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There is panic in the metals market, as the demand for physical gold and silver spikes to all-time highs, while at the same time, prices have dropped dramatically. This makes no sense to a free market, of course, but it exposes how the markets are being manipulated.
Yesterday, Saxo Bank's head of commodity strategy, Ole Hansen, observed that a lockdown is occurring in two biggest gold hubs in the world, New York and London, so many traders are working from home. "This has caused a breakdown in the marketplace", he said.
“There is no price discovery in the market right now,” he said Tuesday morning.
“If you need to borrow gold in the OTC [over-the-counter] markets right now, you are going to pay a king’s ransom.”
And that 'broken' market is no more evident than in the decoupling between spot and futures markets.
Steve Mnuchin, the US Treasury Secretary, used to be head of IT at Goldman Sachs, where he served as the bank’s chief market manipulator. He must have spent a lot of money trying to prop up the dollar by driving down the price of gold. The fund for this purpose is called the Exchange Stabilization Fund, designed to “stabilize” the markets by manipulation. The fund was established in 1934 under Roosevelt. It has remained largely secret since then.
Anyway, Steve Mnuchin spent so much that now the Fund is broke and needs $425 billion so that Mnuchin can continue his manipulations.
U.S. Treasury Secretary Steven Mnuchin on Monday said a coronavirus-response bill he is negotiating with Senate lawmakers doesn’t amount to a corporate bailout, pushing back against Democratic criticism.
The bill would provide $425 billion for the Treasury’s Exchange Stabilization Fund, an obscure pot of money that the Treasury has used in recent days to cover losses on new lending facilities launched by the Federal Reserve.
“I’ve heard people out there refer to this as a slush fund,” Mr. Mnuchin said in an interview with Fox Business Network. “It’s not a slush fund; it’s a mechanism that we can use working with the Federal Reserve that will provide another $4 trillion of potential liquidity into the market. That’s on top of the Fed’s balance sheet.”
A $425 billion infusion of money would give them “another $4 trillion of potential liquidity,” because they can leverage the money 10:1.
There are a lot of investors demanding gold at the low manipulated price, but the supply of physical gold is low, because few people want to sell at such low prices. Normally, the price would simply go up until the supply met the demand according to the markets, but in today’s world, there are no free markets. Fundamentals no longer matter, at least until an epic crisis hits us, where there is no longer enough money in the Fund to manipulate the markets properly.
We are now in that kind of epic crisis. The only question remains: Will Congress allocate enough funds to continue the manipulation? Or have we hit a turning point, where even the government is overwhelmed by the problem?
By all rights, gold should be at $50,000/oz and silver at $5,000/oz right now. If the government had just allowed the markets to be free, the price would have increased more gradually, and the real price would not be such a shock. But the wisdom of government compelled them for decades to prop up the value of the dollar by keeping gold and silver prices low. It’s all relative.
By propping up the dollar, the government can engage in fiscal irresponsibility without feeling the consequences in a free market economy. Every president has kicked the can down the road so that the markets do not collapse on his watch. But at some point, the piper must be paid. The current crisis may be pushing us reluctantly toward an unwanted resolution.
Personally, I think they know that the time has come to end the current system and to move to another. The debt load has reached its limits, and a Jubilee is the only solution. I think that the current crisis will be used to institute whatever change has been planned over the past few years.
Have you noticed that there is now a war against currency? Yes, currency might carry the coronavirus, so some businesses are not accepting currency. You have to use a credit/debit card to buy anything there. We are moving toward a specific kind of digital currency. Most money today is already digital, just a computer ledger on the screen. But the Treasury Department just hired an expert on digital assets (cryptocurrencies) from Coinbase, one of the largest cryptocurrency exchanges in the world. His name is Brian Brooks.
I heard last year that this was the direction the world was moving. Some like it because blockchain technology records everything and keeps transactions honest. Others hate it because it means the government can then track all transactions except barter.
Regardless of one’s view, I believe that this is the plan. Just how they will implement it is another question. It is likely that the government will issue its own cryptocurrency, which, by definition, would then be U.S. currency. On the upside, this would not be owned and issued by the Federal Reserve but by the Treasury Department, and this would mean that interest on the issuance of money would end.
Major banks have been preparing for this at least since 2015, according to this 2017 article:
In other words, the privately-owned Fed would no longer be able to produce a commodity called Federal Reserve Notes and then loan it to the government at interest, creating a national debt. By absorbing the Fed into the Treasury Department, the main lifeline of Mystery Babylon would be cut off. That is the key issue.
Right now, the Fed has become nearly irrelevant with the drop in interest rates to zero. I believe that this is a precursor to the nationalization of the Fed and a major step toward the end of the final phase of Mystery Babylon before the Kingdom of God emerges. The world powerbrokers have their plan; God has His. We will see whose plan works out in the end.