Gold and What Moves it.

... “Increasing attention needs to be given to what is happening with the quantity of money, Eric.  All the money printing ordered by central planners is starting to take effect.  US dollar M1 has now been growing at double-digit rates for two years.  Over the same period M2 growth has been in the high single digits.  Even the broader measure of dollars, M3, which is calculated by ShadowStats.com, is at 4.5%, which is the highest rate of growth in more than 3½ years. 

Money is no different from any other good or service.  It too complies with the laws of supply and demand.  If you create money at a rate faster than the demand for it, its ‘price’ declines, which for money is its purchasing power.  With crude oil and other commodity prices like copper continuing to work their way higher, the purchasing power of dollars and other fiat currencies is being eroded.  So all of this money printing is clearly taking hold and becoming apparent.  That gold and silver prices remain in their trading ranges suggests to me that both of them have some catching up to do with the price rises we are seeing in some basic commodities.

What is clear is that central banks have flooded the world with QE ...

Today James Turk spoke with King World News about a historic event which has just taken place in the United States.  Turk states that this situation is not being accurately reported in the mainstream media.  He also believes that because of this unfolding drama, “It is all but certain now that the dollar is headed for hyperinflation.”  Here is what Turk had to say:  “The huge bases in gold and silver are getting bigger, which is very positive, Eric.  The only thing the drop in price over the last few days has done is set up a retest of this significant and growing support.

“We are seeing just another example of how the central planners intervene in the precious metal markets by selling paper to drive the price down during month-end option expiry.  This maneuver maximizes the profit for their agents - those bullion banks facilitating the gold price suppression scheme – so that the calls they've sold to investors and financial institutions expire out of the money.  It also ensures that as many call buyers as possible lose money, which helps the central planners foster a negative sentiment for the precious metals. 

"We have seen this time and again, Eric.  Contributing to the manipulation is the FOMC meeting this week, during which the central planners like to put a lid on gold and silver prices while they announce their new money printing schemes.  And then watch out for Friday when the unemployment report is released, usually a time of wide price swings aimed to trigger stops.  None of this is new.  But there is something new and important happening in Washington DC. ..."

Today the man who counsels prominent hedge funds, investment banks, institutional money managers, mutual funds, pension funds, and high net worth individuals across the globe, told King World News that he believes we are facing a 1987 type scenario where the markets will get badly shaken.  Belkin, President of Belkin Limited, also believes we are eventually headed for a destructive hyperinflation where gold will have an extended upside move. 

... “The markets are so overextended.  The markets have been going up since 2009, for almost 4 years now.  We need to have a selloff, that’s a healthy thing for the market.  The other thing I would like to say is sell rallies.  When the market is going up you buy the dips and the trend bails you out.

When the market is going down you sell aggressively into these brief, two to three day rallies that we’ve had, and that’s what I’m telling my institutional investors to do.” ...