Willie2The COMEX will shut down in the near future from absent gold in inventory. The Paradigm Shift of power and wealth shifting to the East is underway.
Many are the Gold Inversion Signals which lurk, such as the negative Gold Forward Rates and the Backwardized Gold futures contracts. The physical gold shortages are creating a gigantic problem for the big bullion banks, primarily located in New York and London. They are running out of locations to steal gold from.
Prepare for numerous shocking stories, shocking revelations, shocking developments, and shocking new systems put in place that lift the Gold price to $5000 and then $7000 per ounce, and the Silver price to $150 and then $250 per ounce. It is coming.
The sellers today are the fools of tomorrow, because they react to a stated price of Gold that bears no connection to the true Gold price.

2013 San Francisco Mint Silver Eagles As Low As $3.49 Over Spot at SDBullion!

 

By Jim Willie, GoldenJackass.com

Willie1

The true Gold price is PP in the graph, while the phony price is P* since it is associated with supply shortage and excess demand. A picture might be worth a thousand words, but sometimes a picture requires a thousand words to explain its full meaning. The true Gold price is very much unknown, hotly debated, and unclear even to the professionals in the business of selling it in either small or large quantities. Tremendous variance in Supply across the world will become more common, seen as pockets today. The new wrinkle to float from the ether is the wide perception that the gold market is corrupt, that futures contracts are corrupt, that the official inventory accounting is corrupt, that the bond market behind the fiat currency system is corrupt, that the derivative market that supports the banking system is corrupt, that the bank asset accounting is corrupt, and that the leaders are members of a corrupt corporatocracy that hardly steeps in democracy. The perceptions toward corruption are fast changing. The Jackass contention is that the true Gold price is an order of magnitude higher than the corrupt COMEX & LBMA price spouted in the official Reich public address system that hovers over the financial arenas. Take a stab and declare the true Gold price actually (based on real value) to be on the order of $3000 per ounce, with huge upward thrusts in the works. The discovery of the 20,000 tons missing in Allocated Gold Accounts, or perhaps 40,000 tons missing, and possibly more, will send shock waves through the entire Gold and Currency and Bond and Bank system. The Allocated Gold Account scandal has finally begun after long wait. Then and only then will the true Gold price be marked as closer to $10,000 per ounce. The entire financial structure and system with all its interwoven cables and leverage rods and gearboxes will be broken like on a Mad Max film set.

 

The last few months have been filled with deep criminal activities and powerful deeds committed in the open. Many are the indications that the COMEX is in the final stages of its own death, to revert to a Cash & Carry market, since they have almost no gold in inventory. To pretend to execute price discovery without benefit of adequate gold in inventory is both an utter farce and a grand pretension inflicted upon the world. Imagine little Suzie setting the price for lemonade at her cute lemonade stand, but without any lemonade, resorting to IOU chits to keep the price down. She would become the laughing stock on the neighborhood. But in the gold world, the COMEX and its inventory overlord the London Bullion Market Assn do just that. They are slowly becoming the object of ridicule.

 

DISTORTIONS ABOUND

Permit a clever quote. It was heard from Grant Williams, but also from the Incrementum Advisors group out of Liechtenstein. “People tend to confuse the price of Gold with the Gold price.” It means people tend to regard the stated official price of Gold as being more than a set of numbers posted on a marquee billboard by a bunch of sadistic avaricious bankers whose personal lives of $200 lunches and private basement rituals would make for horror films. The official price of Gold has nothing to do with the true Gold price. The official price of Gold is what the corrupt bankers and their paid market henchmen (errand boys) will pay for an ounce of gold, a far cry from its real value. The morons who sell at their price are the fools, the suckers, and the saps. Of course, to be fair, many are bound to sell in order to raise funds for household expenses, for business costs, even for educational costs. They are not morons so much as unfortunate captives. As for the futures contract gamblers (hardly investors), they are the real idiots among us. They are the junkies trying to beat a rigged house. They thrive on the juice. They will be swept aside. They seem stuck and transfixed on the potential of big leveraged gains, when they ignore how 80% or more of such players leave the arena with empty pockets and vanquished accounts, even broken lives.

 

To be sure, the Western world financial system is undergoing a powerful debt writedown process. The big irony is that the writedown process involves a vast reduction in the wealth and savings of the entire West, if not the world. Sadly, many in the East have invested in the sham instruments of the West, to their own dismay. The entire USDollar has its value foundation in debt. Therefore, as the major sovereign bonds are written down in value, then wealth evaporates. Few seem to notice the chain of events, starting with the lost home equity, then lost mortgage bond value, and in recent years the propped USTreasury Bond by derivative leverage and the propped US Stock market by S&P500 futures leverage. The next stage that features powerful and outsized losses will center on the big banks. Perhaps the Deutsche Bank trigger will provide the detonation for a broader bank collapse, since if any big bank suffers a failure, almost all big banks will suffer the same failure. As the banks go down, the Bail-ins will kick into gear, and the citizens of the Western nations will realize how the wealth evaporation process can work quickly and efficiently. The paper wealth disappearing act is well along, seeking a climax event, as consequence to a debt-based currency system. The deep distortion is that the mountains of paper wealth accumulated by individuals, families, organizations, and funds is not really wealth at all. It is debt in ornate packaging and clever disguise, bearing beautiful impressions and fine ink. The only viable verifiable protection is with Gold & Silver, especially held outside the Western nations, as in vaults outside the United States, outside London, outside Switzerland, even outside Canada.

 

BERNANKE DON’T KNOW MONEY

As preface, consider that USFed Chairman recently declared he does not fully comprehend Gold. He is both an elaborate liar and a carnival captain, a syndicate front man, even a bagman to sit on the banker throne when the stage sinks. He will become Lord of the Flies without a conch. My claim has been for a full year that his grand liquidity experiment with QE to Infinity has proved without any doubt that his own Doctoral Thesis is incorrect and invalid, where he painted a fantasy revisionist history picture about how ramping up liquidity overcome the ravages of the Great Depression. Bull cookies, bullocks, and poppycock! What enabled the release from the powerful clutches of the Great Depression was the Gold Standard in place, which provided traction. The current system has no economic traction, no kick start from monetary stimulus, no relief from bank insolvency, no end to the toxic paper bond dissemination, no end to the fire trucks on the scene that resolve nothing with ample liquidity infusions. IRONICALLY, BERNANKE DOES NOT COMPREHEND MONEY OR WEALTH. He spews out false money, while he wrecks wealth. While undermining the economic structure from rising cost structure, he has angered foreign wealth managers in charge of reserves management. The Tapered QE talk was done on order from Basel castle dwelling masters of the universe. My description is of a Live Stress Test to demonstrate full dependence upon monetary heroin, thereby winning political justification for QE to Infinity in resumption to the armies of financial addicts. It will be begged for, despite the assured damage.

 

FOREIGN REVOLT & USDOLLAR ALTERNATIVE

The foreign entities have finally decided to put their weight, their power, and their efforts to create a new trade settlement system. The Eastern nations in clever strategy have been working toward a non-USDollar solution outside the banking system and outside the FOREX system. The USDollar is in the process of gradually being isolated, then rejected, starting with the Chinese Yuan Swap Facility. It will reach critical phase in rejection when Gold Trade Settlement is in place at sufficiently many global trading posts. They are so clever, that they called an important fund the primary fund the BRICS Development Fund, lately called the BRICS Development Bank. Later it will be recognized as the Gold Trade Central Bank in a remarkable transformation. It will issue Gold Trade Notes used as Letters of Credit. It will serve as a grand processing plant to convert emerging nation FOREX reserves (principally USTBonds) into Gold bullion stored at the central bank. Prepare for a global dump of USTreasury Bond, returned to sender with prejudice and hostility. If really smart, it will be a decentralized Gold Trade Central Bank so that it is less vulnerable to US & UK attack. Besides, if the trade solution is to be peer-to-peer settlement using gold instruments, then the central bank in support of the system should also be decentralized.

 

The Jackass is in deep gratitude to a great information source, who prefers to be known only as The Voice. Other sources of information have been and continue to be very helpful also, like a London banker source, a USGovt security agency source, an Indian-Turkish finance sector source. The Voice has been critically involved with numerous important projects of this modern era, a humble private man with his hand in a great many arena, whose Rolodex is worth 1000 times its weight in gold. He is a tri-lingual man with a generous spirit and big heart, whose deep desire is for a better more just and equitable world to come for us. He has been informing steadily about progress, made step by step, in the Gold Trade Settlement and the so-called Dollar Kill Switch. For four years, he has described a grand Paradigm Shift tilted to the East, the trade accords to be the climax. His commentary steadily appears in the Hat Trick Letter reports, with enlightenment, exposures, and hope offered.

