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Bill Murphy at the New Orleans conference: Bombs away on gold and silver
Remarks by Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
New Orleans Investment Conference
New Orleans Hilton Riverside Hotel
Tuesday, October 19, 2021
First of all, it is my pleasure to salute Brien Lundin for pulling off this conference. Considering the Covid mess, floods, turbulent storms, and timing decisions, it has been quite a task!
Two months before the conference I was asked to come up with a title for this presentation, which can usually be a dilemma because so much can happen between then and the conference. This time it was a lay up: Bombs Away.
As most of you know, GATA came into being over 22 years ago with the organization set in motion by Chris Powell and myself to expose the manipulation of the gold market and end it if we could. At the time we thought it was just the bullion banks doing the dirty. However, it wasn't long before we realized it involved the Fed, Treasury, Exchange Stabilization Fund, other central banks, the BIS ... yes, the silver market.
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It has been a tumultuous two decades plus, with many ups and downs.
However, for me, nothing has been as irritating and frustrating as this year, not even close. Having been involved in the financial markets for nearly 50 years, I have never seen anything like it in terms of blatant manipulation and the lack of attention that manipulation has been given by the gold/silver media, as well as the industry itself.
Let me explain.
On the first day of this year gold rose a whopping $51.50 to $1944.70, silver gained 95 cents to $27.28, and the HUI gold index shot up 22.60 to 323. A banner day for the gold/silver camp to say the least. But, it was a horror show for what I call The Gold Cartel, the evil ones manipulating the gold/silver prices.
Many of their operators were probably just returning from a New Year's Holiday and caught off guard. However, it didn't take long at all for THEM to respond and that response has been easy to identify if you have closely followed the daily market action this year, which is my role.
And it didn't take long either for their call to go out to associates: Houston, We Have A Problem.
At the same time investors all over the world had days to think about where they should invest their money for the new year, to do the right thing. So, what were intelligent investors thinking about then and ever since?
-- Say, inflation, which was beginning to surge everywhere you looked.
-- Say money printing by the US, which was going off the charts.
-- Say growing US deficits, which are out of control.
-- Or say, a minor issue of US total debt now approaching $29 trillion.
Throughout US history, those are most of the basic reasons investors bought gold, silver, and their shares to protect their net worth against severe devaluations and dollar debasement.
What a winner gold, silver and the shares appeared to be as we started out the year.
They, us, me could not have been more wrong in that assessment.
The Gold Cartel immediately went into action with their call to Houston to mitigate their problem and suppress the gold/silver prices. Throughout our history gold has been viewed as the barometer of US financial market health. As former Fed Governor, Paul Volcker, once said about gold, "Up is bad, down is good." That barometer had to be immediately made dysfunctional and the gold price suppressed. Since silver has historically been viewed as a similar barometer, it needed to be treated in the same manner.
And boy did the cabal go into action, with a tactic no one in history has ever seen before … and that has been to bomb the gold/silver prices in straight down fashion on just about a daily basis ... generally between two hours before, to two hours after, the opening of trading on the Comex.
As reported in my LeMetropoleCafe commentary, the bums have done so every day this year, except for approximately 20 of them … and that includes EVERY DAY of the first 19 days in September, with one of them being just silver on downside.
When you think about what they have done, it is mindboggling. For those who follow markets, it is rare for a market to trade the same way two days in a row, hardly ever 3. But all year, and then 19 days in a row! Yet, no one outside of the GATA camp says a thing. It is revolting.
This will be a super conference and you will listen to many terrific speakers smarter than I am, but unless these folks deal with the manipulation issue, so what? None of those historic bullish reasons to own the precious metals have meant a thing all year. Will many of them explain how they could have been so wrong if bullish?
Yes, I am biased and for good reason. If I did not know how corrupt the gold/silver scene was, I would have bowed out years ago, and maybe I should have. My long held view about silver going to $100 could not be more off the mark, for now.
My point is I do know what they are doing to suppress the precious metals, and while effective, it is artificial, which we will get into in a bit.
