The Gold Market is a Fake

Here's my two bob on the gold market...and the world market.

The gold market is fake because the price is set in the futures market where more than 100 times paper gold is traded than physical metal every day. There is little gold backing these transactions. Silver is maybe twice as diluted or more. The advance of silver and gold prices imo is moderated by naked short selling etc by bullion banks such as JPM and HSBC. You may do searches on GATA, Andrew Maguire or visit sites like Silver Doctors who regularly quantify the paper shenanigans going on the silver market. Without this anomaly, prices would already have appreciated much more.
Of course the real supply and demand for precious metals will someday prevail through price. This may happen when the US dollar collapses and loses it's reserve currency status.
The foreign nations who traditionally bought US paper are increasingly skirting around the USD and seeking to settle trade in alternative currencies and gold. Without buyers like the BRIC's, the US Federal Reserve bank (private entity) has been left buying most of it's own debt which is basically printing money. When consumer price inflation eventually becomes a problem and it is, the USD will quickly lose it's reserve status as holders dump it. The west will be faced with a real devaluation of it's currencies and lowering of living standards. Living costs will increase in nominal terms faster than wages. US dollar hyperinflation leading to the inflation in many other currencies. Gold and silver cannot be created artificially so they will remain a quality store of value and holding or increasing value in real terms.
In a monetary sense massive inflation has already happened. The ECB balance sheet has increased to around three trillion Euro's this last twelve months or so. The US Fed balance sheet is also around three trillion. With more peripheral Eurozone nations facing bond market collapses now things are going to stay on this trajectory and worse.
The USD with it's reserve currency status, fractional reserve banking practice and a proliferation of financial derivatives has masked the reality for decades that the west has lived ahead of it's means. We have imported more than we export. We have lived on cheap Asian imports while they have accepted our bits of paper for our trade deficit. While Asian people have mostly lived in poverty with low wages, states like China have become the recipients of real wealth such as the manufacturing base once located in the west. They (BoC) are hoarding gold and silver and their government policy is to promote the same idea to it's citizenry. China does not export any gold and they are now the worlds leading producer. This west to east wealth transfer has been politically driven.  The entire global economy is extended miles away from the mean, it is fake. Welcome to the Matrix.

In Australia there is written in our constitution a clause for allowing confiscation of gold from citizens in exchange for Australian currency. Why? Because gold and silver is real money. It is the antithesis to the unbacked paper currencies that have proliferated in this century gone. The power of the political and financial classes is the power to inflate or print money whether through fractional reserve banking or outright monetisation of government debt. This power is lost when money becomes a very poor store of value via monetary inflation leading to high price inflation. In those conditions people understandably swap currency for gold and other hard assets like farmland and fine artwork (also shares to some extent) which accelerates currency collapse. So gold stands in opposition to the objectives of the state and financial system.  You cannot buy precious metal bullion in Australia without a drivers license and paper trail. I guess if you find gold in the bush none of this matters. If I am lucky enough to find gold I will keep it. Theoretically there is no upper limit to the dollar denominated price of gold. What is important is the exchange rate gold has for other tangible assets. How many houses can you buy with 500oz gold etc.

To conclude I add that I don't choose to worry about these things, though I am keen on surviving them as best as I can. There has always been a monopolising force at work, it is the way of the world. A product of human nature. In this case one needs to understand the merger of private banks, corporations and the state. The hallmark of recent decades maybe is that people began to think we humans had evolved to some new civilised state where freedom and democracy reigned. As I see it however our prosperity has been the result of this complex economic situation and also unmentioned things like technological advances, while human nature itself has changed nought.

Of course the post above is just my amateur opinion and is not financial advice.

Hello Feralslug,

I only stumbled upon this website this morning, promptly joined it, and upon reading various submissions I have to say that your "Is Gold a Fake" intrigued me.
May I question the veracity of the statement about the Constitution?
I downloaded the entire Constitution into MS Word, did a word search on "gold" and got just two hits, as follows:

CHAPTER IV - FINANCE AND TRADE
Exceptions as to bounties.
91. Nothing in this Constitution prohibits a State from granting any aid to or bounty on mining for gold, silver, or other metals, nor from granting, with the consent of both Houses of the Parliament of the Commonwealth expressed by resolution, any aid to or bounty on the production or export of goods.

CHAPTER V - THE STATES
States not to coin money.
115. A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts.

While I empathise with the conclusions you drew from the discussion on the control of gold I find it hard to agree that the Australian Constitution provides for confiscation, thank goodness.

Cheers,
DickyBeach

Call me picky if you will but I refuse to buy godl at any price

Wayne.

Hi DickyBeach
Nice reef break off Dicky's btw....surfed as a teenager.

I tried what you said and searched "gold" but did not get the result either. Not sure what's up there. However instead of that search for "Banking Act 1959"and click the relevant result then go down to Part1V Gold.
Or click this link http://www.comlaw.gov.au/Details/C2012C00911

Here is some of the text also...

