A Simple Experiment to Disprove the Alleged Gold/Silver Price Suppression Schemes
As long as man has lived, man has always been keen to commit grand acts of deception on his fellow man. Joseph Goebbels, Hitler’s Propaganda Minister said, “The bigger the lie, the more it will be believed.” The theory of global warming caused by carbon emissions is likely to be another one of these great lies. Over the past several years, as the global monetary crisis has unfolded, men that have repeatedly been caught in a web of their own lies, deceit, and gross misrepresentations include the most prominent of all financial leaders – Alan Greenspan, Tim Geithner, Ben Bernanke, Robert Rubin, Sandy Weill, Lloyd Blankfein, Henry Paulson et al. But the greatest big lie of all, in my opinion, is our global monetary system and the suppression of gold and silver prices to perpetuate this lie.
The beauty of the argument between the believers and non-believers regarding the price suppression of gold and silver is that non-believers can discredit those they view as gold/silver conspiracy buffs and put a rest to this argument with a simple little experiment that will require very little time or effort. But more on that in just a little bit.
Over the years, my interest in this topic has led me to conduct my own research regarding this matter, a very small portion of which has been outlined below.
IMF Gold Sales v. the Alchemy of Gold Futures – What’s the Impact on Gold Prices? Feb 18, 2010
Gold and Economic Freedom, Reinterpreted for the 21st Century, May 8, 2009
Bankers and Economists Say Gold is a Bubble. Here’s Why You Should Ignore Them., Dec 28, 2009
Will CFTC Chairman Gary Gensler Really Curb Manipulation Schemes in the Futures Markets, or is it Another Smoke & Mirrors Game? July 10, 2009
The GLD and SLV: Legitimate Investment Vehicles or Not? July 15, 2009
Is Gold Expensive at $791 an Ounce? Why Gold Will Continue to Soar Much Higher, November 2, 2007
Gold’s Speculative Stigma is Unwarranted, Sept. 11, 2006
The lies about gold and silver bandied about by bankers and gladly disseminated by the mass media have persisted for years. Even when gold was trading at $500, $600, $700 and $800 an ounce over the past several years, at each one of these junctures, the mass media disseminated numerous stories that quoted “metals experts” from various global financial institutions about gold being a bubble just waiting to pop. And of course, the next time gold steeply corrects, and it will, the same “metals experts” will be quoted by the mass media again that proclaim the “end of the gold bull” without a peep of the behind-the-scenes actions taken by the big bullion banks in the gold/silver futures markets in London and New York to manufacture these steep declines.
Of course, this discussion would be incomplete and near irreverent without a mention of the tireless efforts of GATA’s Chris Powell and Adrian Douglas to uncover the most damning available evidence of government-directed bullion bank price suppression schemes. GATA, of course, is the OG of the gold/silver price suppression scheme theories, having sorted through mountains of documents to find evidence of a banking cartel that artificially suppresses gold/silver prices in order to convince the world to continue subjecting itself to a fraudulent fiat currency monetary system that is led by the US dollar:
GATA Chairman Murphy rebuts defense of gold lending, April 7, 2010
If everything’s manipulated, does that make it OK? April 1, 2010
A London trader walks the CFTC through a silver manipulation in advance, March 25, 2010
Can’t manipulate Treasuries market? But that’s the point of rigging gold! March 25, 2010
Adrian Douglas: More Fed minutes document gold market manipulation, March 14, 2010
Gold is decade’s best-performing investment, March 6, 2010
Most recently, Zero Hedge chimed in with a criticism of CPM Group Managing Director Jeffrey Christian’s take of why the gold futures markets exist:
Jeffrey Christian Has A Second Chance To Disprove The Gold Ponzi Scheme, Fails, April 10, 2010
Given that the number of non-believers far outnumber the number of believers regarding gold and silver price suppression schemes despite the growing-by-the-minute mountain of evidence, here is my challenge to the non-believers, many of whom own considerable dollar/euro/yen amounts of unallocated (and allocated, for what that’s worth) paper gold and silver certificates and gold and silver paper ETFs. Over the years, as I educated myself further regarding certain topics, my views regarding some widely-accepted theories have radically changed, including my views regarding the carbon-emission based theory of global warming (I have long stopped believing this particular theory).