 

It is really amazing how little the gold community is aware of the diverse disruptive developments behind the scenes in seeking an alternative to the current US$-based trade system and USTBond-based banking system. The members seem to focus in mesmerized manner on the COMEX price, the USFed monetary policy, the Commitment of Traders reports, the various vaulted inventories, the busted sovereign bonds of Southern Europe, the growth of Asian gold holdings, the new Gold Exchanges, and the official mint coin demand, as well as the big bank ultra-slow motion demolition. But nothing seems to appear about Eastern Trade Zone, USDollar alternatives to trade, and Gold Trade Settlement in general. A large blind spot! That is precisely a main advantage of the Hat Trick Letter, a peek at future developments, platforms, and systems.

 

The other side of the world is working avidly, if not feverishly, to replace the corrupted USDollar bank and currency and bond structures in a vast workaround. What pushed the process into developmental overdrive was the foolish Iran sanctions, which in my view was self-mutilation. Of the spokesmen for the gold community in Jim Sinclair, Bill Murphy, Eric Sprott, James Turk, Axel Merk, Dorsch, Nick Laird, Gerald Celente, several others, even Paul Craig Roberts, none seem to report of anything coming out of the East on alternatives in fast current development to displace the USDollar. They report on many very cogent important themes, but not those emanating from the East. The biggest spokesman to report on Eastern projects seems to be Pepe Escobar of Asia Times. History will be written about the many trade platforms, trade zones, gold intermediaries, energy pipelines, trade accords, tax agreements, and more coming from the East, in progress right here right now. To be sure, the events in the West are very distracting, with bank confiscations, endless toxic paper QE-type non-solutions, bank welfare, austerity measures, rife unemployment, broken bond markets, and desperate attempts to preserve the fiat currency system long after it smacked a gigantic iceberg long ago.

 

The newest ugly festering boil is Egypt, which has demonstrated in full view the sunset of the American Empire. Events in the Middle East & North Africa region should result in the entire Persian Gulf ablaze (politically) amidst the fall of the House of Saud. The next act of the Moslem play script will be North Africa ablaze (literally), starting with Tunisia. Then kiss goodbye the Petro-Dollar defacto standard, the transparent USDollar foundation. Third World dead ahead for the Untied States of America.

 

EQUILIBRIUM

Permit a maxim. The Jackass makes a basic claim, that if adequate supply is not available at a posted price of Gold, then it is not the real Gold price. Very simple. The economist whores, harlots, front men, marketing shamans, and apologists overlook the basic tenet of price. The price is determined by the market seeking an equilibrium, where Supply can meet Demand, but also Demand can clear Supply. These are the industry terms. At the current official price of Gold, not to be confused with the Gold price, neither occurs. Shortages abound, since inadequate supply is brought to market at the current phony price. Excess demand prevails, since tremendous response comes in reaction to the destruction of the financial system in all its parts. Furthermore, additional demand has arrived, in response to and the growing awareness that

 

  • the COMEX & LBMA do not possess the gold inventory
  • the official Gold Accounts like Germany’s have been looted
  • the Western central banks have leased their gold vaults
  • the Western fiat currency system has as its basis a crumbling sovereign bond system
  • the United States has no gold in Fort Knox.

 

If too much Demand exists to be met and satisfied at the posted price, THEN THE COMEX PRICE IS NOT THE TRUE GOLD PRICE. If not enough Supply exists to arrive and clear the orders at the posted price, THEN THE COMEX PRICE IS NOT THE TRUE GOLD PRICE. The charade is to maintain the current posted price of Gold as real, meaningful, relevant, or worth posting on the billboard at all. It is no different than Al Capone and Bugs Moran (Chicago Gangland Criminals) attempting to buy small businesses for absurdly cheap prices, under threat of sabotage and arson and murder. The banker elite are organized crime, laced with nazi roots, in a sprawling financial syndicate with industrial wings only to produce weapon systems. They deploy the same methods and games with intimidation (see the hit & run attempt on Andrew Maguire), coercion (see jailing Martin Armstrong), obstruction (see Houston registration for sales), false stories (see Gold earns no yield), and baseless prosecution (see BitCoin), even lawless taxation (coin sales are not subject to sales tax since money). The hope by the bank syndicate is that the public minions will give up their gold at the absurdly low set price, which is not the result of any equilibrium process, but rather dictated by naked shorting and other lawless leveraged cables like the currency derivatives. But the Jackass digresses.

 

COMEX TO SHUT DOWN IN NEAR FUTURE

Given the artificially low dictated price by the COMEX, the supply is fast vanishing. Soon the COMEX will be relegated to a Cash & Carry arena, a fact worth repeating. The challenge for the bank syndicate is to keep the game going, to keep the price down, to support the unsupportable fiat currency game, despite having almost no available metal in inventory to support any semblance of equilibrium. The challenge has no possible success, since over time the supply vanishes and goes away. A false price causes the drainage. It is rapid. Notice the signs of diminishing supply, soon to turn critical. The compensating factor is the massive raid on the SPDR Gold Trust, also known as the GLD exchange traded fund. The Gold market lacking gold is much like a human body deprived of oxygen. The energy level goes lower, the activity and movement slows, then the cramps with spasms arrive, then finally comes the organ damage. Lastly the heart attack and convulsion. The death of the COMEX will be an event to celebrate the world over. It will be extremely interesting to watch how the syndicate (with its political and news media cover team) report the shutdown of the futures contract trading for Gold & Silver.

Willie2

SUPPLY DISAPPEARING FAST

The rapid reduction in supply is largely a Western phenomenon. When the East sees shortage, it is quickly addressed with higher premium prices paid. Besides, the Western gold has been heading East in large volume for five or more years. Details of each item below are found in the Hat Trick Letter reports, in particular the Gold & Currency Reports.

Willie3

 

  • JPMorguen House and Client vaults have substantial reductions within the official COMEX vaults. These are what are made available for futures contract deliveries. Their House Account is down over 40,000 kg (40 metric tons) between December 2012 and June 2013. Their Client Account is down almost 40,000 kg over the same time. Conclude the clients distrust the landlord, and for some good reason (see MF-Global).
  • The Brinks gold vaults are also going bare, as huge reductions are reported.
  • JPMorguen still has not made deliveries on the official June Silver futures contracts. In fact, during the month of July, the big corrupt bank has seen fit to take into its own house accounts a ripe 90% of the July Deliveries. Of course, they conceal their activities, but not well enough to fool Andrew Maguire.
  • Henry Bath delisted 21 London metal exchange storage units worldwide. It serves as the warehouse manager for JPMorguen.
  • Clients at the metals exchange pay deposits upfront, but are forced to wait over 100 days in London for delivery on bullion Gold & Silver orders. The delivery schedule must accommodate the London bankers to find the bars at source, since all fingers point to empty official vaults. The term check kiting applies, but magnified to the extreme.
  • Numerous big (some prestigious) European banks are refusing to allow clients to withdraw gold from their Allocated Accounts. Worse, they are not permitted to see their gold held on account. Most of the client gold has been leased and sold without permission. My source informed that since 2011, major lawsuits have been filed in complaint, seeking damages. The class action lawsuits are active today in Switzerland, totaling in the multiple $billions. Be sure that the plaintiffs must sign non-disclosure agreements to proceed with their legal action. Swiss laws are very bizarre.
  • Morgan Stanley is stalling on almost every metals transfer request. The reasons are flimsy. When the metal is finally transferred, an inconsistency is noticed on serial numbers and weight. Clearly the broker dealers are going into the market to acquire the necessary bars to meet the requests, since they leased and sold them illicitly long ago.
  • No more gold is provided at ABN AMRO or at another smaller bank in The Netherlands. In addition, no more gold is provided for redemptions at the Zurich Kantonal Bank or the other kantonal banks in Switzerland. They do not possess any for their clients, since the bars were leased and sold illicitly long ago. Investors must read the fine print of their investment account contracts, which call for cash settlement.
  • Dubai souks (markets) are experiencing chronic shortages of gold items for sale. Many merchants are eating the premium paid in order to maintain their client base. Shortages abound.
  • At the Shanghai Futures Exchange, the silver warehouse stocks have declined by 32% over a seven week period recently. Given the stubborn global economic slowdown, conclude that industrial demand is not the proximal cause. Investors in China are capitalizing on the lower price of silver, gobbling up silver at discount prices.
  • Regular premiums paid in Vietnam indicate great shortages for gold.
  • The major gold miners are having big problems with certain projects. Barrick Gold’s Pascua Lama has too many problems to list. The Kennecott project in Utah owned by Rio Tinto experienced an historic landslide that buried a cubic mile of operations. The Grasberg mine in Indonesia had a shutdown for a while, due to cave-ins and safety rules, but its open pit is back in operation. South Africa has become a mining industry nightmare, with worker strikes and violence. Numerous other projects are being halted (large and small) on a cost basis, since the lower official price has rendered projects unprofitable.
  • The GLD inventory raids are becoming almost a comedy. The big US banks routinely short the GLD shares, help themselves to gold bars overnight, and use the same bars to satisfy COMEX official deliveries. Worse, deep suspicion has been aroused that the New York banks are selling GLD gold bars in Shanghai, taking advantage of the higher price posted at the Shanghai Gold Exchange. It is called arbitrage, but primarily the banks qualify to participate in this shuffle operation. The correlation is over minus 80% in the last few years, as shown in the graph. (N.B. Never has the Jackass seen such high statistical correlation evidence outside a scientific laboratory.)

