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History Tells Us That A Gold Crash + An Oil Crash = Guaranteed Recession

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History Tells Us That A Gold Crash + An Oil Crash = Guaranteed RecessionIs the United States about to experience another major economic downturn?  Unfortunately, the pattern that is emerging right now is exactly the kind of pattern that you would expect to see just before a major stock market crash and a deep recession.  History tells us that when the price of gold crashes, a recession almost always follows.  History also tells us that when the price of oil crashes, a recession almost always follows.  When both of those things happen, a significant economic downturn is virtually guaranteed.  Just remember what happened back in 2008.  Gold and oil both started falling rapidly in July, and in the fall we experienced the worst financial crisis that the U.S. had seen since the days of the Great Depression.  Well, a similar pattern seems to be happening again.  The price of gold has already crashed, and the price of a barrel of WTI crude oil has dropped to $86.37 as I write this.  If the price of oil dips below $80 a barrel and stays there, that will be a major red flag.  Meanwhile, we have just seen volatility return to the financial markets in a big way.  When volatility starts to spike, that is usually a clear sign that stocks are about to go down substantially.  So buckle your seatbelts – it looks like things are about to get very, very interesting.

Posted below is a chart that shows what has happened to the price of gold since the late 1960s.  As you will notice, whenever the price of gold rises dramatically and then crashes, a recession usually follows.  It happened in 1980, it happened in 2008, and it is happening again…

The Price Of Gold

A similar pattern emerges when we look at the price of oil.  During each of the last three recessions we have seen a rapid rise in the price of oil followed by a rapid decline in the price of oil…

The Price Of Oil

That is why what is starting to happen to the price of oil is so alarming.  On Wednesday, Reuters ran a story with the following headline: “Crude Routed Anew on Relentless Demand Worries“.  The price of oil has not “crashed” yet, but it is definitely starting to slip.

As you can see from the chart above, the price of oil has tested the $80 level a couple of times in the past few years.  If we get below that resistance and stay there, that will be a clear sign that trouble is ahead.

However, there is always the possibility that the recent “crash” in the price of gold might be a false signal because there is a tremendous amount of evidence emerging that it was an orchestrated event.  An absolutely outstanding article by Chris Martenson explained how the big banks had been setting up this “crash” for months…

In February, Credit Suisse ‘predicted’ that the gold market had peaked, SocGen said the end of the gold era was upon us, and recently Goldman Sachs told everyone to short the metal.

While that’s somewhat interesting, you should first know that the largest bullion banks had amassed huge short positions in precious metals by January.

The CFTC rather coyly refers to the bullion banks simply as ‘large traders,’ but everyone knows that these are the bullion banks.  What we are seeing in that chart is that out of a range of commodities, the precious metals were the most heavily shorted, by far.

So the timeline here is easy to follow.  The bullion banks:

  1. Amass a huge short position early in the game
  2. Begin telling everyone to go short (wink, wink) to get things moving along in the right direction by sowing doubt in the minds of the longs
  3. Begin testing the late night markets for depth by initiating mini raids (that also serve to let experienced traders know that there’s an elephant or two in the room)
  4. Wait for the right moment and then open the floodgates to dump such an overwhelming amount of paper gold and silver into the market that lower prices are the only possible result
  5. Close their positions for massive gains and then act as if they had made a really prescient market call
  6. Await their big bonus checks and wash, rinse, repeat at a later date

While I am almost 100% certain that any decent investigation by the CFTC would reveal that market manipulating ‘dumping’ was happening, I am equally certain that no such investigation will occur.  That’s because the point of such a maneuver by the bullion banks is designed to transfer as much wealth from ‘out there’ and towards the center, and the CFTC is there to protect the center’s ‘right’ to do exactly that.

You can read the rest of that article right here.

There are also rumors that George Soros was involved in driving down the price of gold.  The following is an excerpt from a recent article by “The Reformed Broker” Joshua Brown

And over the last week or so, the one rumor I keep hearing from different hedge fund people is that George Soros is currently massively short gold and that he’s making an absolute killing.

Once again, I have no way of knowing if this is true or false.

But enough people are saying it that I thought it worthwhile to at least mention.

And to me, it would make perfect sense:

1. Soros is a macro investor, this is THE macro trade of the year so far (okay, maybe Japan 1, short gold 2)

2. Soros is well-known for numerous market aphorisms and neologisms, one of my faves being “When I see a bubble, I invest.”  He was heavily long gold for a time and had done well while simultaneously referring to it publicly as a speculative bubble.

