Ain’t Never Been No Conspiracy

That’s sort of how I feel like putting it every time I see an analyst or two analysts explaining how The “Satanic-Illuminati run by the Money Changers and Central Bankers since the evil Rothschilds are seeking a New World Order and a central monetary empire to control and suppress the free world“.

The term “conspiracy” is only used by those who have been ratted on, debunked, demoted or simply ill-advised. Every oil driller in the 1920s was convinced that John Rockefeller, owner of Standard Oil (now Exxon) had colluded together with the government and the wealthy to conspire against them. Maybe it was beyond their imagination that someone would have enough business sense and gall to be that successful, or that the monopoly would eventually create an industry that would pump enough cheap oil for everyone in the world over to live on for decades.

Nevertheless, I’d say that a good conspiracy would be one that no one knew about. I touched on the “Gold Manipulation” concept in the past and let me say two things:

Survivalism: If you are threatened and do something to defend yourself (like knock every tooth out). Is that fair? It’s not so much a question of ethic as it is a matter of responsibility. It may be wrong but you don’t have too many options.

Now the rational mind would say that this person most probably did do something in the past that validates him being threatened in the first place. Maybe not. Regardless of the facts, who is rational at a time like that?

Capitalism: Why say that the Government is pumping up the Dollar? Why not just say that funds were over-leveraged on gold?. Back a few months analysts pointed out that there was a serious short-position in the precious metals complex and explained that they were up against a wall and if prices rose even slightly the whole market would pop, unravel and send these commercials running for cash and cover.

It seems that the theory has backfired, and it was the Commercials who saw the opportunity of getting the Technical funds against the wall. If you knew you could forced someone out a position, and create a domino effect by simply selling a truck-load of contracts. Wouldn‘t that be considered a sensible investment? Anyone who believes in free-markets would jump on an opportunity like that!

I believe that the markets reflect these two dynamics. That’s all markets are about: Survivalism and Opportunity. I always saw the downside (that’s why I buy physical metal) and I see en even greater upside (that’s why I continue to hold that metal). One thing we have been witness to in recent years, the market over, is the undeniable devastation of leverage. We saw Enron fall as it leveraged its hubris, Bear Sterns as it bit more than it could chew and John and Jane Smith go bankrupt and lose the house as they borrowed more than they could earn.

This is markets. You could either get used to them, or you could just choose to take delivery and sleep at night!

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