Willie4

DEMAND GROWING FAST

Demand is off the chart, hardly what the bank syndicate anticipated. But they have a mission and an agenda to suppress the gold price, despite the unintended consequences. History shows that Gold Bull Markets are produced by investor demand in a global sustained torrent. After the April gold ambush, followed by the June gold ambush, the global demand went into the next higher gear. The evidence is astonishing and impressive.

 

  • The Sprott Fund managers report that Silver demand in US$ terms is equal to Gold demand. The one-to-one volume had never been seen before, and has been the case for two years. Given that central banks own no silver, which is in high demand (often non-replaceable) in industry, the Silver price will rise three times faster than the Gold price.
  • The suppliers at Swiss refineries are under strain. In fact the Swiss refineries are running 24/7 to meet demand around the world. They are processing mine output, and recasting old gold bars. Many bars being recast are from discharge at the Western central banks from massive lease programs operated by JPMorguen and Goldman Suchs. The buyers of recast bars are not liable, only the criminal sellers. The William Kay story is remarkable and bold on ownership of central bank recast gold bars.
  • Gold transfers at the LBMA are at a 12-year high.
  • The USMint and Royal Canadian Mint have seen silver coin demand in 2013 exceed national mine output for the two countries by 25 million ounces. The silver coin demand for industry will add to the gigantic deficit. The governments are bound to continue minted coin sales, usually with domestic supply.
  • Shanghai Futures Exchange volumes are surging. They have begun after-hours trading, in order to compete with the West and to prevent price manipulation. The exchange officials have announced a plan to slash contract margin requirements. On June 25th, the Chinese bourse reduced margin requirements for the precious metals futures contract to 4% from 7%. Contrast to the New York scummy practice of raising margin requirements in a falling market.
  • The Shanghai Gold Exchange moved a record 83.4 million oz of silver in May alone.
  • New Gold exchanges are opening in Singapore and South Korea to meet Asian demand. The Asian nations no longer wish to be associated with New York and London, where the markets are corrupt. Even Russia announced a new Gold exchange. Expect pan-Asian gold demand to continue to pressure prices and to widen price gaps.
  • China is on an acquisition binge to purchase or merge with Western mining firms. They clearly wish to secure a supply chain, and to exploit the low market cap valuations of the big Western mining firms. Regard both moves as unintended consequences of the criminal price suppression in the gold market by the Anglo bankers.
  • The Reserve Bank of India has created numerous obstacles to halt the enormous import of gold, which is seeing torrid growth. The Indian Rupee currency has fallen as a result of the trade imbalance. Banks are banned from gold sales. Import duties have been imposed by the Indian Govt. Smuggling has ramped up in a major way, a long tradition.
  • In the first five months last year, India imported 1900 tons of Silver. So far in the first five months of year 2013, India has imported 2400 tons, a 26% comparable increase. Contrast to the global annual silver mining output at 25,000 tons. Extrapolate to find India on track to take out 5760 tons of silver this year. Therefore India is on track to grab 23% of global silver production.
  • The repatriation phenomenon has changed the Gold world. Germany and several other nations have officially requested the return of their gold held in official accounts. The New York and London banks are dragging their feet in a criminal manner. New wars have been declared in order to provide the supply, as in Mali.
  • Numerous anecdotes of huge volume of gold coins are being purchased in Turkey, with premium prices paid. Turkey has an historical role as the primary gold supplier to the entire Moslem world. They will spearhead the Gold Intermediary Bank role when the Gold Trade Settlement standard is finally put in place and goes into practice. The Ankara banks have been working with Iran for over a year as key gold intermediary, working around the USGovt sanctions, facilitating trade for Iran.
  • The Chinese Gold demand through its Hong Kong window is doubling every year for the last four years. The full year 2012 saw 573 tons imported. Given the first five months had 413 tons imported, the extrapolated full 2013 year is expected to be around 992 tons. Soon China through its HK window will demand the entire global gold mine output, perhaps their plan to crush the Anglo bankers and drive them into the streets.

Willie5

ENDANGERED SPECIES, CERTIFIED FECES

The Gold market has been ruined. Equilibrium between Supply & Demand is not the rule of the day. Rather it is brute force, naked shorting, heavy leverage currency derivatives, exotic applications by the Exchange Stabilization Fund (run by the USDept Treasury), long delays in delivery, intimidation to settle in gold contracts in cash, and more. The paper gold certificates are destined to become toxic paper and verifiable feces.

 

The USTreasury Bond market has been ruined. Equilibrium between Supply & Demand is not the rule of the day. Rather it is brute force, high volume bond monetization by the US Federal Reserve (buys 80% of all supply), heavy leverage interest rate derivatives (Interest Rate Swaps), absorption of JPMorguen counterfeit bonds, as the coercion to recycle trade surplus winds down from the exporting powerhouse nations. Witness the advent of Indirect Exchange, the return to sender of USTBonds by foreign entities, directed back to London and New York in debt settlement by third parties. See Rosneft (oil giant buyout of British Petroleum) and other examples. The USTreasury Bond certificates are destined to become toxic paper and verifiable feces.

 

The Mortgage Backed Securities market has been ruined. Equilibrium between Supply & Demand is not the rule of the day. Rather it is brute force to conceal the MERS title database corruption, brute force to conceal the multi-$trillion Fannie Mae corruption, and basic hard work to settle on scores of investor lawsuits, as well as individual lawsuits. The JPMorguen crew can be proud of its foreclosures of those in active USArmy service, and even a handful of people who paid their home loans in full with held title. The USAgency Mortgage Bond certificates are destined to become toxic paper and verifiable feces.

 

There US Stock market has been ruined. Equilibrium between Supply & Demand is not the rule of the day. Rather it is brute force to apply share demand from the USDept Treasury with its trusty Working Group for Financial Markets (aka Plunge Protection Team), clever steady gimmicks with Algorithm Flash trading where Wall Street firms engage in endless self-dealing (80% of NYSE volume), and the USFed itself operates the levers to buy big bank stocks and surely linked leverage stock index purchases. The US Stock share certificates would be destined to become toxic paper and verifiable feces, except that the corrupt Wall Street brokerage houses often refuse to supply the actual certificates. Hence, much wealth will simply vaporize in the electronic clouds.

 

Soon the bank derivatives market will be ruined. Equilibrium is not a concept germane to this cockeyed vaporous foundation that stands in the ether, supporting the entire banking system with nothing tangible at all. Compare to the Unobtainium in planet Pandora on the movie set for Avatar. The gold market bust is in progress, exposing the derivatives, sure to release the evils from Pandora’s Box, the remaining Spirit of Hope in Elpis (think Gold) to come later. The bank system insolvency is profound and wretched, and universal. If implemented, the Basel III rules are soon to force adequate capital to stand in order to address unspeakable insolvency. The new rules are designed to collapse the entire financial and economic system, and permit the onset of Western banker fascism, a basic totalitarian mega-state where bankers can impose rule modeled after the old nazis (their grandfathers), with justice, murder, mayhem, pillage, and thefts the prime directive, maybe even human organ trafficking in the camps. The various and sundry derivative contracts are destined to turn toxic and create a Black Hole the size of which the world has never observed before.

 

BIZARRE CONCLUSION

Many are the Gold Inversion Signals which lurk, such as the negative Gold Forward Rates and the Backwardized Gold futures contracts. The physical gold shortages are creating a gigantic problem for the big bullion banks, primarily located in New York and London. They are running out of locations to steal gold from. Africa seems like ripe ground for future thefts, passing as colonialism, but more like the next stage of predatory wars. The Congo has been a fertile ground for gold smuggling (bars & dust), the volumes for which are astounding. The future might include secretive arrests of bankers, starting with middle level bankers who know too much but lack sufficient rank for protection. The agenda has been agreed for mass arrests. Rumors abound concerning an undersea prison in the Caribbean. It is confirmed by two independent sources. Its capacity is 5000 people, recently expanded to accommodate the growing banker criminal class. The way to earn liberty from the secured remote prison, so told, is to flip and cooperate to bring down banker executives from Western sites. My heart-felt suggestion is for the bankers in the enclosed system prison to create their own currency system among themselves for internal trade, not for export. Let their unit of currency be human teeth, which they would supply. Let history repeat itself in reverse.

 

Prepare for numerous shocking stories, shocking revelations, shocking developments, and shocking new systems put in place that lift the Gold price to $5000 and then $7000 per ounce, and the Silver price to $150 and then $250 per ounce. It is coming. The sellers today are the fools of tomorrow, because they react to a stated price of Gold that bears no connection to the true Gold price. Hint: the bank syndicate captains own personal hidden bank accounts, many located in the Carlyle Group.

 

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

 

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Jim Willie CB, editor of the “HAT TRICK LETTER”

 

Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. The historically unprecedented ongoing collapse has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

 

From subscribers and readers:

At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.

