Has the collapse begun? Is paper gold selling in a panic to buy physical?

Excellent analysis and guidance from David McAlvany:


http://www.youtube.com/watch?v=2uWrU...layer_embedded

Is it time to buy?

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Originally Posted by vacuum

Is it time to buy?

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I bought SLV and GLD. Don't hang me yet folks...it was digits in my IRA and roth IRA.

I don't have the cash on hand to buy physical now unfortunately. Go SLV!!

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Originally Posted by Hitcher

I bought SLV and GLD. Don't hang me yet folks...it was digits in my IRA and roth IRA.

I don't have the cash on hand to buy physical now unfortunately. Go SLV!!

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For what it is I think this is as good a time as any to get on board.

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Originally Posted by Cebu_4_2

For what it is I think this is as good a time as any to get on board.

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I don't know what else to do with my IRA and Roth IRA.

Seems like SLV and GLD right now might be the best gamble. I know the IRA's can go poof, and be taken, it's all gambling in this market. Heck, Cyprus showed us any money in the bank is gambling, we inherit the risk, of the bank, just by having our money in the account.

What a scam. If I put my money in the bank, at a .05 interest rate, how is it fair I share the risk of the banks bad decisions? I should instead buy bank stock, and at least get some return on that investment.

Folks should not have bank accounts, they should own bank stocks instead. At least, the greedy bonus they chase can increase the stock price a little.

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Originally Posted by mamboni

Good interview - Rick Rule is very wise and has an iron investment back.

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Note the following... about Rick Rule...
1) He does not believe in any manipulation or conspiracy. The world is normal according to Rick.
2) Gold and Silver price take-down is a non-event. Despite Merrill-Lynch selling over 400 Tons and others adding to the sale in the space of only a few hours, we know who did it!
3) AT THE 8 MINUTE MARK NOTICE THE MASSIVE FREUDIAN SLIP!!!
4) Notice how smug and how he is constantly smirking, he's actually laughing at gold and silver investors.
5) Rick has a long track history of "predictions" that are all wrong! But in this video he claims NOT to make predictions when he always does! In this video LINK, he claims that gold will bounce.
See HERE and read the comments below like... "Rudy S 3 months ago Rick Rule has had so many BNN Top Picks become dogs, it's not even funny. I trust this guys opinion as far as I can throw him." and " thesheeeet 1 month ago google stockchase rick rule expert and look at his picks picked over a number of years. I don't see where you come up with your conclusion."

Funny at the same time, a "charitable foundation" of Eric Sprott sells off Silver too.

Haha, people are now realising TPTB in charge mean business and this includes in gold and silver markets. They've been wondering if it was a set up and now it's dawning on them what they are up against. I think people really believed that they could win against them so easily...

Even David Morgan's latest Propaganda piece "co-incidentally" coincided with the price take-down.

Is the price an opportunity? I hope so.

Linky

???

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Originally Posted by Hitcher

I bought SLV and GLD. Don't hang me yet folks...it was digits in my IRA and roth IRA.

I don't have the cash on hand to buy physical now unfortunately. Go SLV!!

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Sell SLV and GLD and convert to CEF. The former are tools being used by the bankers to short the metals and crash gold and silver. SLV and GLD are metals slush funds for the manipulators. If you have to hold paper (and I do), then buy CEF. It is fully backed by physical gold and silver bullion and the trust is held in Canada. Paul Craig Roberts has mentioned CEF repeatedly though was careful never to specifically recommend it. You must read between the lines.

Posted April 15th, 2013 by Jim Sinclair & filed under General Editorial.


My Dear Extended Family,

I deeply appreciate the many kind emails today.

I have no doubt that gold will perform to the levels we have anticipated. The action in this market has been the product of two firms that act as gold banks selling paper in amounts that exceed any imaginable long position. The means of the sales have been vicious and clearly intended to depress the price.

Personally, I am horrified that markets are in the hands of such people, but more so that I did not fully appreciate how disorderly they would act in markets that now have no rules for the Banksters. For this I offer my heartfelt apology.

You and your financial affairs are precious to me. I feel your pain. Your positions, and mine are on the same side.

There is no doubt whatsoever that gold will perform exactly as we expect now to enrich the Banksters, just as it occurred in the 1970s bull market.


Sincerely,
Jim

April 15 is Tax day.

The top lives off the yield from the bottom.

The top does all the buying and selling...The bottom follows along and speculates.

The master elploys the slaves to supply all teh power to the top wholesale...teh top then marks it up and sells it to the bottom retail.

the difference between the wholesale cost and the retail price is the tax the master lives off of.

The yield...the Profit...the Interest...etc.

Usury.

Or taking more than you give.

The top grows richer in power by taking more power than they give from the bottom while the bottom grows poorer in power by giving more power than they take from the top.

If the growth rate is 5% and you tax away 4%...that leaves 1% numbers are green.

but if the growth rate is 3% and you tax 4%...that leaves -1% numbers are red.

red numbers on tax day means taxes have gone up significantly.

Remember cyprus?

That was a tax operation...in the blink of an eye taxes by the top were raised to the point that people's hopes and dream's for the future were blown out like a candle.

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Originally Posted by Jewboo

Note the following... about Rick Rule...
1) He does not believe in any manipulation or conspiracy. The world is normal according to Rick.
2) Gold and Silver price take-down is a non-event. Despite Merrill-Lynch selling over 400 Tons and others adding to the sale in the space of only a few hours, we know who did it!
3) AT THE 8 MINUTE MARK NOTICE THE MASSIVE FREUDIAN SLIP!!!
4) Notice how smug and how he is constantly smirking, he's actually laughing at gold and silver investors.
5) Rick has a long track history of "predictions" that are all wrong! But in this video he claims NOT to make predictions when he always does! In this video LINK, he claims that gold will bounce.
See HERE and read the comments below like... "Rudy S 3 months ago Rick Rule has had so many BNN Top Picks become dogs, it's not even funny. I trust this guys opinion as far as I can throw him." and " thesheeeet 1 month ago google stockchase rick rule expert and look at his picks picked over a number of years. I don't see where you come up with your conclusion."

Funny at the same time, a "charitable foundation" of Eric Sprott sells off Silver too.

Haha, people are now realising TPTB in charge mean business and this includes in gold and silver markets. They've been wondering if it was a set up and now it's dawning on them what they are up against. I think people really believed that they could win against them so easily...

Even David Morgan's latest Propaganda piece "co-incidentally" coincided with the price take-down.

Is the price an opportunity? I hope so.

Linky

???

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What "MASSIVE" Freudian slip?

So gold and silver are a scam? Fine. I'll buy your premise for the moment. SO, what is your alternative?

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Originally Posted by Hypertiger

April 15 is Tax day.

The top lives off the yield from the bottom.

The top does all the buying and selling...The bottom follows along and speculates.

The master elploys the slaves to supply all teh power to the top wholesale...teh top then marks it up and sells it to the bottom retail.

the difference between the wholesale cost and the retail price is the tax the master lives off of.

The yield...the Profit...the Interest...etc.

Usury.

Or taking more than you give.