3. He recently reported that he had pretty much exited the trade in gold back in February. In his Q4 filing a few weeks ago, we found out that he had sold down his GLD position by about 55% as of the end of 2012 and had just 600,000 shares remaining. That was the “smartest guy in the room” locking in a profit after a 12 year bull market.

4. Soros also hired away one of the most talented technical analysts out there, John Roque, upon the collapse of Roque’s previous employer, broker-dealer WJB Capital. No one has heard from the formerly media-available Roque since but we can only assume that – as a technician – the very obvious breakdown of gold’s long-term trend was at least discussed. And how else does one trade gold if not by using technicals (supply/demand) – what else is there? Cash flow? Book value?

5. Lastly, the last public interview given by George Soros was to the South China Morning Post on April 4th. He does not mention any trading he’s doing in gold but he does reveal his thoughts on it having been “destroyed as a safe haven”

It is also important to keep in mind that this “crash” in the price of “paper gold” had absolutely nothing to do with the demand for physical gold and silver in the real world.  In fact, precious metals retailers have been reporting that they have been selling an “astounding volume” of gold and silver this week.

But that isn’t keeping many in the mainstream media from “dancing on the grave” of gold and silver.

For example, New York Times journalist Paul Krugman seems absolutely ecstatic that gold has crashed.  He seems to think that this “crash” is vindication for everything that he has been saying the past couple of years.

In an article entitled “EVERYONE Should Be Thrilled By The Gold Crash“, Business Insider declared that all of us should be really glad that gold has crashed because according to them it is a sign that the economy is getting better and that faith in the financial system has been restored.

Dan Fitzpatrick, the president of, recently told CNBC that people are “flying out of gold” and “getting into equities”…

“There have been so many reasons, and there remain so many reasons to be in gold,” Fitzpatrick said, noting currency debasement and the fear of inflation. “But the chart is telling you that none of that is happening. Because of that, you’re going to see people just flying out of gold. There’s just no reason to be in it.Traders are scaling out of gold and getting into equities.”

Personally, I feel so sorry for those that are putting their money in the stock market right now.  They are getting in just in time for the crash.

As CNBC recently noted, a very ominous “head and shoulders pattern” for the S&P 500 is emerging right now…

A scary head-and-shoulders pattern could be building in the S&P 500, and this negative chart formation would be created if the market stalls just above current levels.

“It’s developing and it’s developing fast,” said Scott Redler of on Wednesday morning.

Even worse, volatility has returned to Wall Street in a huge way.  This is usually a sign that a significant downturn is on the way…

Call options buying recently hit a three-year high for the CBOE’s Volatility Index, a popular measure of market fear that usually moves in the opposite direction of the Standard & Poor’s 500 stock index.

A call buy, which gives the owner the option to purchase the security at a certain price, implies a belief that the VIX is likely to go higher, which usually is an ominous sign for stocks.

“We saw a huge spike in call buying on the VIX, the most in a while,” said Ryan Detrick, senior analyst at Schaeffer’s Investment Research. “That’s not what you want to hear (because it usually happens) right before a big pullback.”

The last time call options activity hit this level, on Jan. 13, 2010, it preceded a 9 percent stock market drop that happened over just four weeks, triggered in large part by worries over the ongoing European debt crisis.

And according to Richard Russell, the “smart money” has already been very busy dumping consumer stocks…

What do billionaires Warren Buffet, John Paulson, and George Soros know that you and I don’t know? I don’t have the answer, but I do know what these billionaires are doing. They, all three, are selling consumer-oriented stocks. Buffett has been a cheerleader for US stocks all along.

But in the latest filing, Buffett has been drastically cutting back on his exposure to consumer stocks. Berkshire sold roughly 19 million shares of Johnson and Johnson. Berkshire has reduced his overall stake in consumer product stocks by 21%, including Kraft and Procter and Gamble. He has also cleared out his entire position in Intel. He has sold 10,000 shares of GM and 597,000 shares of IBM.

Fellow billionaire John Paulson dumped 14 million shares of JP Morgan and dumped his entire position in Family Dollar and consumer goods maker Sara Lee. To wrap up the trio of billionaires, George Soros sold nearly all his bank stocks including JP Morgan, Citigroup and Goldman Sachs. So I don’t know exactly what the billionaires are thinking, but I do see what they’re doing — they are avoiding consumer stocks and building up cash.

