currency wars.
"One of the central facts about modern America is that everything is political; on the right, in particular, people choose their views about everything, from environmental science to gun safety, to suit their political prejudices. And the remarkable recent rise of “goldbuggism,” in the teeth of all the evidence, shows that this politicization can influence investments as well as voting.

What do I mean by goldbuggism? Not the notion that buying gold sometimes makes sense. Gold has been a very good investment since the early 2000s, and it’s probably not all bubble. One way to think about this is that gold is like a very long-term bond that’s protected from inflation; and actual long-term inflation-protected bonds have also seen big price increases, reflecting a general perception that there aren’t enough alternative good investments.

No, being a goldbug means asserting that gold offers unique security in troubled times; it also means asserting that all would be well if we abolished the Federal Reserve and returned to the good old gold standard, in which the value of the dollar was fixed in terms of gold and that was that. And both forms of goldbuggism soared after 2008."

Paul Krugman, Lust for Gold

You see, gold is not an investment decision, it is a 'lust.'  And since it does what Mr. Krugman does not wish it to do, it is irrational, and something from his evil adversaries on the right. 

There is nothing quite so cheaply formed as this type of toss off piece from an establishment economist in defense of the status quo. 

This is the common thread I see amongst financial engineers and theoreticians.  The weakness in their theories and models always seems to turn to the brute force of financial market repression when their schemes get into trouble, based on some inherent weakness or false assumption that makes them unstable.  That certainly is the picture in Europe. 

Here is a piece I wrote some time ago about the 38 Year Cycle in Monetary History

Here is a detailed picture of the gold trading on the Comex today. You can look at it and judge for yourself.

There was no news to provoke this kind of a massive sell off in a quiet market and on heavy volume. 

This is just shock and awe in the currency wars.  And everyday people are collateral damage.  And there are always those who will beat the drums, on cue.