Buy Silver Kookaburras at SDBullionA situation where more gold standing for delivery than is claimed to exist is NOT a “good” thing.  This is a VERY dangerous situation of potential default and one where by hook or by crook has been avoided to this point. Is it this delivery month where delivery fails?  I do not know.
I do know we live in a world where China is importing every single gold ounce produced on the planet leaving nothing else leftover for the rest of the world.
This situation can only last or continue as long as vaults have gold and the owners are willing to fill the deficit between supply and demand.
I will say this, the global financial system will completely seize up and close for trading once gold delivery fails.  This will only take 48 HOURS after a failure, and the ability to procure metal, sell stocks and bonds, or do anything else financial will not be an option.

 

Silver Rounds SD Bullion

Submitted by Bill Holter, JSMineset

The action in nearly all markets worldwide changed on a dime since January 1st. I am not sure “what or why” the change coincided so closely with the calendar year but the rate hike by the Fed is the leading candidate.  As for the real global economy, there is certainly evidence the weakness of late last year has deepened significantly. The pace of collapse has shifted gears as evidenced by trade, earnings and even central banks. Japan’s new policy of negative interest rates followed by new Fed trial balloons of same speak volumes about “stress”.

Another area of stress is change in the action on COMEX. I have documented over the past year several delivery months where there were more contracts standing than registered gold available for delivery. The current Feb. contract has gone past first notice day with 13.3 tons of gold standing for 4.5 tons of registered gold. A very good synopsis of this was done yesterday by Craig Hemke at TF Metals Connecting The Comex Dots I encourage you to read this as Craig documents the recent shell game with inventory.

It is important to understand there are huge changes going on at COMEX. First I need to correct something I wrote last week. I said “it doesn’t make sense for the shorts to not deliver on the first or second day of the delivery period and wait until the end of the month”. This is absolutely correct, but I wrote this in late Jan. … so the deliveries we saw were some FIFTY PLUS days after the delivery period began on Dec. 1st! Are they really allowed to wait 55 days to make a delivery? Just to make it clear, it make no sense whatsoever to not make a delivery on day one or two because the storage costs must be paid. I absolutely stand by the most obvious reason not to deliver is because the gold was not available. “Waiting” to deliver earns NOTHING and costs money, Wall Street does not work this way!

We are also seeing another VERY BIG change in this delivery month. While we saw very few “serves” early in delivery months in the last couple of years, this has changed. We saw 58 on Monday, 546 Tues., and 158 on Wednesday. It is my opinion we are now seeing serious rebellion in the queue! It has been contended which I firmly agree with, “cash settlement” with premium has been prevalent on the COMEX for quite some time. I now believe there are some standing and DEMANDING delivery and refusing cash. This I believe is evidenced by gold in backwardation all the way out to October.  I won’t spend the time to explain again why here, but backwardation CANNOT exist in gold in a correctly functioning market and one where the rule of law actually exists.

No matter how big of an apologist you are, it cannot be argued that a situation where more gold standing for delivery than is claimed to exist is a “good” thing. This is a VERY dangerous situation of potential default and one where by hook or by crook has been avoided to this point. Is it this delivery month where delivery fails? I do not know.

I do know we live in a world where China is importing every single gold ounce produced on the planet leaving nothing else leftover for the rest of the world. This situation can only last or continue as long as vaults have gold and the owners are willing to fill the deficit between supply and demand. I will say this, the global financial system will completely seize up and close for trading once gold delivery fails. This will only take 48 hours after a failure, and the ability to procure metal, sell stocks and bonds, or do anything else financial will not be an option.

Liquidity is drying up and no Ponzi scheme can survive without “new juice”! A very basic and core problem with no solution other than resetting, rebooting and revamping the system itself! We are living a global margin call that cannot be met. The system is clearly broken and you do not need to be a rocket scientist or even have higher than an 8th grade education to understand this. No matter what you look at, it is clear something is very very wrong. I have written I believed a force majeure will occur within the gold and silver complexes. I have written of “truth bombs” being dropped by Mr. PutinThe Ultimate “Truth Bomb” – The East Knows The West Is Bankrupt and the Chinese holding a silver “Kill Switch” in China http://www.silverseek.com/article/kill-switch-13503?quicktabs_most_popular_tabs=0 . A financial failure larger than any and all past crashes will end in social unrest all over the world. When credit ceases and breaks down, it will be felt first and foremost in “distribution”. The distribution of everyday and necessary goods will be interrupted. Empty stomachs will fan the flames of angry mobs. Those who have lost the fruit from their life’s work will be more interested in their next meal versus wealth. I stand by everything I have written on these topics. The greatest credit unwind of all time is unfolding right now before your very eyes!

