Barron:  “QE has been a total failure in that it has not produced the jobs and filtered down to the man on the street.  The banks have held on to all of the money, in part because of the Basel III agreement.  Basel III calls for much greater capitalization of the banks....

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“So the banks are holding on to the money like grim death, just in case things go sideways again.  This means the money is not finding its way into the economy.  We know the velocity of money is very slow right now, and this is in spite of the artificial and phony interest rate fix by the Fed.

The bond market has also disappointed investors for the past year.  So the US Fed and the US government have decided to let the stock market go berserk and this has stocks in a bubble right now.  You see the Dow and the S&P hitting new all-time highs on a daily and weekly basis.

Against the backdrop of a roaring stock market, you still have 50 million Americans living on food stamps.  We have also seen US municipalities go bankrupt.  So the decision has been made by the Fed and the Obama White House to initiate a stock market bubble.  That’s where we are right now.

This has also had the affect of dampening Western investor interest in the gold and silver markets.  Demand is still booming in Asia and the Middle-East, but it has slackened in the West.  I believe investor interest in the West in gold and silver will remain flat until the stock market bubble pops. 

When the stock market bubble pops, it will happen without any warning, and investors will be in a position to make massive gains in gold and silver.  Some of these major mining companies have now become takeover targets such as Newmont Mining.  Newmont has lost 50% of its market capitalization in the past year.

Newmont is a viable company that employs tens of thousands of people worldwide.  The company earns money and pays a solid dividend and yet the share price has cratered.  This has taken place with all of the major companies in the mining sector because it has become perceived as a place where you can’t make money.

Throughout this bearish phase we have seen physical gold disappearing from the West.  We are also seeing coordinated raids on the gold and silver ETFs.  This has only hastened the process of moving gold from the West to the East.  The bullion banks are also taking advance of the arbitrage in the price difference between Shanghai and London.

We have also seen coordinated short sale calls on gold from bullion banks such as Goldman Sachs, which were then followed by other threats such as Draghi pretending Cyprus was going to sell their gold.  So the manipulation in the gold market has been extremely intense in 2013.  This has meant that the UK vaults, which previously stored the Western gold, have been emptied.

This gold has traveled to the five refineries in Switzerland, where it was fashioned from 400 ounce bars, down to one kilo and 100 gram gold bars.  This gold was then immediately shipped to the Chinese and Indian markets, as well as other destinations in Asia.  So the West continues to destroy itself.  Meanwhile, in India gold import taxes rose as high as 15% at one point.  India has largely repealed these punitive taxes on gold because they realized that they were doing cultural damage by imposing these taxes. 

The real question is, how is this all going to end?  Well, you can’t be shipping most of the world’s gold from the West to the East without serious consequences.  The Chinese have been rapidly moving the yuan front and center in terms of global commerce, and their intention is to make the yuan the strongest currency in the world by having a big chunk of it backed by physical gold.  The Chinese are extremely secretive about their gold purchases, but it doesn’t matter because the yuan is destined to be the currency of choice in terms of international transactions.”

Barron added:  “The gold market is the most manipulated market in the world.  It is not free-and-fair in any way.  Governments are also setting interest rates at will and this is impacting the housing, commodity markets, and every other financial market.  But with a situation like this it is only a matter of time before the gold and silver markets explode higher.  I don’t know when the bearish phase in gold and silver will end, but when it does it will end with a bang.  Meaning, gold and silver will turn violently higher.”

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