Gold and Silver: Back to Our Regularly Scheduled (de) Programming

I discovered the gold sector in 2001 at the beginning of the last bull market.  There I found inflammatory commentators going on about the death of the dollar and a corrupt system.  Eventually I found some entity called GATA (the Gold Anti Trust Action Committee).  The whiff of revolution was a good hook because being a life long malcontent with the way the system works, I am geared toward revolution (preferably the kind without gunfire).

Then I expanded out to take in the negative systemic views of former GAO chief David Walker, the deflationary views of Robert Prechter, the distinctly non-gold bug views of Bob Hoye and the balanced views of Steve Saville.  In other words, layers and textures were coming into what I had thought was a fairly black and white picture.  Biiwii (but it is what it is, implying a balanced outlook dealing with reality) came shortly thereafter.

Last week I was writing some posts about the gold and silver CoT situation after noting for weeks in NFTRH the gathering negative alignment.  One Ted Butler, a long-time sleuth into nefarious goings on in the silver market by JPM and others, sent me an email with his views and permission to publish, which I did.

Then somehow, this Ed Steer character – who has never heard of me nor, mind you – found Ted’s article “accidentally” posted here at the site and linked to it, advising the gold herd to skip the stuff from a supposed ‘analyst’ (ah, the dreaded ‘ ‘ around my descriptor) and go right to Ted’s excellent analysis of the CoT.

Ed Steer is a promoter.  GATA are promoters.  They promote an agenda that may or may not be materially valid, but you can promote things you truly believe in… again and again and again until those that the story resonates with simply go ‘all in’.  For many it has been 4 years and counting of ‘all in’.  I have had so many emails over these last 4 years telling me stories of woe about having followed promoters too far, and into personal hardship.

We all know gold is manipulated.  So are currencies, stock markets and every other asset market out there to one degree or another and by one method or another. Look no further than Operation Twist, which manipulated bond maturities to paint inflation (and gold, silver and commodities) right out of the macro picture.  That was an ingenious macro manip if I’ve ever seen one.

The thing with these promoters however is that the grip of ‘good vs. evil’ (and most people I think want to be ‘good’) is powerful.  The business is not in making or preserving capital in such chaos.  It is in keeping the troops lined up and at the ready while the generals stand a rear and bark out the dogma.

As often happens when I get too close to the gold “community” I end up feeling a little bit soiled.  Again, I don’t know much about Ted Butler other than he is courteous and he has done a lot of work uncovering silver manipulation.  But I do know that Ed Steer directed his automatons to avoid the drivel of a supposed ‘analyst’ (who just happens to have been publicly critical of GATA, Sinclair and others over the years) and skip right to the good stuff, i.e. Ted’s commentary.

Exploring further, I saw one of the faithful in the comments at a gold forum advise other readers to skip down to Butler as well.  It was as if he took Ed Steer’s advice unquestioningly and passed it on.  Which is fine.  I myself admitted that I neither know for sure, nor really care about the fine details of what went on with the CoT.  All I knew is that it was really bearish.  Take heed and prosper.  Chase ghosts around without taking action and well, it’s 4 years and counting for some people.

The bottom line of it all is that while I am currently expecting the next bull market in the gold sector to be coming by 2016, the reason I get the creeps when I rub up against the gold bug “community” is that I realize that not only have they not been neutralized by the bear, they are as powerful as ever.  Why, this one article from a website called is bombing with visitors to read Ted Butler while enduring I assume, the drivel that precedes him in that post.

I used to know somebody who revered GATA, started a gold website of his own, was strapped with debt and never even thought of owning gold bullion (“why would I want to own gold?” he asked me in all seriousness).  He was a light weight, his site failed and he now works at a bank.  While there are some quality people out there writing and speaking about gold, others peddle simple answers for other people to consume.  Their business is drama, not managing financial markets.

The bear market may have more work to do yet.