… the billionaires are thinking that consumption is heading down and that America’s consumers are close to going on strike.

So what are all of those billionaires preparing for?

What do they know that we don’t know?

I don’t know about you, but when I start putting all of the pieces that I have just discussed together, it paints a rather ominous picture for the months ahead.

At some point, there will be another major stock market crash.  When it happens, we will likely see even worse chaos than we saw back in 2008.  Major financial institutions will fail, the credit markets will freeze up, economic activity will grind to a standstill and millions of Americans will lose their jobs.

I sincerely hope that we still have at least a few more months before that happens.  But right now things are moving very rapidly and it is becoming increasingly clear that time is running out.

Time Is Running Out

  • Ralfine

    here some more bad news: Bank of America increased their profit only by 300%.

    • HecatesMoon

      Poor Bank of America. 🙁
      It’s hard to get by on just millions and billions like that these days. tsk tsk….

  • Ralfine

    Remember a few months back? You said America has now so much oil, it will become an oil net exporter.

    One way to react on that is to reduce the risk factor to foreign oil, that means it will become cheaper.

    Another way to react is to make the oil cheaper to make the market unattractive to newcomers.

    • DownWithLibs

      Does anyone know what has been decided on the shale oil (apparently vast amounts in the Rockies) that I keep hearing about? Is anyone trying to extract it?

  • Ralfine

    Of course you sell Intel stocks. PCs are run by Intel. Smartphones and tablets are run by ARMs.

  • Ralfine

    GM is doing bad for some time now. 3 of its european brands are in trouble or already bancrupt – Saab, Opel, and Vauxhall.
    Factories are closing and with fear gripping the remaining workers, quality will be affected further.

  • VegasBob

    It ought to be evident to anyone with common sense that Bernokio’s (aka Bernanke) toxic combination of zero interest rates and money-printing (aka “quantitative easing”) has done nothing except turn the US dollar into a “hot potato.” As with any “hot potato,” the person holding it wants to pass it off to somebody else as quickly as possible. Hence, investors have rushed back into stocks, and now real estate, hoping against hope that they can earn some kind of real return on their money, while simultaneously dumping their hot potato dollars onto somebody else.

    Despite Bernokio’s printing of trillions of counterfeit electronic dollars that have been used to reflate the stock market and generate an echo housing bubble, there is little or no empirical evidence to support Bernokio’s assertion that his economic policies have created or saved even one single job or contributed in any way to an “economic recovery.”

    At best, it can be asserted that Bernokio’s policies have permitted Federal Government borrowing and spending to ramp up sufficiently to conceal or delay the onset of the Second Great Depression. What we really have is a statistical illusion in which the economy appears to have basically flatlined.

    My personal view is that Bernokio does not know the first rule of drug addiction, which is that there is no such thing as “enough.” Bernokio’s first three money-printing programs failed to keep the stock market reflated, so he finally came up with a new money-printing program of $85 billion a month to REALLY juice up the markets.

    I suspect that the “high” of Bernokio’s current $85 billion-a-month money-printing program is now wearing off, and the US economy is returning to a depression-like baseline of steady economic decline.

    In simpler terms, I suspect that Bernokio has pumped his patient (the US economy) so full of monetary heroin that the patient has finally died on the operating table, in which case all further intervention is completely useless.

    The only sensible action at this point is to fire up the crematorium and allow a new, healthy economy to arise from the ashes of the old, dead economy.

    • Ralfine

      Actually, the traditional purpose of low interest rate is to invest in manufacturing, mining and agriculture. That means buying machines, employing people, sell products, make profit.

      There is only one action on the stock market, when buying stock is investment: the IPO.
      All other activities are gambling, and have negligible effects on a manufacturer (except commodity prices).

      Financial institutions do not generate wealth, they multiply money. Money that is not backed by any produced product, hence inflation.

      All the recent bubbles were not caused by the industries they got the name from, but by financial institutions together with their embedded journalists gambling with “forecasts”, expectations, dreams, greed,

  • Tim

    I really don’t know what to believe. It’s impossible to make sense of any of the financial markets because all of them are manipulated. Dr. Steve Sjuggerud of Stansberry Research and editor of True Wealth believes stocks will soar over the next few years. He even said the DOW could go to 50,000. And Dr. Sjuggerud isn’t without credibility. Before joining Stansberry Research in 2001, he was Vice President of a global mutual fund and had his own hedge fund.

