The Doc sat down with Harvey Organ again for the 3rd and final interview regarding the recent massive cartel intervention in the gold and silver markets post the QE4 announcement, the fiscal cliff, the CFTC’s silver probe, and the unprecedented 20 million oz of silver still standing for December delivery.
Harvey stated that the CFTC’s silver probe has concluded, but they can’t release the findings because it would collapse the entire financial system! Harvey also stated that China is ultimately the big gold & silver short, and stated that the nation is draining massive amounts of physical metal East.
Organ also made the shocking allegation that COMEX is settling allocated delivery & storage requests with paper metal, and stated that he no longer has any faith whatsoever in the numbers reported in the COMEX gold and silver inventories.
Harvey gave hope to PM investors who have endured years of cartel interventions in the gold & silver markets, stating that the end game is being played out, and that extreme physical shortages of silver could end the manipulation once and for all, possibly as soon as March!
Full MUST LISTEN 3 Part Interview Below:
2013 Silver Eagles As Low as $2.59 Over Spot at SDBullion!
The Doc began by asking Harvey what is the explanation for the absolute hammering the metals have received ever since the QE4 announcement? Harvey responded:
The reason for the hammering is the control that the bankers need to get on the circumstances. This is not just the United States! You’re seeing Europe, Japan, you’re seeing QE going on globally all at once, so the bankers are nervous as hell! They have to dampen the paper market of gold, but at the same time they’re probably personally purchasing the physical metal, along with China, Russia, all the Stans, Iraq, Iran- this is taking a huge toll on London.
As you know, London is really a 100 to 1 paper to physical ratio in gold. The problem is that when you start removing that one physical ounce of gold to China, you start putting a tremendous amount of pressure on the bankers, as they have nothing bot hot air. This is why you’re seeing all the stories about rehypothecation, repatriation, stealing of allocated gold- they are probably doing that!
What’s happened is that the end game is being played out, and the bankers certainly don’t want you to win! And I can tell you that you will know the game is over when you hear Goldman Sachs is on the buy side of gold. At that point you have a plethora of buyers, no sellers, and the game is over.
CFTC Commissioner O’Malia asked me in March 2010 whether the COMEX could default.
I told him yes, it will default, it will default when all the gold leaves US shores and lands in China, Russia, and South Korea. He looks at me and says ‘South Korea?’ And I told him South Korea! And sure enough, South Korea is purchasing gold to a high degree. You’re now seeing India, all eastern nations buying physical! The only nation buying paper is Mexico, and they certainly found out the hard way when they bought 100 tons and found out it was unallocated and they simply got a piece of paper. I believe they are trying to acquire physical now.
You’re now hearing stories of Germany and Austria, and they’re trying to repatriate their gold back to their homeland. That’s when you start realizing that the pressure is on London. The moment London is out you now have the derivative mess. The derivative mess will be huge. You’ll probably see a default in London, then a default in the COMEX, and that will do it!
I personally spoke with Bart Chilton, and he used the following words: They’re wrapping the silver probe up in September and I expect to have a revealing of what goes on probably in October. It’s now the end of December. Bart Chilton personally informed me that the investigation on silver manipulation would wrap up in September. Chilton’s worried because they’ve wrapped it up, and they can’t release the findings, because it would take everything down!
They can’t release the results because it’s the government that’s behind everything! They’re behind all the trades, and they’re making such a mess of things that they can’t release the results, because no matter what they report they’ll be found guilty of a crime!
The Doc then asked Harvey his thoughts on the extraordinary developments in the December delivery month for silver, which has seen the amount of longs standing for delivery actually increase as the month progressed:
That has never happened before! I’ve been watching this- on an active month, usually what happens is the deliveries are the highest in the first 3-4 days in the month, then they go down a bit as there’s usually a few cash settlements.
What happened in December, on December 6th you saw the low point of 12.6 million ounces. All of a sudden it turned around and you saw 13, 14, and now 19.5 million ounces of silver standing for delivery. What really bothers me (and I have been unsuccessfully trying to get an answer from the CFTC) is that every single deposit, withdrawal, and adjustment in the CNT vault is done at three decimals at .000.
The COMEX is a physical market! It’s strictly physical! You should see oddball numbers! I could understand one or two bars adding up to .000, but when I start seeing everything, I start getting suspicious! I have a strange feeling that they’re settling in paper. The owners don’t know it, they think they’re getting the real thing.
What’s actually happened is that there has been a large increase in the number of investors wishing to get their silver out of a registered COMEX vault. They’re asking for silver, but they’re asking that it’s not stored in a COMEX vault, specifically HSBC or JP Morgan. That’s what I’m seeing in silver.
The other thing you should be very mindful of, the open interest on gold has declined, it’s kind of low, and it kind of tells you that many players no longer want to play the rigged game. But it’s not so in silver! OI has remained relatively high at 140,000 or higher constantly the past 2-3 months regardless of price! Certain people have decided to take these guys on, they know exactly what they can take out of the COMEX, and that is exactly what’s going on at the silver front.
The Doc asked Harvey to explain rumors of tightness in the silver market, when official COMEX inventories are substantially higher than early 2011 when they dipped below 100 million ounces:
I have no faith whatsoever in the total registered nor the total eligible silver that they record.