The top grows richer in power by taking more power than they give from the bottom while the bottom grows poorer in power by giving more power than they take from the top.

If the growth rate is 5% and you tax away 4%...that leaves 1% numbers are green.

but if the growth rate is 3% and you tax 4%...that leaves -1% numbers are red.

red numbers on tax day means taxes have gone up significantly.

Remember cyprus?

That was a tax operation...in the blink of an eye taxes by the top were raised to the point that people's hopes and dream's for the future were blown out like a candle.

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OK, we get it. Where are you going with this?

With massive selling once again in the gold and silver markets, today whistleblower Andrew Maguire told King World News the reason for the recent takedown in gold and silver was because of an imminent LBMA default. Here is what Maguire had to say in part II of this remarkable and exclusive interview.

Maguire: “Gold and silver only have this type of selling when there are extreme shortages of the physical metal. I am totally aware that before this takedown occurred there was an imminent LBMA default.


We had already seen COMEX inventories plunging. In 90 days COMEX inventories saw an incredible decline. So immediately available physical gold was disappearing. People around the world don’t understand what has been happening since Cyprus....


“Entities went to the LBMA and said, ‘We don’t trust anybody anymore. We want our physical metal.’ They were told they would be cash settled instead by a bullion bank. The Western governments have been trying to plug holes, and the reason for it has to do with the default that was taking place at the LBMA.


This is why this smash has been orchestrated because of the run that has been taking place on physical metal. So Western governments had to do this because of an imminent run on the unallocated LBMA system. The LBMA bullion banks had become so mismatched at one point on their trading positions vs real world demand that they had to orchestrate this smash.
This orchestrated smash in gold and silver was nothing short of a bailout for the bullion banks. So there is a run on physical gold that is taking place and the Ponzi scheme the West is running is being threatened because of it.”


Maguire also added: “We are nearing the end of this decline. Physical demand is already beginning to catch up with leveraged paper. If gold were to trade into the low $1,300s it would be unsustainable for very long.”


http://kingworldnews.com/kingworldne..._Takedown.html

mamboni

I've read most of your comments and would like your opinion. How much of a role do you think Russia and China are playing in the current financial collapse and do you see this as being a battle between capitalism and communism?

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Originally Posted by irmatvep

mamboni

I've read most of your comments and would like your opinion. How much of a role do you think Russia and China are playing in the current financial collapse and do you see this as being a battle between capitalism and communism?

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You can't have communism without capitalism. Both created by the same group.

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Originally Posted by osoab

You can't have communism without capitalism. Both created by the same group.

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I realize that both systems were created by the same vultures. However, what we are witnessing now is the death throes of capitalism. In my humble opinion, I believe that Communism (even though the brainchild of same criminals) was always intended to be the ultimate victor. Even though the world has never truly enjoyed free market capitalism there has never been any other economic system in which the majority of people were allowed to keep most of the fruits of their labor. Indeed many people were able to become very wealthy and creativity flourished. However under Communism it's the exact opposite. Only the ruling elites who are comparatively few in number own and control most of the wealth and resources. The majority of the people are reduced to miserable serfdom. I think this was always the plan of those who own and control the worlds banking system. These evil men only allowed capitalism to exist long enough to enable all the great advances in technology and wealth accumulation. It was their plan from the very beginning. As soon as these goals were achieved they would swoop down like the greedy vultures that they are and rob every honest hard working person of all they possessed. At least this is the way I see things.

It's no secret that Russia and their partner China along with all their other allies hate the West, particularly America and that they are working diligently toward our destruction. Russia in particular resents us because they are no longer a super power and they can't wait for us to be completely stripped of all power so that they can reign supreme. I also believe that Russia is only using China to achieve this end and that as soon as they are no longer necessary they will flush them down the toilet like a turd. It's also no secret that the collapse of the Communism in 1991 was a total sham designed to lull the idiots in the West to sleep and to convince them that Communism is dead and no longer poses a threat. Nothing could be further from the truth. It was all a big lie! All the evidence is there for anyone interested in learning the truth. The KGB had been working out all the details of this plot as early as 1956. The Communists know that they are no match against us and that they will never defeat us honestly. That is why they resort to such tactics as infiltration and subversion. They excel at these things. America has been infiltrated for decades by Communists and now they are in control of every aspect of our society. Joe McCarthy was right. Unfortunately he was silenced. If anyone doubts this all they need do in order to be convinced of the truth of what I'm says is to study the 45 goals of Communism. We've had what Lenin termed "useful idiots" serving as presidents who've allowed the Commies to steal our military technology right under our noses. The current occupant of the WH is doing all in his power to weaken us even further. Our military is being dismantled, our stockpile of nuclear weapons, our only means of preservation, is being reduced. Obama wants to cut our stockpile of nuclear weapons to 300. Our military is being stretched beyond the breaking point by our involvement in all these foreign wars which do not benefit us in the least. Isn't that the whole purpose our enemies intend? America is literally being bankrupted by these wars and eventually we will become so demoralized and weakened that we will not be able to offer any resistance. Meanwhile Russia and China are busy increasing their stockpile of nuclear weapons, building up their armed forces and equipping them them with all the latest and best technology courtesy of America. God only knows the full extent of their activities. Don't even get me started on who has been fueling Islamic rage against us is aiding and abetting all the turmoil in the Middle East.

Russia and China are amassing gold as if it were going out of style which means that if Jim Willie is correct, all the worlds wealth is being transferred to the East. It's like 1917 all over again. The biggest transfer of wealth is happening before our very eyes. Only instead of confining all the looting to one country, this time these vipers are pillaging the entire world.

A nice analysis indeed

You did tend to tip toe around the zionist fingerprint of both" isms" but i will spot you that.

I never really thought about China getting ditched by Russia but that is a extremely plausible scenario

I know what i have pondered and rather deeply is when America finally does fall.

She will NEVER rise again to the superstar status she held.

She will be spoken about in the future like how Britan is today a throughly emasculated empty shell.

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Originally Posted by irmatvep

mamboni

I've read most of your comments and would like your opinion. How much of a role do you think Russia and China are playing in the current financial collapse and do you see this as being a battle between capitalism and communism?

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I think China and Russia are playing the dominant role in the wealth transfer that is occurring, as gold moves from west to east. I don't think it's capitalism versus communism. Rather, a hybrid political-philosophy, a fusion of capitalism and communism has emerged. It is not fully formed and is still evolving. In twenty years, the BRIIICS trade zone will dominate the world economy. It is to employ so combination of top-down command economy communism-socialism and free-market capitalism in decentralized but contained units. Whether the system can balance the greed for money and power by the few against the need to give the masses enough freedom and private property rights to incentive them to produce remains to be seen. There is a long cultural tradition of authoritarian government in the east, unlike America which was unique in being founded on virgin ground by libertarians and the intellectual fruits of the enlightnment. I think history will look back at birth of America as a unique and miraculous event, when freedom and justice manifest in nationstate reached the apex of opportunity and prosperity for common man whilst also providing for stable government. Unfortunately nothing so near perfect lasts forever. And today's America is a far cry from the one the founders created. We won't see another nation of greatness to rival America, or republican Rome before her, for a thousand years.