I am sure this article will fan the flames in “troll town”! Please attack the logic, do not say “it will never happen because it has not”. Do not point at the prices of gold and silver and say “see, you are wrong”. The manipulation of markets, all markets is so obvious even an idiot can see it with very dark sunglasses on! I expect we will see “gap” openings in nearly everything very shortly … Please do something, anything, to protect yourself and loved ones!

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome,  [email protected]

2 oz Pearl Harbor Memorial Ultra High Relief
Secure Yours Now at SD Bullion!

  1. Great article, so much better than all that useless TA chart chatter of other articles.  This is the meat of the story.  How much influence does the cartel have and what will they do to get more?  I think capital controls will get more aggressive in response to failing comex gold.  Some version of you have to have high level security clearance to take delivery because gold is a Terror threat since it can’t be traced or some nonsense like that.

    In December I was patient to stack when the price was smashed.  I didn’t think things would break open until March.  Now have to think about stacking with prices going up.  For me, stacking with prices going down was easier, as much as most people curse the falling prices……

    • @ART005

       

      “How much influence does the cartel have and what will they do to get more?”

      About now, there emphasis could be changing from getting more influence to keeping what they have.  As things unravel, their control will slip and PM prices will become more and more difficult to manipulate.  They’ll still try, of course, but when things don’t go their way, their thoughts may turn from manipulation to self-preservation.

       

      ” For me, stacking with prices going down was easier, as much as most people curse the falling prices……”

      Falling prices are good for those of us who are accumulating metal.  Flat prices are as well but not as much.  Rising prices may make people feel as if their investment is finally paying off but it doesn’t help a bit with accumulating more metal.  Those rising prices are not at all helpful unless one is selling their metal.  Some people probably are selling some of their stack.  If they need to do so then higher prices will help them.  If they do not need to do so, then higher prices are just tripping hazards that get in the way of adding to the stack.  Not that they prevent us from adding to the stack, they just make it more expensive to do so.  Like most on here, I would prefer to buy more of something when it is on sale.  The low prices that the banksters have arranged for us have been good, IMO.  It has allowed a lot of us to get more ounces for the fiat we have.  Our stacks are bigger now than they would have been at higher prices.  Thanks, banksters.  😉

       

  2. COMEX  failure to delivery is very unlikely to cause  total systemic financial failure.  COMEX will be largely irrelevant except to those who care about gold,  trading of paper contracts  even as much as people want to focus on this system.

    The event more likely to cause failure is far larger than gold or silver market, is most likely concentrated in the oil industry loans disruptions and bankruptcies or a SIFI bank failure in Europe that cannot be contained.  I am looking at DBank or the Italian bank system where stocks of major banks go to zero and liquidity fails cause a banking crash

    That said, it’s still prudent to stack as bail ins rule, precious metal price shortages can occur and bank/supply chains could crumble.

    • Agreed – there is a fair bit of sensationalism in this article and the majority of global investors will be largely unfazed by a gold default; a new trading platform will be introduced and life will continue – albeit at a higher price. A gold default will however be symptomatic of a deeper malaise and the timing of such an event could be planned to coincide with the emergence of these problems. Oil/banks/derivatives are all likely to erupt into major problems and these are the greater threat to the broader economy and markets. A gold default will serve as a warning and indication these sectors are in trouble – and will also confirm how manipulated, controlled and interconnected every market has become.

    • @AGXIIK

       

      “COMEX  failure to delivery is very unlikely to cause  total systemic financial failure. “

      Agreed.  But it would be a falling domino and who knows what kind of follow-on problems would be created if COMEX did fail to deliver and lose whatever trust investors have in their system?