42 Delivery of gold
(1) Subject to this Part, a person who has any gold in the person’s possession or under the person’s control, not being:
(a) gold coins the total value of the gold content of which does not exceed the prescribed amount; or
(b) gold lawfully in the possession of that person for the purpose of being worked or used by that person in connexion with the person’s profession or trade;
shall deliver the gold to the Reserve Bank, or as prescribed, within one month after the gold comes into the person’s possession or under the person’s control or, if the gold is in the person’s possession or under the person’s control on any date on which this Part comes into operation, within one month after that date.
(1A) A person is guilty of an offence if:
(a) the person fails to comply with subsection (1); and
(c) there is no instrument in force under section 48 exempting the person from the application of this subsection.
Penalty: 50 penalty units.
Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.
(2) Where a person who has gold lawfully in the person’s possession for the purpose of being worked or used by the person in connexion with the person’s profession or trade ceases to have that purpose in respect of that gold, the person shall deliver the gold to the Reserve Bank, or as prescribed, within one month after the person has ceased to have that purpose in respect of that gold.
(3) A person is guilty of an offence if:
(a) the person fails to comply with subsection (2); and
(c) there is no instrument in force under section 48 exempting the person from the application of this subsection.
Penalty: 50 penalty units.
Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

Also I have seen this subject discussed in finance websites in Australia and you may be able to get some search results up.

Personally I doubt that this law will be used...it's just interesting to note it's existence because it helps demonstrate some important points about the nature of currencies.

cheers DickyBeach

feralslug wrote:Hi DickyBeach
Nice reef break off Dicky's btw....surfed as a teenager.

Blah blah blah

cheers DickyBeach

You post as feralslug, but end it signing off as Dickybeach.....

No worries Goldminer. I meant cheers to DickyBeach. I am the feralslug a different person if that's what you mean.

Ok ..thanx for clearing that up....

Gold Miner wrote:

feralslug wrote:Hi DickyBeach
Nice reef break off Dicky's btw....surfed as a teenager.

Blah blah blah

cheers DickyBeach

You post as feralslug, but end it signing off as Dickybeach.....

but it could have been worse if he signed of as slugbeach or even worse as feraldicky

Wayne.

I find it hard to understand why the big drop in Gold price. In the end supply and demand is generally the formulae that is reliable and I can assure you that here in China at the moment the gold trade has gone through the roof since the fall in price. Demand shall continue with the rise in middle classes here in China and also in India. What bigger markets do you want than those two countries. Look at the cost of opening new mines and there are not too many new discoveries happening these days with such high cost of exploration and very little funding available for the small explorers.

Many of the listed companies consider themselves clever if they can operate recovering an ounce of gold around $800 to $850 an ounce. Times have sure changed 30 years ago when gold hit those prices we thought it was unbelievable. Currently because of high wage costs, bad decisions etc etc including a bit of greed and bad government management(non political statement meaning both parties) we find Australia is pricing itself out of the market in so many facets of the world economy. We are where we are today only because we rode on the back of the Chinese success during the GFC not because of any other reason. Bottom line my opinion find as much gold as you can its a good bet.

My comments are investment advise just my opinion.

Please correct my comments as I meant 'not investment advice'.

Many people are bearish about gold as of in 2015. This might be because of large decline and current gold prices. But, considering about long term, currently all central banks have started to increase their gold reservoirs. So increasing the gold reservoir and not selling it out could be the sign of supply constraint in future which is definitely going to result in rise in gold prices.

Good thing we only have mineral specimens

Sorry to bump an old thread, but just to reassure anyone who might think that we're breaking the law by not surrendering gold to the Reserve Bank within the month, you need to read the whole section of the act, and not just the page quoted above. Under Part IV Gold it starts off by saying:

BANKING ACT 1959 - SECT 40
Operation of Part
            (1)  This Part shall not be in operation except as provided by this section.

            (2)  Where the Governor-General is satisfied that it is expedient so to do, for the protection of the currency or of the public credit of the Commonwealth, the Governor-General may, by Proclamation, declare that this Part, or such of the provisions of this Part as are specified in the Proclamation, shall come into operation, and this Part, or the provisions so specified, shall thereupon come into operation.

            (3)  Where the Governor-General is satisfied that it is no longer expedient, for the protection of the currency or of the public credit of the Commonwealth, that this Part, or any of the provisions of this Part, should remain in operation, the Governor-General may, by Proclamation, declare that this Part, or such of the provisions of this Part as are specified in the Proclamation, shall cease to be in operation, and thereupon this Part, or the provisions so specified, shall cease to be in operation.

Yes people can buy bullion here because it is legal to buy and hold it however it is certainly not legal to hold bullion in all circumstances which is what this legislation is for. Otherwise it would not exist. The particular circimstances if refer to pertains back to my reason for mentioning such laws. Governmments protect their currencies from gold because gold is high quality money. So, "Where the Governor‑General is satisfied that it is expedient so to do, for the protection of the currency or of the public credit of the Commonwealth" at this point a person is guilty of an offense if they do not," deliver the gold to the Reserve Bank, or as prescribed, within one month after the gold comes into the person’s possession or under the person’s control or, if the gold is in the person’s possession or under the person’s control on any date on which this Part comes into operation, within one month after that date."
Neither are your bank deposits totally protected by law during a credit event which is deemed a significant threat. In New Zealand (so I have heard from a reasonable source) there is possibly an explicit policy to freeze deposits and take large parts of them away in a collapse situation so as the banks can be recapitalised. If governments can live with the fall-out of bailing in banks with retail deposits then is it anlikely they will have a problem taken gold off a few crusty gold bugs?