ned-naylor-leyland.09.11.11Our good friend Ned Naylor-Leyland of Cheviot Asset Management is back with a MUST READ update on gold.

In light of the deep sell-off in the Gold price, I present 3 charts to clarify what has (and hasn’t) happened.
Chart 1 is a chart of Spot Gold, the second an illustration of what makes up the daily ‘Gold’ market, the third shows the enormous flow of physical metal from West to East in the context of Global mine supply
There is an ongoing clash between the forces of paper supply and physical demand – paper supply has won the latest round, but its objective of satisfying and slaking demand for the real metal has failed entirely.

Leyland’s full report on gold is below:
Silver Eagles generic add


Gold Update_July 2013



  1. Need your help.
    If the PM markets are leveraged 90:1 – 100:1 —  what does this mean for the price of the metals once the banks are disolved? Can we look forward to the metals going up 90 fold? 50 fold? 2 fold?

    • Fiat paper ‘money’ (currency) only has value because it is mandated by the government, and people have grown accustomed to its acceptance everywhere, and contracts are written in fiat paper ‘money’, and people have to pay taxes in fiat paper ‘money’.  So, it is the people at large who give value to paper currency, with some coercion from the government.
      When people understand and realize that fiat paper ‘money’ was designed to make the majority work and labor all their lives for the benefit of a few (while being allowed to ‘live’ a ‘normal’ indebted life), they will soon abandon fiat paper ‘money’ and start saving in real assets, including the two monetary metals that have stood the test of time for thousands of years of human history: Silver and Gold.  The price of the precious metals in fiat paper currency will be irrelevant.  The fiat paper currency will have collapsed and died.

    • @sam520:  The most likely scenario will unfold with many of the bullion banks like JPM still standing as the price of paper gold and silver are forced higher.  That’s far more probable than the banks falling apart as the trigger to higher prices.  The LBMA and COMEX systems are under massive strain right now, and at some point the pressure valve is going to be released (I think the odds for it starting quite literally today are pretty good, as I note here), with the cartel being forced to let gold and silver rise higher given that the physical market’s supply is shrinking to the point where it destabilizes the paper market and the games the manipulators run.  It’s a myth that the cartel is all-powerful.  There are limits to their power, just as there are limits to the Fed’s ability to cap long-term interest rates at below normal market rates (just looking at the last 9 months of 10 year bond trading graphically shows the limits to the Fed’s power).

  2. Usual case is 16:1 , but now silver is needed more for  electrical applications, coinage, and jewlery,  silver Stealers are trying their hardest to take silver out of true currency value by the money exchangers roll so they can manipulate , enslave individuals, empower themselves. other means, the population will nott have a second thought on how screwed they are receiving. 

  3. I think we are at the point where the weak hands have sold off their stacks. More manipulation is getting less gain for the banks and at some point it will start to cost them more than they gain. That is the trigger point for a price spike.

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