      Speaking of which, we can only wonder what sort of derivatives might be written on COMEX delivery.  Seems as if just about everything else has such paper attached to it these days.  It’s not impossible that such paper could be many times the size of the actual COMEX futures contracts.  Everything seems to be tied to other things these days.  IMO, the bond market could well take this much worse than the stock market does.  Bond investors tend to like gold as an asset class, unlike many stock investors, so would see this as a much more serious event than the stock guys would.  So, just what would a Lehman Bros. moment look like in COMEX terms?

       

  3. (Kitco News) – Gold prices ended the U.S. day session solidly higher and hit a 3.5-month high Thursday. Add the slumping U.S. dollar index to the list of bullish elements helping to drive gold and silver prices higher recently. Silver prices also scored a 3.5-month high Thursday. Safe-haven and technical buying continue to support the yellow metal amid volatile world stock markets that presently still have a downside bias. April Comex gold was last up $15.30 at $1,156.60 an ounce. March Comex silver was last up $0.126 at $14.86 an ounce.

    The sharply lower U.S. dollar index the past couple days has helped to lift raw commodity markets. A weak U.S. manufacturing report on Wednesday spiked the dollar index lower, and there was follow-through selling pressure on the greenback Thursday. Most raw commodities on the world market are priced in U.S. dollars. A decline in the value of the dollar makes those commodities less expensive to purchase with non-U.S. currency.

    The marketplace is now awaiting Friday morning’s U.S. employment report for January. The key non-farms payroll number is expected to be up 185,000 following a strong rise of 292,000 in December. A number outside of market expectations is likely to cause higher price volatility, at least in the aftermath of the 8:30 a.m. eastern standard time report.

    Technically, April gold futures closed prices hit a 3.5-month high today and closed nearer the session high. Prices are in a six-week-old uptrend and the bulls have technical momentum on their side. Bears also have gained the slight overall near-term technical advantage for the first time in months. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,175.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at 1,130.00. First resistance is seen at today’s high of $1,157.30 and then at $1,165.00. First support is seen at $1,150.00 and then at today’s low of $1,139.70. Wyckoff’s Market Rating: 5.5

    March silver futures prices closed nearer the session high and hit another three-month high today. While the silver market bears still have the slight overall near-term technical advantage, recent price action has been bullish, including prices now in a three-week-old uptrend on the daily bar chart. A bullish “rounding-bottom” reversal pattern has also formed on the daily chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.25. First resistance is seen at today’s high of $14.93 and then at $15.00. Next support is seen at today’s low of $14.65 and then at $14.50. Wyckoff’s Market Rating: 4.5.

    March N.Y. copper closed up 350 points at 213.00 cents today. Prices closed nearer the session high and hit another four-week high today. A big downdraft in the U.S. dollar index the past two days has also helped the copper market bulls. The copper bears still have the overall near-term technical advantage but the bulls have gained some upside momentum. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 220.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 200.00 cents. First resistance is seen at today’s high of 213.80 cents and then at 215.00 cents. First support is seen at 210.00 cents and then at 207.50 cents. Wyckoff’s Market Rating: 3.0.

    By Jim Wyckoff, contributing to Kitco News; [email protected]
    Follow me on Twitter @jimwyckoff

     

     


    Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

  4. AGXIIK
    Agreed.  I think a connecting link is gold not available to hide/escape from bail-ins.  Gold not available then refers to Holter’s article.  The world doesn’t care too much about gold until they feel threatened by fiat.  I think things are escalating in that direction and a perceived possible lack of gold (PM) creates more interest in gold (PM) and a viscous circle starts spinning quickly.

    So oil/energy leads to bank weakness/failure.  Bank weakness/failure leads to fear of capital control/confiscation.  Fear of capital security leads to PM demand.  Perceived lack of PM supply escalates PM demand and fiat failure….

    • “… and a viscous circle starts spinning quickly.”

      I just hate it when thick liquids start spinning quickly.  No way to know how that’ll end but probably badly.  😉

       

  5. @ART005  I see your point  If precious metals are kicked to the curb by something either predictable way or an outlier event,  then the banks win, with a two part salvo of bans on cash and systemic failure scenarios like bail ins and bank/ATM/debit-credit card lock ups, only the hyper aware will be sufficiently prepared to endure these assaults even if PMgo into lock down or supply crashes.  If I get sufficient warning I’ll go to the bank, cash out my  mid 5 figure bank line of credit , sell maybe a mid 5 figure of PMs for cash, something my LCS is quite capable of doing, and bunker in for the duration.      That’s given a DEFCON  1 situation. Until then we can all watch the movie with plenty of non-GMO organic popcorn.