Gold's Price Collapse And 4,500 Tons Of Mysterious American Gold Exports...

-- Posted Tuesday, 16 April 2013 | Share this article | Disqus By The Goodman Letter Leveraged gold speculators panic whenever someone decides to sell large numbers of transient short positions into the market. That isn't anything unusual. It is because they are gamblers who, like their soul-mates in Las Vegas, ignore common sense and think they can win against the House. But, the House always wins. It is no different with the world's derivative players who play at derivatives casinos. The only difference is that while casinos in Las Vegas admit that the odds are rigged in their favor, derivatives casinos are more deceitful, and don't. The derivatives casino gamblers always set automatic points, where their positions will be automatically sold if the price dips low enough. This is supposed to show that they are "investing" rather than gambling. But, the stop positions are well known, because they cluster around technical "resistance" and "support" levels. The gamblers virtually all believe that they can foresee the future through non-living psychics, known as "charts". Coordinated short selling, therefore, will ALWAYS be devastating. It will be targeted to trip those automatic stop-loss orders, to result in the dominoes falling, and a deep decline in paper prices. The short selling on Friday, April 12th, was bigger, but essentially no different from all other price takedowns from 2001 until now. These events often, if not always, cluster around big economic announcements. Bad economic news should ordinarily increase the attractiveness of gold-related investments. Yet, because of the short sellers, gold habitually moves in a counter-intuitive manner. Suffice it to say that futures market short selling tends to be at its most intense at the moment that economic news is at its worst. Thus, "up becomes down" and "down becomes up". New data, out of the USA, shows that the hopes and dreams of the economic optimists are unjustified. We now have much higher real unemployment, reflecting huge rolls of discouraged workers, collapsing retail sales, collapsing home builder confidence than the so-called "experts" ever thought possible. It is a reversal of all the trends that the gold bears at Societe Generale and Goldman Sachs, for example, cited as justification for a prediction that gold prices would decline. Yet, gold still went down, in spite of heavy increased buying reflected in a vastly larger open interest. All that increased buying was absorbed by multiple waves of paper short selling. But, most people buying physical gold, as opposed to the paper traded on derivatives markets, are not overleveraged get-rich-quick schemers. The fear-mongerers at Societe Generale, Goldman Sachs and other Fed primary dealers hold no weight with them. They don't care about the movement of the stock market. According to Forbes magazine, sales of physical investment gold skyrocketed when the spot prices were reduced by the futures markets. Over the coming days, no doubt, we will learn that the same phenomenon has occurred everywhere in the world. much more about the missing 4,500 tons of FED gold at: http://news.goldseek.com/GoldSeek/1366140621.php

Thanks for the updates Mamboni. There are many pieces to the puzzle and I appreciate your help in connecting the dots. Keep up the good work.

Gold Is Over – Just Like in 1976

By Jeff Clark, Senior Precious Metals Analyst


Goldman Sachs has lowered its gold price projections and says the metal is headed to $1,200. Credit Suisse and UBS are bearish. Citigroup says the gold bull market is over.

So I guess it's time to pack it in, right?


Not so fast. As we've written before, these types of analysts have been consistently wrong about gold throughout this bull cycle. Another reason to disagree, however, is history; we've seen this movie before. In the middle of one of the greatest gold bull markets in modern history – the one that culminated in the 1980 peak – gold experienced a 20-month, one-way decline. Every time it seemed to stabilize, the bottom would fall out again. From December 30, 1974 to August 25, 1976, gold fell a whopping 47%.


1976 had to be a tough year for gold investors. The price had already been declining for a year – and it just kept on sinking. Since that's similar to what we're experiencing today, I wondered, What were the pundits were saying then? I wanted to find out.


I enlisted the help of two local librarians, along with my wife and son, to dig up some quotes from that year. It wasn't easy, because publications weren't in digital form yet, and electronic searches had limited success. But we did uncover some nuggets I thought you might find interesting.
The context for that year is that the IMF had three major gold auctions from June to September, dumping a lot of gold onto the market. Both the US and the Soviet Union were also selling gold at the time. It was no secret that the US was trying to remove gold from the monetary system; direct convertibility of the dollar to gold had ended on August 15, 1971.

The public statements below were all made in 1976. You'll see that they aren't all necessarily bearish, but I included a range to give a sense of what was happening at the time, especially regarding the mood of the gold market. I think you'll agree that much of this sounds awfully darn familiar. I couldn't resist making a few comments of my own, too.


To highlight the timing, I put the comments into a price chart, pinpointing when they were said relative to the market. Keep in mind as you read them that the gold price bottomed on August 25, and then began a three-and-a-half year, 721% climb…

http://www.caseyresearch.com/sites/d...76-486x323.jpg(Click on image to enlarge)

[1] "For the moment at least, the party seems to be over." New York Times, March 26.
[2] "Though happily out of the precious metal, Mr. Heim is no more bullish on the present state of the stock market than any of the unreconstructed gold bugs he's had so much fun twitting of late. He's urging his clients to put their money into Treasury bills." New York Times, March 26.
Me: These comments remind me of those today who poke fun at gold investors. I wonder if Mr. Heim was still "twitting" a couple years later?
[3] "'It's a seller's market. No one is buying gold,' a dealer in Zurich said." New York Times, July 20.
Turns out this would've been an incredible buyer's market – but only for those with the courage to buy more when gold dropped still lower before taking off again.
[4] "Though the price recovered to $111 by week's end, that is still a dismal figure for gold bugs, who not long ago were forecasting prices of $300 or more." Time magazine, August 2.
The "gold bugs" were eventually right; gold hit $300 almost exactly three years later, a 170% rise.
[5] "Meanwhile, the economic conditions that triggered the gold boom of 1973 through 1974, have largely disappeared. The dollar is steady, world inflation rates have come down, and the general panic set off by the oil crisis has abated. All those trends reduce the distrust of paper money that moves many speculators to put their funds in gold." Time magazine, August 2.
This view ended up being shortsighted, as these conditions all reversed before the decade was over. Does this sound similar to pundits today claiming the reasons for buying gold have disappeared?
[6] "Our own predictions are that gold will go below $100, with some hesitation possible at the $100 level." As stated by Mr. Heim in the August 19 New York Times.
Yes, this is the same gentleman as #2 above. I wonder how many of his clients were still with him a few years later?
[7] "Currently, Mr. LaLoggia has this to say: 'There is simply nothing in the economic picture today to cause a rush into gold. The technical damage caused by the decline is enormous and it cannot be erased quickly. Avoid gold and gold stocks.'" New York Times, August 19.
You can see that these comments were made literally within days of the bottom! Take note, technical analysts.
[8] "'Gold was an inflation hedge in the early 1970s,' the Citibank letter says. 'But money is now a gold-price hedge.'" New York Times, August 29.
Wow, were they kidding?! This reminds me of those dimwits journalists who said in 2011 to not invest in gold because it isn't "backed by anything."
[9] "Private American purchases of gold, once this was legalized at the end of 1974, never materialized on a large scale. If the gold bugs have indeed been routed, special responsibilities fall on the victorious dollar." New York Times, August 29.
The USD's purchasing power has declined by 80% since this article declared the dollar "victorious."
[10] "Some experts, with good records in gold trading, declare it is still too early to buy bullion." New York Times, September 12.
Too bad; they could've cleaned up.
[11] "Wall Street's biggest brokerage houses, after having scorned gold investments during the bargain days of the late 1960s and early 1970s, made a great display of arriving late at the party." New York Times, September 12.
No comment necessary.
[12] "He believes the price of bullion is headed below $100 an ounce. 'Who wants to put money over there now?'" As stated by Lawrence Helm in the New York Times, September 12.
The price of gold had bottomed two weeks before, making the timing of this advice about the worst it could possibly be.
[13] Author Elliot Janeway, whose book jacket states, "Presidents listen to him," was asked by a book reviewer about his preferred investments. He writes: "Then, gold and silver? He likes neither. In fact he writes: 'Any argument against putting your trust in gold, and backing it up with money, goes double for silver: silver is fool's gold.'" New York Times, November 21.
Mr. Janeway ate his words big-time: from the date of his comments to silver's peak of $50 on January 21, 1980, silver rose 1,055%!
[14] "Mr. Holt admits that 'in 1974, intense speculation caused the gold price to get too far ahead of itself.'" New York Times, December 19.
http://www.caseyresearch.com/images/goldarrow.jpg So, anything sound familiar here? Yes, it was a brutal time for gold investors, but what's obvious is that those who looked only at the price and ignored the fundamentals ended up eating their words and dispensing horrible advice. Investors who followed the "wisdom of the day" missed out on one of the greatest opportunities for profit in their lifetimes.