 

“I commend the Jackass for being the most accurate of all newsletter writers. Others called for the big move in Gold right away, but you understand that the enormous fraud in the system needs to play out before free market forces can begin to assert themselves. You seem to have the best sources and insights into the soap opera that is our global financial system. Most importantly, you have advised readers to be patient, stay safe, and avoid mining shares like the plague. Calling the top in the USTreasury Bond (10-yr yield at 1.4% yield) stands out as a recent fine accomplishment. The Jackass understands the markets, understands the fraud, and also has the sources to keep him the most up-to-date on the big geopolitical and financial events and scandals. Few or no other writers have all three of these resources.”

   (Austin in California)

“After first reading the Hat Trick letter a few years ago, I was amazed at Jim Willie’s prophetic calls concerning the economic forgery and corruption worldwide. His knowledge, coupled with his worldwide contacts and gutsy fortitude to call out and expose the evil criminal bankers, and to expose the lying US government, forced me to become a subscriber. I have no plans to cancel. Willie’s work creates an anticipated excitement for new reports issued in the middle of the month.”

   (JeffH in Virginia)

“A Paradigm change is occurring for sure. Your reports and analysis are historic documents, allowing future generations to have an accurate account of what and why things went wrong so badly. There is no other written account that strings things along on the timeline, as your writings do. I share them with a handful of incredibly influential people whose decisions are greatly impacted by having the information in the Jackass format. The system is coming apart on such a mega scale that it is difficult to wrap one’s head around where all this will end. But then, the universe strives for equilibrium and all will eventually balance out.”

   (The Voice, a European gold trader source)

 

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at  www.GoldenJackass.com. For personal questions about subscriptions, contact him at  JimWillieCB@aol.com
War Bird

    • JLee2027: The COMEX has never been a cash market. Contracts are purchased and sold, mostly under “normal contango” conditions where someone pays a premium for the right to buy and have delivered “x” amount of a commodity at a future point in time, regardless of the fact that they might not take delivery and simply accept cash profit or loss on the position (perhaps that’s what is confusing you?). That, by definition, is not a cash market. A cash market is where transactions involve the trading of commodities at the “spot price,” i.e., with no forward based contractual obligations dealing with delivery in the future (that’s why it’s called a “futures market,” after all).

      No offense, but you really do need to bone-up on the basics.

      For others: What Jim Willie is getting at is that given the massive inventory draw-downs at the COMEX and the limitations of available physical in inventories to stand for delivery when contract holders indeed stand for delivery, the futures market begins to break down. If a futures market has zero inventory to deliver on a futures contract holder for delivery in the future, by definition, there no longer exists an ability for a futures market to function. It’s really that simple. While it’s very difficult to say exactly when and if the COMEX will be forced into a “cash market” rather than serving as a true futures market, there can be no honest rebuttal to the FACT that inventories are collapsing and that puts massive strain on the very function and purpose of the COMEX gold trading system. Get it? I’m trying to stick to jargon free language here.

      Also, I frequently remind SilverDoctors readers that the cartel isn’t in 100% control. If you truly understand what I wrote in the above paragraph, you will understand why. Despite their ability to create fiat at will, past fiat creation resides within the masses of economic actors — investors, hedge funds, pension funds, wealthy individuals, sovereign wealth funds controlled by China, etc. That mass of “money” is bigger than what the Fed can realistically elect to put into use to fight against “the market.” The market is bigger than the Fed (unless the Fed were to execute a “nuclear option” and create $10 trillion dollars in a flash and go nuts against gold, in which case, the sheer size of the action would backfire, which is exactly what has been happening since their “mini-nuclear-option” raid on gold April 12-15, and subsequent blast in late June, creating unsustainable and bogus “paper” gold prices that awaken the power of the BIGGER-than-the-Fed world market for true physical gold and silver). Remember when George Soros led a gang of hedge funds against the Bank of England and won? That’s an illustration of the point I’m making, and right now, nothing scares Uncle Ben more than a revolt by bond vigilantes and the rise of long-term interest rates that is starting to become a serious risk of blowing up his bogus economic house of cards.

      So, for those that like to bemoan that the cartel is all powerful: it’s not true. In the long run, they will lose. Study history. To draw an analogy: No empire that becomes abusive stands forever. None. The oligarchy is powerful in many ways, but they wouldn’t be freaking out and building a police state all around us were it not for the fact that they fully understand their limitations against even a small percentage of the masses waking up and demanding change, hopefully via peaceful means (but the idiots at the top are so damn greedy and power-hungry that they might end up creating that which they fear most).

      Eric Dubin / Flying Wombat

    • Eric, you beat me to it.  Only want to add that this ‘new era’ of stocks depicted in the graph is not new by any stretch.  Extending the timeframe on the x axis by a couple of years will reveal that.  I still dont lhat kind of sensationalistic design when the true story has merit on it’s own right,

    • Bone up? You misread my post! Anyone who wants delivery is offered a cash premium instead. I don’t give a crap about the basics or contango or anything else. That’s irrelevant.
      And if you believe that crap they feed you on an Excel spreadsheet, you are a sheep.

    • The problem most people aren’t recognizing: This is a very elaborate strategy to control the money and gold supply.  You’re being shown the left hand only while the right hand is behind their back.  Anyone that believes they can forecast this market needs to wake-up and smell the coffee.
       
      Even if a Force Majeure happened the press would just label it “temporary” and blame overseas wars or strikes for “temporarily” disrupting supply.  While prices would rise they wouldn’t go from $1325 to $20,000.  Maybe they’d jump up to $1500 or $1700 if investors are lucky.
       
      However, one of the only person which has been calling this market correct is Precious Metals Pete.  He is predicting a revaluation of above ground only gold bullion.  The paper will not get revalued, only the real gold bullion.  We should know in a few months if he’s correct.

  1. This has been going on since April, 4 months and yet they still keep the lid on gold and silver by providing the bullion to the market, if central banks have gold and can supply the market, who has the silver to suppress the price!
    This doesn’t add up, now that you have explained the symptoms, can you explain what is their plan? Hold the price  down for how long and why?? How is this gonna end? Do you really think it will blow in the bankers faces?? I don’t think so,, these mofos are what you call (criminal creative) with a grand plan, and can think long term better than anyone else,  since the start of the year, (6months) and the price just keeps going lower and lower, 6 months is a long time, and I think it will end the year low so the media can do their spin next year and say gold/silver is lower by 20-30%!!
     

    • Important to note that, at least in silver, JP Morgan has been the main player this month in taking silver away from the market via comex deliveries, that implies they’re long silver and, therefore likely long futures (paper) as well.

    • They aren’t suddenly long silver after 30+ years of shorting the market. Give me a break. Those shorts are larger than the national debt and cannot be covered.
      They might be hoarding or hiding what little they have left. Or floating rumors, which apparently you fell for.

    • not rumors, and obviously not an insider so I can’t say for sure, but anyone with even a brief exposure to futures markets knows that if you want to stand for delivery you have to be long the front month.  So, mr eloquent, just how has jp morgan stopped 2733 contracts out of 3310 delivered in July?

    • Don’t change the subject now. 
      I’ve seen your type again and again. You peddle BS and sow doubt into people’s minds and when called out, ie. caught in a lie, you always post some arcane question and demand an answer that has nothing to do with what I just said.
      Bottom Line: JP Morgan has not gone long.
       

    • This reminds me of feeding trolls on usenet, but you have posted here and on topic in the past, so i’ll give you the benefit of the doubt today.

      With that, please note that it is not I, but you, who keeps changing the subject.  My post was in direct response to your statement that JP Morgan cannot be long.  There is direct evidence in the fact they’ve stopped, taken delivery, and transferred silver to their own vault.  The only way they could do what they have done is to have been long July silver futures. No ifs, ands, or buts about it. If you would like to prove that argument false please go ahead, but at this point any insults, slams, Jlees ‘personal gut feel’, or other misdirection will be dealt with as I would deal with a child, a healthy dose of the silent treatment. Similar to flying wombat, i have no issue with needing to adjust my worldview if my understanding is flawed, but again i’m looking for some facts, not the obvious statement i assume you will reply with… please be better than that!
       
      If you can’t track with the delivery piece I’d be happy to explain as this is not the easiest of concepts to understand, and if i had not traded in physically settled commodity markets for 10 years and counting I probably would not understand the finer points either. However, it seems from your responses to me and others (including one of the best contributors to this site) that you have no intention of doing anything but causing a disruption, so if you’d like help understanding send me a PM, but I won’t clutter up anyone elses feeds here.

      As far as that ‘arcane’ question… it was really quite simple and direct and has 100% bearing on the question at hand, which is whether JP was/is long.

      http://i1.kym-cdn.com/photos/images/original/000/340/205/4d5.png

    • @JLee2027
       
      Here is a tidbit courtesy of Ed Steer’s note today that sheds a little more light on what I was getting at. Note this is Gold, not silver, but point remains the same, people are watching JP’s actions in silver this past month, and now speculating on the COT and who is the bulk of the position. August deliveries come due on a couple days. I for one will be watching. JP Mo stopping gold for their house account, now that would be something!
       