  6. Just me or did it seem like the powers that be just held the system together long enough for the bank bail in laws to go into effect in UK????? (Jan 1) Maybe time to let it all go cuz their asses are partially (if not all) covered.????????

  7. So what is it? +$13/oz a day for Au the last 4 days or something close?

    Didn’t it break its 200 day moving average?

    I am not even watching Ag until it hits $17/oz …just adding little by little…How much more time until that happens?

    But Au? Me likey! 🙂

    If the COMEX closes I feel good about my efforts to secure my right amount.

    Keep stacking my friends!

  8. Nibiru is coming in March, watch for collapse to coincide with horrific change in weather due to incoming of this ninth (or tenth) planet.  Stop lying to yourself, look at the signs in the sky and what has been happening all over the world.

    • There are literally tens-of-thousands budding and very knowledgeable astronomers gazing the stars every night though telescopes.  Today’s amateur telescopes can easily pick out far away planets let Neptune, Uranus and Pluto.   They also use state of the art CCD cameras and take photo’s of the exact same area of sky every night and looking for anything that might have moved.  If there was some planet within 60 days of nearing the earth it would had been spotted months ago.   Many of these astronomers intentionally look for anything that could be a new comet or large asteroid that will get their name in print as a new undocumented discovery.  Case in point Nibiru predictions belong in the same paradox as the Iraqi Dinar Revaluation.

    • Its worse than you think. Not only is Nibiru hurtling toward us, the entire planet is covered in Shemitah!  The only thing that can save us now is Gods intervention.  Someone put in a call to Marshall Swing. He is the only one on good enough terms with God to change his mind.

    • @PowerBall

       

      “Case in point Nibiru predictions belong in the same paradox as the Iraqi Dinar Revaluation.”

      I was thinking that this was right up there with the flat earth crowd.  This is mostly the “don’t confuse us with facts because our minds are already made up” group.  😉

       

  9. Another RIDICULOUS BIG ‘OL YAWN article. Why in the hell would the ENTIRE GLOBAL FINANCIAL SYSTEM collapse within 48 hours (or any length of time for that matter) because the Comex couldn’t make delivery? Its a crooked entity as it is and everyone knows this. I’m fairly certain the ENTIRE GLOBAL FINANCIAL SYSTEM isn’t relying on the Comex. Where do these people come up with this shit?

    • Holter does get a bit excited, but you are missing some important factors…

      If the COMEX defaults, prices could get out of control and the derivative exposure could very well set the financial system on fire. Other commodities could then follow.

      Everything was under control in 2007 as well… until it wasn’t.

    • If you’re arguing that it will be at least 96 hours,  then you are missing the point.

      The issue isn’t if Comex can’t deliver as in a new shortage of gold. The issue is Comex Au fails in some way, then the whole Emperor Has No Clothes charade will implode. Wealth of the world plays with fiat because that is were the leveraged profits are.  But only until fiat can’t be trusted. The brakes coming off Comex PM will be unmanageable for fiat.

  10. Based on my observations of how the COMEX scam has been pursued by the bullion banksters, I suspect it is unlikely that we are on the imminent brink of a default, and least not quite yet — although the reported stock of registered gold is certainly well within the “danger zone” of being drained in a day or two.  Is the writing on the wall for the COMEX?  Unquestionably. Unless they can somehow source more gold, whether from the eligible category or elsewhere, the jig will be up; they will be compelled to declare force majeure, and the halcyon days of COMEX futures as the gold price-setting mechanism of the world will come to a screeching halt.

    I would add this: on whatever day the COMEX finally does fail to deliver, I believe it will be according to a long-envisioned contingency plan whose edicts originate all the way up the ladder to the Exchange Stabilization Fund.

    The real question is what happens next?

    I find it hard to believe that there is not already a well-defined strategy in place vis-a-vis the pricing of gold when the COMEX ultimately seizes up.  Will it actually work?  That remains to be seen.

