“Criminal” Paper Derivative Selling Used To Crush Gold Market

Barron:  “I’ve done some calling around to key contacts around the world regarding this gold and silver smash, and again it has to do entirely with the paper market, with options, and with large entities utilizing derivatives.

What’s being done here is criminal, but there won’t be any investigation by the SEC, CFTC or the powers that be because they are sanctioning it.  King World News often talks about a ‘War going on in the gold and silver markets,’ and people should remember that this is in fact a war.  It’s a war to destroy the psychology of people invested in this sector.  To destroy them mentally…

This is a manipulation of the paper market, not of the physical market.  Gold is still being looted from the ETF’s such as GLD, and physical gold continues to hemorrhage from Western central bank vaults to Eastern vaults.  If they are selling in places like the U.S., you can be sure they are buying in places like Shanghai.  That’s where your physical gold is going to end up if you are selling today, is China.

We have already seen 6 or 7 of these types of declines since 2002, even though this one has been particularly long and brutal, but investors in the sector have to remain mentally tough and hang in there.

This is all part of a desperate effort by the West to collapse the psychology of smaller participants around the world, and even to shake up institutional players, but the reality is there is only so much physical metal around.  Physical gold is in very short supply, and eventually this game that is being played is going to end.  This action is being forced mostly through the use of seemingly endless paper derivative-related futures selling and options.

But as key entities are called upon for the physical gold, eventually this fraud will unravel because they will not be able to deliver the gold.”

Barron also shared this remarkable personal information:  “My father was literally one of the first original goldbugs.  He started to buy gold in 1966 at $35 an ounce.  I have a receipt from one of the banks where he bought a 400 ounce gold bar back in 1966, and he paid $35 an ounce.

My father had a wife and four kids.  He was not an economist, but he went ahead and accumulated gold because he saw the amount of money being spent on the Vietnam War by the American government, he saw inflation going up and he knew that eventually the gold price would soar.

For many years afterwards people said to him that he was, “crazy.”  Even during the late 1990s, when tech and biotech was booming people told him he should have sold his gold because he missed that whole bull run.  But he said to me and to others, “Keith, that’s not stuff that I understand and I’m not going to play in it.  But I understand gold.  I know I can put some gold in my pocket, walk out the door, that it’s tangible, and it’s mine.”  My father would tell me, “Nobody is going to take away the value of the money that I worked so hard for during my life to accumulate, through inflation.”

That’s why he was an investor in physical gold, right up until the day he died two years ago.  This is the sort of approach and mental toughness that investors need to take when they are in a war like this.  You don’t go and trade out of gold and try to time the market because JP Morgan or Goldman Sachs decide they are going to take down the price by $70 to $75 in order to try to scare you out of the market.

So investors have to hang in there and weather these lows.  We have seen this all before.  And who really gives a damn about what Bernanke says?  The Fed is buying up $85 billion worth of bonds every month.  The world has witnessed an unprecedented amount of money creation and at some point it’s going to have an impact.

It’s going to create massive inflation and the gold price is going to soar  The Fed and Western governments can’t defy the laws of Mother Nature or the laws of economics.  They can only manipulate in the short-term.  Whenever markets are being manipulated by governments, eventually they break free and they break free in a very hostile way.  The bottom line is we are going to see the price of gold many thousands of dollars higher.”

Barron also added: “I have the strength and the wisdom taught to me by my father and I have been a believer and on the right side of the equation since 2001, and I’m sticking to my guns.  I don’t give a damn what the bullion banks and Western central planners do in the short-term to manipulate these markets in the final stages of this churn.  I’m sticking with the physical gold just like my father.  I can guarantee you there will be a catalyst to send the precious metals to new highs.  There is going to be a powerful catalyst and it’s going to happen sooner rather than later.”