Gold bubble has reached equivalent 1980 peak

Thank you to all the closet Paper Money lovers who have linked to my site over the past couple of weeks, I hope you have enjoyed reading the truth about the precious metals cartel and the hypocrisy they dish up to the unsuspecting public on a daily basis.

In a previous post I wrote about the bear market in the USD. The purchasing power of the US Dollar has fallen dramatically over the past 100 years, but this bear market will end. It is only a matter of time. When the Dollar starts rising strongly this will likely trigger the end of the precious metals bubble as gold's purchasing power starts to decline.

Many of the precious metals cartel claim that gold is not in a bubble, but we only have to look at an inflation adjusted chart to workout that it is.

Inflation adjusted gold price shows bubble in metal as extreme as 1980 peak

The next time you see a claim from the precious metals cartel that gold is not in a bubble, ask them one simple question... 

"Was gold in a bubble at the peak in 1980?" 

Once they answer in the affirmative you can show them the above chart to prove that gold is in fact, once again, in a bubble when you've adjusted the 1980 peak for inflation.

They will probably try and find a way to discredit the above chart, claiming that the inflation figures are wrong or coming up with wild claims that differing factors driving the gold market today means that it will go higher. Others still will try and claim that gold will be remonetised, but this is nothing more than speculation and it's unlikely central banks will once again relinquish control of the money supply to a useless barbarous relic.

One must concede to the facts. Gold is as overvalued today as it was at  the 1980 peak. From these high levels we are likely to see gold fall to 1/3 of it's current price, maybe even less. The cost to mine the metal is probably a good place to start, which is currently around $700-800 as per the chart in this previous post, but it could fall much further. 

Some Australian iron ore miners recently found out the hard way that commodities can fall further than any imagined "price floor" and with 170,000 tonnes of gold mined to date and above ground as ready supply their is no guarantee the cost to mine will provide a price floor. Indeed such an abundant supply of gold is likely to lead to people to cart wheelbarrows of gold to their local dealers in order to exchange it for Paper Money.

Accept no substitutes to real, Government backed, publicly trusted, Paper Money... avoid the gold bubble and backup your truck to load up on crisp, freshly printed notes.

- Paper Money Shield

P.S. If you didn't already notice I put up a page last week displaying some pictures of various paper notes which may interest you...

Bill Murphy, GATA Chairman, Market Manipulator!

As I've pointed out on this blog previously, the hypocrisy of the precious metal cabal is almost unbelievable if you didn't observe it for yourself. Claiming that those shorting the metal are manipulating the price when they are hoarding it in much larger quantities to force the price higher. Claiming that there is a cartel pushing down the price when it is they who are trying to force the metal higher through resistance.

Bill Murphy would have to be one of the most vocal commentators out there claiming that precious metals are being manipulated, but what of his own past?

You may or may not be aware that Bill Murphy has actually been convicted of fraud and manipulation himself (from Mineweb):

Gata chairman Bill Murphy pulls no punches when he rails against the "gold cabal", but his critics think it's a case of the pot calling the kettle black since he was drummed out of the futures industry on similar charges nearly a decade ago. 

NEW YORK -- Nine years ago, Gold Anti-Trust Action Committee chairman Bill Murphy and his two brothers had their Commodity Futures Trading Commission registrations permanently revoked and paid a massive fine to settle a Comex fraud case. 

The issue resurfaced in the backlash following Murphy's circulation of a Royal Bank of Canada report that amounted to a summary of Gata's claims of a conspiracy to suppress the price of gold. Critics of the abrasive conspiracist say his invective-laced vendetta against the bullion banks looks rather rich in the circumstances of his own CFTC settlement on nearly identical charges, and continued reluctance to admit his guilt. 

Settled in February 1993 at a total cost of $650,000, the case stemmed from accusations that Trading Resources Inc, a futures commission merchant and commodity pool operator owned by the Murphy brothers, had engaged in "non-competitive trading and fraud in the trading of copper futures and options contracts for [its] proprietary and discretionary customer accounts... from October 1987 through February 1988."

What?

Yes that's right. One of the most renowned precious metal advocates who claims the precious metals are manipulated was in fact a manipulator himself (and might I add, still is!! Read on...). He continues to manipulate the precious metals higher today by spreading half truths and rumours.

