Today one of the top economists in the world spoke with KWN in the aftermath of the dramatic developments surrounding yesterday’s breaking news from King World News that two JP Morgan whistleblowers had confessed that JP Morgan manipulates the gold and silver markets. This is a powerful discussion with Michael Pento, and the interview ends with a timely and exclusive piece from the acclaimed economist.
The King World News interview with Andrew Maguire just revealed that two JP Morgan whistleblowers have come forward with hard evidence that JP Morgan manipulates the gold and silver markets. This has exposed the fact that the big banks, the primary dealers, which are very closely related to the Federal Reserve, work in tandem to suppress the price of gold -- all at the bidding of the government.
This means the price of gold could skyrocket. That’s what I think the after-hours action was about, money beginning to position itself accordingly, as well as some short covering.”
Pento: “Gold has no friends in government because it’s the ‘Great Revealer.’ It exposes the government for what it is -- virtually all governments are counterfeiters and middle class destroyers. So I’m not surprised that people in power would love to see gold prices taken down even more aggressively.
“When I look at the chart of the after-hours move in gold on Friday, right after the KWN interview with Maguire was released, not only do you see a substantial move in gold, but also a very dramatic increase in volume. And, again, this was after-hours on a Friday (see chart below).
My thoughts are that any entities which are naked short gold, and don’t have the ability to deliver the underlying commodity, now have to be a very nervous group of individuals. And anything that exposes their highly tenuous position makes them want to cover.
This also makes entities which have been on the sidelines, waiting to buy this artificially manipulated price of gold, want to come in to the market on the buy side because when you see entities which are that naked short, and unable to deliver, they want to bring them a lot of pain.
Wall Street is now reflecting upon the fifth anniversary of the Lehman Brothers bankruptcy and the start of the Credit Crisis. In fact, most are celebrating the belief that the complete collapse of the American economy was avoided thanks to a massive intervention of government-sponsored borrowing and money printing.
However, it is much more accurate to maintain that the Great Recession was only temporarily mollified by our proclivity to re-inflate old bubbles. Therefore, the Great Recession should not be thought of as something that is behind us. Quite the contrary; the last five years have been spent creating the conditions conducive for producing a depression.
It was our reliance on asset bubbles to generate economic growth that caused the Great Recession of 2007. Therefore, to believe that the U.S. has truly overcome our problems, we should have already weaned the economy from its addictions to debt, low interest rates and inflation. But nothing could be further from the truth.
Our central bank pushed down interest rates to one percent during 2002-2003, and that was the primary contributor to the creation of the housing bubble. Now the Fed has resorted to providing a zero percent overnight lending rate, from December of 2008 until today. The monetary base has jumped from just $800 billion, before the start of the Great Recession, to $3.7 trillion—and it’s still growing at a rate of one trillion dollars per annum. The money supply is back to the same growth rate we witnessed during previous bubbles.
Our nation’s debt is now at 107% of GDP and the aggregate debt now stands at 350% of our annual output—the same level as it was at the start of the Credit Crisis. Home prices are rising at the same double digit clip as they were during the height of the real estate bubble and stock prices are up nearly 20% year-over-year on little or no earnings and revenue growth. And, keeping in line with our tradition of lending money to people who can’t pay it back, subprime auto loans now make up 36% of all car financings.
Yet despite of all the above facts, most investors now believe our problems are behind us and interest rates can rise without causing a slowdown in growth. But if that were indeed the case, why is it that the Fed is still conflicted over whether or not the economy can withstand even a slight reduction in its $85 billion worth of monthly counterfeiting? It seems they are tacitly admitting that our GDP growth (anemic as it may be) is still contingent on the perpetual growth of asset bubbles, debt, low interest rates and money printing.