      That surprise was the large increase in JPMorgan’s massive net long COMEX gold futures position. The data indicate JPMorgan may have increased its net long position in gold by almost 9,600 contracts to bring that position close to 85,000 contracts. What data? There is only one data point, but it’s a very hard number. The percentage of the Big 4 net long position (which JPMorgan must reside in) jumped to the highest ever at 32.4% and when multiplied against total open interest of 434,750 contracts results in a hard net number of 140,859 contracts held by the big 4 longs. This represents an increase in the Big 4’s net long position of 9,655 contracts from the previous week.
      I’m alleging that JPMorgan accounted for the entire one-week increase in the Big 4 category and that the bank now holds 85,000 contracts of the 140,859 contracts held net long by the Big 4. Certainly, if JPMorgan or the CFTC dispute my calculations, then they can set the record straight. I further allege that JPMorgan holds, once all spreads are removed from total open interest, more than 23.6% of the entire net open interest in COMEX gold futures, up from 20.6% in the previous week. Never has any entity held such a large concentration in COMEX gold futures, to my knowledge. Certainly that is something the CFTC should respond to, as the implications for manipulation in gold has never been clearer.

  2. “The official price of Gold has nothing to do with the true Gold price.” ought to be taken in a far more poignant sense than assumed here and in which originally uttered, I’m certain.

    Price expressed in banknotes, ipso facto, places the banker (and his ‘guarantor’, government) into transactions as a third party ‘facilitator’. In Reality, however, ‘Price’ is a ratio of abundance between two objects as determined between two parties EXCLUSIVELY. It is the HIGHLY coveted ‘Right of Contract’ reserved as unalienable. So, as long as the ‘expert’ commentariat propounds escape from loathsome bankers, while simultaneously speaking in terms of default to banknotes, their ‘messages’ are fundamentally hypocritical … in fact.

    The INSTANT that the ‘worth’ of ANYTHING is defined in banknote terms, the trap is sprung shut on the leg. The solution to this conundrum isn’t arrest and jailing of bankers but, EXECUTION OF THEIR BANKNOTE with the proverbial DECAPITATION and STAKE THROUGH ITS HEART.

    • Good point, if gold is worth 10,000 dollars, then its a pretty safe bet (in my opinion) to say that those 10,000 dollars will buy close to what $1200 does today.

    • mikeyj80
      “10,000 dollars will buy close to what $1200 does today.”
       
      True, but no interest is infinitely accruing on gold and silver; in or out of circulation. Banknotes, on the other hand, ARE subject of that ever-compounding charge, whether stored OR in active circulation. Automatic depreciation of those banknotes is the result and since it doesn’t manifest itself until it reaches general circulation, it doesn’t effect those in the initial distribution level … speculators among them … which is why you’re incessantly supportive of the scheme.

      Whether or not you’ll admit it, as long as you can pile up your ‘precious’ Plantation Scrip, insulated from its inherent consequences, you don’t give a CRAP that hundreds of millions ‘below’ you are doomed to suffer crushing cost-of-living increases, while suffering the after-effects of metastasizing debt in society … like dwindling employment at shrinking wages and cruelly elevated taxes to ‘bail out’ the scheme’s sycophants.

    • I agree 100 percent, i am making no effort to defend anycurrency, just pointing out thata again, this is a good argument pf he effectiveness of gold/silver to insulate from changes in the purchasing power of a currency.

      As to whether i give a crap or not, I’m not really sure how that is relevant? I have no desire to see anyone suffer, but i don’t have the means or method to save all those millions you mention. I have my charities and local shelters I support, but that does little to address the problem looming that you mention. If you have a good solution Or idea I’m all ears.

  3. “Rumors abound concerning an undersea prison in the Caribbean. It is confirmed by two independent sources. Its capacity is 5000 people, recently expanded to accommodate the growing banker criminal class.”

    That was the real WTF moment for me in this report.

    • Same here.  Where did this come from?  I was okay with his comments until he got to this point.  I would like to hear more about this new undersea world in the Caribbean.  Must be beautiful.  I think I have seen commercials but I think it is called Atlantis.
       
       

    • After a claim like an “underwater prison meant for bankers” I have a hard time swallowing anything else that comes out of this guys mouth.
      Almost as crazy as Bix Weir stating that U.S debt will be eliminated and currency will be re allocated based on the amount of social security you’ve paid. Since watching that interview with Bix I have lost ALL interest in whatever analysis he comes up with.

    • Gigolo Jim is well plugged in to the conspiratorial dark side of reality LMAO! He has commented on attacks on the dark side of the moon, and underground US military railways from langley to colorado. He often talks about the Vatican.
       
      I absolutely love listening to him. He just needs to not believe everything he hears but I firmly believe reality is much more odd than we can possibly imagine.

    • I don’t know why I even bother but I have to say Jim Willie is off the freaking deep-end. Crazy as rabid batshit. I could hardly read all the crap he spewed without losing consciousness. I don’t mean he put me to sleep really……it is just that he talks such a load of crap I cannot possibly absorb so much in one single sitting. Like being spoon fed peanut butter mixed with oysters and mayonnaise by force till you puke. What a waste of mind.

    • For this to have any degree of plausibility, someone would first have to tell me about all the times that ANY government at ANY time EVER developed the most expensive way possible for housing criminals.  If they can point out some historical references that show that governments have a tendency to do this, THEN I might give it some credence.  Until then?  PFFFFTTTT!!
       

    •  
      Well Ed, if Staci Herbert’s sources are credible here … http://www.youtube.com/watch?v=wREiTtKHRfQ … then we have a model in Corrections Corp of America. Not only is it the world’s most costly such system, but it’s LOOSING money to boot (and, what the hell does government care, it’s on the backs of the taxpayers).

      Before spending a year living on Key West, I was building Geodesic Domes outside of New Orleans, which gave me the inspiration of how to build an underwater living structure utilizing their unique load-distribution qualities.. The idea isn’t as far-fetched or costly as it might at first seem. Although, I can’t imagine it as a prison, but MORE as a tax funded hide-out.

    • shanghai data is easy to get at, similar to comex, the physical settlement there tends to be greater than at comex, need to recheck that tonight as they’ve seen a big uptick in the paper volume.

  4. 100 day delays for gold and silver in london… pretty sure this is actually aluminum in detroit.
     
    “The GLD inventory raids are becoming almost a comedy. The big US banks routinely short the GLD shares, help themselves to gold bars overnight, and use the same bars to satisfy COMEX official deliveries.”

    if one shorts the GLD shares they have to buy them back or deliver the physical in satisfaction. In this case shorts in GLD do not get gold, and cannot use it for CME. You need to either be long GLD and short CME… create a basket from gld shares, get the phyz and deliver on comex, or just do the reverse. Shorting both markets does not allow for any arbitrage.

    there are some good bits in here, but these falsehoods and misinterpretations dim what is a good story on its own right.
     
     

  5. I’ve made a few sallies here into the “forbidden zone” of what the gold bug community is apurpose kept from understanding: it’s been apparent to me that to flog a horse[dead or alive] is not a productive strategy – and therefore I’ve held back from making the full case for what needs be known by those whose native intelligence or intuitive sense directed them ‘wards the precious metals.

    But what you’ve just read here from the BIG MON hisself is the clarion call of timely notice – the gig is up – and all of the worst case scenarios which any of us could possibly imagine are about to unfold. I can say that with total confidence, because Big Jim has unleashed this missive in a manner that is an unmistakeable ‘last call’ – and I’m intent pon riding the coattails of the indisputably major prophet of what must pass, because there will never be a better time than right now.

    I’ll make one claim straight up: you could stop reading this post by Jim right where he says\but the Jackass digresses/…everything above that line is a masterful presentation of needtoknow info that is unavailabe to 90% of the slender 2% of people in the west who go to gold. Everything below that line is a regurgitation of what you and many other informed members of the community probably already knew. Jim has thrown out a lifebouy. I recommend that you catch it. I’ve parsed the essential elements of what he has given forth pon here:

    The true Gold price is very much unknown, hotly debated, and unclear even to the professionals in the business of selling it in either small or large quantities. Tremendous variance in Supply across the world will become more common, seen as pockets today.
    The big irony is that the writedown process involves a vast reduction in the wealth and savings of the entire West, if not the world. Sadly, many in the East have invested in the sham instruments of the West, to their own dismay.
    As the banks go down, the Bail-ins will kick into gear, and the citizens of the Western nations will realize how the wealth evaporation process can work quickly and efficiently.
    The only viable verifiable protection is with Gold & Silver, especially held outside the Western nations, as in vaults outside the United States, outside London, outside Switzerland, even outside Canada.

    It is really amazing how little the gold community is aware of the diverse disruptive developments behind the scenes in seeking an alternative to the current US$-based trade system and USTBond-based banking system…. none seem to report of anything coming out of the East on alternatives in fast current development to displace the USDollar

    They report on many very cogent important themes, but not those emanating from the East.

