BREAKING: Gold Cartel In Turmoil As Derivatives Unravel - Mike Maloney & Alan Hibbard

Summary

This video discusses the ongoing manipulation of the gold market by major banks, drawing parallels to historical financial crises such as the Panic of 1901. The speaker explains how banks are heavily shorting gold, which could lead to a massive short squeeze. They emphasize the dangers of short selling and highlight the risks these banks face as they try to cover their positions. The speaker also critiques the Federal Reserve's influence on the economy, urging viewers to invest in physical gold as a more secure alternative to financial manipulation.

Takeaways

• 😀 Gold is being manipulated by major banks because it competes with the U.S. dollar, which is considered a key threat to the financial system.
• 😀 The creation of the Federal Reserve in 1913 is seen as a pivotal moment where the U.S. was taken for a ride by a central banking system, with comparisons to previous attempts like the Bank of the United States.
• 😀 There is a growing concern that the U.S. might face a similar fate to past financial crises where the central bank’s control is challenged.
• 😀 A new record-high net short position in gold has been reached by major banks, signaling potential trouble as they could face significant losses if gold prices rise.
• 😀 Short-selling involves borrowing an asset, and when banks short gold, they face unlimited risk, as the price can skyrocket, leading to massive financial repercussions.
• 😀 A major short squeeze is currently happening with gold, which could cause financial instability, similar to past historical market events.
• 😀 The Panic of 1901 is cited as a similar event where banks, due to short-selling positions in a railroad company, caused stock prices to soar and led to a market collapse.
• 😀 The Northern Pacific Railroad short squeeze caused a banking panic, which ultimately led to significant regulatory changes, including the Sherman Antitrust Act.
• 😀 The current financial environment mirrors the 1901 panic, where major banks could be at risk if their gold short positions fail and cause a market disruption.
• 😀 The increasing cost of borrowing shares of gold-backed ETFs, like GLD, indicates that major financial players are struggling to cover their short positions, raising concerns over the stability of gold prices.
• 😀 The speaker recommends going long on gold and purchasing physical gold instead of relying on paper-based investments like ETFs to avoid exposure to potential short squeezes and financial instability.

Q & A

What is the main issue discussed in the video?

The video discusses the manipulation of the gold market by large banks, specifically how they are shorting gold and the potential financial consequences of these actions.

What role do large banks like JP Morgan play in the gold market?

Large banks, such as JP Morgan, are involved in suppressing the price of gold, as it competes with the U.S. dollar. These banks have been accused of manipulating the gold market for their benefit.

What is the significance of the U.S. gold reserves in the context of the discussion?

The U.S. gold reserves are important because they are perceived as a store of value that could compete with the U.S. dollar. There is a push to audit and confirm the gold holdings before large banks can move gold back into the Federal Reserve vaults.

What is a 'short squeeze' and why is it relevant in this context?

A short squeeze occurs when investors who have shorted an asset are forced to buy it back at higher prices due to rising market prices. This is relevant as the video suggests that large banks are caught in a short squeeze related to gold, which could lead to financial instability.

What does it mean to 'short' a stock or asset, and how does it relate to the gold market?

To 'short' a stock or asset means borrowing the asset to sell it, with the expectation of buying it back at a lower price. In the gold market, large banks are shorting gold, betting its price will fall. If the price rises, these banks face significant financial losses.

What is the historical context of gold manipulation mentioned in the video?

The video draws parallels between current gold manipulation and past financial schemes, such as the creation of the Federal Reserve and earlier financial crises like the Panic of 1901, which was triggered by short covering and market manipulation.

What was the Panic of 1901, and how does it relate to the current situation in the gold market?

The Panic of 1901 was a financial crisis caused by a short squeeze in the Northern Pacific Railroad stock, leading to a market crash. The speaker compares this event to the current situation in the gold market, where large banks are similarly caught in a short squeeze.

How does the cost to borrow GLD shares relate to the current gold shorting situation?

The cost to borrow GLD shares has increased dramatically, indicating that shorting gold has become much more expensive. This increase in borrowing costs is a sign that the banks shorting gold are in financial trouble and are facing significant risk.

Why does the speaker advise against shorting and instead recommend buying physical gold?

The speaker advises against shorting and recommends buying physical gold because shorting involves unlimited financial risk, as seen in the short squeeze scenario. Physical gold is seen as a safer investment to avoid the risks associated with paper assets like GLD shares.

What does the speaker suggest about the future of gold and the banking system?

The speaker suggests that the manipulation of the gold market by banks may lead to a crisis, similar to past financial events. However, the speaker remains hopeful that this manipulation will come to an end, leading to a more stable financial system where physical assets like gold play a larger role.