I Smell A Rat!

Cambridge Dictionary explains, “I smell a rat – idiom – to recognize that something is not as it appears to be or that something dishonest is happening.” The idiom dates back to the 1500s.

Lately, I’ve smelled a rat for years about gold prices.

On Inauguration Day, gold closed at $2,709/oz. Nine months later, it peaked at $4,356/oz. Recent price swings have been well over $100/oz.; highly unusual. JM Bullion shows us:

During the 2008 bank bailout, we intuitively understood inflation would follow; time to buy gold. The Fed/government kept reporting inflation artificially low far longer than most thought possible.

“I’ve smelled a rat” with the Bureau of Labor Statistics (BLS) jobs data for years; their nutty adjustments led to phony jobs numbers. President Trump fired the head of the BLS; the revised numbers dropped by 911,000. For decades, politicos manipulated the jobs numbers, deceiving the public.

The BLS also publishes inflation data. John Williams at Shadowstats.com calculates inflation using the same method from the Carter years. It clearly shows the BLS is massaging data to hide the true inflation numbers from the public.

John cites a conversation when House Speaker Newt Gingrich encouraged the BLS to find alternative ways to calculate inflation to make the government “look better.” The split from reality began in the early 1980s. In 2024, using the old method, reported inflation would have been around 11%.

Consumers “smell a rat” regularly at the grocery store; yet the government reassures us everything is under control.

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Gold Price Manipulation

For decades, the Gold Anti-Trust Action Committee has alerted the public that the gold price was being manipulated, quoting Peter Warburton:

“What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value.

Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies.

…. Central banks, and particularly the US Federal Reserve, are deploying their heavy artillery in the battle against a systemic collapse. …. Keeping the equity index on an even keel is essential. …. For as long as these objectives can be achieved, the value of the US dollar can also be stabilized in relation to other currencies, despite the extraordinary imbalances in external trade.”

The government and Fed (owned by the banks) suppress gold prices, removing a major benchmark, protecting their own interests. High inflation gets politicos fired!

I’m a long-term subscriber of Ed Steer’s Gold and Silver Digest, and I highly recommend it. Ed is a true expert on gold and the precious metals market.

When I began to smell a rat, I interviewed Ed about price manipulation. Here are some excerpts:

DENNIS: For years you’ve presented compelling evidence of gold price manipulation. You show that “8 or less” large banks control the market.

How do they pull this off? Who are the culprits? What are they trying to accomplish?

ED: Let’s take one question at a time.

First, the price of gold is set in the COMEX futures market, nowhere else. The large U.S bullion banks, (JPMorgan is the ringleader) uses a combination of illegal bid-pulling, spoofing and high-frequency trading to manipulate technical fund traders into selling out their futures contracts, even if they don’t want to.

This causes prices to decline. Most technical fund traders follow their black boxes. The bullion banks use techniques that automatically trigger their black boxes, effectively manipulating market prices.

As to the second question; along with JPMorgan, there’s HSBC USA, Citigroup – and probably Morgan Stanley and Goldman Sachs. I suspect that Canada’s Scotiabank is heavily involved, plus a few others.

The Peter Warburton quote answers the third part of your question thoroughly.

Price manipulation pays very well. About 40 banks and investment houses in total have figured out how to scam the brain-dead/black-box traders, while managing the price in the process. Silver analyst Ted Butler figures that the bullion banks and other commercial traders have made many billions from this scam over the years.

Let’s face it. If they got investigated and fined, the fines would be a pittance in comparison to the billions they have scammed.

DENNIS: This is illegal, right? We have seen manipulation in the currency markets and the government has cracked down. Why not gold and silver?

ED: Absolutely, it’s illegal! Both the CME Group, (which owns and ‘regulates’ the COMEX) and the CFTC (Commodity Futures Trading Commission) ignore it even though they are both fully aware of what’s going on.

J.P. Morgan said back in 1912 – “Gold is money, everything else is credit.” That applies to silver as well.

…. As Peter Warburton said, as long as you control the price of precious metals, you keep the price of all other commodities in check; you are making it easier to hide inflation and currency debasement.

They want to hide that fact from the general population so they can continue with their fiat money, created from nothing. If fiat money fails, they lose their power. It’s a battle between the banks that produce money from nothing, pitted against those who produce the real wealth in the world.

…. It’s become another form of imperialism that the United States and her close allies have used to suppress all commodity prices – and the aspirations of the countries that produce them.

At the moment, the banks and governments are running the show.

Note: At the time of the interview, inflation was below the Fed’s 2% target.

DENNIS: The Fed is trying to create inflation, targeting 2%. Why not let the free market take over? Wouldn’t it help them reach their inflation target?

ED: Higher precious metal prices would do the trick nicely – and then some. If the powers-that-be wants higher inflation, then let commodity prices run; they’ll have all the inflation they could ever want.

But playing the “Gold Card,” as I call it, is also fraught with danger. Along with the guaranteed higher inflation comes the strong possibility that the entire world’s economic, financial and monetary system will go down the drain.