I was pleased to learn, though, that not all comments were negative in 1976. In fact, in the middle of the "great selloff," there were those who remained stanchly bullish. These investors must've been viewed as outliers – they, much like some of us now, were the contrarians of the day.
Also from 1976…

• "Many gold issues, in fact, are down 40 percent or more from their highs. Investors who overstayed the market are apparently making their disenchantment known. The current issue of the Lowe Investment and Financial Letter says, 'We are showing losses on our gold mining share recommended list… but keep in mind that these shares are for the long-term as investments.'" New York Times, March 26.
  
  Sounds like what you might read in an issue of BIG GOLD or the International Speculator.

• "The time to buy gold shares," [James Dines] declares, "is when there is blood in the streets." New York Times, September 12.
  
  If you glance at the chart above, Jim's comments were made within two weeks of the absolute low.

• "We're recommending to clients that they hold gold and gold shares," [C. Austin Barker, consulting economist] says. "The low-production-cost mines in South Africa might be interesting to buy for the longer term because I see further inflation ahead." New York Times, September 12.
  
  Investors who listened to Mr. Barker ended up seeing massive gains in their gold and gold equity holdings.

• "The probability of runaway inflation by 1980 is 50%... In light of this, the only safe investments are gold, silver, and Swiss francs,'" said the late Harry Browne on November 21 in the New York Times.
  
  Browne's Special Reports were edited by our own Terry Coxon for 23 years, along with all his books since 1974.

• "In the longer run, [Jeffrey Nichols of Argus Research] believes gold's price trend 'is much more likely to be upward than downward.'" New York Times, December 19.
  
  The "longer run" won.

• "'I think the intermediate outlook for gold is a period of consolidation and a bit of dullness,' says Mr. Werden. 'However, six or nine months from now, we could see renewed interest in gold.'" New York Times, December 19.
  
  He was right; within nine months gold had risen 13.5%.

• "Mr. Holt offers some advice to investors who are taking tax losses on their South African gold shares – some of which are selling at just 30 to 35 percent of their peak prices in 1974. 'If leverage has worked against you on the way down,' he reasons, 'why not take advantage of it on the way up?'" New York Times, December 19.
  
  Solid advice for investors today, too.

• "What's his [Thomas J. Holt] prediction for the future price of gold? 'A new high, reaching above $200 an ounce, within the next couple years.'" New York Times, December 19.
  
  His prediction was conservative; gold reached $200 nineteen months later, by July 1978.

It's clear that there were positive "voices in the wilderness" during that big correction, and as we all know, those who listened profited mightily.
There were other interesting tidbits, too. For example, gold stocks had been performing so poorly for so long that some advisors suggested a strategy we also hear today…

• "It is probably too late to sell gold shares, the stock market's worst-acting group these days, except for one possible strategy: selling to take a tax loss and switching into a comparable gold security to retain a position in the group." New York Times, September 12.

Even back then, it was widely known that gold often bucks the trend of the broader markets…

• "You might put a small portion of your money into gold shares and pray like the dickens that you lose half of it. In that way, chances are that if gold shares go down, the rest of your stock portfolio will go up." New York Times, September 12.

Gold miners provided critical revenue and jobs, just like today. From the August 2 issue of Time magazine…

• "South Africa, the world's largest gold producer, is being hurt the most. The price drop will cost it at least $200 million in potential export earnings this year."

• "Layoffs at the gold mines would make it even worse – the joblessness could intensify South Africa's explosive racial unrest."

• The Soviet Union, the world's second-largest gold producer, is feeling the price drop, too. The Soviets depend on gold sales to get hard currency needed to buy US grain and other imports."

Gold was also used as collateral…

• "The international gold market was also roiled yesterday by a report by the Commodity News Service that Iran was negotiating to lend South Africa roughly $600 million, predicated on a collateral of 6.25 million ounces of gold."

And just like today, there were plenty of stupid misguided US politicians: From the New York Times on August 27:

• "The drop in gold bullion prices from $126, which was the average at the first IMF auction June 2, provoked the Swiss National Bank to attack Washington's attitude toward the metal as 'childish.' Aside from the estimated $4.8 billion of gold reserves held by Switzerland, bankers there advocate some role for the metal as a form of discipline against unrestricted printing of paper money."

That last statement from the Swiss bankers is hauntingly just as true today.
Last, you know how the government in India has been tinkering with the precious-metals market in its country? And how it's led to smuggling? From the New York Times on August 27:

• "India announced it was resuming its ban on the export of silver. India is believed to have the largest silver hoard and the government there freed exports earlier this year as a means of earning taxes levied on overseas sales. However, most silver dealers minimized the significance of India's move yesterday. As one dealer explained, 'Smuggling silver out of India is so ingrained there that the ban will have no effect on the flow. It never has. Indian silver will continue to ebb and flow into the world market according to price.'"

So what's the difference in mood today vs. the mid-1970s? Nothing! This shows that the same concerns, fears, and confusion we have now existed at a similar point in the gold market then. There were also those who saw the big picture and stayed vigilant. Virtually every comment made in 1976 could apply to today. Keep in mind that most of the statements above are from two publications only; there are undoubtedly many more similar comments from that year.
The obvious lesson here is that patience won out in the end. It took the gold price three years and seven months to return to its December 1974 high. It only took another 18 months to soar to $850. Today, that would be the equivalent of gold falling until June this year, and not returning to its $1,921 high until April, 2015. It would also mean we climb to $6,227 and get there in November, 2016. Could you wait that long for a fourfold return?
This review of history gives us the confidence to know that our gold investments are on the right track. I hope you'll join me and everyone else at Casey Research in accepting this message from history and staying the course.

