Proof of Gold Price Suppression by Adrian Douglas. [Real price = $53K/oz]

Howdy ATS'ers. Thought some here might find this information a bit interesting...

From GATA(Gold Anti-Trust Action Committee):

GATA board member Adrian Douglas, editor of the Market Force Analysis letter (www.MarketForceAnalysis.com...), examines the ratio between the supply of gold and the U.S. dollar and concludes that the dollar's gold backing has fallen to a mere 2.3 percent and that the real dollar value of gold now approaches $53,000 per ounce. Douglas' new study is headlined "Proof of Gold Price Suppression: Gold and the U.S. Dollar," and you can find it in PDF format with a chart at GATA's Internet site here:

Read This Document!

Some big claims from Mr. Douglas.

He was recently quoted in a Telegraph article about a massive gold swap, since he is a member on the board of GATA:
Secret Gold Swap has Spooked the Market

A discussion of that article in this thread:
Mysterious 380 tonne gold swap = secret bailout?!

More info on gold suppression at my other thread over here:

Gold Rush 21 (Documentary)

A quote from Douglas's article:

Let’s call POG (Price of Gold) the average market price for all gold, that is to say
paper gold and real physical gold which is the price quoted as the “gold price”
each day. If there is, let’s say, only one ounce of physical gold backing each 45
ounces of “gold” that are sold in the market through the selling of unallocated
gold then the price will be suppressed. Forty five ounces will cost $54,000 at
POG=$1200/oz. But if this is made up of 44 ounces of worthless paper promises
for gold and one real physical ounce then the effective price paid for the real
ounce is $54,000/oz. If the investor never takes delivery he doesn’t realize his
investment is backed by just one ounce not 45 ounces.

3 years ago I began to worry about the markets. Did a bunch of research into it and decided to get out and go into gold.

One of the people I talked with was my former companies investment broker. We all had our retirement funds in one account. Smaller land development firm. I set up a withdrawal to get into gold and since I knew I wanted to leave Cali and as long as you transferred your investment from one savings to another, you originally were not hit with a tax.

Hmmmm, except that year. For some reason the government had instituted a 25% penalty even when transferring to another savings. Oh well I still did A LOT BETTER than the retirement account. Anyway the investment broker TOLD me not to purchase gold certificates but to actually take possession of the gold. I took his advice and he never elaborated on it.

I am beginning to believe the gold certificate and future mining certificates is a major problem. This is just another corrupt and soon to be found out problem. Just like everything else. Too bad I have been living off that gold.

reply to post by endisnighe


Wow, good on you for making the switch.

I am trying to convince my family to invest in a little nest egg - one you can hold in your own hands.

The more I talk about it, the more I think it makes sense to them... so hopefully it will pay off otherwise I just come off as annoying.

I also think the paper and electronic gold is just as much of a scam as fractional reserve banking... in fact in Douglas's article linked above he compares the bullion market to precisely that - fractional reserve banking.

It is a gambling scam, no more.

reply to post by beebs


Makes zero sense. We are not on a Gold Standard.

The last I saw an estimate its still under $400 an ounce in cost to mine and produce, even assuming a 300% markup, your talking the current price.

Why is he calculating Golds value based on the existing money in circulation. Was he in a state of suspended animation since the Gold Standard ended, or what?

Look for another motive. He may have horded Gold and now the balloon is getting fragile, he thinks this propaganda will help him unload it. People are naive enough to fall for that and they are the same ones likely hording it.

Why would anyone buy when the price is spiked so high anyway? Why do you think we have all these ads selling Gold? If it were about to skyrocket, no way would they be selling. It's getting ready to adjust down to its real value.

[edit on 7/20/2010 by Blaine91555]

reply to post by beebs


beebs good stuff, I have read most of this and it is of course essential reading - even for the naysayers of gold and those who choose to blindly believe in the machinations of the banker's paper games (ironically it is the same bankers who are also hoarding gold, now moreso than ever).

I posted exter's pyramid just earlier, which is another relatively easy graph for people to digest to get a hold on the global demise that is currently going on.

Now there are some wild projections for gold, and I don't believe this should be anyone's sole reason for making the switch - until they aquaint themselves to some of the stuff you have posted, and the reasons why gold is doing what it is right now.

