Golden Dreams & Delusions: The Story about Gold You Haven't Heard (PART 2)

Continuing from Part 1

Why I Became Cautious on Gold

Over the past couple of years as gold pricing soared, I began turning much more cautious as I recognized the increasing wave of manipulation that was building.

This type of manipulation in gold pricing is not something you are likely to hear about other than the times I have discussed it.

In fact, when the topic of gold manipulation arises, gold bugs and other charlatans speak of manipulation by Wall Street and central banks. This is just one excuse they make when gold pricing stalls or sells off.

What they fail to recognize is that the manipulation of gold pricing by central banks (notably the Federal Reserve and Bank of England) occurs so regularly that it has become an accepted component of gold price volatility. 

They always have an excuse to explain why gold hasn’t soared to $5000 yet. The problem is these excuses are always inaccurate.

Aren’t some of you out there wondering why, with Europe getting flushed down the toilet, gold has barely moved? 

The snake oil salesmen are always prepared to spin any line you feed them. For instance, I can already hear them preaching to their prey…“well, gold hasn’t gone up because it’s tied to the dollar and the dollar has gone up.”

Yes Mr. Schiff, that is correct. The dollar has gone up BECAUSE THE EURO IS SCREWED. Yet, Peter Schiff is still telling his sheep that the euro is safer than the dollar!  I suppose he is now trying his luck as a comedian.

Now, if gold had soared, the gold bug dog-and-pony act would tell their sheep it was because they Federal Reserve bailed out Greece, Spain and the ECB via swaps and other financial arrangements. You get the point. These individuals will always spin things in order to provide support for their sales pitch.

Thus, rather than the standard manipulation by central banks and Wall Street, which again is a normal part of gold price swings, the type of gold manipulation I became concerned about was that being carried out the gold bug crowd because this manipulation is likely to end the gold bull market prematurely. It is also likely to cause many less sophisticated investors to lose big because they have neither an active management nor exit strategy for gold. As a result, they are likely to hold onto it forever, thinking that it will remain in a bull market indefinitely.

Who are these Gold Bugs?

The gold bug crowd includes most individuals who write about financial and economic issues on blogs and websites. And it includes virtually every individual who believes in conspiracies routinely.

It is a network comprised of tens of thousands of individuals; that’s right, I said TENS OF THOUSANDS. Perhaps the most disturbing fact about this network of gold charlatans and their naïve puppets is that the vast majority lack an adequate or realistic understanding of economics, investments and finance.

The problem is that most people who read and listen to these individuals assume they are expressing unbiased and credible commentaries despite evidence that points to the contrary.

In reality, virtually every one of these charlatans is engaging in marketing activities on a full time basis, all while masquerading as investment experts. They are indeed experts; but only in sales and marketing.

Many of the kingpins of the gold propaganda network have a unique talent. They are able to tell you convince you of anything they want. They are no different than the guys who speak across the country holding “free” wealth seminars. Perhaps you have attended one of these events in the past. If aren’t extremely careful, before you leave you may have signed away $2000 for their “elite program.”  They have an amazing ability to hypnotize their audience; even the biggest skeptics. This is why they are hired to run these events.

And they are able to tell you bold-faced lies without even flinching. This is the type of crowd you are dealing with when you speak of the kingpins of the gold hacks.

Some are gold dealers, while some make money selling gold ads. Others receive under the table payments for contributing to the gold bubble. Their articles are flooded to 100s of websites, they appear on dozens of radio shows and some are even found on TV. They are everywhere you turn.

In the future (time permitting) I intend to expose the inner workings of this network. I will name names and detail how they operate so you will understand that there are a large number of variations on the main theme of pumping gold in order to line their pockets at the expense of their audience.

This is just another reminder that you must always stay away from the media.  Anyone who is in the media has been bought off. And that is a fact. The more they frequent the media, the more they are owned by the media and its sponsors.

Rather than absorbing everything that comes across your eyes and ears, you need to be extremely selective about what you watch, hear and read, especially when it comes to investments because unlike what CNBC would have you believe, investing is not a game, nor is it meant to be “fun” or “exciting.”

Investment content should NEVER be packaged as entertainment, because what you read, watch or listen to could determine whether you retire with a great deal of money or whether you are able to retire at all. So you never want to mix such content in with humor, emotions or psychological triggers such as sexual innuendos. CNBC uses these tactics routinely.

Why Most People Get Conned

Unfortunately, rather than scrutinize print and broadcast material pertaining to the economy and investments, in their quest to gain valuable insight, the vast majority of retail investors swallow what they read and watch, especially if it reinforces their "investment strategy." 

Rather than investigate and question, most investors gravitate towards the views that reinforce their own ideas, which they formed from listening to hacks.

Why do they do this?

In order to understand the answer to this question, we must first identify what it is that influences people. Quite simply, most people use a subconscious voting system which goes with the consensus.

When one viewpoint has been reinforced by a large number of individuals, most people equate this “relative” consensus as validation of this viewpoint. The media understands how this basic element of human behavior works.

Accordingly, when the media wants to influence its audience, it will air many different segments with different individuals discussing the same topic while forming the same conclusions. I call this the flooding approach. To put it in simple English, most people are sheep and the media is designed to lure the sheep into the slaughterhouse.

Who does the slaughtering? 

Those who buy the ads; this is how the game of deceit works, whether we are talking about TV, radio, print or the Internet.

A much smaller handful of individuals will automatically denounce what they read or watch because they most likely suffer from some type of behavioral disorder. Some might liken this to the sheep versus contrarian approach.  While the former analogy would be correct, the latter is not. 

A true contrarian approach has little to do with blindly taking the opposing side of the trade or argument. A true contrarian scrutinizes everything and makes a decision based on the weight of the evidence. Thus, being an effective contrarian requires very good judgment because one must be able to scrutinize different viewpoints, large amounts of data, and so forth, all while remaining unbiased.

Sometimes contrarians go against the crowd and sometimes they go with the crowd. A true contrarian isn’t always moving against the grain. A true contrarian is always scrutinizing every detail to determine whether he is dealing with fact or fiction, hype or reality.

Since most people are sheep they fall for the flooding approach. This is specifically why flooding is one of the most common brainwashing tactics utilized by the mass media. The same method is also used on the internet perhaps even to a greater degree.

Read PART 3