Often you will hear him quoting from his many "secret sources" (vague sources such as "The London Trader") that something will happen within a particular time frame, rarely it does, and this is simply one of many tactics employed to get gullible people to buy more physical, restricting the market in an attempt to push up the price.

Murphy was banned for life:

Murphy has a case for sympathy considering that the big firms retained their CFTC and LME registrations, while he has been banned for life and remains locked out of futures trading until 2003.

Is it any wonder he has turned to a new method of manipulation, trying to get those around him to buy Gold in order to push up the value of his physical holdings. No longer able to manipulate the futures market he turned to other ways to make money.

I would not be surprised if once he has traded out of his worthless metals that he turns around and starts PATA (Paper Anti-Trust Action) in order to start boosting the purchasing power of his cash. As I pointed out a couple of days ago, the USD has been in a long term bear market, but it will eventually turn around and head much higher in purchasing power terms (a new USD bull market will begin).

Bill Murphy is manipulating your minds. Beware.

- Paper Money Shield

Speculators try slamming gold through resistance

As I've previously identified on Paper Money Shield, we regularly see the precious metal cartel trying to manipulate the price higher in order to benefit themselves. An important overhead technical resistance has been formed at around the $1800 level and the cartel will do anything in their power to try and push the spot price higher:

If they can push the price through the $1800 barrier then there's a good chance they will be able to convince even more suckers people that the price is going to new highs, even though as I've recently discussed the price is well above a fair price set by production cost of the metal.

During trade today we saw what I refer to as a "raid". 

During a raid the precious metal cartel engage the services of professional "paper market" (the cartel uses this description of any market where one is not trading physical assets) traders on the gold exchanges (such as the COMEX) to buy lots of contracts centered around a specific point in time (often during quiet periods or right at the start or end of trading sessions on a particular exchange for maximum effect). They do this in order to overwhelm sellers and slam the price higher (usually in order to scare out stops creating a squeeze higher as they're triggered), take for example this spike:

Clearly this raid was an attempt to send the price shooting above resistance, but luckily on this occasion they were not successful. We must be ever vigilant of the cartel, they have many devious tactics in order to manipulate the price. 

Another tactic they've been known to use is trying to make the COMEX default by taking delivery of their registered warehouse precious metal stock. Funny how a group so publicly against the paper markets such as the COMEX will use them extensively behind the curtains.

We must do what we can to stop these financial terrorists from disrupting the important and long trusted paper markets used by the majority.

It is unacceptable that the majority be put out by the overbearing opinions and actions of a few who choose to play the markets in this unfair manner!

- Paper Money Shield

Precious metal manipulators hoard the metal

One thing we have already established on Paper Money Shield is that the precious metals cartel is extremely devious. They use selective charts and accuse others of manipulation, which I pointed out in a recent post, while it's in fact themselves who are up to no good.

Look no further than the evidence provided in this chart from CPM Group (a reputable company, who are often painted differently by the precious metal cartel):

You will notice that in 2010 there was over 800 MILLION ounces of silver being hoarded in ETFs. This figure is probably much higher 2 years later.

The amount stored in ETFs is likely a drop in the ocean compared with the Shadow Silver Market (this is shadowy market used by the precious metal cartel, they keep their physical off the books and trade amongst themselves so that no one knows just how large their speculative silver hoards really are). Often these transactions will even take place face to face at "stacker meetups" where these Paper Money terrorizing cells  gather to talk about how they will "take down the system, 1 silver ounce at a time".

The precious metal cartel hoards silver (and gold!) in ETFs as well as stacking physical in order to restrict supply and manipulate the price higher.

Often you will see the precious metal cartel complaining about those shorting the market with mere fractions of the amount of silver hoarded in ETFs and physical. For example take this Silver Doctors article where they complain about a mere 16.5m ounces of silver being used to send the price lower:

A miniature replica of the May 2nd, 2011 drive by shooting was just completed, as silver was knocked down the proverbial mine-shaft moments ago, dropping nearly a dollar in nano-seconds on Monday’s Asian open. Volume data indicates that 3,297 contracts, or 16.5 million paper ounces of silver were dumped on the market.

