Letter from Bill Murphy

The gold industry is truly daffy. Not a week goes by when a number in this industry fail to give credence to my decade long statement: Never have so many known so little about their own industry. It is truly astounding and NEVER changes as the years go by…

*The World Gold Council promoted jewelry consumption until very recently as its main focus … even as gold has been in a ten year bull market and the most consistent investment around.

*The senior gold producers finance the World Gold Council even though this outfit has done little to deal with the real issues affecting the gold price. As a rule producers are afraid of going with the GATA line because of fear of losing mining permits and financing by the bullion banks … those same bullion banks which encouraged that they hedge below $300 an ounce … those same bullion banks (like Goldman Sachs and JP Morgan Chase) who made HUGE fees for the transactions they concocted. The reason for a WGC is to have them do the infighting for the producers. Instead, the WGC just lets The Gold Cartel do whatever they want and says nothing … and the producers remain compliant.

*The WGC has an alliance with GFMS, the industry stat group, which is usually neutral to bearish. For the most part they have missed the move all the way up and constantly understated demand, refusing to deal with the gold flow used to suppress the price. GFMS’s latest is a joint promotion with Société Generale which is looking for $800 gold by the end of the year. They deserve each other.

*The mainstream gold world analysts have been neutral to bearish on the price of gold most of the way up … and still are. The mainstream financial market press never calls them on it and asks them how they could have got it so wrong. Barclays is calling for gold to drop to $800 by the end of this year. JP Morgan is looking for $950 gold in the years ahead. When they are proved wrong AGAIN, the financial market press will continue to give them all passes and then ask for their next predictions.

*Just as confounding are the commentaries from some of the bullion dealers. Nitwit Nadler comes to mind. He has been wrong most of the way up too and has one of the worst predicative commentaries in the history of markets (Prechter gives him a run for his money on gold). Is the guy that dumb or is he talking his book … perhaps like other dealers which have sold unallocated over and over via their gold ponzi schemes?

Any of you that glance at Kitco, know that The Nitwit scours the net looking for the gold bears and their commentary. He found another bullion dealer yesterday who is as clueless as he is…