Posted on October 4, 2015 by Martin Armstrong
QUESTION: Hello Martin,
First let me say thank you for all that you do keeping us informed on the markets and geopolitical events.
I’ve been an avid reader of yours for many years and especially your typed correspondence during the years of incarceration.
My question pertains to today’s “Gold and Money Supply” article. Since gold will only rise during a crisis in government, do you consider gold a leading indicator and if so would the precious metal then rise in value ahead of main stream media letting the public know we are in trouble?
ANSWER: Gold will rise when confidence in government declines. It did not respond to the rise in money supply, it responded because people feared the banking system would collapse. Once that fear abated, gold declined from 2011 yet money supply doubled. So the brainwashed keep harping on money supply and gold relationship. Gold declined for 19 years while money supply increased following 1980. How wrong do you have to be and for how long before one admits it?
The object here is to survive; not to tout some theory that is wrong and then blame paper gold and manipulation. They always like paper gold in bull markets though and it is amazing how when gold rises its never manipulated but real and all declines are manipulation. If gold was systemically manipulated, then it should be the only market down. Proof that clipping markets (manipulation) is different from systemically manipulating something is the fact that ALL commodities are in a bear market. Gold is in the trend of decline for the moment. No big deal.
Gold will rally when we see the same crack in confidence in the banks and government. Mainstream media will preach the opposite as they always do for they are part of the political establishment – not free press. So when they say its a false rally, no worries, they are usually wrong 100% of the time. So it is hard to say it is a leading indicator. It is an indicator of a serious decline in confidence whether or not the media even understands that.
Right now, everyone is turning bullish assuming once again the jobs number will mean that QE4 will come so gold must rise. Perhaps this is necessary to sucker everyone in for the final low. The Benchmarks are still the target. Yet gold in this role will rise when the ECM turns down, not up. It declined from the 2011 low moving into 2015.75. So it remains a matter of time and price right now.
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