Gold Posts Biggest One-Day Loss Since 2008

You can almost predict the oft-repeated explanations the pundits offer up every time the precious metals behave irresponsibly.

  • The trouble with being a contrarian is that you can never be quite contrarian enough. We began having doubts about the ‘feds inflate…gold soars’ hypothesis last year. It was too easy…too obvious. And if it were that easy to inflate a nation’s currency, how come the Japanese couldn’t get the hang of it in the ’90s?
  • Inflation, yes…but not for a while. And gold? Well, we are in it for the long run. In the short run, anything could happen.
  • To clarify our view on gold, The Daily Reckoning is not bearish on the metal. It is not bullish on the metal either. It is buggish. We are gold bugs. In the long run, gold will retain its value. Since that’s all we ask of it, we are always satisfied. Even if it is down in the short run – and it went through an 18-year down cycle from 1980 to 1998 – it will come back in the long run.
  • A wave of risk aversion swept through global markets, triggering massive technical selling in the precious metals.
  • Bullion tumbled more than 4 percent in heavy trade, briefly falling below $1,060 an ounce as escalating sovereign debt fears in Europe prompted investors to bid up the dollar and unload riskier assets.

The “experts” are having trouble explaining the movements in the precious metals markets because they just can’t comprehend a debt-based monetary system.

The process that the Federal Reserve, or any bank, uses to create money “consists of making an entry in a book, that is all,” says Graham Towers, governor of the Bank of Canada. “Each and every time a bank makes a loan (a debt) . . . new bank credit is created—brand new money.”

There is just no limit to the amount of monopoly those scoundrels behind the Federal Reserve can create out of “thin air” that they use to manipulate the dollar on the foreign exchange market and the precious metals at the Comex.

You are free to blame them for keeping investors from being wealthy while everyone else is out of work, out of hope and living in tent cities, but be sure and thank them for postponing the greatest calamity the world has ever seen.

When The Powers That Be can no longer keep the precious metals from taking off and the dollar from landing at zero, look out, Mad Max and the breakdown of society is around the corner: This is an Ominous Neutral Sign.

Previous article at disinfo: Ominous Signs Are Aligned: Not A Particularly Good Sign

Coming soon: An Oily Obaminous Sign

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