They’ve Had Enough: Queue The Gold & Silver Hit Pieces

When you can’t smash ’em, trash ’em. And so the MSM is out, as per tradition, with hit pieces to help slow this price rally. Here’s a round-up of the lies claims today…

This is why the MSM hit pieces matter:

When the price must be allowed to rise as the wash-rinse-repeat cycle calls for, we have reached that stage after over a month of smashing. When gold and silver prices are actively being smashed, there is no need for hit pieces, just cover-ups. “Gold fell because the dollar is so awesome”. “Silver is not as valuable as it once was because it is just an industrial metal in a weak commodities market”. Those are the canned responses.

Some may be quick to say “but the MSM is not actively coordinating with the cartel to bad-mouth the precious metals.” Good point. Maybe they aren’t, so let’s consider it.

Mainstream financial news articles are “anybody but gold & silver” fans, much in the same way there are “anybody but the Patriots” fans. They are paid to pump the stock markets, and they are either unwilling to peek behind the curtain or they are flat out told not to. Furthermore, good behavior is rewarded with more articles, and gold and silver bashing is good whereas praise of the role of money and and hedge against inflation, uncertainty, and out-of-control governments is punished.

It is not as the cartel is saying: “Hey, we need four staggered hit-pieces today”. It doesn’t have to be. It is an unspoken rule. They know it. Furthermore, there is the whole cognitive dissonance thing going on. So whether individual writers know their bashing is part of the multi-faceted approach to kill sentiment in the precious metals, that is beside the point.

And so we arrive at the need for some good old-fashioned gold bashing today. After a healthy rally overnight, enough was enough, and the cartel needed the jawboning to begin.

Hard to open up a website without seeing the gold bashing this afternoon. As the Catalan President was kinda-sorta declaring independence but not really unless you push him to far, the dollar was a little chaotic, to the downside, and so, where the fingers failed on the keyboards to day, nothing like a little MSM headlines to feed the black boxes.

Here’s a round of of the most absurd.

From Bloomberg: Is Gold Really a Good Hedge?

From the beginning it is necessary to take pot shots at the precious metals, because, market guys appearing on Bloomberg knows who is buttering their bread:

Gold bugs point to a myriad of reasons to own their favorite metal, from fiat currency debasement to gold’s history as a monetary unit.

We didn’t know it was just a monetary unit. We just thought it was money. At any rate, the analyst goes on to recommend gold as a hedge against “market turmoil”. In what most people don’t need serious research to understand the “no-duh” aspect of the argument, every analysis and comparison comes with a caveat (see butter on bread):

Interestingly, gold’s relationship with inflation over the past three decades has been sharply negative, suggesting the metal could drop as inflation rose. So its reputation as an inflation hedge appears somewhat exaggerated.

Uh, okay. That’s why a $20 Double Eagle from 1933 costs over $1300 dollar but a $20 fiat Federal Reserve Note has lost, what is it now, 97% of it’s purchasing power? Though not to appear biased (sarcasm friends), Further problems with mainstream analysis is that when one can’t escape the reality from gold (and silver) acting as a massive hedge against uncertainty, analysts will cherry pick the data to either prove their point, or prove the goldbug’s point less. In the case of the Bloomberg article, it as all from either 1987 or the 1990s on. Had he chosen an event such as, say, August 15, 1971, when Nixon severed the last link to gold, his point would have come across very different.

Moving on to Reuters, there is not beating around the bush. In regards to the U.S. Fed & Co moving to a whopping 125 – 150 basis points, as opposed to the 100 – 125 where they are now, well:

“The Fed is going to raise rates, so we see gold breaking out of the (current) range down to the $1,250 level, with geopolitical tensions supporting the downside,” said Societe Generale analyst Robin Bhar.

Although what they say about silver, is, well, mostly true, less the red stand-out antonyms of reality:

“The gold-silver ratio is trading above the 10-year average, suggesting silver is undervalued,” Standard Chartered said in a note.

“Silver’s supply and demand dynamics are supportive of higher prices in light of stagnating mine output and firming industrial demand. India’s silver imports are up almost 60 percent for the year to August while China’s are up 45 percent.”

And for those wondering the opposite of stagnating, which could be rising just as much as falling, well, spend any time here and it will quickly be obvious that mine production is falling.

Then there’s Barron’s, which seems to be right on script with all the rest:

That said, gold may not be able to keep its rally going, as the prospect of interest rate hikes looms.

Then we can shift to MarketWatch who takes the cake today. Right off the bat, we can see the push to label silver as some sort of tax for people bad at math, otherwise known as a lottery ticket:

Silver sees longest win streak since mid-August

If the purpose of the futures market is to discover price so that mining companies can hedge their production against future supply and demand fundamentals and lock in contracts to off-set and mitigate negative market consequences, how is that a win streak? It’s not. That’s just part of the jab. Again the MSM pulls no punches:

“But technically, I am not yet convinced gold will hold on to its gains as it is still below that key $1,300 inflection point. Only a decisive break above this level would be technically bullish,” said Razaqzada.

And that is exactly why it is important to stay the course. As we highlighted yesterday in our Jim Rogers post, when something is so hated, that’s exactly when to buy. And it sure seems like if gold and silver are not downright hated right now, there is absolutely no love…

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