So here is a simple experiment that I challenge all non-believers to engage in that will not hurt you in the tiniest of manners yet provide a massive benefit if your current beliefs are proven to be wrong.
If you currently own any of the physical gold or silver paper ETFs, if you are long in gold/silver futures contracts, and if you own paper gold/silver certificates, sell just a small portion of these holdings (10% or so) and replace them with physical delivery of that gold and silver instead. For this experiment to work, you must encourage every single person you know that is in this same situation (holding a derivative gold/silver product or paper certificate as a proxy for physical gold/silver) to also convert a tiny 10% of these holdings into physical gold and silver. If this simple experiment can spread across the globe, we will discover if those of us that endorse a gold/silver price suppression scheme are right or if those of you that endorse holding paper ETFs like the GLD and SLV as a sound financial practice are right.
For example, if the holders of all paper gold and silver followed Greenlight Capital David Einhorn’s lead and converted just 10% of their paper gold and silver into physical gold and silver (actually we’re not asking you to execute the same actions as Einhorn as he converted 100% of his paper GLD holdings into physical gold last year), and this caused the price of gold to increase significantly, then this would prove that the gold futures market contributes absolutely nothing to the free market price of gold in which supply and demand leads to price discovery.
If the banking cartel has not set up a fractional reserve system for gold and silver that they use solely to manipulate prices, and if most paper gold and paper silver is 100% backed by physical gold and silver as they claim (sans the futures markets), then the conversion of 10% of all paper gold and silver into physical gold and silver should not cause any increased demand in the physical supply of gold and silver that would send prices higher. In fact, the conversion of 50% of all paper gold and paper silver into physical gold and physical silver should have a negligible effect as well if indeed bankers have set up an honest system for gold and silver in which supply and demand currently set prices. However, if this act causes an increase in gold and silver prices, then one should question the very purpose of paper gold/silver derivative products. If such a small act can create a huge disturbance in gold/silver prices, and physical supply and demand for gold and silver are not the market forces that set prices in today’s gold and silver markets, then what is the very purpose of the gold/silver futures markets in London and New York? (for even though the futures markets allow producers to hedge against future fluctuations in the prices of the commodities they produce, the hedging action shouldn’t be so skewed in one direction that it massively skews the price from the price a free market would determine for a prolonged period of time, aka, years and years). The more significant accompanying question then becomes this: If the prices set in the gold/silver futures markets in London and New York are not determined by physical supply and physical demand of gold and silver, then are the prices not being set in these markets entirely fraudulent?
So take the Gold and Silver Challenge, non-believers. Take physical delivery of just 10% of your paper gold/silver derivative products and encourage everyone you know to do the same. Even if you consider yourself the greatest skeptic of all regarding gold/silver price suppression schemes, you have absolutely NOTHING TO LOSE and EVERYTHING TO GAIN from participating in this simple experiment. And if it just happens that you discover that your faith in gold/silver paper ETFs and derivative products was wrong, well, you may just make this discovery in time to exchange these paper products for physical gold and silver before it is too late.
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Posted: Monday, April 12th, 2010 @ 8:56 am
Categories: Gold Investments.
Tags: fractional reserve banking, gold price suppression, silver price suppression.
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April 12th, 2010 at 10:13 am
ABSOLUTELY !! Those that can look at the 24 hour gold chart and still think paper ticket metal is the real thing should test their faith in the Nadler/Christian school of monetary theory,.
Just the thought of this test should engender enough nervous sweat to grease the skids and squeeze the naked shorts.
April 12th, 2010 at 3:37 pm
This is the only way to break these bastards. The other thing to do is clean out all the 4,000 coin shops in the US. I’ve been trying to tell GATA and Ted Butler for a while that this is what needs to be done. I KNEW that the CFTC hearing would not have the immediate impact that they thought it would have. Instead, people are sitting tighter on this thing, and gold/silver are merely doing their thing, which is going up a little bit during the first half of April before it declines or trades sideways for the summer until the fall, before it goes up again, unless the stock market takes a hit again (in that case, they’re going down along with stocks and everything else).