This chart, which actually (and ironically) comes from someone in JPM, states clearly "ownership of gold in dilutable terms (aka dollars), as a portion of global financial assets has declined from 17% in 1982 to just 4% in 2009. And even though the price of gold has doubled in the time period, as has the amount of investible gold, the massive expansion in all other dollar-denominated assets has drowned out the true worth of gold. Were gold to have kept a constant proportion-to-financial asset ratio over the years, the price of gold would have to be well over $5,000/ounce." (www.zerohedge.com... )

[atsimg]http://files.abovetopsecret.com/images/member/105bd54f2551.jpg[/atsimg]

And here is Exter's pyramid - the philosophy behind it being that mankind has branched out into all sorts of paper shennanigans over the past 100 years or more, and the contraction is now in a healthy reversal back to tangible goods of intrinsic value, with gold/silver being the real focus. The contraction begins with the derivative bubble, through to certain equities et al, think of it in terms of the domino effect or a cascading influence.

Zerohedge points out, "If one were to factor the above table [from JPM] to include this Exter securitized credit money as well, then the true constant worth of gold would be well north of $10,000."

[atsimg]http://files.abovetopsecret.com/images/member/f731ac7f2039.jpg[/atsimg]

reply to post by cloudbreak


Explain why they are selling it like crazy? Then explain why when we are not on the Gold Standard its even relevant?

Golds value is historic. Beyond that its pretty, but you can't eat it and if the bottom falls out, a handful won't get you a loaf of bread.

No, those are the ramblings of a person who wants to start a rumor that will get him a few more dollars an ounce as he unloads what he Gold he has.

Originally posted by Blaine91555
reply to post by cloudbreak

 

Explain why they are selling it like crazy? Then explain why when we are not on the Gold Standard its even relevant?

Golds value is historic. Beyond that its pretty, but you can't eat it and if the bottom falls out, a handful won't get you a loaf of bread.

No, those are the ramblings of a person who wants to start a rumor that will get him a few more dollars an ounce as he unloads what he Gold he has.

Who are "they"? I don't see anyone selling like crazy, other than an organized mob of pro-paper entities intent on suppressing the price so they can keep a lid on it and acquire it at low prices while they still can. This though, they are losing the battle at as confidence has now deteriorated on a global scale thanks to the out-of-control criminal speculation and creation of derivatives, for one.

I am not in the US, but I have heard that there is actually a bombardment of ads to buy gold - you know, the gold party type scams to get people to part with their assets and currency (gold).

I can empathize with your views, many hold it, and each to their own. If gold is only historic and pretty, would you mind explaining why central banks have become net buyers in recent times? Why even bother holding or buying such a worthless relic?

There is talk of emerging rival reserve currencies between trading blocs (being backed by gold), there is talk of deflation/inflation/hyperinflation, there is the fact that dollars and paper currencies are depreciating (you should know that the USD, for example has depreciated 95% since inception as far as purchasing power goes), there is the fact there is global volatility in markets and gold will be the ultimate safe haven...I could go on but I won't for now.

You really need to put together a macro view, not what you see on your television in one country as far as "people selling like crazy". I don't see it one little bit. I see something quite the opposite.

reply to post by Blaine91555


I recommend reading the linked document in the OP.

If you understand fractional reserve banking, just apply that rule to the bullion reserves.

Basically, a large amount of electronic and paper gold are just that. No actual physical gold to back up the market speculation and investments. So, for example, assume there is a ratio of 1 physical ounce to 10 electronic/paper ounces of gold(because of the fractional method/scam). The market price for an ounce is, say, $1,200...physical or certificate. But if everyone went to claim their physical gold at once(like a run on the bank) there is not enough gold there, so naturally the price of that 1 physical ounce would be $12,000.

This is oversimplification hardcore(and probably bad maths ) but you get the idea I hope.

And, GATA has also claimed that many reserves around the world have been laundered back into the market to keep the market price of gold kept low. For more information, please see my other thread, also linked in the OP.

I can only show you the door.

[edit on 20-7-2010 by beebs]

reply to post by cloudbreak


Thanks for the info, cloudbreak.

I'm hoping ATS will start to view this topic like it does Aliens and NWO stuff.

Its probably one of the most important topics that could be discussed here, IMO.

The CASH FOR GOLD!!! scam is really telling as to what is really going on.

And it is interesting, that sometimes on Fox they show the opposite... which is the Buy Gold! ads. I'm not saying I like Fox news, but it is interesting to note.