    With enough time, I could rework the above into a flow that would be easier to digest and make sense of as a whole. But because of major time zone differences tween me and the SD community, most everything is stale by the time I get to comment. So I’m going to go with the above as is, and apologize in advance for any lack of coherence.

    Here’s what you need to know, and other “goldbug” sites have made it impossible to be debated: the sources available to Jim Willie have consistently pointed to a global division coming – the former “haves” will quickly{as in breathtakingly}become “have nots”… if you are in the geographical radius of this description…your best laid plans to survive the storm – by means of prepping…precious metal aquisition, prayer festivals, or fire-power – will come to NAUGHT. Allow me to amend that to NAUGHT! I urge your reading of the selected quotes above for as many times as necessary for as to realize…. the storage of your assets outside of the described zone….NEEDS BE AU\G\mented BY THE storage of your person(and loved ones)outside of same.

    Jim Willie is a one of a kind genius…with the means and intent of saving many thousands of you from complete destruction and degradation - however, the man lives in CR… which is but a halfway house along the road to safety(as much as any port in the coming storm will offer “safety”)…. he is as informed as anyone living in the western world can be. But not informed quite enough…to give you the rest of the story that you need… to be out of the pot. He is giving a lot of push to getting subscriptions to his site here… I can only second that motion: but for the paltry few of you who read these pages … be aware that even that prescient move is not enough…. the man has the keys to showing a way out of Dodge… but you’ll be needing to saddle up your own mounts and and get going on the trail even his map shows no sign of. 
    I’ll give some further specifics a little bit forward if interest demands, but that’s as much of a comment as seems allowable for this venue. I wish for you all a safe and speedy journey out of harms’ way.
     

  6. As it seemed more reasonable to put this in a different comment,
    Mr Flying Wombat…
    please be aware that JLee may be more specifically correct in his analysis – and therefore require much less “boning up” than you anticipate. There is a lot of confusion around the term “cash market” right now, as there is equally, a lot of confusion around terms like “backwardization” of contracts etc. There is a lot of cherry picking of data going on in the pm community which is ultimately counter-productive, at best, and to get a little “conspiratorial”…. at worst, a deliberate attempt at playing people into false hopes and hopeless channels. Dan Norcini, for one, has stood up against this current, and I would expect that a full and balanced presentation of facts of interest to the pm community would include this kind of wise counsel. His site is gaining a lot of traction lately for exactly that reason… folks are tired of cheerleaders…they want hard cold facts… from which to make informed decisions about the future.
    I hope you will read the above in a constructive fashion.

    • @hedgey:  The earth is not flat.  We know this just as much as we know the definitions of a futures and a cash market.  I’m sorry, but with this comment, “please be aware that JLee may be more specifically correct in his analysis,” you’re shooting from the hip and not even defining why you think JLee is right (because it’s not possible).
       
      As for Dan Norcini, he’s been 95% correct with his rebuttal directed towards people exaggerating “backwardation” in gold (versus those of us speaking about “temproary backwardation” — a big difference, one that I explain below).  Even the genius-level intellect behind Jesse’s Café Américain has been off a bit (sorry, I forget his real name).  He’s been talking about the comparison to “true” backwardation visible in the oil market, where it’s massive for very good reasons, while simply not understanding the importance of $2+ temporary backwardation in gold that has existed for short periods recently as the near-contract moves towards expiration versus the “spot” price.  Gold is a very different commodity from all others because it’s pure money without traditional “time value decay” (and the pure storability, etc. that indeed makes it what it is – pure money). Gold also is supposedly available in huge above ground supply and thus, perfectly able to be called-up in normal markets to facilitate the hedging opportunity of a trader selling his physical today while simultaneously buying the near-term soon to expire contract for the same amount of deliverable gold and a small premium that temporarily manifested for a few days — the temproary backwardation, which even though small, should never happen with gold (again, unlike other commodities), and thus even though it existed for only a short period of time it nevertheless serves as an indicator for how tight the phyiscal market is, and how paranoid traders and investors are — the big boys — about the small risk that COMEX would default and only cash-settle a couple of weeks forward. The reason the instant arbitraging away of this “temporary backwardation” is not happening as it should be, is because the risk of a COMEX default is rising and traders are not willing to go after that small $2 some-odd dollar per contract premium that we saw recently.  That is real backwardation, even though it’s small and temporary.  It matters not that, unlike in the oil market, the entire “futures curve” fails to show backwardation.
       
      I’ve been too busy to check to see if Dan Norcini has been able to see and discuss this very fine point.  But all the silly back and forth in the gold community about do we or do we not see backwardation is largely missing the forest for the trees.  Showing an example of the oil market is helpful in understanding the big picture.  But it’s kind of a “straw man” exposition and argument.   No one that has responsibly pointed out the real backwardation going on while not exaggerating it (the James Turks and Andrew Maguires of the world — and myself) has been making the claim that others like Dan are shooting down.  The backwardation we’ve seen has been small and temporary.  But since we’re talking about gold, which is not just a commodity but also pure money, that small and temporary backwardation is very important.
       
      Don’t go basing your views of other people’s level of insight based on how you “feel” about them.  While I wouldn’t go as far as to say you’re showing Guru-worship tendencies re. Dan, I will say that you’re not evaluating Dan’s work objectively (and your defense of what JLee said is just odd — not even offering to explain why he’s right, but rather, almost offering a gut intuition).  Dan has made a small mistake, which indeed, is very rare.  He’s a brilliant man.  But he’s got this one partly wrong because he’s making a debate about a forest when in reality, all those that have been pointing out temporary gold backwardation have been doing is discussing what’s now visible and impacting a handful of specific trees.

    • @Flying Wombat
      Having come only days ago to Dan’s site, via a link provided by he who the Silver Doctors could arguably be suggested to have elevated to a level of “Guru-worship”(as per volume of cross-links, quotes and this most curious specimen – http://www.silverdoctors.com/your-enemy-is-the-banking-cartel-not-jim-sinclair/)themselves, I doubt that I have spent enough time there to have succumbed to whatever ‘emotive’ charms you imply he may be capable of casting over the community. lol.
      But the critical aspect of his point in relation to the backwardation debate does indeed lend itself to your forest versus trees analogy. Indeed, like a good ol mixed farming husbandman of the northeastern variety, Dan has “tapped” into the latent interest of the precious metals community to have delivered to them the heady elixir of an unadulterated syrup of truth, not watered down with the sugary sweetness of daily doses of “stack the smack” pap. 
      If you were to make a small foray into the minds of your own readers, I believe you might see the point I had made in highlights. Those of us truly committed to seeing things through to the end have had enough of boosterism, and are in search of the bottom line truths which can give us an edge in surviving what I’m sure you’ll agree is going to be a messy situation in the not-too-distant future. That puts a premium on commentary that can contain the right measure of true believer and skeptic… not an easy balance to be sure… but one that Dan’s trader persona gives him an edge with. When I think back to how many of us excoriated Martin Armstrong short months ago for his (now proven correct) call about June lows, I am reinforced in my opinion as to the merits of having a measure of caution in all things.
      I’ll spell that out in detail for you sir, in order to complete my response to your reply. In the two years or so that I’ve been actively interested in the daily doings of the precious metals markets, I’ve watched various pundits and sites peak in their ability to gauge their audience and grow their business. And one thing I’ve noticed repeatedly is that those who became accustomed, in their temporary good fortune, to talking down to their readers from some supposed level of higher understanding have been seeing the foundations erode from underneath them: an most interesting trend to watch is that of seeing the grasp of the students in many cases beginning to exceed that of the teacher... especially with the “austrian” -styled pontificators who are busily falling upon their own swords of the present moment of extremely nasty sentiment. They’ve simply run out of runway for their self-styled know-it-allism and have lost touch with the vital elements of adaptability and good ol horse sense that shifting conditions demand.
      I have your interests sincerely at heart therefore, in suggesting that the “feelings’ which you attempt to disparage may in the long run prove at least as valuable as your own arsenal of insights… and will try to incorporate your critiques of my reasoning in parallel with the hope that you will evolve your own presentation from the pedagogical to one more peer to peer. At which time I think we could have some constructive fun with the issue that JRLee brought up. If, on other hand, you choose not to, you can simply continue to call my approach ‘odd’ – trust me, at this point, it’s water off a ducks backside!
       

    • @hedgey:  What an outstanding and thoughtful reply!  Thank you!  I agree with almost everything you noted.   But I will point out to you that once again, you have not explained what was correct about JLee’s comment ;-)  You also didn’t refute what I was saying about temporary backwardation, I might add.  I hope you read carefully what I wrote.  I was describing simple facts about what happened in the recent past.  I also think my characterization of the debate that has been going on in the precious metals community about backwardation, as of late, was 100% fair.  It just may very well be that people like Dan didn’t notice the quick, temporary backwardation and they’re simply looking at the overall term structure of the entire futures market (missing what happened with a few specific trees versus what the overall forest’s picture looks like).  Enough on all that.  I stand by what I wrote above.  If I’m wrong, I kindly request that someone point it out with specific facts about actual trading quote history, charts, etc., and not feelings about what other pundits described.  I don’t care about being proven wrong.  I care about having the best approximation and understanding of object reality (and being careful with how I speak to others, as an analyst and pundit).
       