    I’m at the point where I really don’t care about any of this stuff anymore. I’m just tired.

    • MeMadMax

      We got so many worldwide gyrations affecting the world economy that it’s hard to say when the curtains finally come down… but at the rate this is going, it looks soon, with no intermission in between…. the ol’ fat lady is warming her voice for the grand finale….

    • Ralfine

      That’s good. Sit down and have a rest. Volatility is fuelled by people jumping up and down, running hither and thither.

      On the other hand, highly volatile markets CAN bring large profit in a short time to those who buy low and sell high, while ruining those who buy high and sell low.

      And as the rich are getting richer, the golden rule to become rich is: You need to be rich in the first place.

      Or fearless.

      I am neither, so I stay away from stock markets and casinos.
      I cut my basic needs.
      I have some cash that covers these basic needs for some time.
      When I have a job, I fill this cah pot, and then accumulate wealth – good quality products tuat will last forwver.

    • markthetruth

      The questioned to be Answered is :

      Who can you ” TRUST ” anymore !

      the end…

    • tayronachan

      The 1920s stock market of the Weimer Republic. “During the Weimar Republic hyperinflation, stocks went up 7,000%…”

    • Alasha

      lol… Amen

  • A few more months? I would say we have at least a few more years until another crash.

    • HecatesMoon

      Who in the world knows at this point? It could be a few years or with the craziness that seems to be picking up lately I suppose we could wake up tomorrow and things suddenly be changed. I don’t think I could be surprised either way, but sheesh is there a current in the air lately or what?

  • jsmith

    I’d like to ask Mr. Paul Krugman two questions. Mr. Krugman, when someone sells their gold, who buys it? Someone has to buy it, right? And… Mr. Krugman, does that mean that interest rates are going up on savings accounts? I need interest rates to be set at 8% so that I can open a savings account. I need to stay ahead of the 7% inflation rate! Tell me Mr. Krugman. Do tell.

  • markthetruth

    ” EINSTEIN ” couldn’t figure out the mess we got this world into !

    God needs to take the pencil out and use the eraser and start over again.

    the end…

    • Tim

      He’s going to.

      “And he that sat upon the throne said, Behold, I make all things new. And he said unto me, Write: for these words are true and faithful.” Rev. 21:5

      That’s my hope. There’s no hope in this world.

      • Cata

        God is my only hope too, I am sick and tired of this world and of the filth it spews out. I can’t do anything in this world without being someone’s slave. If I try to have a field to work and get my food and everything it’s impossible because farmers are too poor in my country to do anything. I have to go slave at some horrible multinational where they exploit you like an animal. I am so sick of this filth I will burst into tears of joy when this world finally breaks down but then I will remember the children and be overwhelmed by sorrow.
        When God’s judgement on the world begins, I just want to be small as an ant and hide somewhere in the cracks of the earth, it will be horrible but well deserving of this pitiful human society.
        God bless you all who trust in Him, just the most horrible period in human history to go through and that’s it, were done. God help us!

        • god is your only hope…? you might want to start backing that hope up with relationships to other humans.

  • Rufus T Firefly

    So Enron-paid stooge Krugman is cackling about gold’s slump is vindicating his policies (which have five years of not. Working under the obumessiah)? Back in October 1987 his ilk were cackling about how Black Monday was proof that Reagan was about to give us another Great Depression. Didn’t happen then.
    Besides some manipulation, gold is volatile in the short term, as are most financial sectors. Some decline after13 years of increases was inevitable.
    Hopefully the banksters who so deservedly made a mint in gold will be able to buy Philadelphia’s assets at a good price now that Mayor Nutcase is selling them to pay his bosses ( unions).

  • K

    Michael, another excellent article. I find myself in total agreement.But let me add one bit of good news. With the Senate defeating any new gun control laws today. At least one of the sparks, that might have started the violence is eliminated for now. Yes the economic spark is still there, and it does not look good. But at this point one spark, looks better than two.

  • Mustard Seed

    These “crashes” are not accidents. They are not anomalies. They are ORCHESTRATED…for a purpose. The people running the mega banks and corporations are CRIMINALS. The people running our government, our judicial system, and our regulating agencies are CRIMINALS.