Screw the government. Buy every contract there is and stand for delivery. MAKE THE MANUFACTURERS WHO USE SILVER BUY THE SILVER THEY NEED FROM *** YOU ***. PERIOD.
Anything paper is designed to keep you out of the real thing. US Treasuries, various bank accounts, EVERYTHING BUT THE REAL THING.
Don’t make me say I told you so.
April 12th, 2010 at 3:52 pm
Thank you for publishing about this. It is not common these days to read a good piece regarding gold.
April 12th, 2010 at 6:10 pm
Its indeed a simple and elegant way to test this paper market. and as a matter of fact, for those people who only owned paper gold/silver, Its nice to get a little physical product anyway, nothing feels as good as holding real gold and silver in your warm hand.
April 12th, 2010 at 10:13 pm
Although this website is much to sophisticated for this I’m not.
All the men that do not have their holding in physical will be moving forward as the author recommends and converting 10%. The ladies however can sit on the sidelines and go shopping.
Grow a spine in 2010!
April 12th, 2010 at 11:29 pm
I am a believer in the gold/silver manipulation theories. There is ample public evidence supporting this. But I have one problem. If the physical metal was as scarce as I believe (in relation to paper contracts) why doesn’t it get grabbed up by the “Big Boys”. If gold, for example, has a smaller market cap (at current prices) than Wal-Mart, why the heck haven’t we seen a Hunt Bros. x 100 in both metals from billionaires all over the globe. It would cause a gigantic squeeze and the big longs would make a fortune. Why hasn’t this happened?
April 13th, 2010 at 4:16 pm
Great idea. Now if we can get everyone to follow suit.
April 14th, 2010 at 3:58 pm
“If the physical metal was as scarce as I believe (in relation to paper contracts) why doesn’t it get grabbed up by the “Big Boys”. If gold, for example, has a smaller market cap (at current prices) than Wal-Mart, why the heck haven’t we seen a Hunt Bros. x 100 in both metals from billionaires all over the globe. It would cause a gigantic squeeze and the big longs would make a fortune. Why hasn’t this happened?”
Because the day that happens could be the day human civilization ends. They want to keep their plane rides to Barbados, their exotic dinners shipped in from around the world, their nice-but-useless cars, etc. You must understand that to live like third-world citizens, without access to clean water, sanitation, and a steady food supply, not to mention a save place to live, is absolutely terrifying to them. It’s like beating one prison inmate severely in a public manner to keep the rest in line. They will stay where they are, and will do anything they can to stay there (being the inmates that live as they do instead of the one that lives without), and that includes maintaining the illusion that the world lives in regarding financial knowledge.
If they so much as go after more than a handful of contracts, the price of gold/silver goes up, and that destroys the value of their billions of dollars they have. If they try to move to tangibles, they have to do this, slowly over time to so as not to upset prices and immediately slash the value of their holdings.
This is exactly the position China finds themselves in. They have all those reserves, but they cannot even convert a fraction of it into all the gold in the world plus tangibles without the rest of the reserves become worthless overnight. NEVER put yourself in that position regarding fiat. ALWAYS put some of that money into something else besides paper, I don’t care if it’s underwear, a college degree, SOMETHING so that it can’t be taken from you in a devaluation of ANY SORT. Beeg meestahkeh (big mistake)…
April 15th, 2010 at 2:39 am
“Because the day that happens could be the day human civilization ends. They want to keep their plane rides to Barbados, their exotic dinners shipped in from around the world, their nice-but-useless cars, etc. ”
Well put Stephanie. I was going to answer Royce’s question but you have done a fine job yourself. Anyone that has the money of Gates and Buffet could end the ridiculous fraud that occurs in the gold/silver markets but the wealthiest of the elite benefit from the current fiat monetary system so they have no desire to end it, although some may even pretend that they have a desire to end it for public show. I think I read recently someone that stated it only takes the bullion banks about $20 billion to control gold/silver markets through use of fraudulent paper derivatives (futures). I’d have to double-check this to make sure that figure is accurate but it was not a lot of money that is required to control gold/silver markets given the tremendous leverage fraudulent paper derivative products offer. It is a drop in the ocean compared to the trillions Central Banks have thrown around in these recent bailouts. So the wealthy elite could shut down the fraud if they so desired, but they do not desire this, and they know they would get slapped down like the Hunt Brothers if they tried.