What is your stand on silver, cloudbreak? Is the same thing going on? Is it due for a large positive correction as well? I mean, its only what, 20 bucks an ounce?

reply to post by Blaine91555


It's a commodity.. it's supposed to be relative to the currencies of the World.. because it's not purchased like oil is with a Petrol Dollar, if one currency begin a decline against others, all commodities should increase (like Gold). Oil is whole other story I won't get into. But Gold has been very stable considering the turmoil the USD has seen, then with more and more people buying into Gold, all while mining has stayed stagnate.

I don't think Gold should be any where near 53k/oz .. but it is certainly undervalued right now.

The TV and magazines are full of ads selling gold and gold coins. More than I've ever seen.

As to the Gold Standard it ended here in 1971. It was a stupid system to begin with. It did not reflect productivity in any way. The value of Gold now is historical and false. It should be based on the cost to produce like all other products and it is a product. The whole thing is a shell game.

If I can pull Gold out of the ground, smelt it and create ingots for say $400, how in the name of sanity could it be worth tens of thousands of dollars? It is just a pretty metal that has lost most of its value as a component of products. Every time you buy Gold your getting ripped at these prices. I imagine the Gold Mines are celebrating night and day right now.

Ask yourself, if you bought heavy into to Gold when it was low and you sensed the balloon was about to burst, would you say don't buy my Gold its overpriced? Or would you try and inflate it even more so as you sold it, people would not realize what you were doing and stop buying, leaving you stuck with a bunch of Gold?

What is driving this is panic buying.



[edit on 7/20/2010 by Blaine91555]

reply to post by beebs


No worries, I think the only thing one can do is what you are doing - keeping stuff out there on forums like this for people to at least have the option of making up their own mind.

I do come across a degree of hostility sometimes when it comes to gold, and I am not sure why other than perhaps it doesn't fit people's paradigm yet of what is going on globally in the current market meltdown we are in the middle of. Or they simply don't own gold yet, and are invested in what may be in future losing propositions. But, it's good to just keep things real and deal in facts and current events, which all point to a secular bull in the precious metals.

Silver, I think as many do that it too has tremendous upside, possibly even moreso in relative terms to gold, but who knows for sure. What I do know is it still has yet to move, and if you've been keeping up with Adrian Douglas and his evidence of manipulation (among others), then certainly we have a long way to go in silver as well. Silver is an excellent sibling to gold, and possibly could well be at bargain basement prices if you were to take a mid to long term view.

Silver is an ideal way too for anyone to enter into the precious metals market at very inexpensive prices, just to see how it feels, what it takes, and to start learning more.

Anyway, it is good that there are still opposing views on the metals, but I am very confident we are a long way from being out of the swamp in terms of market meltdown and stability. A long way away.

reply to post by Blaine91555


Ok. I can see your point, but that doesn't mean that the price isn't suppressed.

You might not value it, but loads of people around the world do.

That gives it a demand, and therefore a value.

About 65 percent of processed gold is used in the arts industry, mainly to make jewelry. Besides jewelry, gold is also used in the electrical, electronic, and ceramics industries. These industrial applications have grown in recent years and now occupy an estimated 25 percent of the gold market. The remaining percentage of mined gold is used to make a type of ruby colored glass called purple of Cassius, which is applied to office building windows to reduce the heat in the summer, and to mirrors used in space and in electroscopy so that they reflect the infrared spectrum.

www.enotes.com...

Gold is central to safe space travel, so it’s demand has obviously grown as the space industry has. For example, more than 40.8 kilograms of gold was used in the construction of the famous US Columbia space shuttle, mainly in brazing alloys, fuel cell fabrication, coated plastic films and electrical contacts.

www.goldipedia.gold.org...

reply to post by cloudbreak


Thanks, and yeah there is always an open door.

I think silver will be my introduction to precious metals, thats for sure.

And maybe some really small weight gold coins, just because.

But I'm putting my cart before my horse... I gotta get some dollars haha.

Originally posted by Blaine91555
Why do you think we have all these ads selling Gold? If it were about to skyrocket, no way would they be selling.

Because that's what Gold dealers do for a living...sell Gold ?

More correctly, they both buy and sell Gold.

Dealers make their money on premiums (the spread), so it makes no difference if Gold is selling at $400 an oz, or $4000. Nor does it matter whether prices are rising, or falling. Why ? because it's SOP in the Gold biz to hedge your inventory in the futures market.