    It would seem to be a given that any successor pricing mechanism must have gold to deliver. Who is willing, at this point in time, to deliver physical gold — in LARGE quantities — for under $1200/oz? The answer to that question is the key.

    As for whether or not the global financial system would seize up as a result of a COMEX force majeure, I think some of the naysayers above fail to appreciate the implications of a radical upward revaluation of gold — say to a value equivalent of today’s $10,000/oz or even $25,000/oz.  Whether by government edict or market forces, the effects would be the same: every single currency in the world, including the US dollar, would be devalued to a commensurate degree.  In fact, they would effectively go to zero, and the various countries of the world would be forced into issuing (and trying to sell the legitimacy of) completely new currencies. In the process, all of the sovereign entities of the world — whether they possess gold reserves or not — would find their outstanding debts suddenly much more affordable than they were beforehand.  Never mind that their loyal subjects … er … fellow citizens will suffer through a decade long (or longer) period of economic nuclear winter.  At least that pesky debt gauge will be reset to zero and the powers that be can start the whole game over again at square one.

    Either that or we line them all up, ten rods apart, like the six thousand of Spartacus on the Appian Way.  Except in our case, it would require I-80 from New York to San Francisco.  Both sides.

     

    • “It would seem to be a given that any successor pricing mechanism must have gold to deliver. Who is willing, at this point in time, to deliver physical gold — in LARGE quantities — for under $1200/oz? The answer to that question is the key.”

      Agreed.  Another question that interests me greatly is “At what price would the Chinese be willing to sell THEIR gold?”.  Something tells me that it would NOT be $1160 an oz.

  11. still enjoy reading holters articles.prices higher will only go so far.the big SMASH is coming.only 3 words that mean anything.

    “Loss Of Confidence”

    still hoping we have 2 or 3 years to stack.

    I for one do not want to live in anarchy.

  12. the global financial system will completely seize up and close for trading once gold delivery fails. This will only take 48 hours after a failure, and the ability to procure metal, sell stocks and bonds, or do anything else financial will not be an option.

    I think Holter is right for the following reasons:

    This crisis is a crisis of financialism which has taken over the world economic system as  the main driver of economic activity.  You are all pointing to ‘economic events’  such as the seizing up of the banks due to the oil crisis, the european financial crisis etc  but these are economic events not financial events.  As we all know the Dallas Fed has been papering over the bank failures due to the oil patch crisis since late December and no one even knows about it in the mainstream.   So the failure of currencies is what blows open the financialism system..because they can’t paper over anything more when their currencies are now worthless or heading toward worthlessness.  That’s why the flight towards real money will happen in an instant when the world gives up on financial currencies and that will be the event causing the global collapse. I also believe as does Bill that the moment is now for that to happen.  The massive silver fix problem of last week is a big tell tale sign of the emerging seizing up of the silver/gold comex system as the crooks were trying to drive down the price as low as possible getting out as many holders of longs as they could before the ‘force majeure’ hits.  They will likely do it over a weekend and I am betting this is the weekend.

  13. @captain danite @mfields111 @Ed_B   I’ve been rethinking what Holter said and my original response.  While I don’t see the exact connection to financial world failures connected to a  COMEX failure., there are probably some strings attached that when pulled will cause some real harm.  Unlike a bullion bank drawn down to zero;  Ed, you note whether there are derivatives attached to the COMEX.  Beat’s me on that subject

    When everything in the paper ponzi bankster world is little more than a street corner crap shoot,  3 card monte grifters looking for the last few easy marks before they armor up and start stealing with a vengeance, all markets being nothing more than ‘cover your a** interventions’ the losing side of these bets always involves us remaining as players on the wrong side of the bet. Bail ins are the ultimate resort of the bad bet bankers who want their last bail out, enforced by the goons in a government office set to enforce that blatant theft.

    What I mean by that is when one looks at the  history of currencies, the rulers who printed money or caused their bankers to do so at their bidding, ended up either failing and falling when their schemes no longer held true to the people’s long suppressed but natural instincts to seek true and good money.

