There is no free market capitalism where central banks, eight commercial banks, and two “institutions” (IMF and World Bank) effectively and completely control and distort, almost all supply & demand

Posted by freedomforall 1 year, 4 months ago to Economics
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"In case you think such statements are meant to create drama rather then perspective, let’s consider objective facts rather than controversial adjectives and nouns.

It would (and has) taken hundreds of pages to delineate the myriad ways in which fiscal and monetary policy from global law-makers and bankers have hijacked, distorted and then destroyed free market price discovery and natural, true capitalism.

Rather than break such a word count here, let us briefly examine just one corner of this twisted world order and illustrate how rigged the current playing field otherwise known as free-market capitalism and free market “price discovery” truly is.

In short, let’s draw back the curtains to that corrupted stage otherwise known as the COMEX futures market for precious metals and see for ourselves.

At its most basic level, however, the COMEX futures market is a place where paper contracts representing actual hard assets (from soybeans to gold) are traded.

In a normal world, for example, a contract to buy a bundle of grain at a fixed price can be traded on the COMEX market to ensure fixed (i.e. contractual) pricing against market price swings.

Once such a contract (be it for grains, metal, or pork-bellies) nears its expiration date, the holder of the contract can either take delivery of the contracted-for commodity, or rollover (i.e. extend) that contract for a longer period, thereby delaying actual delivery.

Pretty simple, right?

Such simplicity, however, gets more complex when that same exchange (thanks to creative young bucks like Leo Melamed and Alan Greenspan) allows those simple contracts to be traded with leverage, anywhere from 100:1 to even 300:1.

In short: Far more contracts than the actual assets within them.

The simplicity gets even more complicated when participants are allowed to go long AND short those contracts via the use of admittedly complex derivative instruments.

Finally, the simplicity gets fully distorted, and complex, when a small minority of extremely deep-pocked participants control the vast majority of the buying and selling of those contracts, and hence their pricing.

In short, the COMEX futures market is not a simple place for the buying and selling of paper contracts, but rather a highly corrupted place for the manipulation, leverage and manipulation of those paper contracts and hence the pricing of the assets they represent.

But paper, as we know, is ordinarily just a flimsy thing. Paper is also where we get to hold and touch fiat currencies, which like most paper products, are not terribly valuable. As Voltaire famously said: “All paper money eventually returns to its intrinsic value—zero.”

Yet this ever-weakening paper money, ever since Nixon robbed it of its gold-backing in 1971, is what makes the ever-mad financial world go ever-round in this new, ever-“interesting” era.

Central banks, and broke nations, therefore need to make otherwise weak paper appear valuable, and will do all kinds of complex market gymnastics to keep the illusion that paper is actual wealth.

Toward this end, it is therefore very, very, very important for those powerful players to make true stores of wealth—i.e. gold and silver—look far less valuable than what the natural market would otherwise dictate.

In short, key market manipulators (described below) like to use paper products to make gold and silver products look less sexy, for if gold and silver where to be priced according to genuine supply and demand forces, then the entire (and embarrassingly broken) paper scheme of global fiat currencies and markets would fall like a house of cheap (paper) cards.

Hard to believe?

Let me show you."

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