HSBC forecast on gold

In my previous blogs, I provide evidence that a couple large commercial banks collude with the US government to artificially suppress the prices of gold and silver at the COMEX exchange. JP Morgan and HSBC are the two culprits with the largest short positions--hence, the title "permanent" bears.

Here's an HSBC research report on gold:

http://www.reuters.com/article/hotStocksNews/idUSTRE5745S120090806

To their credit, HSBC raises their price projections for both gold and silver, for the same reasons we have outlined: central bank spending, US Treasury printing of dollars, and USDollar debasement. The price targets are curious though: they were upgraded, but to targets already below current spot prices.

They are hedging their opinions--an admission that the prices of precious metals will inevitably rise, but they use low price targets so as to attempt to suppress prices. The operative word is "attempt". Shorting gold and silver has been a disastrous trade for the last decade, as gold soared from $250 to $950.

These banks have had persistent large short positions all these years. So how come they aren't bankrupt? Here's a hint. Previous to their implosion in the spring of 2008, Bear Stearns was one of the perma bears. Credit default swaps, derivatives insuring collaterized mortgage obligations, tanked as home borrowers defaulted on their mortgages. I believe derivatives in the precious metals market alao led to Bear Stearns' demise.

How JP Morgan and HSBC continue to thrive while their money-losing short positions in gold and silver is beyond me. But I have a feeling that when "fail to delivers" come home to roost, we'll have another financial earthquake of epic proportion.