    We live day to day, working and striving to make ends meet, taking care of our families and watching the horizon for problems (for those few  of us with the awareness to do  that).   The  1 out of 10,000 who have immense wealth and power do the same but are at the elite level because they know how to manipulate money and power to those ends.  Then it becomes all about the manipulation and fiddle to maintain that level, devil take the hindmost and to heck with those who live down the rungs of the ladder.

    I’m not saying the people who achieve substantial wealth and income are all bad; not by any means. Power and money tends to attract enough bad actors who seek these two things It allows them a greater degree of free rein to engage in actions that most of us would find reprehensible.  We often end up with the bit in our mouths as a result.

    From this standpoint, history shows time and again how real money is targeted by the elites for both external destruction, so that people on the lower rungs become addicted to debt and FIAT while the princes retain gold and silver.  Thus the game becomes all about buying, stealing and retaining precious metals.   Since PMs became the coin of the realm, wars were fought and countries rose and fell on their abilities to gather as much gold as possible.  Without gold they were powerless.

    For 1,000 years the kings of England and of the latter day B.E. constantly battled for control of gold and silver.  When silver went east to India and China, that imbalance was seen as harmful to the royals ambitions and power. They declared economic war against India and China with opium, trinkets and oppression to seduce these peoples to spend their silver and gold back to the home country.   When that failed in its mission, actual war resulted.    When we broke away from the home country and became the USA, we remained an economic and financial colony of Britain, continuing to do the Crown’s bidding.  In itself that story is epic but when you consider that 43 of the 44 presidents can trace their ancestry to the British crown and others, the royal blood’s quest for power and gold did not end at the American Revolution.  The Crown just moved some of its power and wealth to another landmass, one that was safer and more fertile than Europe.   The Atlantic and Pacific were seen as first rate moats. With the royals, it’s all about protecting throne, flanks and moats.

    Before and during WWII the Chinese were stripped of their gold through promises that their millennium old stacks of gold were in safe hands in the US, protected from the Japanese.  The treasury notes retained by the Chinese as claim to the gold,  estimated in the trillions, were destroyed or held as fraudulent.  The Chinese claims were not honored.  The Chinese bidded their time, using their stack of WRC to buy up gold from the west.  Now that the East has seen maybe 50,000 tons or more of gold heretofore held in western vaults moved east, a new evolution of the game of “Those who have the gold make the rules” might be coming soon.

    Hugo Salinas Price’s article that spoke to revaluation of gold to $20-50,000 an ounce, suggested that we might see a day when the Chinese, Russians and Indians declare their currencies gold backed at $50,000 an ounce, fully secured by gold.Their valuation becomes dominant; the COMEX irrelevant. Thus these three countries are dumping anything dollar denominated. WalMart takes it in the shorts.
    When a currency reset happens, the dollar could suffer an enormous collapse. If gold resets at $20-50,000 an ounce, China Russian and India will toss the dollar and their investments in treasuries overboard as sunk costs, devalued to zero, having spend down the dollar over the last several years to buy strategic assets around the world.

    If the actual total of currencies in those 3 countries was backed fully by $50,000 an ounce gold, the world would change in an instant.  They might take losses on dollars but their currencies would  be immediately tradable and recognized as the only means to create a new trading paradigm without a single world reserve currency. Russia sells oil to China, their largest customer, in Yuan.

    If the US, B.E. and Europe allowed themselves to be divested of gold by their own hubris and lack of foresight, forgetting how the gold backed currencies work, relying instead on the paper money paradigm, we will be thrown into an economic tailspin that might make us a fourth world economy almost overnight.

    Granted, the US sits on tens of trillions in gold reserves in Nevada, Oregon and California even at current prices. We might be able to start a Manhattan project to bring gold out and restart our economy with mined gold. Imagine the jobs created and economic boom that would result from those efforts.  It would take 5-10 years to do that and I’m not sure we would have nearly that amount of time to pull ourselves up by our bootstraps

    That said

    Those who have the gold make the rules.

    Those who don’t, make war.

