SHOULDA, WOULDA, COULDA DEFENSE

I've got to say when I read this I had a good laugh. Apparently the whole premises for these nutty manipulation theories all boils down to the shoulda, coulda, woulda defense.

If it hadn't been for government manipulation then gold shoulda done this. Or gold coulda rallied to ... Or gold woulda been much higher if only....

I asked in my earlier post how gold could possibly rally from $250 to over $1200 and the best response they gave was a "controlled retreat" Seriously? A controlled retreat?

Either gold is manipulated or its not. Why would they retreat? That doesn't make any sense. Are they going to make a controlled retreat all the way to $5000 (which I think is probably a minimum target for the secular gold bull)?

Since 2001 the Dow:gold ratio has dropped from 42:1 to 7.5:1.

That doesn't look like a manipulated market to me. It just looks like a powerful bull doing what bull markets do.

I notice they failed to explain why gold manipulation only appears to work when the dollar is rallying. Now if gold was dropping consistently over a lengthy period while the dollar was also falling then I might buy the whole manipulation theory. But that never happens now does it. When the dollar is falling gold is rising.

If a C-wave wave was capped before it entered the final parabolic move higher then maybe I would buy the whole manipulation nonsense but that also never happens. During the final push in November gold rallied 19 out of 25 days as the dollar was dropping into its final intermediate cycle low. I guess the "cartel" was in uncontrolled retreat mode.

Since 2001 the dollar index has lost a little over 38% of its value. Gold on the other hand has rallied almost 400% in that time but according to GATA that's not enough. Don't forget that during this time oil rallied almost 1400%.

Obviously the first phase of the commodity bull favored energy and base metals. These sectors were rising the most in percentage terms so investors understandably concentrated on these sectors. Now that the second stage of the commodity bull is underway the laggards of the first phase should outperform. That means it's gold's turn to shine. There's nothing mysterious about that, it's just how commodity bulls work. The commodities that underperform during the first phase almost always outperform during the second. Gold is the one commodity that has recovered all of its losses and is now trading not only above the 07 highs but at historic all time highs. Gold is outperforming!

What I would really like is for someone from GATA to answer me why it is that gold can never seem to be manipulated when the dollar is falling? It would seem that the powers that be must not only manipulate the gold market but they also have to manipulate the currency markets all in an attempt to control the price of something that the general population not only doesn't give a damn about but one that the vast majority of the population have never even seen in real life.

This might give you an idea just how aware the general public is of gold. 

I believe that if Greece hadn't run into trouble and taken down the Euro that the dollar index would have rolled over again and we would have seen a second leg up in the gold C-wave.

So I guess the cartel had something to do with the Greek debt crisis in order to drive down the Euro, spike the dollar index, and ultimately bring down the price of gold (wink wink).

Trust me folks gold is going to finish its secular bull market. The Dow:gold ratio will ultimately continue down until we see a ratio of under 2:1 (I actually think we could see gold priced higher than the Dow at some point).

I doubt it will do it in the time frame that GATA has decided is appropriate, but it will do it. Let's face it, all we are talking about here is timing. The folks at GATA require the bull to move at their predetermined pace. Unfortunately this bull, like all bulls, decides just how fast he wants to move and our wishes and desires don't really come into play.