Market Games and Gold

I’ve been trading gold miners for about three years now, and I’ve observed first hand how easily these guys are thrown around by manipulation in the price of gold. There’s paper gold and there’s physical gold, both the same price in the stock market. The idea is that gold is gold, but in reality, there are many times more paper gold contracts than there is physical gold to back them up. According to Heartland Precious Metals, it’s something like a 207:1 ratio! You can be sure that when there’s a default, this will all change.

So here’s what happens. When the price of gold gets to a certain level, every time, without fail, “someone” dumps an unbelievable amount of paper gold contracts on the market and pushes down the price. It forces people to sell, driving the price down even further, and “someone” makes a lot of money in the process by shorting it (betting on the downside). After some time has passed, events occur that push the gold price up again. Then it starts over—someone comes in, usually just before a major negative event and knocks the gold price down in similar fashion. This pattern has become a game.

Oddly enough, the U.S. dollar has an inverse relationship with gold. Generally, if gold is going up, the U.S. dollar is going down and vice versa. This happened after Nixon ended the convertibility of U.S. dollars into gold on August 15, 1971. In no uncertain terms, he broke a segment of the international monetary system that pegged the value of other nations’ currencies to the U.S. dollar, which was pegged to the price of gold. While other nations’ currencies are still pegged to the dollar, the dollar is not pegged to gold. This is ironic because the only reason the dollar was chosen as the world reserve currency was because the U.S. had the most gold.

Back then, gold was $35 an ounce. Had my daddy only bought $10,000 worth, it would be a whopping $371,428 today. I don’t need to explain how several stock market crashes and the debt-burdened dollar has driven the price up. Gold always does an accounting for fiat’s devaluation over time. The sad thing is the U.S. dollar had a very important role as the world’s reserve currency, to manage its printing in proportion to its gold. All it had to do was stand with gold, but it ditched gold just like much of our modern-day world has ditched God, so that it could have more and more on credit. In the future, there will be a day of reckoning, and I don’t think it’s too far away.

This week, the gold miners were slammed down again as the gamers got their high. But if you know anything about the significance of seven in the Bible, then you’ll pay attention to May 8, 2019. This date marks 47 years, 7 months, 7 weeks, and 7 days since Nixon detached the dollar from gold. Psalm 47:7 reads, “For God is the King of all the earth; Sing praises with understanding.” Psalm 47 is the first song of the divine reign, the union of the nations as one people. Who knows when the clock will strike, but it’s worth keeping your eyes open. All the nations in the world reserve in gold, and God loves gold! It will not be forsaken.

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