So, what will your kids or grandkids read in a few decades?

• "Buy gold. It's going a lot higher." Jeff Clark, Casey Research, March 4, 2013.

Yeah- why would you want gold? It isn't backed by anything!

Now look at this beeeeeeautiful little federal reserve note:

http://stephansmithfx.com/wp-content...serve-Note.jpg

It is backed by the full faith and credit of... well.... uhhh.... another federal reserve note.

WHO SAID THE HYDRA WOULD TAKE IT LYING DOWN
while its several heads were being chopped off one-by-one?


Antal E. Fekete
New Austrian School of Economics


I have never appealed to the so-called conspiracy theories in trying to explain
the strange world of fluctuations in the price of monetary metals. But neither
have I ever said that the fiat-money Hydra will take it lying down when it comes
to chopping off its several heads one-by-one.

Markets for the monetary metals under fiat money

Here are the relevant facts:

(1) The U.S. government defaulted on its obligation to pay its short -term
dollar debt to foreign governments and central banks in gold at a fixed rate, as
confirmed by several international treaties and by the solemn pledges of several
sitting presidents, on August 15, 1971. Subsequently it has been bankrolling a
chorus of servile academic cheer-leaders and other sycophants to shout from the
roof-top that the gold standard was a ‘barbarous relic’ anyway, quite ripe to be
gotten rid of – in an effort to cover up the shame of fraudulent default
(fraudulent because the U.S. did have the gold and could have lived up to its
international obligations).

(2) Thus the U.S. confiscated some of the gold belonging to institutions
outside its own jurisdiction, but could not confiscate all of it. University
economics departments and research institutions have failed to investigate what
gold at large will do in the long run. They just assumed that it will be business
as usual without gold in eternity. Well, it didn’t quite turn out that way.
Speculators soon started trading gold futures, first in Canada, then in 1975 in the
U.S. as well. No universities and think-tanks showed an interest in studying gold
futures trading and its long-run consequences. Why, gold has been reduced to
the status of frozen pork bellies. We know all that is to be known about trading
frozen pork bellies, don’t we? Supply and demand, right? And when push comes
to shove, it is easier to increase the supply of paper gold than that of frozen pork
bellies, isn’t it? (With due apologies to the late Fritz Machlup of Princeton
University for this interpretation of his theory of gold futures trading.) We may
bypass the question whether our institutions ignored problems connected with
futures trading of monetary metals on their own volition, or whether they did so
under duress. As it turned out two scores of years later, the failure to study the
consequences of the so-called demonetization of gold (euphemism for highway
robbery) has caused an unprecedented world disaster: the disintegration of the
world’s payments system that is now unfolding before our very eyes.


(3) A scientific inquiry would have shown back in the 1970’s that the gold
basis (defined as the difference between the nearby futures price and the price
for immediate delivery of gold) would be robust, in fact, it would be at its
maximum (equal to the carrying charge, or opportunity cost of holding gold).
But soon it would start its relentless decline all the way to zero and beyond. A
negative gold basis, a condition known as backwardation of gold, would create
an extremely unstable situation in international finance because it meant risk
free profits for holders of gold. Knowledgeable market participants realize that
persistently falling basis means increasing scarcity which, in the case of gold, is
not and cannot be alleviated by current output from the mines. Output ultimately
proves no match for the mass movement of gold going into hiding, first
gradually, eventually reaching crescendo when the threat of permanent gold
backwardation starts looming large. At that point all deliverable supplies of
physical gold would be gobbled up by gold hoarding. In case of monetary
metals, in contrast with all other commodities, high and increasing prices may
not bring out new supply. Rather, they might make supply shrink. Monetary
metals are exempt from the law of supply and demand.


Under permanent backwardation, as no gold were offered for sale at any
price, the ‘price of gold’ would become a vacuous concept. Gold, silver and,
soon enough, all other highly marketable goods would only be available through
barter. In other words, paper money as we know it would simply cease to
function. We cannot fathom how our complex world economy could operate
under such circumstances. One thing was certain, though: the world economy
would contract in a way that would make the contraction in the 1930’s appear as
a blip on the screen.


(4) All bubbles, all currency and financial crises of the past forty years are
direct or indirect consequences of the vanishing gold basis – whether we admit it
or not. A few years ago Professor Robert Mundell of Columbia University
invited me to attend his annual seminar at Santa Colomba, with most of the
leading monetary scientist in attendance. I circulated a statement warning of the
danger of permanent gold backwardation and how it would adversely affect the
world economy.


I argued that permanent backwardation of gold would be a watershed -event. As long as the gold futures markets are open, U.S. Treasury debt is still gold-convertible (albeit at a fluctuating rate, never mind that the rate is
minuscule). But no sooner had gold futures trading stopped after the advent of
permanent backwardation than gold was no longer to be had in exchange for
U.S. Treasury debt. The entire outstanding debt of the U.S. was worth not one
ounce of gold. Not one gram of it. It is insane to pretend that this would make no
difference in world trade, as pretended by official doctrine. This event would
mark the transition from monetary economy to barter economy.


My missive did not provoke a single rejoinder. It was simply ignored. All
the same, I have reasons to believe that people in the U.S. Treasury and the
Federal Reserve started to listen and they took a crash course on the problem of
vanishing gold basis and the threat of permanent gold backwardation.


(5) To summarize, in forcing the world off the gold standard in 1971 the
U.S. government created a many-headed Hydra. The problem was compounded
by the apparent gag order, muzzling research on the gold basis – as a face-saving exercise to cover up the fact of default.

Gold is not the same as frozen pork bellies after all
In waking up too late that there was a problem after gold futures markets have
been flirting with backwardation for a year or so, officialdom was forced to act.
Act it did in a typically haphazard fashion. A few days ago, on April 12 and 15
the paper gold market was demoralized by a ferocious attack on the lofty gold
price. This in and of itself is proof that Bernanke is fully aware that permanent
gold backwardation is imminent, and that it will create and unmanageable
situation. It’s got to be stopped in its track at all hazards.


Well, well, well. Gold is not the same as frozen pork bellies after all. The
Hydra is not taking it lying down. The kid gloves have finally come off.
Bernanke is trying to stop gold backwardation by selling unlimited
amount of gold futures contracts through his stooges, the bullion banks. He is
underwriting losses they are certain to suffer in due course. We can take it for
granted that they haven’t got the gold to make delivery on their contracts. In
fact, delivery of gold will be suspended under the force majeure clause. Short
positions will have to be settled in cash, to be made available by the Fed’s
printing presses. Gold futures trading will be a thing of the past.

Bernanke and columnist Paul Krugman, formerly his subaltern colleague
at Princeton don’t understand that the issue is not the price of gold. The issue is
backwardation or contango. In trying to wrestle the gold price to the ground the
Fed makes “the last contango in Washington”* an accomplished fact.
From the frying pan into the fire.

Ostensibly a lower gold price would solve the problem Bernanke has.
Demoralized gold bugs would be forced out of their holdings through margin
calls. Disillusioned investors would shun gold. This would make physical gold
available to rescue the strapped gold futures market.

