Gold Continues To Defy Fed’s Attempt To Control The Price

Bloomberg News admitted that it is aware of the Fed’s “hidden” mandate to control the price of gold when it published an article last Sunday titled, “Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – Bloomberg/Yellen/Gold.

That title, combined with the content of the article, implied that the journalists and editors at Bloomberg are aware that the Fed actively manipulates the price of gold.  It’s hard to know if this admission was put forth intentionally or unwittingly. But the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The Fed’s current tool for this purpose is the “good cop/bad cop” routine played out on a daily basis between the Fed Governors who purport the need for more interest rate hikes and the Fed Heads who advocate waiting until the economy improves.

Lost in the smoke of Orwellian propaganda is the absurd notion that the two “rate hikes” were a mere quarter of a percentage point in magnitude.  This can hardly be described as “raising interest rates.”  It certainly is not even remotely close to the concept of “interest rate normalization,” whatever that is supposed to mean.   In mid-2007, about a year before the financial system nearly collapsed, the Fed Funds rate was 5.25%.   A little more than a year later it had been dropped to near zero.

If the financial analyst “Einsteins” define “rate normalization” as the 5.25% level in 2007, it will take about about 20 years using the speed of rate hikes by the Fed over the last two years.   On the other hand, going back to 1954, which is as far back as the Fed’s database takes us for the Fed funds rate, the median level for the Fed Funds rate is somewhere around 7%.   Is THAT level how one would define “normalized rates?”  You can do the math on how long it would take thereby to achieve “normalized interest rates” if 7% is the goal.

Since mid-December 2016, when gold appears to have bottomed out from the manipulated price “correction” that began in August, gold has been trading in defiance of the Fed’s attempts at price control.  Yesterday’s (Wednesday, Feb 22nd) trading action is point in case.  Gold was slammed for about $9 right after the paper trading market on the Comex floored commenced.  This is standard operating procedure.  But about 5 1/2 hours later, when the Fed released the minutes from its last meeting, gold spiked up and reclaimed the full $9 price take-down.    Today gold has soared another $16.

At the Shadow of Truth, we suspect both Yellen and the editorial staff at Bloomberg News are mumbling to themselves.  In today’s episode, we discuss the trading action in gold and the potential more interest rate hikes this year:

3 thoughts on “Gold Continues To Defy Fed’s Attempt To Control The Price

  1. Dollar index is in totally schizophrenic territory, with Goldman Sachs Mnuchin coming in this morning & saying a “STRONG” US Dollar is not such a “BAD” thing!!! LOL!?!? And we haven’t even gone thru all the Europe elections yet. Andy Hoffman has his favorite saying: “If a nuclear missile struck Europe tomorrow, making Euro disappear & US Dollar shoot thru the moon, by corollary it should make gold tank into the toilet, like $1 an ounce. RIGHT? RIGHT????” Between Janet Yellen’s incompetence & this cognitive dissonance, it’s truly a tragicomedy.

    But the real reason I came on this comment section is because I’m FURIOUS THAN HELL that CIA Deep State agent Jeff Bezos has hired suspected child trafficker/torturer/pedophile OUTRIGHT HARDENED CRIMINAL John PEDOsta a column in his propaganda rag Washington ComPost.

  2. Sorry, I must make another update to above comment, as the Deep State situation is getting ABSOLUTELY DIRE by the day.

    Yes, the fraudulent SYNTHETIC paper price of gold & silver contracts is rising every day for a change.

    But the Deep State is setting up for a violent showdown. Apart from the Jeff Bezos update above, there was COMPLETE clampdown on Ben Swann few weeks ago. All of his social media accounts except linkedin (i.e. instagram, twitter, Youtube, Facebook) all vanished without trace, because he did an investigative PizzaGate segment. As it is, Ben Swann was on the bad books of Deep State for covering Federal Reserve, police militarization, military industrial complex lies (Syria, ISIS, Ukraine, Iraq & related), marijuana legalization, real truth behind 9/11, Monsanto evil, pharmaceutical company vaccine contamination fraud, Ron Paul & whole gamut of “taboo” subjects.

    As if that’s not enough, Google has now TOTALLY blacklisted Mike Adams’ naturalnews.com website, basically deleting all of their articles from their index. He was an outspoken critic of the evil of Monsanto GMOs, as well as pharmaceutical industry corruption on contaminated vaccines.

    https://www.youtube.com/watch?v=qH8Kr_tkcYw

    These are very serious & chilling developments. If they want, the Deep State operation in Google can nuke ALL of ZeroHedge or this blog on any given day.

    ============

    Somewhat unrelated: I’m extremely pissed @ Sean Spicer & Donald Trump’s decision to declare that all states which legalized “recreational” marijuana will be ignored by Federal govt & only “medical” marijuana will be honored. (What the hell is recreational vs medical marijuana anyway? It’s all freaking medical.) AND Trump is pushing for spending gazillions in military budget to build up US nuclear arsenal.

    On 1 hand, the faction of Deep State opposed to Trump admin has started violent censorship. On the other hand, their enemy (Trump) has started different fascist moves declaring that marijuana must remain illegal.

  3. I apologise for the double post: I had problems sending this comment and ended up posting it to the article on Northern Dynasty by mistake.

    Indeed, Dave! I have been saying this since 2010 at least that it is all BLUFF. They can never, ever raise interest rates because the debt is already unserviceable! This MSM garbage is for those who cannot make a connection between govt. debt and the purpose of interest rates and, from there, the fact that all interest rates derive from (or are based upon) the interest rates paid on official govt. debt offerings. This is banking economics 101 – which is why it is so poorly understood. Who learns that kind of thing in school nowadays, let alone college or university? The first rate ‘hike’ in Dec. 2015 was in reality, according to Dr. Jim Willie, about 0.10% or 0.15% of an announced 0.25% increase which was achieved by offsetting bond sales with reverse repo purchases (http://www.investopedia.com/terms/r/repurchaseagreement.asp). This subject is rather over my head but the result was an actual interest increase of a little more than half the increase announced. What isn’t difficult to understand is my first point, namely, if a govt. (any govt.) issues more debt than it can ‘service’ (pay interest due upon), the value of its debt (bills and bonds) will fall, pushing the ‘yield’ on the bill/bond up! This is now the dilemma they find themselves in and there is now no solution whatsoever but to cancel some of it. The Fed buying Treasuries (English sp.) is insane and probably illegal. They cannot service $20 trillion of US govt. debt unless they ‘monetize’ it. Create new ‘money’ with which to pay the old debt ‘money’. There is always a limit to that strategy. They have reached – and probably exceeded – that limit as of NOW! All further ‘rate hikes’ will JUST NOT HAPPEN!
    The next thing to occur will be gold and silver taking off as the above begins to be understood more widely and as monetary dilution through excessive money creation begins, also, to be widely understood by the population – probably because inflation will no longer be contained and prices of essentials (food, clothing, fuel, medicines, etc.) begin to skyrocket! The next thing you will see is widespread barter by those who do not have gold and silver. Anything swappable/exchangeable will be used to buy those things that ‘money’ cannot buy (any longer). In Germany in 1923, you were rich if you had more than one sack of potatoes available – as long as it wasn’t pilfered or looted.

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