If those shorting the metal can manipulate the price down with a small 16.5m ounces, imagine what the precious metal cartel can do with more than 800m ounces (and as explained this only accounts for recorded silver, not taking into account the Shadow Silver Market)!

The goal of these hoarders is to drive the price higher and then trade their metal into a larger amount of fiat currency. Ultimately, like we all do, they just want more Paper Money, but go on extensive misinformation campaigns in order to achieve their goals. They are driving a grass roots movement into precious metals to further their cause for a greater amount of fiat money and will stop at nothing to get what they want.

Accept no substitutes. Paper Money is what you should be holding, the currency of choice when it comes to regular use. Gold and silver aren't real money in today's modern world. They are mere barbarous relics and as once described by the great Bernanke only held for traditional purposes.

- Paper Money Shield

Precious metal terrorists destroy Paper Money bank

Reported in Spiegel Online today was news of a "bank robbery":

Thieves in Germany would seem to have been a bit overeager in their attempt to crack open a cash machine using explosives on Sunday night. The resulting blast destroyed the entire bank branch, causing hundreds of thousands of euros in damage.

 

They have reported this as a robbery gone wrong, but in fact this has all the earmarks of a "hit" from one of the underground precious metals terrorist cells.

Rather than peaceful co-existence with Paper Money outlets these terrorists instill fear and doubt into the masses, making them think twice before entering a bank to deposit or withdraw their important savings.

To avoid retaliation against their own physical metal distribution points they often keep businesses to an online/telephone order only model. A precious metals peddler/vendor without a physical outlet is very likely to be involved with such acts as the bank bombing described in the above article. We must be ever vigilant.

I mentioned in a recent post that these terrorists have threatened to and committed acts of violence in the past:

While not always specified, often the cartel is reference to major US banks such as JP Morgan who we at Paper Money Shield hold in good standing as founder and part owner of the Federal Reserve Bank.

Attacks on reputable banks such as JP Morgan is a regular tactic of the precious metal cartel who are trying to push the price higher. They use such violent suggestions such as killing JP Morgan with a silver bullet. Unthinkable that such suggestions should be allowed on the internet. They should shut these precious metal terrorists down once and for good.

Such violence should not be endorsed.

Today I will leave you with a quote:

"On the Internet, inside information is currency, and there will always be counterfeiters among us"

- J. Michael Straczynski

One must be careful what one reads on the internet as these precious metal manipulators have infiltrated many places you would least expect.

- Paper Money Shield

Hypocrisy of precious metals propaganda

As I've already mentioned on this blog (see About Page) there are hordes of precious metals speculators attempting to drive the price higher.

One of their usual tricks is to throw out a chart such as the below (from Silver Doctors):

They tell you that the price is being manipulated downwards by an undisclosed cartel! But notice how the chart above only shows from when the price started dropping? What they don't show you is the graph showing the unnatural spike in silver that occurred prior to the drop...

As we can see from the above chart they price rose unnaturally earlier in trade in this particular trading session and was simply returning to it's natural level as the price drifted gracefully downward again.

The hypocrisy here is amazing, those manipulating the metal higher claim there is a cartel doing the opposite! While not always specified, often the cartel is reference to major US banks such as JP Morgan who we at Paper Money Shield hold in good standing as founder and part owner of the Federal Reserve Bank.

Attacks on reputable banks such as JP Morgan is a regular tactic of the precious metal cartel who are trying to push the price higher. They use such violent suggestions such as killing JP Morgan with a silver bullet. Unthinkable that such suggestions should be allowed on the internet. They should shut these precious metal terrorists down once and for good.

The price of silver has risen steeply over the last couple of months (from around $26 to $35). This is almost definitely the work of the army of small stackers who are trying to drive the price higher and flip the metal onto unsuspecting public at a higher price. With productions costs for silver much lower than today's spot price we can expect silver to continue falling in the long term until the "ponzi factor" is reduced significantly.

There are many influencing leaders of this army using their highly held regard amongst stackers encourage the purchase of physical (an attempt to drive the price higher by reducing available metal for delivery to the non-speculator purchases, such as the use of silver for industrial purposes). They try to use buzz words to give themselves a modern vibe, such as "Get your phyzz from the Doc" but those manipulating precious metals higher have been in the game for a long time... they are far from hip.