The benefits of fraud to those that reside at the top of the pyramid is also the reason why banks participate in the fiat currency system as well. As long as they cooperate with the larger more powerful central banks (citigroup, goldman sachs, jp morgan, etc. they will be bailed out always, and they know it, so they participate instead of disengaging and acting courageously,honorably, or with the slightest bit of integrity or concern for the welfare of nations). The ones that aren’t as well connected, like Washington Mutual, fail. But the biggest banks in the world are NOT “too big to fail”. They are simply “too well connected to fail.”
April 16th, 2010 at 8:21 am
To Stephanie and J.S – Your explanation to my question is incorrect. First of all not “all” billionaires are benefitting from the fiat scam. Some like Paulson, Sprott, Soros, etc. are loading up on gold. How many Eric Sprotts would it take to end this thing and send gold prices soaring? Not too many. The guy just offered to buy all the gold the IMF keeps threatening to sell (191 tonnes). My point is some of the ultra-rich stand to make a killing if gold increased dramatically. Again, all the bullion gold in the world (at current price) is less than the value of Wal-Mart. Stop and think about that for 30 seconds. The gold market could be emptied in 3 days if 10 billionaires decided to make it happen. That is my question…why hasn’t this happened? Secondly, you are assuming the government could pull a Hunt brother type slap-down on the big buyers. This is wrong. The Ultra-rich in China don’t care about American regulatory rules? If gold is being sold they’ll buy it. What are the regulators going to do? Shut down the COMEX? Forever? They open up and the rich start buying again. It would be over in three days I assure you. No, there is some other reason.
April 16th, 2010 at 5:04 pm
Wrong, Royce. Do you not understand the basic principles of supply and demand, and bank runs? Go over to Friend of Friend of Another’s blog,
http://fofoa.blogspot.com/2010/04/21st-century-bank-run.html
This explains the bank runs of the 21st century, to be on gold and silver (and commodities as well).
Look at the pricing of houses during the boom. You could say there was a run on houses (not in the fractional reserve sense, but that supply was having trouble keeping up with demand or that demand was forecast ahead of time). Things get bid up, and essentially the objects of desire increase not because they are any more valuable than the dollars are, but that the dollar falls against houses. Fact is, it takes more dollars to buy that one house than it did when people were buying them as a place to live.
My point is, if the Chinese try to buy a quarter of the entire above-ground supply of gold, that is a considered a run on the gold supply, and prices will increase such that their remaining reserves (in dollars and other fiat!) will NOT buy the same amount of gold per dollar as before.
And you said, “If gold is being sold they’ll buy it. What are the regulators going to do? Shut down the COMEX? Forever? They open up and the rich start buying again. It would be over in three days I assure you. No, there is some other reason.”
The regulators will make everyone settle in cash to preserve the system. Maybe it would be over in three days if all the gold is actually delivered, but at what price?
Think about it. The financial markets is the greatest scam on the face of this Earth, even greater that what may have occurred millions of years ago…
April 17th, 2010 at 2:16 am
I don’t think you understand commodity markets. I am sure you don’t understand the physical gold market.
April 17th, 2010 at 4:50 pm
Royce,
What Stephanie and J.S. are saying makes sense, yet you are arguing against it without stating any argument. You say, “There is some other reason”. In order to say that, don’t you have to have at least an inkling of what that something else might be? If so, I think we would all like to hear your theory, even if you cannot fully buttress it with complete factual evidence at this point.
April 22nd, 2010 at 1:28 am
Behold a fool………..
November 6th, 2010 at 6:10 pm
Royce is one person clearly wanting the ponzi-scheme to continue.
Do a search of Benjamin Fulford, folks.
FAKE fiat money is on the way out.People are & have been dying as this financial war rages on behind the scenes.
We are at war AGAINST the illuminati-satanists who have caused wars, destruction of the environment and famine all for profit.
I for ONE say, “NO MORE.You are all gonna hang from the nearest lightpost where you live you vermin scumbags!”
What say ye?