If you’ve followed our writings here, you know that we believe gold and silver prices are going much, much higher as priced in US Dollars over the coming years. In putting together this series of medium term predictions, I tried to think a little outside the box and take some reaches. This is one of those reaches. I wouldn’t bet anything at all on this prediction happening and fact, I think it’s very wise to own the appropriate amount of gold and silver in multiple appropriate (for you) ways.
That said, I could easily see western governments and bankers mounting an all out attack on the price of gold and silver in order to try to get their currencies to maintain some value. As a matter of fact, something similar happened just over a decade ago. We’ve told this story before, so I’ll just hit the highlights…
Gordon Brown sold all of the UK’s gold at the very bottom of the historical gold market price chart. People mocked him & this move for years. It seemed to just be another typical governmental bad decision. In the last couple years, the facts have revealed a more sinister truth.
Turns out that he wasn’t just making a bad decision on behalf of UK taxpayers, but instead was consciously forcing the price of gold down to bail out the big bankers who were short on the London Bullion Market (LBMA).
So, he gave away the assets of the people so the bankers would not go under. He would tell you (if he ever had to admit this) that he was doing it to “save” the people’s economy. Of course, in the real world, all he did was train bankers further that if they take big risks they will either make a fortune, or be bailed out by taxpayers. Which keeps happening again and again.
What he won’t tell you is that he might have had to bail out the bankers because the bankers (not all bankers, just those in really high places) are working together with governments to suppress the price of gold and silver and every now and again they get overrun trying to fight the markets. Thus, how could the government not bail out the bankers when they are doing the banker’s bidding?
Ok, so the long story short is, that Gordon Brown sold all of the UK’s gold in order to push the gold price to historic lows. So, this has been done.
Could it happen again?
Perhaps. The gold and silver price suppression has been going full speed over the last year. This has been doing on for decades, but has been rather breathtaking in recent years. When someone shows up at the worst possible time to try and get a good price for their gold and dumps an entire year’s worth of the entire world’s production in a matter of minutes…that’s fishy. No sane person would do it. The only person who would do such a thing is someone who didn’t want to profit, but instead wanted to push the market a certain way for their own motive. These things continue to happen in plain sight and the government does nothing about it.
But that’s not what I’m talking about here. What if the value of the Dollar, or Pound, or Euro, etc, started to really suffer and it started to panic people. What if the masses started to sell their colored paper and buy real money (gold and silver) with it?
What if governments and central banks panicked?
Could they…Would they…mount an all out assault on the prices of gold and silver? It seems possible that they might want to crush those who were moving away from their currencies into real money to teach them a lesson and try to preserve the value of the currency they stand for.
So this is why I threw this prediction in here. I could see it happening.
Here are the biggest problems with this theory (and the reasons why I don’t really believe it will happen). After this, I’ll give you the big non-financial reason I could definitely see this happening.
Why Governments won’t destroy the value of gold and silver…
Western governments don’t have the power they once had! A decade ago, most of the world was still asleep to the problems in the Western currencies and the price suppression techniques in metals. Asian governments didn’t own any gold or silver and didn’t mind holding their wealth in US Dollar paper.
Times have changed. Particularly since the CME (who runs the COMEX metals exchange in the US) admitted that there only exists one ounce of metal for every 100 ounces of metal traded on a day to day basis. Thus, the price of gold and silver is not determined by the supply and demand of gold and silver, but by the amount of people that are willing to trade pieces of paper that claim to be associated with this price.
Every since then, China and others have been buying every ounce they can get their hands on. The supply of real metal is quietly disappearing. But the paper game at the COMEX and LBMA goes on unfettered!
But that can only last so long because a day will certainly come when people will demand that their contracts be filled in real metal. And then the jig will be up!
Even now, as the price continues to be attacked, more and more buyers step up to buy the dips at higher and higher prices. So, it might be impossible to push the price as low as some might like to. But you never know what could happen in a good old fashioned panic…
How could the price of gold and silver drop severely even though fundamentals are so against it?
It occurred to me that in a time of great turmoil, people might find considerable safety in the value stored in their gold and silver.
But what if the Lord is bringing these times about to make people realize that their safety is not to be found in things or governments of this world. Certainly not in money.
If people are finding their peace in gold and silver, the Lord just might allow a great attack on this too to further shake people who thought that their own wisdom had allowed them to escape the damage that affected most others! It certainly seems possible.
All this said, I believe it’s important to own gold and silver. Just don’t put your faith in rocks! If you’re not sure how this should be placed together with other assets to form a good overall strategy or what is the best way to own these metals, give us a call/email. The Contact Us button is at the top right of the page.
This is the 34th post in a series. You should read the initial thoughts on these forecasts here. and the Overall Prediction Page here. Here are the rest of the posts: 3) Ben Bernanke’s Dollar Devaluation Plan, 4) The Coming US Dollar Devaluation, 5) Stock Market Volatility, & 6) Stocks to Fall in 2012, 7) The European Crises, European Options, 9) European Prediction, 10) Recession in Japan, 11) Japanese Yen Crash, 12) War with Iran, 13) Jewish Perspective on Iran, 14) Commodities to End 2012 Lower, 15) Where Will Gold Go Next?, 16) Gold, Should you Wait?, 17) Will Silver Move Higher?, 18) Why Buy Silver Now?, 19) Oil Prices to Explode Higher, 20) Bonds Will Fall, 21) US Dollar, 22) European Recession, 23) Sovereign Default in Europe, 24) China’s Slowing, 25) US Recession., 26) Currency War, 27) Deflationary Crash, 28) Hyperinflation, 29) Increasing Natural Disasters, 30) Fed Announces New Form QE, 31) Derivatives Pt 1, 32) Derivatives Pt 2, & 33) Coming Stock Market Crash.