So wouldn't that make the price go up? If we follow the laws of supply and demand that would certainly be the case. But remember, this is Bush/Cheney America, where black is white and up is down and the normal rules of economics don't apply. So if it wasn't supply and demand, then what caused the sudden plunge in the price of oil and gold and silver?
Well, if you rule out Satan, then the logical deduction is market manipulation by the heavy hitters and big speculators who sold those commodities short and made huge money on the sudden spike down in price. It's a pretty good scam; technically, it's illegal, but the truth is, there's market manipulation of commodities all the time.
For example, as of October 25, 2007, the Department of Justice "filed more than 60 civil enforcement actions and at least 33 criminal indictments against individuals and firms that fraudulently operated multi-million dollar commodity pools and hedge funds. These actions have resulted in numerous criminal convictions and fines and restitution totaling almost $400 million." And those are just the ones that got caught!
As a result, average investors get played for chumps and lose big time whenever the heavy hitters decide to cash out. But hasn't this always been the case? Yes, to a degree, but from the days of FDR until the 1980s, there were much tighter rules and regulations and more government oversight in the financial markets, as well as in the banking and real estate industries.
All that changed, of course, when Ronald Reagan became president and his gang of free market crooks took over the government (remember the savings and loan scandal in the 1980s?) and made capitalism a rigged game for the benefit of the wealthy and well-connected.
Following in Reagan's footsteps, the Bush administration has done its best to remove or ignore government regulation and oversight of the financial markets, thus creating an ideal environment for big players to create artificial price spikes and bubbles to enrich themselves and their friends and associates.
The question is, how long can the elite class of investors keep bilking the system before it collapses of its own weight? Jim Rogers, a former partner of George Soros and one of those elite billion-dollar investors that financial analysts love to quote, is talking nothing but gloom and doom these days and has pretty much given up on America as a lost cause. In fact, he's already moved to China, and it wouldn't surprise me if a lot of other big players are already beginning to bail out on the good old USA and stash their cash in Swiss bank accounts and the Cayman Islands.
After all, they know the score better than anyone else. They know our country's financial system is basically a glorified Ponzi scheme that is not only broke but over $9.5 trillion in debt. And this year there have already been runs on some federally insured banks, including one of the biggies, the IndyMac Bank of California.
Not a good sign! But are we in for a lot more bank failures in 2009? And can Americans still be confident that the FDIC will back their personal savings accounts if more banks go under and the system begins to unravel? Or will this be the next-- and maybe the last-- bubble to burst?