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Topic: The shearing of the sheeple  (Read 259 times) previous topic - next topic

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The shearing of the sheeple
This forum has referenced the manipulation that takes place in the PM market on several occasions.
A few of us are fortunate to have some experience in PM's and are so used to it that we have adopted a certain strategy that allows us to remain solvent and hopefully sane.
I believe the key to success is knowing that an event like last week's dumping of such a large amount of futures  is part of being in metals. You must all know that this type of trading is a somewhat regular event.
The regulators are all in line with official policy of keeping the price of precious metals completely under control.
There are limits to this, $250  at the turn of the Millennium, and $700 in 2008 are examples of the maximum that the paper market can drag the physical market with it.
I believe Dec. 2015 was a similar price bottom, this does not mean that another unwinding of the paper market isn't possible.
They can't let it unwind to the upside, because it would never stop, similar to what is happening in Bitcion, with no way for the establishment to short it, or take it over with a buyout or regulate it out of existence, or tax the gains on it for that matter. It is tulip mania on a worldwide scale, with very little standing in it's way as it snowballs, becoming a self-fulfilling prophecy. As people make money, they re-invset in the sector, this makes sense. You keep the winners and sell your losers.
Normally there are controls to alleviate this compounding of gains.
In BTC there are markets with leverage, similar to other asset markets. The difference is that as the new money flows in and is lost to the market, those making the money aren't the big boys, it is common people.
As these common people gain they are saving them, not all are converted back into fiat.
Bitcoins are continually removed from the exchanges, put away in "cold storage" preventing them from being used against the market.
In other words their manipulation (see Chains last crackdown right after a CNBC story about BTC) will temporarily slow the rise, but in the longer term, will actually do the opposite of the intent. The long term holders didn't sell and as a collective gained BTC to be put away.
The manipulators may have made money but they aren't making BTC to keep. If they are doing this, then it will be game over for any currency that is devaluing vs BTC.

This is what started to happen in the 1970's with silver and the Hunt Brothers. They made so many US dollars by holding real wealth that they were able to convert those dollars made on paper into more real wealth, Physical Silver. As the Hunt Brothers did this, the rest of the market started to follow and real shortages were causing a self-fulfilling prophecy of never-ending prices.
That is when they changed the rules in the middle of the game, and then blamed these 2 brothers for "cornering the market". It was the changing of the rules that really led to the decline, taking most of the gains made by the rest of the PM investors with it.
The next 20 years were controlled with government dis-hoarding.
You can see the resulting price increase over the next decade.
With no more metal to fill the demand gap, other methods of preventing the collective from "cornering the market" had to be developed.
I know what the public goes through because I am one of those "Joe Publics"  with the exception that I'lI have an addiction to this sector to the point of living it every day for years on end.
So I am sure what happened to me, happened to the "collective" also.
In the mid 2000's My stocks and physical made me a lot of unrealized profit, which I re-invested into the stocks.
When the crash of '08 happened, I was forced to sell due to margin calls which drove the price on my remaining holdings down, which cased me to have to sell more, this continued until I had basically nothing left, right at the bottom.
This was the first part of the plan for the decade. The second part came during the next few years, where they didn't cap the market at all and let it go up to the point where the same situation manifested, all the newly made money was put back into the market, so that when it was decided to start the fulfilling cycle of de-leveraging, The higher prices that they allowed in 2011 gave the collective just enough rope to hang themselves, again. Just in case they were still dangling, like me.
It was honestly luck that I liquidated my PM stocks in 2011.
Allowing the leveraged and margined money to increase with price far enough above the long-term averages gave them the room to be able to get the margin call ball rolling.
The issue now is that the last cycle down was pushed below the long-term averages, and the metal is being taken from the markets again (See Russia and China's purchases). This just means that the same thing will have to keep happening to slow the melt-up of the entire sector. I believe this to be inevitable as the only value in a US Dollar or any other currency is it's utility.
It doesn't take an Einstein to figure out that fiat is a horrible store of value for any duration, as it is constantly being diluted.
Because they were limited in the amount of control they could exercise, new methods needed to be developed in order to stem the flow of capital into the sector as metal prices rise.
Of course the primary objective is to keep the collective from taking physical possession. This is paramount to keeping control. The control comes from having everything being based on leverage and margin.
Many of us have learned to stay away from both, which adds to the problem of how to stop us from making fiat and putting it back into the sector.
They needed a way for the money that is coming into the sector to just evaporate, to be taken away - some method of diverting some of the flow of money that is an ever-increasing demand for true wealth such as precious metals.
They came up with a way at the end of the decade and started implementing it right before the 5-year "Bear market" so that when gold did make a real bottom and start rebounding, the populace could be held in check and taught the school of hard knocks PM investing. Lesson #1: If you invest in the PM market, you are likely to never want to do it again - not after the losses you will suffer faster than you can even begin to think about what is happening.




 
 



 
 
  • Last Edit: March 06, 2017, 01:59:30 AM by mamastinky
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