Thursday, July 12, 2018

Manipulation and depression of gold price has led one of world's largest producers of gold to see 75% of mines unprofitable

Futures markets were never originally supposed to be arenas of speculation, where investment banks, central banks, or wealthy players could manipulate prices through the sheer volume of their trades.  No, the purpose of a futures market was supposed to allow those who needed commodities such as energy, food stuffs, and metals to buy at a fair price, and to be able to hedge their bets in case their own production outputs fell below expectations.

But sadly today, futures markets are primarily a playground for the elite, where the skimming of profits through derivatives are the status quo.  And perhaps no other market can provide the best example of this than in the gold and silver one.

Over the past several years, the Comex has facilitated the use of naked shorting to allow investment banks to manipulate and depress the price of gold and silver by selling upwards of 580 contracts for every ounce of gold they control.  But sadly for the industry itself, this widespread manipulation has led even the world's largest producer of gold to see 75% of their mines no longer profitable.

South Africa’s 140-year-old gold industry – which was once the world’s largest – is now facing a major crisis. The country’s mineral council says 75 percent of gold mines are unprofitable or barely making money. 
The announcement comes as the sector enters wage talks with its employees. Around 200 employer and employee representatives are set to start the negotiations on Wednesday. The number of work stoppages in South Africa increased by eight percent over the past two years to 132. 
Motsamai Motlhamme, head of employment relations at the council, reportedly said the parties need to "find common ground in the interest of the sustainability of our industry."Most of the world’s deepest and historically richest gold mines are clustered some 40 miles south-west of Johannesburg. The deeper they go, the more expensive and difficult the work of extracting the ore becomes. The council said the mines are old, deep, with falling grades and productivity, and rising costs. As a result the industry has lost 70,000 jobs over the past five years. The cost of extracting the gold may soon exceed its value, experts say. – Russia Today
Ironically price controls, or manipulation in the long run, tends to do exactly the opposite of what the speculators want... it evaporates supply and output and causes the price to artificially soar once even a modicum of demand returns to that market.  And with gold being such an important part of governmental and central bank reserves in our fiat currency system, once a new crisis rears its head in the financial markets, demand will come back with a flurry and prices will skyrocket to extreme levels thanks in large part to today's current price suppression policies.

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