In fact, however, a lower gold price is making the problem more
intractable, not less. The Fed is diving from the frying pan into the fire. This is
the point missed by almost all observers and market analysts. They ignore the
underlying flight into physical gold that continues unabated, in spite of (or,
better still, because of) the panic in the paper gold market. The Fed’s
intervention in bankrolling short interest is going to back-fire, for the following
simple reason. The Fed’s strategy is inherently contradictory. A lower price for
paper gold makes it easier, not harder, to demand delivery on maturing futures
contracts.

The more paper gold Bernanke sells, the lower the cost of acquiring
physical gold in exchange for paper gold becomes. The price of the nearby
futures contract will drop to hitherto unimaginable depths, relative to the cash
price, making backwardation worse, not better. Ultimately this will make
backwardation irreversible. Welcome to the world of permanent gold
backwardation.

From what hole does the evil deflationary wind blow?
Academia and the financial press have utterly failed to recognize the relevance
of gold backwardation as regards deflation. They might fret about hyperinflation
as a result of unbridled money-printing (euphemism for the monetization of
government debt). Yet the real danger is not on the inflationary but on the
deflationary front as realized even by Krugman – while he is perfectly clueless
on the question from what hole the evil deflationary wind blows (other than
conservative wishful thinking).


Well, I can pinpoint the location of the hole to within yards for the benefit
of Krugman. It is on Constitution Avenue, in Washington, D.C. The evil
deflationary wind is blowing from the building of Federal Reserve Board.
If Bernanke thought that his attacks on the gold price would stem
deflation, well, his efforts were counter-productive, to put it mildly. They have,
in fact, made the flight into physical gold accelerate. Permanent backwardation
of gold, and its concomitant, the re-invention of barter – the ultimate in deflation
– will be the result.


There is no reason to fear that the Fed is pushing the world into hyper-inflation. In fighting the gold price the Fed unwittingly pushes the world into
hyper-deflation.

All the same, it is destroying the dollar and the international monetary
and payments system.



April 18, 2013.

Let's not forget what we saw before the takedown:

1) ABN Amro announces to clients they won't deliver any gold. Forced cash settlement.

2) Multiple reports of individual large clients being forced to take cash settlement for their gold when they attempted to retrieve it from LBMA banks in the aftermath of the Cyprus FUBAR.

The purpose of the takedown was to drain the GLD etf to bail out the LBMA. Every time somebody sells shares in the GLD, gold bullion is transferred from the client side of the vault to the trustee side. That's why buying SLV or GLD plays right into the hands of the EE.

Interesting comments/'gossip' allegedly from Dave in Denver (via DavidPierre @ ZH) in the comments of the same article:

"My buddy in NYC just called me. He was chatting with a high level relationship manager in a big bullion bank private wealth management area. It's a pretty small-knit community. This guy worked at JPM until about 6 months ago and now works at another Euro-based bullion bank (there's only a few).

He (my friends contact) said that there's a massive scramble going on in Europe right now by very wealthy families and individuals to get their 400 oz. bars OUT of the bank vaults. He said "imagine a very wealthy Swiss family walks into a JPM office and says 'Id like to take my $30 million in gold bars out of your bank and if you don't let me do that I'll move my $100's of millions you manage somewhere else.'" Apparently this scenario is going on en masse. In fact, he said not too long ago JPM sent around a notice to wealthy clients that their bars were safe in a segregated vault account at JPM.

He said everyone is aware of what's going with the paper vs. physical scheme and now these wealthy entities are doing what they can to get their physical bars out of the bullion bank vaults. It certainly explains the drain in "eligible" gold from the Comex, most of coming from JPM's vault.

He also said that he suspects - although he can't confirm - that someone like a John Paulson held a gun to GLD's head to get their gold out of GLD. That's part of the bar drain from GLD. He can't confirm it was Paulson specifically, but Paulson is a private bank client of JPM's. JPM is also Paulson's main hedge fund prime broker."
Denver Dave


www.lemetropolecafe.com

Quote:

---

Originally Posted by mamboni

He (my friends contact) said that there's a massive scramble going on in Europe right now by very wealthy families and individuals to get their 400 oz. bars OUT of the bank vaults. He said "imagine a very wealthy Swiss family walks into a JPM office and says 'Id like to take my $30 million in gold bars out of your bank and if you don't let me do that I'll move my $100's of millions you manage somewhere else.'"

---

might make a good core plot for a movie.

http://static6.businessinsider.com/i...-kong-gold.jpg

Retail Demand For Gold Is Going Nuclear In Asia And Shops Can't Keep It On Their Shelves [PHOTOS]

Read more: http://www.businessinsider.com/asian...#ixzz2SAEBxUfy

Monday, April 29, 2013

The Global "Fractional" Paper Bullion Market Is Collapsing


I wrote last week that there was a scramble going on globally by entities seeking to take physical possession of the gold on which they have a legal claim, most of which is sitting either in alleged "allocated" big bank bullion vaults or in alleged "allocated" accounts in Comex custodial warehouse vaults.

I also demonstrated mathematically, using the reported numbers on the CME website for precious metals futures open interest and warehouse gold/silver stocks, that the amount of gold represented by Comex futures open interest far exceeds the amount of deliverable gold on the Comex (the analysis is even more extreme for silver). In fact, if less than just 10% of the buyers of June gold contracts demand delivery, the Comex won't have enough gold to cover the legal claims. For silver (July silver) it's even more extreme.

This is a global problem and not just endemic to the Comex. Globally, the legal claim of ownership on physical gold far exceeds the amount of gold represented by paper futures, LMBA forward contracts, leased gold and vault receipts. The latter - vault receipts - is where the big banks in London have the most severe problem, as gold this is supposed to be sitting in "allocated" accounts under the name of the legal owner who bought and paid for those bars has been largely leased out. I'll get to that in a minute.

First, I received this comment from John Brimelow's "Gold Jottings" report, which comes from Gerhard Schubert, head of Precious Metals at Emirates NBD, the largest banking group in the Middle East. Keep in mind that Middle Eastern buyers demand physical delivery of their gold. Here's the quote from his latest weekly report:

I have not seen in my 35 years in precious metals such a determined and strong global physical demand for gold. The UAE physical markets have been cleared out by buyers from all walks of life. The premiums, which have been asked for and which have been paid have been the cornerstone of the gold price recovery. It is very rare that physical markets can have a serious impact on market prices, which are normally driven solely by derivatives and futures contracts…

I did speak during the week with several refineries in the world, of course including the UAE refineries, and the waiting period for 995 kilo bars is easily 2-3 weeks and goes into June in some cases. A large portion of the 995 kilo bars in the UAE goes normally into the Indian market, but a lot of the available 995 kilo bars are destined for Turkey, at this time. We heard that premiums paid in Turkey have reached anything between US $ 20 and US $ 35 per ounce.

The price hit of two weeks ago has triggered a serious scramble for physical gold and silver. Reports like the above comment have been flooding from Europe, the Comex has had about 30% of its gold bars literally drained from the customer accounts of the Comex bank custodian vaults and the U.S. mint is running way behind on demand for silver eagles and some weights of gold eagles. Ditto for the Canadian mint.