Jim Rickards has said on many occasions: this event is coming soon – be prepared.

Playing the ‘gold card’ could do it.

Waving The Red Flag

I was surprised when Mike Maharrey wrote:

“A 20% Portfolio Allocation to Gold and Silver Is Going Mainstream

In a seismic shift, Morgan Stanley CIO Michael Wilson recently came out with an investment strategy that includes a 20% allocation to gold.

…. Wilson said investors should consider a 60/20/20 strategy, swapping half of the bond portfolio for gold to serve as a “more resilient” inflation hedge.”

The Chief Investment Officer of Morgan Stanley, one of the leading gold price manipulators, is now touting gold? Why?

Ed highlights behind-the-scenes shenanigans. Here are some of his recent headlines:

• Oct 23 New Engineered Intraday Lows in Silver & Gold
• Oct 22 A Monster Bear Raid on Steroids
• Oct 21 Huge Deposits Into Both SLV and GLD
• Oct 18 ‘Da Boyz’ Carpet Bomb the Precious Metals
• Oct 17 Gold & Silver Close At New Nominal Highs
• Oct 25 SLV Short Position: 10% of World Silver Production

Ed calls the price manipulators, “Da Boyz.” While “Da Boyz” are touting gold as a good investment to clients, they appear to be using the sharp price increases to short the market, drive the prices down, grabbing a quick profit.

Ed now feels the scam is worldwide:

“Other banks outside the U.S. are involved as well: British banks Barclays, HSBC, Standard Chartered, Germany’s Deutsche Bank, Canada’s Bank of Montreal and Australia’s Macquarie Futures. While it’s the western banking system running show, but run by the U.S. But they’ve now run into the BRICS+ nations who are wise to their scam.”

My suspicion…

In 2016, I asked, Why would anyone want to run for president?

“Election cycles do not coincide with economic cycles. In good and bad economic times, the incumbent party is considered responsible. When the public is angry, they fire the people in charge.

…. While the president and Congress are deemed responsible for the economic health of the nation, in my opinion, the Federal Reserve pulls the strings.”

The negative consequences of ridiculous government spending and economic policy will come home to roost. The Fed knows how to kick the can down the road, or pull the trigger to ignite the downturn.

President Trump picked his poison, bullying the fed into cutting rates, likely causing inflation. If the Fed held rates steady, the economy would have struggled for a bit, but we would have got through it.

I smell a rat! Why are Morgan Stanley and others now warning about inflation? Inflation doesn’t have to rise to turn Trump into another Jimmy Carter. The BLS, banks and media can coordinate their narrative, report what we’ve known for years and it will get the job done. When it finally happens, no matter who is president, much like FDR, expect one party rule for as far as the eye can see…

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On The Lighter Side…

I had a little break in the schedule. The good news is the medical issues are going well.

Halloween should be interesting if all goes as planned. We will have a furniture delivery, moving van and pest control technicians all arriving at the new house at the same time. I suspect things will get pretty hectic.

Once they all leave, Jo and I will start putting the new place together, have over 200 boxes to unpack. This is a major downsize, adding to the challenge.

No matter how well you think you labeled boxes when you packed them, after they are delivered it takes forever to try to find something.

We want to get things in order before we fly back to IN for the holidays. I suspect we will take a few weeks off. Not to worry, once things are set up I will return sharing my thoughts on the world.

Quote Of The Week…

“The Fed operates in the real world. The world of mega politics. Its real mission is to make sure its brethren in the banking business do not have many bad hair days.”

— Bill Bonner

And Finally…

This week’s humor is shared by friend Phil C.

• There’s a fine line between a numerator and a denominator. Only a fraction of people will find this funny.
• Reading gives us someplace to go when we have to stay where we are.
• I have many hidden talents. I just wish I could remember where I hid them.
• My idea of a Super Bowl is a toilet that cleans itself.
• Exercise helps you with decision-making. It’s true. I went for a run this morning and decided I’m never going again.
• Last night the internet stopped working so I spent a few hours with my family. They seem like good people.
• If Adam and Eve had been Cajuns, they would have eaten the snake instead of the apple and saved us all a lot of trouble.
• We celebrated last night with a couple of adult beverages… Metamucil and Ensure.
• Some of my friends exercise every day. Meanwhile, I am watching a show I don’t like because the remote fell on the floor.
• I woke up this morning determined to drink less, eat right, and exercise. But that was four hours ago when I was younger and full of hope.
• Anyone who says their wedding was the best day of their life has clearly never had two candy bars fall down at once from a vending machine.
• For those of you that don’t want Alexa or Siri listening in on your conversation, they are making a male version; it doesn’t listen to anything.
• I just got a present labeled, ‘From Mom and Dad,’ and I know darn well that Dad has no idea what’s inside.

And my favorite:

• Weight loss goal: To be able to clip my toenails and breathe at the same time.

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

 

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