    In this era of nuclear weaponry, that concerns me more than anything else. The US has proved itself to be very cunning in its quest to steal gold any way it can.   Ask anyone from China, Japan, Libya,  Venezuela, Ecuador, Argentina,  Ukraine and others who saw the US or its proxies come in and take the gold by force or some legal nuances written by Goldman Sachs lawyers, backed by black ops mercenaries threatening death, with 747-400s standing by, ready to transport same back to the bank vaults

    I’ll restate my thoughts on the COMEX defaulting or whatever happens when its vaults are empty.  The arcane rules of engagement, written decades ago by those who could predict exactly what is happening today, having set in motion the same plans and strategies that worked so well decades and centuries before, might simply allow default to become its other definition.

    Default not as in failure to pay or bankruptcy. Default as in  Plan B;  the original plan, the one that allows the COMEX to do anything it wants including settling in cash, selling itself off to the highest bidder, payable in gold,  or even closing down under some provisions of a force mageure, backed by government edict and protection, leaving those who relied on its service to seek prices elsewhere. If COMEX is not here to settle claims and drive prices, someone else will.   T

    hat someone else is not going to be looking out for the interests of us, holders of paper and debt.

    • @AGXIIK

       

      “Ed, you note whether there are derivatives attached to the COMEX.  Beat’s me on that subject”

      I don’t know that there is such paper out there but if there was it would not surprise me.  Seems as if there are all manner of derivatives written these days and some of them seem more than a bit odd to most of us.  Considering the size of the derivatives market, not much has escaped their notice.  :-/

       

      A gold price reset would be amazing to watch unfold.  It will be something that few Americans have seen during their lifetime.  Only those who remember the 1930s gold reset from $20.67 to $35 per oz. have any idea what this will be like.  OK, so that was about a 2/3 shift lower in the value of the US$.  That was bad.  But what will it be like if the US$ falls by a factor of 10-20 times because gold rises that much?  IMO, it will be awful beyond imagining.

      If I could have one question answered by someone who really knows, it would be “For what price will the Chinese sell gold?”.  Knowing that would give us a pretty good idea of how the coming reset will unfold.

      Additionally, silver will likely accompany gold during this gold price rise.  If gold rises by a factor of 10, then it is likely that silver will do the same.  $150 silver?  That’s certainly possible.  The effect upon those who have silver will be that our buying power is maintained.  It might even gain somewhat.  But the effect upon those who do not have silver or gold absolutely will be devastating.

       

  14. I will agree with AGXIIK on the fact that the financial system will not crash completely but it will force a standard that will have to be in a line where this situation cannot unfold again!!!!  My concern for this problem to be solved in a civil manner will be a testament to mankind indeed!!!

  15. The unique problem this time that was not present in prior declines is the fact that we have a paper shadow banking system backing our paper fiat system.  So, if you find a big hole in the fiat system, let’s say the recent 30-50 billions in the federal reserve’s banking system which it is highly likely using to bail out Wells Fargo and Citi and all the others holding the paper on the shale oil companies.  Now the fed says, mark those assets off balance sheet and we will cover you.  What happens to those billions of CDS supporting the bank’s failures. The Fed is not covering those but since the same banks hold the CDS paper too what happens to them?  My point is the counterparties are going to demand payment, the system is going to implode and it will take the whole US dollar system with it. Don’t forget those CDS holders have first claims to the banks assets ..before any investor or person with money in those banks.  So poof goes the dollar.

  16. I want to comment on the market action after the BS labor report today.  The banks mini crashed price which they have done ten thousand times before, but they are buying the price back with gold holding its 200day and silver its 100 day.  This action simply would not be allowed in days of old Even the miners are up on the day.  What is going on? I suspect something very powerful is on the horizon that will shake the financial community.

  17. @mfields111  it looks like the markets called BS on the BLSBS jobs report   Obama comes out for his tin foil triathalon, taking a few laps, cheering 4.9% unemployment.  Why don’t they just come out and say us we have zero unemployment, like Mini Me in North Korea. Then he can stroll to the golf course to shoot 19 holes in one using a 2 iron

    62% labor participation rate is more the tale of the tape

    But here is the good news

    Someone traveling in an elevator with SF Fed President overheard him say   ‘Panthers vs Broncos 31 to 14’. With incredible wisdom like that, I think I’ll bet my stack on the Monreal Canadiens beating the  Nigerian synchronized swim team with an over under prop bet at 45 and see if that’s a better bet than the predictions associated with some bankster

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