      I was obviously incorrect with my “guru” quip in relation to you, specifically.  You’ve demonstrated admirable independent thinking with this reply and I was wrong to make that assumption as to your interpretations of Dan.  I also want to say, point blank, that you are right to point out the cheer-leading punditry that goes on in the precious metals space (happens in other arenas too; general stock market news letters, for example).  It’s problematic, and some people get swept-up by it from time-to-time and end up getting hurt, financially.
       
      Great to see you posting here and I look forward to reading more of your posts in the future.
       
      Thanks,
       
      Eric
       

    • Well, well.  A debate without any name calling and gentlemanly composure.  I most appreciate the back and forth between @Flying Wombat and @hedgy.  I appreciate hearing the truth and not the pontification.  It was a pleasure and I read your exchange in full anticipation of actually learning something.  I might suggest you start your own column specializing in dissecting current issues.  I, for one, would be an avid reader.
       
      Bravo!

    • Ordinary Joe – thank you.

      @JLee2027:Stop dissing me, the person and start addressing the arguments I made.  Begin by explaining your statement, “The COMEX market has been mostly cash for years” and my exposition why that’s wrong.

      And please, stop the silly appealing to another poster (hedgey) because he challenged other points I made far more articulately and fairly than you are doing.  Where he was right, I pointed that out because I’m not wedded to being right or egotistical or in need of keeping up appearances.  But I also pointed out where he continued to not address facts I argued.

      So, again, either retract what you said about the COMEX mostly being a cash market and prove to all of us that you’re not about “ego” too, or actually justify your argument.  Addressing the person, not the argument, is lame.  And don’t take any of this personally, I might add.  I don’t, as can be seen by the fact that I took the time to answer your question below about gold and silver supplies and I’m not personally attacking you in any way.  But pointing out that your statements like the COMEX mostly being a cash market is a fair rebutal to make.  So, grow a spine, and defend your arguments and stop, in the least, acting like you take all this personally.

    • Guys, I’m ever so glad that JLee2027 made their direct reply to FW as it saved me from having to attempt to interpret their point… a sure recipe for confusion.
      As it turns out, we can all be, in this case “correct”… in the sense that coming at things from completely different angles does not necessarily mean somebody has to be “wrong” – while Flying Wombats’ technical points are entirely true, they do not alter the truth of what JL had initially pointed out. He simply had a different way of saying something that we all, including Willie, agree is happening\has happened.
      And I would even go so far as to suggest that the same happy condition applies to the case of Dan Norcini’s and FW’s takes on the “backwardation” issue. But where things get tricky is in the application of the analysis to future movements. In all cases where transitory phenomena are enlisted to support a theory that “market forces” are causing a development to play out, caution must be used to avoid confirmation bias.
      In fact, my greatest beef with ‘technical analysis’ in general is that it assumes many things about the presence, function, and dynamics of the ‘market organism’ that are not applicable to current conditions, or were but theoretical constructs grafted onto real conditions. That’s what makes Big Jim’s work so appealing in my opinion. While based on a firm foundation of statistical and fact-based reasoning, he goes way beyond the supposed role of the markets in search of the real dynamics driving things like the POG. If you read my piece above this one, you probably know I actually believe that he doesn’t go quite far enough, but that’s for another discussion. 
      All in all Flying Wombat, I heartily endorse what you say, and admire you effort to be precise in word use, but have to bow out of any specific rejoinders about that sticky backwardation issue as I’m not informed enough to comment on it. Cheers.

    • Stop dissing you? You obviously know everything already, so what’s the point of talking to you?
      I’ll tell you what. Don’t ever tell me again to bone up, and diss me, when you don’t even understand what I said.

    • @hedgey:  “All in all Flying Wombat, I heartily endorse what you say, and admire you effort to be precise in word use, but have to bow out of any specific rejoinders about that sticky backwardation issue as I’m not informed enough to comment on it.”
       
      No problem.  And again, your are a remarkably mature person to speak of being “not informed enough to comment on it.” Holly cow, no one in their right mind could think of you with anything but respect for that level of honesty and frankly, having that attitude is exactly how people learn new things faster! 
       
      But again, I’ve got to point out that you’re STILL defending JLee’s comment that “COMEX market has been mostly cash for years” without actually explaining why you think that statement has some truth.  Enlighten me as to what I’m missing about his insight.  I certainly can’t expect him to tell me given how he’s proven himself to be an emotional hothead.
       
      Maybe you guys are thinking about the speculation that there’s probably been examples of investors who were initially standing for delivery who were then approached with what amounts to bribe incentives of higher premiums in cash to just take the cash rather than standing for delivery???  If that’s what you mean (and I know Jim Willie has discussed this happening), that doesn’t change the fact that the COMEX was and remains a futures market.  Just because an individual was bribed to take cash and told not to talk about it doesn’t change the fact that the structure of the market trading even up to that very second remained a futures market, by definition. 
       
      Frankly, I think the odds are extremely high that the COMEX is going to become a cash market for very much the same reasons Jim Willie believes.  I hope that’s been obvious throughout all these messages today — certainly anyone that has followed my work over the past few months has heard me make that exact argument over and over and over again.  But as of today, the COMEX is a futures market when it comes to trading on that market.  That hasn’t changed yet — although it might in the not too distant future.
       
      Cheers,
       
      Eric
       

    • @ FW & Hedgey…
      “Can’t we all just get along”… lol!
      Well, JW certainly does get one thinking doesn’t he… maybe the only PM Guru that can go absolutely bat-shit crazy and still keep my attention… of course in the insane world of PMs, it’s seems all we can do is read, listen, and make up our own minds on what to toss and what to add to our personal data base.
       Anyway, one of the better comment threads I’ve seen here at The Docs… the entire thread, but with an extra hat tip to the two of you.
      At the end of the day, something is happening but we don’t know what it is (do we)… but it could be big!
      Best to all!

      Edit: Forgot this… anyone have an explaination for both Au and Ag dropping (usually not that much) at least 80% of the time at the 6:00 pm (EST) resumption in trading each day? It almost allways recovers but I’ve never heard anyone address it, even though it happens almost every day…

  7. Hopefully the price of gold will remain low at least until August 8, when the US Mint begins sales of the Reverse Proof Gold Buffalo.
    For those inclined to ‘flip’ Phyzz, this one may net you a tidy profit, as this is likely just a 1-year only coin to commemorate the 100th anniversary of the release of the original design, which was used on the Buffalo Nickle.

  8. Mike Maloney made a video about 2 or 3 years ago of one of his seminars explaining why the price of gold vs the number of dollars printed from the 1980 875$ price of Au should be around 60,000+ dollars now. Ag should be at parity with Au.

    • Why should silver be at parity with gold?  That has occurred only in a very few isolated cases in the past.  For the other 99.999% of history, the silver to gold ratio in ounces have varied from about 10:1 to about 20:1.  Say 15:1 for a historical average.  It’s higher than that today by about 4x but maybe that’s what happens when we no longer have a free market in PMs?
       

    • @Ed_B: Because of two words Ed. Supply and demand. The historical ratios don’t really matter. Today’s above ground and in the ground supply is not what they have historically been. Nor is current demand the same as it has historically been. There was little need for industrial silver in the 1492! It is the free market that should give silver parity with gold. In history both metals were basically monetary metals “with their value ratio linked to natural ratio”. Gold still is basically a monetary metal only, but not silver. Silver is in a class all it’s own. In it’s uses, the demand because of all it’s uses and it’s limited supply. which is shrinking in the amount mined “and it’s ratio to gold as well”.

    • RocketsRedGlare
      “The historical ratios don’t really matter.”

      No, they DO matter … as references. The problem is that governments legally ‘fix’ them, which is an interference in violation of supply-demand forces. Market conditions cause variance … around … the ‘historic’ ratios because their mixes and volumes of goods is in constant flux. As an example, if the average volume of wheat produced each year is ‘X’ amount, then in relation to the circulating amount of silver, that yields an ‘historic’ ratio of exchange (the word ‘Price’ is ‘market lingo’ for ratio). So, there is a … reference … ‘historic’ ratio that’s discernible and IMMENSELY useful. Again, it’s only when governments (really, acting at the behest of merchants, hence ‘Mercantilism’) legally ‘fix’ these ratios, or prices, that the evil effect occurs and ripples out through the entire goods-matrix.

      There’s no evasion of the empirical natural ratio between gold and silver in the earth’s composition. THAT’S the reference point between their rationalization. Gold’s silver-price is then 10, for all practical purposes. But, because of a ‘market dislocation’ caused by squander of silver into economically un-recyclable applications (a phenomenon CAUSED by ‘price’ suppression), the ratio MIGHT prove to reach a gold ‘price’ of one silver until that ‘market dislocation’ is physically resolved.

