Gold and silver price manipulation ends with the death of fiat

The silver and gold market has been rife with speculation about ongoing price manipulation. Most investors are now familiar with this concept, and even the mainstream has admitted that undue market influence has occurred.

Nevertheless, ending this unfortunate fact of life for precious metal investors and allowing prices to rise to their fair value would probably create a U.S. dollar panic.

Furthermore, terminating precious metal market manipulation by officials — such as the CFTC for example — is virtually impossible because they would be incriminating themselves.

The Big Bullion Manipulators

The big manipulative bullion banks themselves are not directly concerned about a fiat currency collapse because their balance sheets are denominated in U.S. dollars.

These big banks are expected to buy Treasuries as part of the age-old financial repression theory, but this has never been tried with a reserve fiat currency like the U.S. dollar.

Of course, such financial institutions are acting as an official proxy for the U.S. government.  They are also the primary dealers of the Federal Reserve.  

Furthermore, the privately owned Fed basically owns the U.S. government that pays interest to borrow from the Fed to print its own currency so that it can fund its increasing ever-deficits, which are now approaching 40% of expenditures.

The Fiat Reserve Currency Experiment

Interestingly, a fiat reserve currency had never been tried before then-president Nixon unilaterally took the U.S. dollar off the gold standard in 1971.

That outrageous event — widely known as the Nixon Shock — prompted the eventual breakdown of the longstanding Bretton Woods system of fixed exchange rates that used the gold-backed dollar as its lynchpin.

A bet that this fiat dollar experiment will "work" is a bet against the eventual demise of the hundreds of fiat currencies that went before it.  The death of the fiat dollar therefore seems to be just a matter of time.

Some interesting statistics include that the current world debt-to-GDP ratio is more than 300%, representing $223 trillion as of May 2013. Furthermore, derivatives totaled $1 quadrillion before the BIS reclassification, and the outstanding amount is currently estimated at around $500 Trillion.

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