There is a cartel in the gold and silver market, they refer to themselves by many different names, such as "stackers" or "silver liberation army", but the ugly truth is they are nothing more than market manipulators set to wreak havoc on the Paper Money that most of us rely on.

We cannot let such blatant manipulation occur in our markets! It's important that we support the Paper Money of our Governments by holding our savings in them. As pointed out in an earlier post, those who choose to hold Paper Money should be rewarded as the purchasing power comes out of the long term bear market and returns to long term averages at much higher levels than today!

Yours in wanting the precious metals manipulators to stop

- Paper Money Shield

Long term bear market will turn around for USD

There are many individuals and institutions trying to imply that the US Dollar will simply keep falling until it is worth nothing. However, a good contrarian investor knows that all bear markets come to an end eventually!

Take for example this chart used in an article at Gold Price:

It shows a US Dollar which has been in a bear market for some 100 odd years.

No bear market lasts forever and we can see sharp upticks in the value of the US Dollar several times over the last couple of hundred years, I suspect we will see similar as the public reaffirms their confidence in Government backed Paper Money over the next few years or maybe even decades. This chart shows the value of the Dollar is currently well below long term averages. As more people flock back to Paper Money including the US Dollar it's value will no doubt rise.

Those holding Paper Money can expect their value to increase as the long term bear market turns into an unrelenting bull market. Any other outcome (such as that of rabid precious metal investors suggesting the Dollar will return to a value of $0) seems highly unlikely and in fact implausible if we consider the facts.

As mentioned in an earlier blog post, the cost to extract the metal is far below the spot price, so as the price of gold and silver contracts (reducing the previously discussed "ponzi factor") we can expect capital flows to return to Paper Money, further solidifying it as the money of choice for the majority of the populace.

Yours in Paper Money faith

- Paper Money Shield

Mining costs prove precious metal prices are a ponzi

One of the most obvious ways that we can show precious metals are just a ponzi where buyers rely on the greater fool to flip to is by comparing the rise in mining costs to spot price over time.

Take for example the below chart:

The above from an article on Seeking Alpha shows that the price of gold has increased far more than the cost to mine it! I call the difference between the spot price and the production cost the "ponzi factor". Who is to stop these mining companies undercutting each other and selling gold cheaper when such a healthy margin is built in?

There is nothing to stop the price of gold retracing all the way back down to production cost at around $800, that's over half of the current spot asking price.

Now you might argue the same of Paper Money. It's cost to produce are much lower than the value assigned to it, however, Paper Money has one benefit that gold and silver do not. They are backed by world Governments, institutions that have proven time after time over many thousands of years that they will act in the best interests of their citizens. What more could you ask for when relying on a place for your savings?

Yours in Government backed currencies

- Paper Money Shield

History of Money

Welcome to Paper Money Shield where we will keep you informed of the ongoing battle against government currencies by the seedy zealots of the underground precious metals movement. This site will look to expose the truth above these unscrupulous individuals and armies being assembled to attack the good name of Government backed Paper Money/Currencies.

You can read more about Paper Money Shield on our about page.

Government backed currencies have been trusted and used in circulation for many thousands of years. There have been very few examples where Government backed money has not been accepted by the vast majority of a nations inhabitants.

At times Government money has been represented by tokens formed in gold and/or silver. These were used as mere representations of the Government's worth backed by the people's faith in their leaders. As time went on Governments have turned to Paper Money (including Polymer) for the many benefits that it offers, such as lower production cost (reducing Government expenditure on circulating monetary units), reduced ability for counterfeiters to produce fake money (gold & silver coins much easier than to copy than a Paper or Polymer note with inbuilt security features) & other benefits which I will cover at a later time.

You will note that almost all historic use of money has been Government provided. Read more at Wikipedia: History of Money.

Money which isn't backed by the trust in Government & Central Banks is intrinsically worthless. Often we see precious metals advocates talk about the intrinsic value of gold and silver. What they don't tell you is that gold and silver often trade much higher than even the cost to mine. Why does silver trade north of $30 an ounce when it only costs in many cases $5-$10 to mine? It is simply a ponzi scheme of great magnitude where those buying expect to sell for a higher price in the future. At least paper money offers the protection and value provided by Government (who are often elected by the people to work in the best interests of the people).

Yours in fiat money solidarity

- Paper Money Shield