    What do they know that we don’t know?

    The TRUTH.

    They know none of this is an accident. They know the insider info. They know exactly who is in on the takedown and who isn’t. They know which agencies will protect them, and how to deal with those that won’t. They know the whole world’s economy is being manipulated, and they are 100% dialed in to exactly what is going on.

    They know the American people are IGNORANT. Most Americans don’t understand that the presidential elections are a farce to deceive us, the politicians do not serve us, the schools do not educate (they indoctrinate) us, the entertainment industry is used to desensitize us, the laws are to control us, the taxes are to impoverish us, the mega banks created the mega debt/derivatives to rob us, and the MSM are used to manipulate us.

    Or are we? Ammunition is flying off the store shelves. Americans may just finally be waking up.

    • MeMadMax

      Yea, well you may be right, but they can’t destroy us… why? They need us…. to keep slaving away… The banks are not destroying us, why would they do that? It would mean the end of their wealth…

      • CDP

        But would it destroy their wealth? The whole point of the feral reserve bank is to transfer wealth from common men to elitist. We are cattle to them. They only need us as long as we serve some purpose that benefits them. Once that purpose is fulfilled, we are expendable.

      • Mustard Seed

        The banks really don’t generate anything except debt, and a conduit of wealth transfer to a small group of executives. And you are right. They need us to keep their fractional reserve fiat debt/currency system afloat. But our economy is already destroyed because the amount of debt we owe is not serviceable…ever. The only reason everything still continues is due to the amount of debt our government is “printing” every day to keep the system going. It will end.

        • MeMadMax

          I said/say basically the same thing in my posts here and elsewhere… I’m just wondering when/how it will come to an end… And also, I wonder why in the heck people can forget about this huge debt that is incorrectable and will eventually kill us, so easily? Do they really believe that it can be fixed? Even if they stopped all spending now, it’s too late, it would be self sustaining, like a runaway nuclear reactor that is gonna eventually meltdown…

          • HecatesMoon

            Ok….I read, I believe it was on Business Insider, that our debt, despite how high it is, is totally ok because the U.S. holds a much greater value in assets than it does debt. Do you or anyone else care to give their two cents on that statement? I would like to know what people think about that;.

          • MeMadMax

            I would also like to add that all of our debt is more than all the money that exists in the entire world… So in theory, it exists “on the books” and someone may come along and wave a magic wand and make all that debt disappear, this is an option of course, but would have the effect of throwing a grenade into the entire monetary system… of the world… since we are “the reserve currency” of the world it would pretty much screw everyone… Also, that is the only reason why we are not greece right now…. and foodstamps too… the only socialist program I can agree with lol

          • Mustard Seed

            The public believes what they see on the idiot box. They do not or cannot think outside of the moment, and they DEPEND on the MSM to do their thinking for them. Because of this, people are easily desensitized and conditioned by the 24/7 “news”. They are completely manipulated.

            Meltdown. That’s a great way to describe what is happening. I believe you are absolutely correct. But I also believe that the criminals who desire control already know how they want to transition the world into the new system. In fact, I believe we are already quite a way down the “transition” road.

            I do not believe that all the mega corporations and mega banks or central banks are working in mass unity. They are too self-absorbed and narcissistic for that to happen. But there is a very small core of them that are considered too big to defy. They are attempting to control the world, and so far they have had great success in convincing governments of their indispensability. But the dam is starting to crack.

            When will it end?

            If you mean the manipulation…never…as long as our governments refuse to “defy”.

            But John Q. Public is waking up, and the “meltdown” may not go as planned.

          • Mustard Seed

            The current financial system end is happening now as each government capitulates into the new debt slavery…

    • kathy k

      Well said Mustard Seed I am surprised there is a negative vote. Oh well good response

      • Mustard Seed

        Thanks, Kathy. I don’t mind the negative responses. Just hope ECB website keeps growing and more people discover the TRUTH. Take care.

  • Rushmore

    I would say that everything is going according to plan. Prep and then prep some more!!!!

  • hillbillyhustle

    How are investors going back into stocks when the dow, s&p and nasdaq have been selling off with gold and metals? Investors are buying the 10 yr bond. when the fed stops printing money then the investors will run back into stocks. It’s like watching kids on a see saw. One goes up the other goes down. As far as the metals market…..I’m buying when the market sells off more. Metals will go down with it. We will have a good week or two to buy before numbers come in and people run back to gold for safety.