And then I get a call from a close friend in NYC last Friday. His career has been in private wealth management in the private bank department of the Too Big To Fail banks. He's been looking for work and chats with old colleagues all the time. He called my Friday and told me he just got off the phone with a very high level private banker from a big Euro-based TBTF bullion bank, but who was at JP Morgan until about six months ago.

This guy told my friend that there is a scramble by many very wealthy European families/entities to get their 400 oz bars out of the big bank vaults. He knows this personally, for a fact. He said the private banker community is small over there and the big wealthy families all talk to each other and act on the same rumors/sentiment. The Bundesbank/Fed and the ABN/Amro situations triggered this move. He knows for a fact JPM tried to calm fears about 3 months ago by sending a letter to it's very wealthy clients assuring them their bars were safe, in allocated accounts. He said right now those same families are walking into the big banks like JPM and demanding delivery of their bars or threatening to take their $100's of millions in investment portfolios to competitors. His wording was "these people are putting a gun to the heads of private banks and demanding their gold."

I know this information is good because I know my friend's background and when he tells me his source is plugged in, the guy is plugged in. Not only that, my friend's source said that there's no doubt that someone like a John Paulson, not necessarily specifically him, but entities like him or it may include him, have held a gun to GLD and demanded delivery of physical in exchange for their shares.

Regarding the Bundesbank/Fed situation, recall that the Bundesbank asked to have some portion of its gold sitting - supposedly - in the NY Fed vault in NYC sent back Germany. The total amount is 1800 tonnes. After behind the scenes negotiations, the Fed agreed to ship 300 tonnes back over seven years. To this day, the time required for that shipment has never been explained. Venezuela demanded the return of its 200 tonnes held in London, NYC and Switzerland and received it all within about four months.

And regarding the ABN/Amro situation. ABN/Amro offered a gold investment account product that offered physical delivery of the gold in the investment account when the investor cashes out. About a week before the gold price smash, ABN sent a letter to its clients informing that the physical delivery of the bullion was no longer available and that all accounts would be settled with cash at redemption.

I believe it was these two events that triggered the big scramble for physical gold by wealthy families/entities who were suspicious of the integrity of their bank vault custodial arrangement anyway.

In fact, what we are now seeing is the final stages of the paper gold/silver bullion market, which has grown at a parabolic rate over that last 13 years, and includes Comex futures, LMBA forward contracts, OTC derivatives - which is an even bigger paper market than the Comex - leased gold claims/contracts and warehouse receipts.

At some point there will be an even bigger "run on the bank" by those looking for delivery of the physical gold/silver that they have been "assured" is sitting in their "trusty" bank custodian vault. I know for myself that I have seen enough from the JPM's of the world to not trust anything they do or say. I think a lot more people are finally coming to that same conclusion. At some point there will be a complete collapse of trust in the paper monetary system and the price of gold/silver will really go parabolic, as the masses realize all at once - and far too late I might add - that everything that was rumored over the last 13 years about paper gold, gold leasing, etc is actually true.

Posted by Dave in Denver at 10:55 AM

http://truthingold.blogspot.com/2013...lion_6103.html

from above

It is very rare that physical markets can have a serious impact on market prices...hahahahahah

Quote:

---

Originally Posted by Serpo

from above

It is very rare that physical markets can have a serious impact on market prices...hahahahahah

---

Yeah, I picked that little gem up too! It's like what does the supply and demand of the actual physical commodity have to do with the price in this bizarro world?! LOL Everything is perception management by TPTB.

Quote:

---

Originally Posted by mamboni

Yeah, I picked that little gem up too! It's like what does the supply and demand of the actual physical commodity have to do with the price in this bizarro world?! LOL Everything is perception management by TPTB.

---

Its worse than that. It is fake digits on exchange computers controlled to be whatever they decide they want. The plunge protection team has taken full control over the pretend market.

The jist of what i am i getting is that not the Big Fish but the Fat Fish are starting to realize there has been a change in the diet of plankton they have been feeding on.

So they are Quitely moving to another part of the pond.



Something that has been rumored for ages but to actually see it happening is quite amazing

Thank God I own Three Mercury Dimes

Quote:

---

Originally Posted by Twisted Titan

The jist of what i am i getting is that not the Big Fish but the Fat Fish are starting to realize there has been a change in the diet of plankton they have been feeding on.

So they are Quitely moving to another part of the pond.



Something that has been rumored for ages but to actually see it happening is quite amazing

Thank God I own Three Mercury Dimes

---

Three? I don't know if I'd boast about that on a publci forum TT.;D

This was posted on Turd's blog today. Ponder it's incredible significance and ask yourself why is gold at clearance sale prices in the US and 99% of your friends and family aren't buying or don't know anything about it:


I live with a couple of roommates who are young, adventurous and love to travel. recently they -guy and his girl- went to Hong Kong and then mainland China for two weeks. He said that the one oz gold Pandas sold there for $2,800 each! Yes, you read that correctly. He also said that the next time he goes to HK or China he might first buy a couple of Pandas here and resell them there and pay for his trip.

This is a paid message from a third party. StreetAuthority is not affiliated with and does not endorse any publicly traded companies or products mentioned below. Please read all disclaimers.

Dear Reader, A prominent financial journalist sent one of his research assistants to the Federal Reserve in downtown Manhattan to get a good look at their gold vault. He suspected that what they claimed was down there wouldn't stand up to an independent audit. But he was stunned at what was discovered. This was his assistant's report: "I went to the Federal Reserve yesterday to have a peek at their gold vault, and what I saw was pretty shocking... "First, I knew ahead of time that my camera would be confiscated before I was let in the building. They also took my mini recorder and my cell phone, so this is from handwritten notes, which I had to scribble as quickly as possible when I got back outside (because, as I soon learned, no note taking is allowed either). "Anyway, what struck me the most when I got down there is how tiny it is. You'd think that the largest storehouse of gold in the world would be impressive...but it looks about the size (and color) of the locker rooms at my high school. Actually, even smaller. But that's not what shocked me... "I estimated the size of the vault to be about 60 feet long by 30 feet wide by 9 feet high. A room that size could hold about 615,000 bars of gold, packed full. "According to my guide, there are currently 533,000 bars of gold stored there. So, on the surface, the numbers seem to add up. At today's prices, that's about $298 billion worth of gold... "There's just one problem: The vault I saw was half full, at best. "If my estimates are right, there could be a discrepancy of 106 million ounces -- or $148 billion -- between what they say is there and what's actually there. "And it's not just the fed. As I've dug into this, the numbers don't seem to add up anywhere..." It was just one more piece in what this journalist claims is the "greatest scam in U.S. history." And in a groundbreaking exposè, this man is now revealing the full details of what he discovered. It follows years of investigation into every facet of the gold markets -- and explains why he believes many gold investments will soon be worthless. If you have any money invested in gold or silver, I urge you to watch this exposè now. It will likely save your financial life. But even if you haven't invested in gold, I think it's critical that you know the full extent of this story. Because it could have dire consequences for the American economy, and your finances. Get the full details, and find out how to protect yourself, right here. Sincerely, George Rayburn Publisher, S&A Research

Quote:

---

Originally Posted by mamboni

This was posted on Turd's blog today. Ponder it's incredible significance and ask yourself why is gold at clearance sale prices in the US and 99% of your friends and family aren't buying or don't know anything about it:


I live with a couple of roommates who are young, adventurous and love to travel. recently they -guy and his girl- went to Hong Kong and then mainland China for two weeks. He said that the one oz gold Pandas sold there for $2,800 each! Yes, you read that correctly. He also said that the next time he goes to HK or China he might first buy a couple of Pandas here and resell them there and pay for his trip.

