NOTHING IS "NORMAL" WHEN GOLD IS NOT CIRCULATING AS MONEY: SANDEEP JAITLY (EXCLUSIVE INTERVIEW)

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Sandeep Jaitly

The Global Financial Intelligence blog proudly presents this brief  interview with Sandeep Jaitly, a prominent member of Prof. Antal Fekete's New Austrian School of Economics.

Welcome to this blog, Sandeep.

Do you consider this kind of moves (slumps) -like the ones we saw last Friday in the gold and silver markets- are "normal"?

Nothing is 'normal' when gold and silver aren't circulating as money. The central authorities need to manage the fiat and keep going the illusion of it having exchange value forever. By managing the fiat price lower, as occurred on Friday, the supposition is that people will be 'scared' out of their gold/silver and exchange it for fiat to prevent further fiat 'losses'. Of course, such action will backfire as more and more hoard the metal at fire sale fiat prices, never to exchange it for fiat again.

Could there be people "behind the curtain" interested in keeping gold and silver prices as low as possible? 

It's not a case of keeping gold 'prices' low but fiat 'prices' up - and every central authority needs to keep the 'price' of fiat up. Gold and silver don't have 'prices' in the traditional sense. Fiat only has value because of the gold and silver it (can currently) be exchanged for. Managing the 'price' of gold/silver lower gives the illusion that fiat is in control of gold/silver.

Are gold and silver in backwardation now? What does that mean?

Silver is in backwardation and gold will be imminently. In the context of falling prices it means that these recent moves were forward/futures market sales to try to control the price; it wasn't the action of people exchanging real gold and silver for paper. 

Could gold and silver prices keep on droppping?

They could, but it's irrelevant. The smartest don't think in terms of gold and silver's 'price' but their relative exchange rates.

Do you think gold and silver are being hidden from circulation? If so, is that a sign that the worst of the current financial mess is still coming?

The financial crisis of 2008 hasn't ended - nor did it start from the overt reasons given. Every second that gold and silver coins, as well as their attendant bills, do not circulate is a 'financial crisis.' How this manifests itself going forward is hard to predict. It will likely involve global famine and the complete breakdown of payment systems. If the central authorities, as well as the man on the street, continues to believe and accept the ideology of fiat as being money, civilisation will collapse a lot more quickly than would have been the case. This is guaranteed.

Thanks for your time and answers.