It has now been 42 years since The Global
Bankers successfully alchemized gold through the advent of futures
trading so we begin the new year by looking back at how we got into this
position in the first place.
To that end, let's start 2017 by going back to 1974.
Over the past few years, you've often heard me
reference the HISTORY and FACT of gold price suppression and
manipulation. Whenever it comes up in an interview or presentation, it
often goes like this:
- After Bretton Woods, the US tried to go it alone in managing the
price of gold to $35/ounce. By the late 1950s, this caused a
mini-crisis when US gold reserves fell by a third as countries around
the world exchanged their dollars for gold. There were hearings on
Capitol Hill and decisions were made to change the way that $35 gold
would be managed.
- This led to the formation of The London Gold Pool in 1961. No longer
would the US go it alone in providing physical metal at the $35/ounce
price. Seven other countries were recruited to the effort in order to
lessen the burden and drawdown of US reserves. This effort to manage the
$35 price worked for nearly seven years until global gold demand
finally overwhelmed the Gold Pool and the effort collapsed in 1968.
- The US was suddenly on its own again and demand for gold in exchange
for dollars soon grew to such an extreme that President Nixon was
forced to cancel the dollar's convertibility into gold on August 15,
1971. This is the "closing of the gold window" that you've heard so much
about.
A new movement to allow private gold ownership
in the US soon began...recall that FDR had outlawed private gold
ownership in 1933...and on January 1, 1975, US citizens were finally
allowed to once again own and hold physical gold.
But something very important happened the day
before, on December 31, 1974. On that date, the Commodity Exchange Inc.,
also known as The Comex, began trading gold futures contracts and, as
you'll see below, it was through these gold derivative contracts that
the global bankers and governments finally perfected alchemy...a pursuit
which had foiled and baffled scientists for centuries.
You may recall that a few years back, Wikileaks
unveiled a whole assortment of previously-classified US government
cables and transmissions. Wikileaks documented them all together and
posted them to their website under the category of "Public Library of US
Diplomacy". From the site, please read through this cable from December
10, 1974:
The entire document lays bare the intention
behind the manufacture of gold derivatives to replace physical metal.
However, in case you missed it, here's the key paragraph:
And there you have it. Laid bare for all to see. The "Dealers' expectations" of 1974 are manifest in 2017. The futures market is "of significant proportion" and physical trading is "miniscule by comparison". Price suppression, manipulation and volatility has
"negated long-term hoarding" of gold by US citizens and very few even
consider gold as money at all with the vast majority seeing it only as a
commodity or a "hedge".
However, the fraud of the Banker's alchemy will
one day come to an end as confidence in fiat currency collapses and
physical demand for real money overwhelms this fractional reserve
system. Will/can this occur in 2017? It's certainly possible as negative
interest rates and currency devaluations lead to all sorts of
unexpected consequences. But the timing hardly matters when the end
result is a foregone conclusion. No system built upon a foundation of
deceit and fraud can stand the test of time and the Banker's fractional
reserve alchemy is no different. It will one day collapse. Of that you
can be certain.
(A major h/t to James Henry Anderson for reposting the Wikileak page to Twitter on January 1.)
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Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities. Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