---

that is interesting

JPM gold hits another record low

http://www.zerohedge.com/news/2013-0...al-28-holdings

Wednesday, May 8, 2013

The Truth About The Gold Being Drained From GLD

In over 30 years of studying, researching, trading and investing in the financial markets, I have never seen the contrarian signals flashing as bullishly as they are for gold right now. - Link: Update On Gold: Is This The Bottom?

It's really quite astonishing. Especially the degree to which the negative media reports - especially from Bloomberg News and CNBC - are piling up like dead bodies in the aftermath of the Mt. Vesuvius eruption.

I want to "connect some dots" for everyone who has been worried about the rather large liquidation of gold from GLD. In fact, media citations of this gold drain have proliferated like the odor of burning marijuana in the streets of Denver now that pot has been legalized (trust me, it's everywhere).

But what is really going on? Let's look "under the hood" at some relevant information that is being left out of a lot of the financial reporting in the U.S. To begin with, the way gold is put into or taken out of GLD is via the Authorized Participants. These are the primary market makers in GLD shares. When they collect a basket of 100,000 shares from buyers or sellers, they take the cash proceeds and either buy gold to move into GLD or buy gold from GLD to remove the gold from the trust. The current list of AP's, at least according to GLD's latest 10-K filing are: Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sach, HSBC, JP Morgan, Merrill Lynch, Morgan Stanley, Newedge (a online hedge fund oriented futures bookie), RBC, UBS, and Virtu Financial (another online hedge fund bookmaker).

If the price of gold - for whatever reason, legitimate or not - gets crushed, it will tend to generate a lot of selling in the shares of GLD. In turn, that will generate the ability of the AP's to collect 100,000 share baskets and convert those baskets into gold that is removed from the GLD vault and into the "custody" of the specific AP who is turning in the shares. At today's price of gold, 100,000 shares represents about $14.2 million - 9,627 ozs of gold, or roughly .29 tonnes. Since the beginning of the year, roughly 293 tonnes of gold has been drained from GLD, which had 1350 tonnes in it - allegedly - on 12/31/12. Nearly 30% of the total amount of gold that has been drained from GLD occurred in the 3 weeks since the April 16-17 price massacre.

So where, you might ask, is all this gold going? It's not just vaporizing into thin air. Using today's price of gold, 293 tonnes is worth about $14.5 billion. If you look at that AP list above, all of them except the two hedge fund bookies are LBMA "bullion bank" market makers. Unless these bullion banks are keeping the gold for themselves - and if any of them were, it would have to show up in the footnotes of their next 10-Q - that gold is being delivered to buyers of it on the other side.

So, who would be buying this gold? Based on numerous news service reports, which often seem to never make their way into the U.S. financial media reporting, India and China combined through the end of April have imported somewhere around 700 tonnes of gold, plus or minus 100 tonnes. What's 100 tonnes among bullion bank friends when GLD still has 1,057 tonnes left? Here's one news report - actually from Bloomberg - which is calculating that China purchased around 223 tonnes of gold in March alone: LINK That is a staggering amount of gold (mostly 400 oz bars - the type of bar in GLD's vaults) when you consider that the global annual mined production of gold is around 2500 tonnes, and declining.

And here's an account out of India about the massive gold demand there in April and May:

“The biggest slump in gold prices in more than three decades on April 15 spurred banks, traders and jewelers to import more than 100 tons last month, said Rajesh Khosla, managing director of MMTC-PAMP India Pvt. Purchases this month will match April’s imports, he said”

And here's a refreshingly honest assessment of the situation from an Indian newspaper:

The jump in Chinese physical demand also prompted some banks to ship in more supplies from London and Swiss vaults, traders said LINK

If you read that entire article, you'll see that in 2012, India/China imported more than 1/3 of the global gold production and will likely account for close to 50% this year. This is the unintended consequences for the Central Banks who are spear-heading the manipulation of the price of gold for the purposes of defending the dollar and fiat currencies.

This rabid demand for 400 oz. gold bars from China/India (not to mention Russia, Turkey, Viet Nam, pretty much all of southeast Asia) goes a long way toward explaining the rumors that were circulating during February and intensified in March that the LBMA was in danger of facing a big delivery default.

Layer on top of this the fact that many wealthy families in Europe are now demanding delivery of the gold bars that JPM and other bullion banks are holding custody of. The report on this from my friend was confirmed independently by a source of Bill Murphy's over in Europe. This is exactly why ABN/Amro announced a week before the $200 hit on gold that they would no longer deliver physical gold from their gold investment account product and would instead only settle redemptions in cash. That product catered to high net worth investors over there. ABN didn't have the gold that would be required to satisfy delivery claims. It was a fractional bullion investment account, just like all the other big bank "bullion" investment products. Morgan Stanley settled a lawsuit several years ago for this type of scheme using silver. But they never admitted guilt.

So in connecting all the dots, there is no question in my mind that the big price smashing of gold in mid-April was an operation designed to shake loose enough 400 oz. gold bars out of GLD in order to satisfy the enormous delivery demands coming from Asia, India and even within Europe. GLD is the only possible source of above-ground 400 oz. gold bars that could be used to satisfy this enormous demand for physically deliverable bars.

At some point, and probably sooner than most people are willing to believe, this physical demand is going to force an upward "explosion" of the paper derivatives being used to hold down the spot price right now. In 30 years of studying and trading the financial markets, I have never seen contrarian indicators for any market sector flashing as bullishly as they are for gold and silver, which further confirms my view that the metals have bottomed and are getting ready to give those of us who held on the ride of a lifetime.


http://truthingold.blogspot.com/2013...ined-from.html

Yes they have to suck GLD dry first

check this one out, JPM in panic mode as customers realize there is no gold in their allocated accounts (shocking!), just like Jim Willie said way back, and he said when word leaks out about all that missing gold, expect gold to double or triple in price in weeks....


http://investmentwatchblog.com/is-th...endgame-nears/

Quote:

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Originally Posted by Large Sarge

check this one out, JPM in panic mode as customers realize there is no gold in their allocated accounts (shocking!), just like Jim Willie said way back, and he said when word leaks out about all that missing gold, expect gold to double or triple in price in weeks....


http://investmentwatchblog.com/is-th...endgame-nears/

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Yeah, this report is a few days old. But I was waiting for the customers to react to the letter JPM reassuring them that their gold is safe and sound and not to worry. In the business world, when you get a letter like this it is a tell: thay are in actual fact leveraged, short and running a scam. Damn straight if I got that letter I'd be at the doors of the vault first thing in the AM demanding delivery of my gold.