    • 007

      I think they miscalculated their manipulation of the gold market. It has poured over into the stock market and margin calls have started a stock downturn.

  • jokyjo

    When this crash comes the gubmint won’t be able to bail out the banks this time. There will be nothing left. End of the road.

  • HecatesMoon

    Stocks droppin’, Ricin coated letters– and to OBAMA of all people!, Boston marathon bombing, ammo “shortage”, the gun bill getting slapped down (which SEEMS like a good thing BUT certain people didn’t get what they wanted so what will they do about that???)….. it’s makin’ me restless!

    • HecatesMoon

      And all I can think about the bombing and the Ricin is, “PLEASE don’t let them haul in a prepper, please don’t let it be a prepper, please don’t let it be a prepper….”

      • Vicky

        It would be in their best interests to do so, and whatever is good for them is what will happen. Truth, Justice and the American Way no longer exist. Too much “weird” in the news lately, meant to cause concern and confusion. Something big will happen in between these little fires.

        • HecatesMoon

          We all know already that they don’t like “our kind” but if they decide to really start zeroing in… ohhhh boy….

      • I won’t be surprised one bit if they blame it on a prepper; it’s my #1 bet.

    • K

      They will do everything they can, without a change in the law. Restrict importation of ammo. Continue to go after the Vets by declaring them mentally defective. Thus giving them a reason to grab their guns. And they will try to change the balance of power, in the 2014 elections. For folks living in the Cities, no change. For folks living rural, far less reasons for the feds to be running around the countryside. Rural folks, just got a small break. Enjoy it.

      • HecatesMoon

        I wonder if they will not orchestrate another event to try and shove it through again.

        • K

          For now I doubt it. They were sure they could pass it in the Senate. Imagine even the general public would notice, if they failed twice. That’s right,I believe their egos will stop them from trying again for a while. Sad thing to have to rely on.

  • Lisa

    I am thinking about putting an offer in on a house. The payments will be slightly less than what I am paying in rent right now with taxes and insurance and the property is on a well. Should I hold off? I just don’t want to buy and then regret it. I have zero debt. Any advice?

    • Tim

      Just remember, when the furnace or water heater breaks, you have to fix or buy new ones because you are the landlord/property owner. But there’s the freedom of ownership too… so which is worth more to you?

    • Mark

      Well you have to live somewhere and interest rates are very low if you get a fixed rate loan. If you lost your job, how long could you pay rent to the bank. At least you could grow a garden since you have well water. The cost of city water is so high that sometimes gardens don’t pay well enough to grow them. Just make sure that your down payment and closing costs do not leave you broke in case things go wrong. Get a 30 year fixed rate loan without a prepayment penalty and if things are going well for you pay down the principal each month inorder to retire the loan faster. Make sure the home is in great shape with inspections so that you don’t have suprise repairs like septic tanks and so on.

      • “. The cost of city water is so high that sometimes gardens don’t pay well enough to grow them.” ummmm rain barrel anyone?

        • Mark

          true in some cases, many areas do not allow you to collect rain water as they claim that all of the water is theirs

    • Robert (qslv)

      Lisa, don’t forget taxes and maintainence. Is it a place you want to stay in for the next 10-15 years?

    • dave

      Rents will crash, too, in the next leg down. Real estate is not finished falling. Any interest savings will be eaten up in over paying, now. Only, if you plan on staying there indefinitely.

  • 007

    Great article. This gold takedown is such an obvious market manipulation. Our local coin stores have sold out of all their gold and silver coins. The price for physical gold remains almost unchanged on eBay and online stores. The Blaze has an article highlighting massive gold buying around the world. They are doing all they can to break the back of the market, but I believe the public is catching on.

    I just loaded up on more gold and silver coins. Unfortunately, I did not see much of a drop in price.

    • ZigZ

      China and Russia have been stock piling gold so that when they merge currencies it will be a gold backed global currency to replace USD.

  • Blackhawk

    All the big guys dumping stocks when all the dupes are pushed to load up on stocks. Then an orchestrated crash in gold to push everybody from gold to more stocks. A pattern emerges: The big guys will load up on physical gold they just brought down with paper while leaving the dupes with the worthless paper.
    It happened before and it happens again, yet the sheep flock is still ignorant and buys all the nonsense economics they are spoon fed by their masters.
    Apologies to anyone who feels offended!

