If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Understanding Where Gold and Silver Go from Here

As readers now understand, I am not currently a supporter of higher gold prices as a function of inflation risk. Instead, my view is that we must first move through the various iterations of crisis, collapse, debt default, instability, and policy panic before gold attaches itself to inflation. Yes, I agree with the Paul Brodsky thesis (and the FOFOA thesis) that the foundations of future inflation have already been laid. But it’s also my view that for a severe inflation to unfold, there has to be a collapse in currency demand itself. It would also be necessary for global industrial production to have collapsed down to much lower levels to provide sufficient scarcity of goods. Mind you, I see both of these conditions — rejection of currencies and industrial collapse — as high risk. The two maps I offer here include them.

Mapping the Price Future of Gold and Silver

The first price path I want to share with you is called The Grand QE Cycle. It begins with the resolution to the most pressing question facing markets right here, right now, today: Will the ECB federalize all Eurozone debt?

Based on my own analysis and in consultation with contacts, I concluded for myself weeks ago that the crisis in the EU was becoming increasingly binary. Indeed, it is now fully binary. Either the ECB guides to a new charter or mandate, allowing it to buy unlimited quantities of EU debt, or it follows through on its hard-money threats — and the sovereign debt, which forms the core asset of pension funds, banks, institutions across the EU, will become distressed debt, forcing a cataclysmic purge.

Because this urgent question has not been definitively answered as yet, gold is making its way in volatile fashion towards a price of…

If you have not yet read Part I, available free to all readers, please click here to read it first. 

Part II – How to Play the Greatest Gold and Silver Bull Market of Our Lifetime 

Market Manipulation

This brings us to the topic of market manipulation. As many of you are aware this is a topic of exceptional controversy. On one side, we might place the Gold Anti-Trust Action (GATA) organization, alleging constant official manipulation to suppress the price of both gold and silver, and on the other we might place Jeff Christian, managing director of the metals research firm CPM, whose position is that all price movements can be explained by ordinary market forces.

I happen to be in the middle of those views. I know for a fact that the price of gold is of official interest, and that gold has been actively suppressed in price in the past in order to affect one policy aim or another. The London gold pool of 1969 is one such example, but there are others.

I reason that anything that has proven to be a useful policy tool in the past is a likely candidate to be a tool in the present. It would be up to the detractors of this view to prove, from time to time, that gold is no longer of sufficient official interest that its price is not a target of official intervention or negligent oversight.

But even if manipulation exists, there’s only so long that official intervention can hold back the tide. This puts me in the camp with Erik Sprott of Sprott Asset Management, who recently told me in an interview: