In my last column, I attempted to defend my “assumption” that “manipulation is here to stay.”
Today, my charge is to present several scenarios that would/could end the manipulation of precious metals.
Needless to say, for purposes of this article, I am assuming that manipulation is - and has been - a reality.
So what event(s) might end the manipulation activities that have effectively made the “free market” a non-factor in establishing prices (or at least made such forces largely insignificant)?
These scenarios come to mind as possibilities:
1. The physical demand for precious metals becomes so great that the COMEX-set prices become irrelevant.
This is THE scenario that will, without a doubt, end the manipulation or price suppression and containment activities. It also seems to be the consensus opinion of precious metal analysts far more experienced and knowledgeable than myself.
When (many) more investors demand physical gold and silver and there is no physical metal to deliver, the COMEX will be “over-run” and the whole world will finally realize that a price-scheme organized around “paper” contracts is - and has been - a farce.
Demand and supply of the real thing will then set the world price.
Like many others, I believe it’s inevitable that this will happen at some point. The trillion-dollar question remains: When?
Alas, this is impossible to know. I continue to think it might be longer than many of us would prefer for the simple reason that manipulation has been so effective in creating negative sentiment about precious metals.
Among those who would lead the charge to buy even more gold and silver are people like myself (and probably yourself). At some point, the masses who have never considered investing in gold and silver (or who have ridiculed it in the past) will follow. But the core first-wave buyers will probably be the long-term true believers like us.
Even this group, however, has been jaded by past manipulation successes. Why buy today, we think to ourselves, when it’s almost a given in our minds that the manipulators will do their thing and the prices will be even lower tomorrow ... or next week or next month?
As I write this on the morning of September 20, 2013, I notice that there has been no “follow through” on the dramatic price surge of September 18th. In fact, silver prices have dropped by 4.9 percent!.
I for one am not surprised by this. It doesn’t take Sherlock Holmes to put one’s self into the mind-frame of those who control precious metal prices.
Wednesday’s surprising announcement of “no taper” has to make “the powers that be” realize that the coming days or weeks could be critical to their efforts of controlling precious metal prices (and sentiment).
We are actually at one of those pivotal points in time when precious metals could, in fact, take off and break through the orbit of control of the manipulators. Given this possibility, now is the time to nip any possible momentum and enthusiasm in the bud.
The decision to not taper was interpreted by many as an acknowledgement on the part of the Fed that the economy is not as healthy as propaganda has tried to make us believe.
Given this telling message of Wednesday’s announcement, the last thing the Fed (and their manipulation agents) want to see happen is a dramatic surge in precious metals prices.
If the goal remains to “kick the can” down the road as long as possible, a hyperbolic rise in precious metals prices would put this goal in serious jeopardy. Thus, the answer is to resume aggressive price suppression efforts forthwith.
In their mind, such an effort might prevent new investors from diving into the market, while also making those who were eager to “back up the truck” to pause and re-consider.
Remember, last week, “conventional wisdom” (in some circles) was that gold may drop back to $1,000 an ounce. Such expectations and predictions HAVE negatively influenced sentiment in the past.
Speaking for myself, I know I’ve held off buying more in recent weeks. I couldn’t help but notice that premiums for silver have come down in recent months and sales figures for gold and silver, at least in America, seem to be decreasing.
This, I”m guessing, is the bearish sentiment the manipulators want to project/reinforce. Why buy silver today at $22.50 when in a month from now you might be able to get the same ounce for $18.50?
Regardless of what transpired Wednesday, it’s highly unlikely that the manipulators are suddenly going to stop or raise the white flag now. In fact, after Wednesday’s announcement, their resolve is probably even greater (because the risks to the status quo being exploded now seems greater).
Manipulating is what they know and what they, almost by default, do. They might not be able to control A, B or C, but they know they can sell off paper contracts and drive the price lower (or, at worst, stop prices from going higher).
In my view, TPTB are gambling that they can once again prevent the “run” on physical that would implode the COMEX once and for all.
The probability that Scenario 1 outlined above will happen at some point is almost certainly near 100 percent. I’d also put the odds at darn near 100 percent that TPTB are going to do everything they can to prevent this from happening (by continuing to pour cold water on would-be gold and silver investors).
Taper or no taper, they will manipulate as long as they can. Really, manipulation efforts have probably never been as crucial as they are at this moment.
While Scenario 1 - physical demand will over-run efforts of suppressors - is the most likely “cure” to manipulation, other scenarios also exist that could achieve the same result.
In the interest of keeping this column a readable length, I’ll go into more depth on these scenarios in my next column.
But for those interested in a “sneak peak,” here are the possibilities I have identified so far. (Of course several of these events could happen in tandem). How plausible is it that these possible outcomes actually occur will also be addressed in my upcoming treatment of this topic.
Other scenarios where manipulation could be exposed, defeated, overcome or halted:
2. Regulators and/or prosecutors could file charges to stop the manipulation.
3. A mainstream media outlet or credible investigative journalist(s) could expose the manipulation.
4. A credible whistle blower(s) could come forward (with this account and documentation presumably covered by prominent press organizations).
5. Congress could hold high-profile hearings on the topic.
6. The mining sector and/or those in the precious metals industry could organize a sizeable, high-profile public relations campaign to draw attention to manipulation ... and this effort is successful (perhaps by leading to No. 5 or No. 3 above).
7. The “repatriation” movement of gold back to the nations who own it could gain much greater momentum (and press attention).
8. The bullion bank(s) that have been playing a key role in suppressing prices could cease and desist on their own volition in an effort to profit from surging precious metal prices.
9. A maverick investor(s) with extremely deep pockets could start buying in huge sums (and demand possession of physical bars).
10. War could break out.
11. A “grass roots” effort of smaller investors buying coins and bars in ever greater numbers could materialize.
12. Supply provided by the mining sector could decrease dramatically.
13. QE - instead of being tapered - could be increased dramatically.
14. Hyper inflation - with precipitous decline in purchasing power of U.S. dollar - could emerge to such an extent that the “man on the street” and the mainstream media could not dismiss or ignore this development.
Of course, any of these possible developments would simply cause “event” No. 1 to happen. So No. 1 is number one for a reason.
As mentioned, this will happen. I’m not so sure about some of the other scenarios (although rampant inflation seems like a safe bet).
I do know a lot of committed and smart people are trying to make some of these possibilities a reality. These individuals and organizations are, if nothing else, moving the needle and increasing the likelihood that manipulation will be acknowledged, exposed and stopped in the future.
So there is hope, which is certainly a good thing.
Bill Rice, Jr. is managing editor of The Montgomery (AL) Independent. He can be reached by email at:
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