    • dave

      Baaa, baaa! Does anyone really trust the market, anymore? Pension Funds are going to get cleaned out, in the next crash.

  • seb

    Soros dumping bank shares ???? Erm to invest in what ? Keeping dollars on account within those same banks ? That’s pure nonesense !

  • Ralfine

    There are several aspects.
    Stock prices are mostly fuelled by greed and gambling.
    And when poor people have some money to spare, they start to participate in easy money game, and start to believe that money can work and generate profit. But just like in every other pyramid scheme, the profit of the early entrants depends on the stupidity of the later entrants.

    Now, the poor don’t have anything to spare for gambling. They even cash out their retirement funds, which then can’t participate in the stock casino as before. They in turn probably need to dump some of their gold and oil to remain liquid.

    For the boring middle class it then depends on their storage and buffer capacity to cover peaks and valleys. “Just in time” or “from hand to mouth” is not a valid long-term strategy, merely a last minute survival tactic.

  • MeMadMax

    “another major economic downturn?”
    Well, yea… there’s no way we can correct a 16T+ debt window… while we spend everything on entitlements and war… just ain’t gonna happen… we are done unless we stop the spending… taxing ourselves to death is a minor/temporary fix that will just result in permanent downturn in the long run….

  • chilller

    Organized crime + zero law enforcement = very uncivil unrest.

  • Rancher

    I hope nothing happens for a few more months cause fishing season is getting underway out here in the western mountains. Otherwise we are locked and loaded for things going south….

    • Guest

      Yeah me too. Just got divorced and I’m waiting for MY hard earned 401k to get split in half….if it crashes now, she might end up with all of it. 🙁

  • seth datta

    Economy Wars V: The Banking Empire Strikes Back

    “May the farce be with you, always…”

    Not so long a time ago
    In a galaxy definately not so far away
    Emperor Soros and Barack Vader plan their Dominion.

    • Mustard Seed

      LOL! My kids loved this comment.

  • seth datta

    I hereby petition the White House to change the national anthem to p0rn0 music, seeing as we’re all set to get screw@d.

  • germanycalling

    It paints a rather ominous picture for the months ahead.
    More people are speaking of the very short future this year, last year was more, ” yeah , but not right now ”
    Max Keiser was the first to make a call for April, maybe he will still be right. Several others are doing much the same now. Things are hotting up, seems hardly a day goes by without some new game changer. Still dont understand German MSM bull, but then again I dont want to

  • I know this sounds really out there but check out the One Peoples Public Trust and their UCC filings …

  • Trailer Park Investor

    Governments, Central Banks, the super large (in the loop) investment firms and the (in the know) Billionaires are all STILL buying gold. This price drop was “engineered” by dumping (worthless) paper gold to clear out all the small to average investors of their physical gold so the Governments, Central Banks etc. could buy their gold cheaply. Now is NOT the time to panic but to buy MORE GOLD & SILVER and yes it may drop more but IF it does you buy more. This paper ponzi scheme will all come crashing down and when it does you don’t want to be holding worthless stock certificates in your hand. But IF you bought Gold & Silver you will come out smelling like a rose…

  • Trailer Park Investor

    More Good News at Bank of Amerika
    It seems that Bank of Amerika has sold all it’s accounts and closed ALL it’s banks in Arkansas and several surrounding states as well. Sounds like things are NOT going so well at Bank of Amerika, NOT like they are saying. Yea IF you sell an asset it will reflect on your balance sheet, but you loose something, if you sell it to get the extra capitol. So no, things are not all rosy at BofA. IF so then why are they closing banks and selling accounts???

  • ZigZ

    A correction is inevitable. Fed QEing devalued USD by 25% and GDP is growing at an anemic rate. GDP would have to grow at a double digit rate to make up for the value lost.
    ObamaCare Recession will hit very soon.

  • Mondobeyondo

    From the looks of it, a precious metals crash and oil crash (and possibly other commodities) is EXACTLY what we are seeing right now… .*sigh*

  • Ivegotaquestion

    I’m new to this. How are we supposed to realistically use our gold/silver coins in the event of a collapse in our daily trading, etc? Micheal can you do an article on this? thanks.

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