The way I see it now is that the cartel decided, after seeing what occurred on the first day of the year, that they needed a dramatic course of action to defray investor interest in gold and silver.
Thus they came up with the idea to bomb gold, silver too, almost every morning, as described. Their intention was to make gold and silver look SO obviously bad with these daily raids that investors would flee the scene, feeling they could not prevail in our sector no matter what. And that is just what happened. While investors might not have understood the orchestrated nature of the selling, many instinctively knew what was coming every day and ran for the hills.
This running for the hills showed up mostly in the gold/silver share indexes such as the HUI. Ten years ago following GATA's last conference in London the HUI was well over 600. After the first day of trading of this year, it was 322. Just a couple of weeks ago it traded down to 225. Meanwhile, during this year, the DOW and NASDAQ constantly soared into new all-time highs. The horrendous lack of performance by the gold/silver shares was too much for investors and investment managers, so many just gave up the ship and exited.
It has been a horror show of epic proportions. At one point this year gold has traded nearly $300 off that first day high, despite the fundamental reasons for the gold price to soar getting more bullish each passing month. As bad as gold was, silver has been worse. Pitiful silver, as I have called it this year, fell from that early level to right to below $22 recently, breaking a triple bottom, which fortunately is a false breakdown at the moment.
To give you a further idea of just how lousy this year has been for silver investors one only need to regard what happened to the price of silver since February when it spiked to $30 thanks to the vibrant Reddit crowd and others. The investment world has heard all about what the Meme stocks did, such as GameStop and AMC Entertainment. Why not heavily shorted silver that crowd thought? Despite questionable fundamentals, the Meme share prices went bonkers. Efforts to set them back were generally aborted.
Feeling good and rewarded by their profitable efforts to take on such heavily shorted stocks the same crowd, and groups like Wall Street Silver, went after the heavily shorted silver market led by JP Morgan. Early on their efforts seemed like a winner. Silver immediately spiked to $30, as the other Meme stocks did on their efforts.
Enter the Gold Cartel, apparently approved to do so by the CFTC to calm things down. While the Meme stocks kept going and going higher, silver was stopped in its tracks. Subsequently, silver has become the worst acting market I have ever seen in nearly 50 years and have said so in my commentary for most of this year. JPM and allies became more aggressive than ever to bury the silver price.
It has been hard to contain my outrage, but this is the life I have chosen.
During this year commodity prices have soared at times. Can you say lumber, can you say copper, can you say crude oil, among others? But silver, forget about it.
Then you have our stock market indexes, such as the DOW and the NASDAQ, which, as mentioned, have made one all-time high after another this year, while gold and silver sucked wind. Home prices have continued to make new highs after new highs. And, of course, you have the newly heralded cryptos, which have gone bonkers.
I will never forget speaking at Jeff Berwick's conference in February of 2017 in Acapulco. It was a Crypto/Precious Metals conference and the crypto folks were excited beyond belief as bitcoin reached the same price of gold at $1240. I was disgusted at the time and yet they were elated. Little did I know what lied ahead for bitcoin, which became the greatest investment ever, and has dwarfed the Tulip Mania. Those who invested in bitcoin early, and some were GATA folks, have made so much money, it is almost beyond comprehension. I salute them.
So here we are. This is the first day of the rest of our lives. Where do we go from here if you are in the gold/silver camp like me?
As lousy as silver and the shares have been this year, and to a lesser extent gold, when their prices should have been soaring based on historical fundamentals, I am still a big time optimist and invested in our sector accordingly with most of my funds.
One of the reasons is that I am a firm believer is Newton's Law Of Equal and Opposite Reactions. What THEY have done to our sector has been so outrageous for so long, that when the tide turns to the upside reaction will be that good and occur over a much shorter time frame.
Why would that be? The answer, if on the money, is quite simple. The Gold Cartel has gotten their way this year via these daily bombings in the paper market, affecting the widely followed futures markets. They were so ferocious and ongoing that over time the paper bombings weakened the physical markets, as investors in the west ran for the hills … wanting to make money, not get beat up every day.
