Investors,

Fekete is a very good source of information for anyone who wants to understand gold and what true money is.

I think he spends too much time discussing the relationship between the futures market and the spot price of gold though. In my opinion this is a common misconception based upon the fact that people have the beleif that it is a free and honest exchange.

This belief is constantly pushed by the corrupt business media who constantly quote the futures market price and its gains or losses instead of the actual spot price. They constantly like to mention how large the long position is and yet fail to mention that for every long position there is a corresponding short position. It reminds me of how the FED likes to constantly talk about consumer price inflation and how they are fighting it. While all the time failing to mention that price inflation is just a symptom of monitary inflation which they create.

It is the spot price of gold and its direction that is important in todays environment and not the price or direction a corrupt and rigged futures exchange sets.

It is the physical demand and supply balance that is the ultimate driver of any market direction. Since very few gamblers in the gold or silver futures market actually ask for physical delivery of their bullion when they are in the money. Instead they just role the contract over and increase there bet thus there is actually very little physical demand created by this market. Thus unlike the spot market where the gold is being physically traded and has to be delivered. This market should never be used as a guage of price direction.

It is a know fact that there is vastly more paper contracts being passed around than all the know surface stores of bullion in existance.This is why I call future traders in the bullion markets and to a lesser extent in the other commodities gamblers. Why would you invest in something that you know can not be delivered to you when the crunch comes.

The bullion futures markets in the US was set up in 1975 as a means to control the price direction of the physical commodity itself. This was done by corrupt politicians with the aid of even more corrupt bullion banks who were guarenteed that they would make huge profits. Who actually come up with the idea, the politicians or bankers is up to debate but my guess is that it would have come from the bankers and Wall Street community. This was done in order to drain investment away from the physical spot market thus being able to limit demand and influence price direction. It was done in order to help maintain faith in a faux currency system under which fraudulent practices are easily commited. It served the government because it aloud it to expand and run debt up that they would never be able to do under a gold standard, which in turn served the business interests of those people running the governement.

The rigging of the bullion futures markets works in this fashion. The 4 major bullion banks in the US, who own by far the largest amount of outstanding short and under water positions are lent bullion by the central bank. They are charged I believe a rediculous 1% for this privilage of gambling with the nations gold.

They then have used this large supply of bullion for the last 3 decades to short the market. That is borrow the bullion from the central banks and sell it on the spot market thus creating an oversupply and driving the price of bullion down. At the same time they took bets in the futures market and made large sums of money by being proven right on the direction gold would take far more often then those traders who bet against them. Thus they got to be know as the smart money ( institutional investors) and the non insiders and retail investor became know as the dumb money. It is in this fashion over the course of time that the futures market became the market one looked to for price direction rather than the physical market. This only served to help the manipulators as it ment that they needed less and less actual physical bullion to work their scam as more and more investors took direction from them. All they had to do when too many future traders were in the money is essentially go short with every increasing amounts of paper contracts and if necessary with physical bullion on the spot market. This eventually would cause a further collapse in the spot price of bullion as an essentially unlimited amount of paper gold which is thought to exist physically but does not is floaded on the market. Those futures traders who roled over there contracts would then find themselves out of the money once again and the bullion banks would collect their fee's hahahahaha.

Now the famous Hunt brothers figured out what this scam was and tried to work it to there favour in the silver market. What they did was buy into the silver futures market heavily knowing that the bullion banks would heavily oppose them. They unlike the vast majority of bullion future traders supported the physical market by asking for the delivery on some of their contracts. They also bought in the physical market to support the price. The bullion banks were forced to make delivery on there contracts by buying on the open physical market also because the US governemnt had already sold all of its silver bullion and no longer had any to lend to these banks. This further supported the price of silver and attracted other investors into bidding it up. This game went on for some time until the Hunt brothers who also roled over ever increasingly larger amounts of futures contracts asked for delivery on them all.

The bullion banks of course could not do this without bankrupting themselves and thus they changed the rules on the exchange. They changed the rules to total liquidation only, forcing anyone who wanted to sell for trading purposes to sell everything. This rule change caused a panic and collapsed the market and saved the bullion banks from bankruptcy and aloud them to continue their game.

The Hunts took it to court but of course were ruled against by a bunch of governement lackey judges. They were vilified in the press as speculators who tried to corner the silver market when in fact all they were asking for is fullfillment of the other parties contractual obligations. Obligations that obviously could not be met and are were thus entered into fraudulently.

The Hunt brothers were held out as an example of what would happen to any other large players who wished to oppose the establishment.

This same senario played out on the LME in 2006 on the nickel futures contracts. When the shorts who were under water so heavily got called for physical delivery and could not make it because they did not actually have the metal themselves. The board members then changed the rules of the exchange. They took those longs nickel who had it on storage with them and used that to cover the shorts. Giving the longs a pathetic 1% premium. This of course was done in order to promote market stability and had nothing to do with the fact that the vast majority of the shorts where these very same board members who pushed their scam too far. This is just one example of many times that futures contracts have been reneged on or the rules have been changed to benefit the shorts.

The same senario as happened in the nickel market in 2006 is playing out in the bullion market now. The bullion shorts who have pushed their scam too far are heavily under water and cannot rectify their situation. The physical demand is too strong, over the years they have depleted the central banks gold reserves by continual small sales in order to execute their scam thus they have less and less gold to thow at the market in order to suppress it. Traders are once again looking to the spot market for direction rather than the futures market, further limiting the gold cartel effectiveness. The bullion cartel is fighting a rear guard action now trying to limit the speed that bullion rises rather then actually driving it down.

It will not matter since they will never be able to replace the gold they borrowed from the central banks or even cover there own short positions. Their continued shorting actions in the face of this must then lead one to believe that they have no intention of actually making good at some point on their contracts by providing physical delivery. The game will then be up an the price of gold will spike like it has never done before.

This is of course fraud on the bankers and futures exhanges part that someone may actually try to sue them for. However they will have about as much success as the Hunt brothers did in such an attempt. These bullion Banks and futures exchanges will without a doubt in my mind hide behind Bush's new law that say's they cannot be prosecuted. This is because they were working in the governement and public interest in order to support the US dollar hahahaha. Thus all liabilities will be forgiven and another Wall Street crime covered up. This type of law is not passed for no reason at all. t is passed in order to cover someones rear end.

Thus in my opinion the non insiders and retail crowd who invest in the bullion futures market truely are the dumb money and thus aptly named. This is because they are nothing but gamblers who are drawn in by the prospect of winning large amounts of money. Like all gamblers though they never know when to get out and beleive that they actually can beat the house. Truely dumb hahahahahaha.

The smart money in the gold market are those players who know not to push their luck and ask for delivery on a futures contract, buy physical gold on the spot market or invest in world class gold deposits like ARU has.

Regards,

F.F.