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This video discusses a dramatic, non-organic price drop in silver and gold, analyzing it as a highly unusual and coordinated maneuver by banks to suppress prices while major institutions simultaneously accumulated physical metal.
The 4.5 Sigma Move: Anatomy of a Market Smash
The recent massive decline in silver was quantified as a 4.5 sigma move. This terminology is a statistical measure indicating a move of such magnitude that it should only occur once in every 240,000 trading days in a normal world. Silver fell 5.7% in one day, marking the largest single-day drop in 12 years. Although gold had been up 66% over the year, it also experienced a drop of approximately 10%.
Mainstream media focused on aspects that were technically “valid” (such as the market being overbought or due for a correction). However, the media neglected to report how the price collapse occurred, instead suggesting that the market had topped and encouraging selling.
The Coordinated Attack: European Selling and Zero Liquidity
The significant price drop was identified as a non-organic event, referred to as a “coordinated drive-by shooting”. This “shock and awe” tactic involved certain entities dumping billions of dollars worth of paper gold and silver onto the market.
The selling was executed during the access market—specifically, after New York had closed and before Asia had opened, or after Asia had closed and before New York/London opened. This timing was crucial because the dump occurred when liquidity was zero and traders were absent. This method guaranteed the sellers the absolute worst settlement and served to trigger algorithm-driven sell orders running hedge funds, collapsing the market further. The sellers were believed to be three or four European commercial banks or central banks.
The general suppression of precious metals is attributed to a “concerted effort” by Western governments since the 1960s to artificially suppress prices using naked short futures contracts. This is done because gold is the anti-dollar and its direct competitor, and a higher gold price would indicate a collapse in dollar confidence. Silver is even more heavily suppressed because it is a “minuscule market” and serves as the “fuse to light gold on fire,” which would destroy confidence in fiat currency.
The Institutional Response: US Banks Scoop Up Physical Metal
Immediately following the dump, a rapid reversal occurred in the market. Two major US commercial banks, Morgan Stanley and Bank of America, stepped in to buy tremendous amounts of gold and silver immediate delivery contracts (October delivery).
- This buying was unusual, setting a record volume for immediate delivery contracts issued so late in the month.
- The purchase of immediate delivery contracts (instead of holding future contracts) allowed these banks to acquire the metal at the new, artificially depressed low price.
- Total gold standing for delivery in that month alone reached almost 5.9 million ounces.
This institutional behavior aligns with a recent shift in advice from these top-tier firms:
- Morgan Stanley’s CIO publicly abandoned the 60% stock/40% bond mantra, recommending a 60/20/20 split, with 20% allocated to gold.
- Bank of America’s chief analyst recommended a portfolio structure of 25% stock, 25% bond, 25% short-term treasury, and 25% gold.
- The implication is that the most knowledgeable traders are accumulating gold and silver while the broader media discourages it.
Furthermore, physical market stress is demonstrated by the phenomenon of backwardation, seen for about three weeks, where the immediate spot price is higher than the future price. This is incredibly bullish and indicates that physical demand is far greater than the willingness to accept paper promises for future delivery.
The Financial Context: Debt Crisis and Gold’s New Role
The underlying reason for interest in precious metals remains the severe fiscal and systemic risks facing the US dollar. The system is characterized as “hyper indebted”, with a true debt level estimated at around $260 trillion when off-balance sheet entitlements (Medicare, Social Security, etc.) are included. The only mathematical outcomes are default or printing trillions of dollars, both resulting in the dollar’s purchasing power going to zero.
Gold and silver are emphasized as the only “sound money” that cannot default or be made bankrupt. Non-Western central banks are aggressively buying gold to avoid “big black holes” on their balance sheets resulting from holding dollars. They act as a “bridge” to hold purchasing power intact during an inevitable currency reset.
Current financial stress includes regional banks losing deposits daily and market risks tied to commercial real estate exposure. The government shutdown adds to the risk, eliminating the watchdog function of the CFTC during times of suspected market collusion.
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