As The U.S. Economic Collapse Proceeds, Gold Continues To Be Heavily Manipulated

The predictability of the Asia rise/European/NY selloff pattern has become almost comic…Gold surged $4 in the last couple of hours of Shanghai trading peaking at $1,163.30 in April about 2-30 AM. Since about 1AM a sliding $US should have been helping but as MKS Sydney reports

“The $1160 level throughout the morning seemed well capped however with what seemed to be some decent iceberg orders lingering on the offer… There was decent selling from retail, macro and even physical names above $1160 so it does still seem pretty heavy going towards the top end of the range and will likely continue this way into the FOMC.”

There are plenty of well-trained (and well-fed) Bears around.

The quote above is from John Brimelow’s “Gold Jottings” daily gold market update (subscription-based).   Almost every night gold rallies during Asian trading hours, only to be pushed back down once the fraudulent paper gold markets in London (LBMA) and NY (Comex) open.  India and China continue to aggressively accumulate physical gold.

Meanwhile, today’s economic reports continue to confirm the fact that the U.S. economy is beginning to contract.  The Empire State Manufacturing  index dropped to 6.9 from last month’s 7.8 reading, missing the consensus estimate of 8.  The new orders component plunged to negative 2.4.  

Industrial production came in at .1%, well below the consensus estimate of .3%.  The January report was revised to negative .3 from the original report of +.2%.   Had the prior report not been revised lower, the report for today would have been significantly negative – as in, reflecting a large monthly contraction in manufacturing output during February.

Finally, the Homebuilder Sentiment index – which I consider to be one of the more absurdly Orwellian metrics – dropped again to 53 from February’s 55.  It missed the Wall Street brain trust estimate of 56.   Here’s Bloomberg’s mascara-covered take, which is in and of itself uncharacteristically and tersely blunt:

The lack of first-time buyers is an increasing negative for the new home market, evident in the housing market index for March where growth slowed 2 points to an 8-month low of 53. The traffic component of the index again shows particular weakness, down 2 points to 37 which is a 9-month low and directly reflects the lack of first-time buyers.

Notwithstanding Bloomberg’s uncharacteristic candor in its interpretation of the falling builder sentiment index, it’s not just the first-time buyer traffic that is falling off.   The median real household income continues to decline, as new jobs are primarily are of the part-time variety and more people leave the workforce than are finding jobs.  This dynamic does not generate the level of income that can support home ownership.  This is why the rate of homeownership continues drop every month.

Let’s not forget that mortgage rates are near all-time lows and the Obama Government has significantly reduced the credit requirements to qualify for the taxpayer-subsidized mortgage programs  (FHA, Fannie Mae, Freddie Mac, VHA, USDA).  Even Government intervention is not stimulating housing sales.

If you want to exploit the fact that the homebuilders are now more overvalued than they were at the peak of the housing bubble in 2005/2006, my Homebuilder Research Reports will show you why and how.

When I say “overvalued,” that means relative to the companies’ underlying financials.  The stock prices are lower now that at the peak, but the various financial metrics like debt, inventory and p/e ratios are higher now that at the peak. Meanwhile, we found out last week that foreclosures, especially repeat foreclosures, are at a 12-month high – LINK


7 thoughts on “As The U.S. Economic Collapse Proceeds, Gold Continues To Be Heavily Manipulated

  1. Gold is manipulated. Agreed. The manipulation is obvious and bothering but not heavy. Seems they are running on their last fumes. The heavy manipulation was in 2013 with repercutions into 2014. PMs gonna take off again and I have the feeling pretty soon.

  2. Banknote ‘money’ … is the root … of all manipulation and so David Morgan was perfectly correct this week in remarking that … everything … is manipulated.

    I have no doubt that money metals will undergo a resurgence of value, but as long as paper Plantation Scrip defines what ‘value’ is in people’s backwards perspective, they’ll never attain their full intrinsic Purchase Power.

  3. Won’t the manipulation of the metals through the paper price drive miners out of business? I would love to see Dave here and Andy Hoffman debate this. Its all getting very old. Great site Dave!!

    1. Thanks! There’s always a risk that the mining industry will all go tits up. That’s always been a risk since day one. The plunging price of oil helps a bit to offset it. If they obliterate the miners, they obliterate one of their key sources of gold to deliver to China.

  4. The thing about gold in the ground is that it will never spoil and it’s
    value will only increase with the passage of time. The miners should
    shut their doors and put their plants on care and maintenance and
    let the chips fall where they may. It shouldn’t take long before TSHTF.

  5. Wow, gold got smacked starting at 8am central time here. Never seen that before!!! Lol! Its laughable now, I mean, I’m out of words….

  6. This is just me thinking out loud so don’t take it as gospel, if gold miners start to go belly up, and since China has an appetite for all things gold, and since china is buying gold mines or becoming partners with gold miners in Africa, Canada, South America, etc., I wonder, I just wonder if China might start buying up some US Gold miners either as they start to give up on mining or buy bankrupt gold mines from the banks themselves.
    Since China keeps a very low profile (as in off the radar type low profile) when buying gold, it would seem reasonable for some Chinese miner to start sending out feelers in the US Gold mining community seeing if there are any who are looking for a cahs infusion and a partner.
    As I said, this is just me thinking out loud, I will admit I know very little about gold mines or gold mine investing, this is just a thought concerning gold miners, nothing more nothing less.

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