To accomplish their paper objectives the cabal forces have most likely used up a great deal of their physical gold/silver supply they could come up with. Because of the paper raids and weakening physical prices, that amount was not even close to what they would have normally needed in free trading markets to achieve their goals. However, at some point in the not too distant future, they ought to hit the wall in terms of finding dwindling physical supply. Physical prices will firm up, perhaps substantially so, and the cartel's paper raids won't work anymore. When it becomes doable, investors will finally buy cheap paper and sell more expensive physical. We have seen a bit of that here and there these past few months via the gold price action on the Comex, in which it has roared back violently after raids.
And in that regard, what fun last Thursday. Gold was up some $20 when growing inflation news hit the tape. The bums, as usual, went into bombs away mode. Within minutes gold was up 20 cents. However, in most unusual fashion, gold went straight bacl up this time, ending the day $32 higher. This is THE most violent comeback after a hideous cabal raid we have ever seen ... and is a clear sign the bums are in trouble.
At the same time we have the strong possibility of major gold/silver market changes in the new year. ...
The first is about the Basel III dud, a set of international banking regulations developed by the Bank for International Settlements to reduce risk in the banking system. It was set in motion on June 28 and was supposed to be bullish for gold because dealers would be penalized financially for dealing in unallocated gold versus allocated gold. In unallocated accounts dealers can assign the same physical gold to various investors, which could lead to a run on the bank so to speak should many investors want their gold at the same time.
The fly in the ointment appeared to be that England would not be part of this deal until January 1, 2022. Perhaps that soon at hand date will be a game changer for gold and silver.
There has also been some commotion over Stephen Loeb reporting that China will be launching a digital gold- backed currency at the start of 2022 at the Winter Olympics which are being hosted in Beijing.
And finally, there is also some talk by some savvy folks also circulating about a coming reset for the price of gold, silver too, during this same time period, or not long after.
We shall see on those fronts.
No matter what it seems to me that The Gold Cartel's ferocious suppression of the gold/silver prices, so noticeably on a daily basis, that their activity is leading to some sort of END GAME. Bottom line: they know they are going to run out of physical supply, as mentioned, to carry on like they have for so long. Thus, if observed correctly, their raids have been executed to make the gold/silver scene SO BAD that investors would exit long positions and they could cover long held short positions.
Should that be the case, and the odds are pretty good it is, the moves up in gold, silver and the shares will be spectacular when the tide turns. Which will mean, at times, no sellers!
The shares as I call them have led the way down, followed by silver, and then gold. The reverse should be the case as to revealing an epic change in the gold/silver scene. The insiders should be all over the shares before the investment world understands what is occurring. They should begin to take off out of nowhere, followed by silver, and then gold.
We shall see on that score too.
My bet is that some major changes in the gold/silver market are not too far off with current glumness turning into glee. Frowns turning into smiles with Negative Nellie, as I call the cartel cheerleader, finding her only solace in her fading memories.
As far as GATA goes, we will carry on, and do our thing. However, I have no illusions the media/gold, silver world will deal with the most important issue in the precious metals industry, that being the price manipulation and suppression, until the gold/silver markets blow up, which they will at some point. And then this scandal will find the light of day just as the Enron, Bernie Madoff scandals did, unfortunately after the fact and after so much damage was done. The Madoff Wall Street scandal was presented to the SEC 8 years before it blew up. GATA has been making a Harry Markopolos type effort with the CFTC to expose a far bigger scandal for more than two decades. Taking on an indifferent industry, press, bullion banks, and US government has been something else.
All that said the best news is, the way I see it, that those who hung in there through so many years of infuriation and negativity will be rewarded by some of the grandest moves in market history by gold and silver. Who knows, maybe they will even rival bitcoin!
My final note is to salute a GATA hero, James McShirley, a legendary figure in our camp, and a featured speaker at GATA's 2011 conference in London. He suddenly died last week related to Covid issues. Loved that guy.
Thank you very much.
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Toast to a free gold market
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