I have no faith in the numbers for the simple reason that I see too much of the .000 indicating it’s a paper entry, and it’s really not there. Remember that this is a physical market. I want to see physical gold and silver. When you consistently see .000 in the bar weight, that’s paper silver being inserted into the inventory as an obligation of someone. The pieces of paper are being parceled out, and settling on accounts (with a bar number) all over the place! They’re using .000, because it’s easier than having an oddball weight.
It’s exactly what’s going on in London, there’s no difference! London is fixed with obligations- that same ounce of gold is obligated to so many others! That’s what’s going to happen with the COMEX. That’s why MF Global was confiscated! JP Morgan owed all it’s gold and maybe some silver as well, so they just took it in London! That’s why no one should be trading in the COMEX anymore, just go buy physical metal, and be thankful that you got it so cheap!
Don’t ask what the price is- the most important thing is that it’s physical! It’s amazing what you will be able to buy with your silver and gold when this game ends. That’s the big message that I can give you.
I talk to Bart Chilton, and the numbers that they give us seem to be phony. If it’s a physical market, how can all the inventory movements possibly be .000? And why when there’s settlements doesn’t the silver change from the registered down to the eligible? Nothing goes down to the dealer! They have to settle! Are they settling through the adjustments? The figures they’re reporting are phony.
The other thing that’s a huge concern is the numbers that are going through the silver vaults as opposed to gold. Gold on any given day is quite comatose. Every day in silver there are huge deposits, withdrawals, and adjustments. The fact that the movements are massive every single day is evidence that they are short physical metal, and they are scrambling to pay Peter, to pay Paul- down in London, down in China where they’re asking for it.
I hypothesized years ago that China has behind the main silver short, and it now seems that Turk and a few others believe that is the case. China originally had 300 million ounces way back in 1949, and they didn’t know what to do with it, so they stored it- Taiwan got China’s 69 tons of gold, but the silver stayed in China for many years until China started to Westernize.
I believe China’s 300 million ounces of silver became the original inventory for the SLV, along with Buffett’s. We are now seeing all this inventory go, and China is now manipulating the silver market down to pick up silver. Silver demand is through the roof in China, they are massively importing tremendous amounts of silver. This accumulation will be really damaging to JP Morgan who is massively short, who no matter what just cannot cover.
Keep an eye on the differential between the Shanghai silver price and the COMEX price. Unless you have a physical delivery mechanism, you have 2 different markets. So what you do is take delivery on the COMEX, and ship it by plane to Shanghai. China could certainly bankrupt the COMEX any time it wishes. If the Americans attempt to stop the silver exports, expect a swift and fierce reaction by China. The worst thing is this will bankrupt the COMEX- a single 100 ton order and it’s bankrupt.
The Doc asked whether Shanghai could simply cause the COMEX to fade into irrelevance:
No, it will default, then it will automatically become irrelevant. The Bank of England is the center of the fraud. You have to look at the Bank of England. The BOE stores the gold for many nations in Europe. It’s there as a sub-custodian for the GLD. If you deposit your gold at the BOE, they can do whatever they want with it. It’s for deposit. Of course they give you a lease rate, and they can lease it no matter what!
Germany is now shocked out of their minds! They had no idea…which is fascinating, because we told them 10 years ago! They did remove some of their gold in London 10 years ago we recently found out, but everyone else is still keeping it there, and that is why we recently saw the Queen of England. It was a photo op to show that all the gold is there, but 70% has been leased out, and what you saw is what was left. Too much has been leased out, creating a derivative nightmare for the BOE, which in turn will knock out the SLV and GLD, which will then knock out our friends at the COMEX, and then we have a financial nightmare.
The Doc asked Harvey about the US Mint’s 3 week suspension of Silver Eagle sales and whether it indicates a shortage of silver at the mint:
That is a real indication of shortage. If you’ve had a look at the Canadian Maples sales totals. They started in 1985 with 200,000 ounces, and this year they sold 20 million ounces in Canada? My goodness! This means a lot of the Canadian silver is being exported out. The Mint’s making money. So the demand is there, obviously the US Mint just doesn’t have the silver to make them. You can just see it in the demand! The US produces about 40 million ounces of silver. This means that in order for the US to meet demand in all forms they need to acquire silver from Mexico, etc, and then you have the jewelry demand, the medical and pharmaceutical demand, the solar demand. Only 100 milion ounces of the total silver supply goes for investment. 900 million ounces goes towards industrial/ medical demand. There are new uses for silver every day!
What these banks have done is they are eliminating the supply of silver. I really think that the ultimate treason is that our gold and silver are leaving our shores and heading East. Eventually we won’t have it- just like rare earths- we won’t have any! That’s simply treason!
Regarding his outlook gold and silver outlook for 2013 Harvey stated:
I think you will see a resolution of things by March (metals manipulation), but we have to be very careful as we are going through the fiscal cliff. As we’ve seen, every time the DOW plummets they hit gold and silver. They knock out the thermometer, they don’t want to show that things are that bad. So I would be careful. I really don’t pay attention to the price. Just buy physical. The politicians won’t get their act together regarding the fiscal cliff until the DOW has crashed. I’m afraid that the economy will be so bad for all of us, it will be what we’re seeing in Spain and Greece.