Center for Strategic Assessment and forecasts

Autonomous non-profit organization

Home / Economy and Finance / Markets: estimates and projections / Articles
Fraud on the market of precious metals
Material posted: Publication date: 10-12-2014

The investment Advisor and founder of the consulting firm SmartKnowledgeU J. Kim es (Kim JS) talks in his article about the machinations of the market of precious metals to keep prices down. He also believes that the price of gold could still easily double.

Those who are familiar with my articles on gold and silver over the past six years, knows how I said that gold was cheap at the price 500$, 600$, 700$, 1000$ and 1200$ per ounce. Same thing I said about the silver. Today I repeat my words again and say that gold is still cheap even at the price of 1500$, and$ 1600, and silver remains cheap in the range of$ 40, as the largest increase in the prices of gold and silver, and the gold stocks has not yet occurred. This can be expected in the next 4-5 years. This does not mean that gold and silver will not be in the future to have corrections. Of course they will have a price correction, it is typical for precious metals. In recent years I have written a lot on this topic, because I think that anyone who owns or plans to own physical gold and silver, that is just crazy.

Hundreds of millions of investors around the world succumbed to the propaganda of Western bankers and consciously decided not to invest in physical gold and silver. Any investor should understand that one of the first realities in the market of gold and silver — does not apply here the principle of "supply and demand". In today's financial and banking world of deception the price of gold and silver is not determined by the physical demand and physical supply of these metals. The price of these precious metals is established by using artificial paper contracts for the supply and demand, which is generally not backed by any physical metal.

These facts known to the regular buyers of physical gold and silver, but completely unknown simple layman and beginner investor. Consulting and research firm in the commodity market CPM Group has published in 2000 the following document: "Since the publication of the London Association of participants of precious metals market (LMBA) monthly data on trade in precious metals market participants became aware that each year is traded 100 times more gold and silver than it produced or used. Some participants of the market of precious metals was very much surprised, as was the possible trade of 10 billion ounces of gold in the major markets annually compared to 120 million ounces of total demand and supply, and the silver was sold during the year 100 billion ounces, while new supplies of physical silver amounted to 628 million ounces". Now it becomes clear what scams do banks focusing on deals with precious metals on the futures market for silver. These frauds exceed even fraud on the futures markets of gold. With a simple calculation of these figures it is evident that the bankers were selling in 160 times more "paper ounces" of silver annually, silver than is mined each year in the mines.

If closer study of these numbers, manipulation in the precious metal market become even more striking. In 2000, the market was available 628 million ounces of physical silver. In 2010 silver production at mines rose slightly to 735,9 million ounces. The government "threw" the market is still 44.8 million ounces of silver, recycled silver give an additional 215 million ounces of silver hedging by producers amounted to 61,1 million ounces. Thus, in 2010 the silver market was available for about $ 1 billion of physical silver. However, industrial production, production photos, and jewelry production absorbed about 78% of this 1 billion is available in the market of physical silver. For investment demand, for example, the minting of coins, were available for only 100 million ounces. (Source: Silver Institute).

Despite the presence of a small amount of physical silver investment market, there were days when on the COMEX in 1 minute has sold more than 250 million ounces of "paper silver", which led to a sharp drop in silver prices. Thus, it becomes clear that the bankers used artificial delivery of contracts of paper silver to knock the price. Moreover, bankers have devised other tools illusory supply of gold and silver such as ETF (exchange traded funds) for gold, GLD, ETF for silver, SLV. Both GLD and SLV have been used in the trade of precious metals in 2006, Is a very suspicious investment instruments that are part of the fraud on the market of precious metals. They are either not insured by any physical precious metals, or precious metals provided neurokirurgi claimed by several people.

Fraudulent paper investment instruments in the gold and silver give the impression of increasing the supply of physical gold, but in reality there is no increasing supply, and sometimes, on the contrary, delivery of the physical metal are reduced.

Bankers have created this mechanism for curbing the growth of prices for gold and silver, the paper money system worked as long as possible — a system that quietly robs every person on this planet.