A little slogan for future reference: Education...before pontification.

I'll give you this much by shear happenstance though....

As a high profile Gold activist, you can bet the ranch that Adrian Douglas is hoarding Gold...and given his stature...lots-o-Gold, but you can also bet your bippy he won't be selling any time soon.

Originally posted by Blaine91555
The TV and magazines are full of ads selling gold and gold coins. More than I've ever seen.

As to the Gold Standard it ended here in 1971. It was a stupid system to begin with. It did not reflect productivity in any way. The value of Gold now is historical and false. It should be based on the cost to produce like all other products and it is a product. The whole thing is a shell game.

If I can pull Gold out of the ground, smelt it and create ingots for say $400, how in the name of sanity could it be worth tens of thousands of dollars? It is just a pretty metal that has lost most of its value as a component of products. Every time you buy Gold your getting ripped at these prices. I imagine the Gold Mines are celebrating night and day right now.

Ask yourself, if you bought heavy into to Gold when it was low and you sensed the balloon was about to burst, would you say don't buy my Gold its overpriced? Or would you try and inflate it even more so as you sold it, people would not realize what you were doing and stop buying, leaving you stuck with a bunch of Gold?

What is driving this is panic buying.



[edit on 7/20/2010 by Blaine91555]

Well there will always be dealers in gold, that is how they make money on the spreads. There are good premiums to be made on selling gold, and I can assure you those selling are also buyers - that is just the nature of business.

The cost of mining the higher ore grades (and the more easily reached)gold, is some 350-750. That is just for mining it. Not for the additional costs of minting, sales, distribution, refining and all the other overheads that are included in the price of a final gold product. Production of gold is also decreasing.

But you must remember the miners mine the easily reached gold (which is dwindling) while the gold price is low, leaving the lower ore grades and harder to reach gold for when the prices are higher. It costs much more to mine these deposits, so you could assume that with the additional depths and effort to mine the harder-to-reach deposits, the associated costs of mining go up in tandem with a rising gold price.

Mankind has always needed some form of currency, or a reflection of productivity - be it seashells, rocks, scissors or paper - but gold has always been the ultimate, and historical choice, as it satisfies all the criteria for money moreso than anything else.

So as the trust in seashells, rocks, scissors, and paper as a reflection of productivity wanes, the value of the currency of first and last resort, gold, increases.

I do not know the true price of gold, nor do I really want to speculate too much, but I know it is not $400, and I know it is not 1188 or 1200. It's value, relative to the creation of global paper financial assets (which are in fact the shell game you speak of) is worth way, way more.

Because gold is money. That is why banks have always held it. That is why they always will. They won't make a song and dance about gold as they don't want gold to skyrocket, as that will mean their grip on paper is being lost.

I agree with you that many people will say one thing, and do another, when it comes to investments in an effort to create a false market move. That is why it is great there are so many people dissing gold still and saying it is only worth $400. Bring the price down so they can buy. Unfortunately we won't see $400 again for a very, very long time, if ever.

reply to post by OBE1


I hadn't read your reply OBE1 as I was still typing mine, but I agree completely - the price of gold is irrelevant to the dealers as they hedge, and make money on the spreads and premiums.

There will always be sellers, or dealers, of gold - that is if there aren't at some point actual shortages of physical gold or silver.

reply to post by beebs


Yes, just take it one step at a time and don't pile in would be my only advice, not that I would ever advise anyone in reality. But you can make information known to people for them to make up their own minds. Silver is a great starting point though...then just keep reading and learning.

reply to post by Blaine91555

If I can pull Gold out of the ground, smelt it and create ingots for say $400, how in the name of sanity could it be worth tens of thousands of dollars? It is just a pretty metal that has lost most of its value as a component of products. Every time you buy Gold your getting ripped at these prices. I imagine the Gold Mines are celebrating night and day right now.

Then you get into Supply and Demand though.. Ford can make a car for $8k .. doesn't meant hey sell it for that, because people pay more for it and there is even a demand for the expensive car.

For Gold, not much is produced.. it is one of the rarest metals, used for coin, jewelry, manufacturing/electronics and a variety of other uses..

So long as there is demand for it, it has value.

But you are right.. a gold backed system doesn't reflect productivity, it reflects taxation, hording and warfare abilities. Countries that had the most Gold reserves produced the most wars to acquire it.