Fifty Years of Silver Manipulation [wealthwire] $SLV $SILVER $SLW
July 18, 2012 1 Comment
Sophisticated precious metals investors are well-aware of the rampant manipulation of the gold and silver markets. They are also generally aware of the reason for such manipulation. A rapid rise in the price of gold and silver is like an economic “warning siren” – alerting savers that their wealth (i.e. the purchasing power of their currency) is being rapidly eroded by the monetary depravity of bankers.
In a world with a “gold standard”, this isn’t a problem. With currency which is redeemable in gold (or silver), the value of a currency (i.e. its purchasing power) is anchored by the gold and silver backing it. However, in a world of nothing but “fiat currencies” (i.e. money backed by nothing), a loss of public confidence in paper “money” is the worst nightmare of bankers.
This fear can be most easily illustrated by simply looking at the example of Alan Greenspan. In 1966, Greenspan was a respected academic, who wrote a famous essay extolling the virtues of a gold standard, where he simply stated the evils of “fiat money”:
“In the absence of a gold standard there is no way to protect savings from confiscation through inflation.”
I explained this concept of banker-stealing, in great detail, in a recent commentary – so any readers who are interested in a thorough discussion of this should refer to that piece. A quarter of a century later, after “Easy Al” had sold his soul to the bankers, and become Chairman of the Federal Reserve, he was asked directly what he would do if/when people lost confidence in their “fiat” U.S. dollars. His response to that question is even more famous:
“We stand ready to lease gold in ever-increasing amounts.”
Several obvious, observations flow from this. Not only are fiat-currencies a tool which bankers use to directly steal our wealth, but this “tool” is, in fact, nothing but a scam by a bunch of con-men – and (like all scams) it collapses as soon as those being scammed “lose confidence” (i.e. understand that they are being ‘conned’).
What highlights the illegitimate (and ultimately illegal) nature of this scam is that the primary mechanism which the Chairman of the Federal Reserve would (and does) use to “restore confidence” to the world’s “reserve currency” is to (illegally) manipulate the gold market. Put another way, because this is a scam, there is no way to directly “restore confidence” to paper currencies. Instead, all the bankers can try to do is to (temporarily) destroy confidence in gold – by suddenly dumping vast quantities onto the market, in order to cause the price to drop.
Manipulation of the gold market actually began (on a small scale) in the 1960’s, while the U.S. (and the world) was still partially on a gold standard. The U.S. government was “cheating” with its accounting, to hide the obscene amounts of money it was borrowing (and squandering) in its doomed war-effort in Vietnam. Thus, this manipulation is a coordinated scheme by Western bankers which is now nearly 50 years old.
Like gold, the silver market has been manipulated for roughly the same amount of time. However, in keeping with silver’s modern “identity” as an “industrial metal”, the evolution of silver-manipulation, and the mechanisms used to manipulate the silver market are vastly different from the gold market. To begin with, back in the 1960’s when we were officially said to be on a “gold standard”, in fact, it was only silver money which was widely circulated in our economies, in the form of small-denomination coins. In other words, while our monetary systems were anchored by gold, it was silver which was used as money in an “industrial” sense – as an indispensable tool of basic commerce.
Indeed, at the same time that the bankers were trying to prop-up the U.S. dollar while on the gold standard (due to their reckless money-printing and debt-creation), these same bankers (and their allies in government) were making their first efforts to defuse a “silver supply crisis” – caused by pricing silver at only a fraction of its true worth.
In the 1960’s, the U.S. government had kept the price of silver frozen at $1.29/oz. However, whenever an asset is under-priced, there will always be a group of investors who will identify such an under-priced asset – and then accumulate it. Thus, the U.S. (and other governments) were rapidly squandering their entire stockpiles of silver, as they had to dump ever-increasing amounts onto the market to maintain the artificially low price.
Ultimately, the bankers capitulated, and the U.S. government ceased its efforts to keep the price of silver frozen at $1.29. However, as is usually the case with any illegitimate scheme, every time the schemers take action to deal with one flaw in their plans, that produces unintended (and undesirable) consequences – which then require further acts of manipulation.