I've often heard criticism against Eric Sprott and James Turk about their relationship to silver and gold respectively. They are often blamed for the fact that they praise the gold and silver, to make people buy their books. However, I believe that such criticism is unfair. I don't think they are optimistic in relation to gold and silver only to sell their books. On the contrary, I am sure that their optimism about the future returns from investments in gold and silver is associated with a deeper understanding of the market of precious metals than it understands the average retail investor or a large portion of uneducated investment consultants.

Moreover, during the last decades I myself was a passionate advocate investments in gold and silver. I was never a dealer of gold and silver, has never received any commissions from the sale of shares of gold mining companies and was never advertised gold mining companies in their mailings, even though they have requested.

To illustrate the level of misunderstanding that still exists about the price of gold and silver, I will give an excerpt of one of the investment Council, which came to my email address on August 16, 2008: "Gold, the barbarous relic is another good choice for investment. But over the last six years gold rose from 300$ to today's$ 900 per ounce, so to get in the gold too late." The consultant recommended to buy government securities, considering them a good investment over the next few years. From 16 August 2008 until recently the stock index S&P 500 lost 2,92%, while gold was up 111,33% and silver at 284,47%. And where's a good investment? Investment consultants offer their clients to invest in securities because it is their "bread." This is the main reason for their advice. It would be better if they recommended to invest in a real good investment — precious metals.

I remember reading one newspaper article a few years ago, a financial consultant from Florida, who claimed that she was proud that we were able to convince their clients NOT to buy gold at$ 800 an ounce, as the gold price was too expensive, and that its duty was to protect their clients from their own foolish impulses.

On November 8, 2007, subscribers to my free newsletter able to read my following statement: "At a price of$ 800 an ounce of gold is still cheap? Undoubtedly Yes! And here's why. I can't understand where such an absurd headlines like "Gold reached a record 27 years," but if we will soon see a correction in prices, and gold will fall to the level of 720$ before again to go up, then the gold price will be really cheap. Here's why: if someone studied the formula that is used to calculate the Consumer Price Index (CPI) in the U.S., he knows that this formula has been used for many years to create absurdly low inflation numbers that are created artificially, so they can coincide with pre-established government figures, about which they want to inform the public".

So, let's go back to the times when gold was still trading at a price of$ 800 an ounce. Bankers controlled media in the West were constantly told about the inevitable collapse of the "gold bubble", allegedly because gold has reached a "27 year high". Sometimes it is very important from time to time to remember the history to understand how easy it is again to believe in absurd statements about the price of gold and silver, so as not to become a victim of propaganda, spread by the bankers.

The reason that I always was and am today, a passionate advocate of gold and silver, is the ability to overcome common banks ignoring and cheating their clients about gold and silver.

Let's see the developments in the stock markets and with investments in precious metals over the past few years. Since the beginning of my crisis newsletter 15 June 2007 to 25 July 2010, my tips made a profit in 211,49%. During this same period, stock indexes S&P500, FTSE100, ASX200, and top 5 ETF funds iShares Dow Jones EPAC Select Dividend Fund brought profits, respectively, -21.39%, -11.99%, -26.51%, and -2.69%. Furthermore, I am confident that my recommendation tips on investment in the next 4 years, from 2011 to 2015, will double or triple the income on the basis of the following reasons:

1) Western banks increasingly losing control over the schema to contain the prices of gold and silver through the creation of bogus paper derivatives;
2) the Conditions that led the Euro and the US dollar devaluation, is much worse today than 10 years ago. None of the main causes of the financial crisis in 2008 was not adequately addressed;
3) the Number of people who believe that using gold and silver you can get large profit is negligible.

Once the average retail investors finally believe in the facts that surround them about the propaganda of the bankers against gold and silver, then the prices of precious metals will really start to grow exponentially.

Even if a small number of investors in such a populous country as China will realize that bankers have created a huge artificial supply of gold and silver on paper, anything unsecured in addition to the air and will begin to buy their first ounce of precious metals, it will create significant pressure on the prices of gold and silver. And when that happens (I hope you already have the physical gold and silver), then the prices of precious metals will go into space.


RELATED MATERIALS: Economy and Finance