      The ultimate ‘Comic Irony’ here is that the Government-Banker-Monopoly Industrialist cabal, in the end may be forced to disgorge all their ill-gotten gold by the very simple force of natural supply-demand rationality, compelling a 1 for 1 ratio for a while. I, for one, will dance a giddy cackling jig in the streets on that glorious day of justice!

    • “Because of two words Ed. Supply and demand.”
       
      If those were the only forces in play, your argument would carry more weight.  Besides… when have we not had supply and demand issues in the gold and silver markets?
       
      “There was little need for industrial silver in the 1492!”
       
      Perhaps not but there WAS a massive monetary need for both gold and silver that does not exist today.  This may be changing, however.  A few countries are using gold to buy oil and wheat, so some monetary gold use still exists despite the world-wide fiat currency scheme.
       
      “It is the free market that should give silver parity with gold.”
       
      IF we had a “free market”, we could discuss it seriously.  The manipulation of both gold and silver prices has been blatant and obvious.  The dumping of massive amounts of paper gold and silver at the most thinly traded times of the day are NOT conducive to any legitimate profit maximization of which I am aware.  Its only function is to smash down prices and liquidate shorts more favorably… and naked shorts at that.  This kind of repeated behavior does not indicate a free market to me.
       
      As to your other comments, I remain skeptical but open minded.  Time will tell, as they say.  Could you be right?  Maybe.  As with many other things, however, this is a complex issue with many variables involved.  A lot of what will happen in the future will be influenced heavily by other economic factors.  Even if all works out as you suspect, it could be several decades before we see the results you mention, if ever.  Some of us don’t have decades!  ;-)
       

    • @Ed_B: @PatFields:  I won’t say that historical ratios are not a good reference but, I will say that they are meaningless in the since that the past is just that, the past. Everything changes over time. Their values will be decided by the supply and demands of today. Not yesterday, last year or the last five centuries! Both metals are still monetary metals. But Ag is much more than just a monetary metal.The ten year bull market is the result of supply and demand despite the manipulations. The market will reflect their respective values at some point regardless of further attempts to manipulate them. At some point the supply and demand equation will send Ag to parity with gold. There are so many demands for Ag “and new ones every day” vs it’s supply, it may well go beyond parity. Supply and demand may not be the only factors deciding value ” as it should be”, but they remain the the main factors.

    • “I won’t say that historical ratios are not a good reference but, I will say that they are meaningless in the since that the past is just that, the past.”
       
      Have you not heard, “Those who forget the lessons of history are doomed to repeat them?”.  Yes, things change, particularly when they are of a superficial nature.  Human nature, for example, is far more basic and unchanging over very long periods of time.  While something are definitely changing, many others are not.  Gold and silver appeal to most of us specifically because they are a long-term store of value, meaning that they preserve purchasing power and don’t change a lot on that regard.
       
      “Both metals are still monetary metals.”
       
      For me, a “monetary metal” is one that is used by most people in everyday commerce.  Under this definition, gold and silver are not monetary metals these days.  This does not mean that they don’t have value, however, or that at some point they won’t again become monetary metals.  4,000+ years of history are not to be denied, else none of us would care about gold or silver.  :-)
       
      “At some point the supply and demand equation will send Ag to parity with gold.”
       
      Perhaps.  But there is no way to prove this and it is clearly not the case at this time.  Given time, most of us will have wings and sing with the other angels… but not today.
       
      “Supply and demand may not be the only factors deciding value ” as it should be”, but they remain the the main factors.”
       
      I agree that they are primary factors in the pricing / utility / value of PMs.  But I am also trying to keep to what “is” and not wander too far into what “may be” someday.  Someday, it might be possible to cheaply transmute base metals into cheap PMs via some very advanced quantum mechanical / transporter type of technology… but not today.
       
      Beyond this, we have both aired our opinions and seem to have said what we thought needed to be said.  This is the point where we probably need to “agree to disagree”.  :-)
       
       

    • Ed_B
      For me, a “monetary metal” is one that is used by most people in everyday commerce.  Under this definition, gold and silver are not monetary metals these days.”

      Just as a point of clarification … Gold (itself ‘conditioned’ by ‘special’ means, extraneously) trades pari passu with all the paper ‘currencies’ on the FX exchange. While gold very rarely trades at the ‘street level’, it IS universally held quite overtly as money, nevertheless. Not to controvert your larger meaning of practical usage, that’s well taken and undeniable.

  9. Too many “experts” are promoting this central banks are out of gold idea, there is no proof of this, it’s pure speculation.
    Let’s assume for one second the “experts” are correct, how much longer can this continue?   Common sense would say this would explode in a few months, but it’s not happening.
    Why isn’t the price moving higher from this information that every gold trader knows about?   Why isn’t gold at $2000 today?  Because no one believes in this theory. 
    It’s pure speculation, nothing more.

    • It’s not “pure speculation.”  We don’t have sufficient evidence to go as far as to say central banks are “out of gold.”  On that point, you’re right.  Some are going to far.  But we most certainly have a mountain of evidence proving that central banks have been leasing massive levels of gold into the market over many years, almost all of which can never be bought back at currently prevailing prices because only much higher prices could inspire current holders to sell, creating sufficient supply on the public markets from which central banks could buy and restore their original positions.  Afterall, that’s the take-home point about what happened following Germany’s request for repatriation of only a portion of their gold stash.  The Fed told them they could have it all within 7 years because that’s how long the Fed estimates will be required to collect the stash, bit by bit, without driving gold prices vastly higher.
       
      Go spend 20 hours reading the mountain of evidence accumulated by GATA over the years.  It’s well worth your time.  You are simply shooting from the hip.    …and after doing that research, if you want to point out what is specifically wrong with GATA’s fact-based exposition, go for it.  I’d like to learn from that effort should you embark upon it.  But as it stands, you’re just shooting from the hip with the above comment.  Gold leasing by central banks is not a conspiracy theory.  It’s an activity openly discussed in their annual reports and other various public documents.  This isn’t’ about pundits saying one thing or another.  Some of the gold inventory at the Fed has, by definition, more than one owner, because it has been leased into the market, while the original owner (e.g., Germany, etc.) can’t get it back because there are multiple claims to the same bars (even when the bars didn’t move an inch).
       
      Don’t be lazy, zman.  Do the research.  And after spending that time if you can actually prove why those of us are wrong when we note that central banks don’t have title to all the gold they claim, by all means, educate me (and again, the claim that central banks are out of gold is not what most in the GATA camp claim, and it dodges what is in fact what has been the problem, i.e., leasing into the market and multiple title claims on a big part of the gold inventory).
       

  10. What I can’t figure is why GOLD is running in short supply before SILVER. Supposedly, world SILVER stockpiles have been used up since 2009 or so. We are running on scrap, mining supplies, and fumes. Now the price crash probably bought some time, but still….this makes no sense to me.

    Of course, JP Morgan lies about everything…Jim Willie is there to sell subscriptions…Ted Butler too….well, it’s just hard to tell the truth from complete BS these days. But have no fear, Flying Wombat has it all figured out.

    • The most likely explanation for this odd dynamic that you correctly point out as being odd is that:  1) both gold and silver prices are being price-managed;  2) that price management effort is slowly ending, at least for the time being because there are large amounts of buyers scooping up physical, which is putting strain on the primary systems used to push prices down in the first place – namely, the paper futures market;  3) the initial rush into gold is more powerful and more noticeable because the big buyers that are standing for delivery, especially on the LBMA, are so damn large (China, etc., and the investment banks that are going after that frequent $30+ premium for gold in China vs. the LBMA) that the action of stressing the paper trading market is more pronounced with gold to the upside, while over in silver (4) silver remains a much more thinly traded paper market, much more easily pushed down from time to time when both the cartel and hedge funds decide to push silver down.
       
      In fact, this very dynamic is happening today — right now.  Look at the relative performance of gold and silver.  Gold is catching a stronger bid, as traders say…
       
      The point about stockpiles being used up isn’t totally correct because a great deal of supply has been liberated from time to time when these artificial crashes happen.  But I do get what you were trying to point out and you’re right to draw attention to what seems like gold being in shorter supply.  It’s a subtle difference.  It’s not exactly that gold is in shorter supply when speaking about the paper market that has set the prices of gold and silver below were they would be if we had free and fair markets.  It’s that silver’s more thinly traded paper market is much more easily manipulated that is the biggest factor behind what you’re observing.
       

    • I didn’t ask you, it was a rhetorical statement! Called thinking out loud, you know. And no, I didn’t read your reply. Just saw the name and cringed.

    • “I didn’t read your reply”
      By that statement, you just proved in no uncertain terms to everyone here that you’re not about discussion, that you elect to not defend your incorrect statements, and that you (not I) take things personally (“…saw the name and cringed.”) over the pursuit of knowledge. 

  11. Wombat, I’m not lazy, I have studying the PM market for many (8) years, reading and listening to every person in the PM world, GATA included.  Yes, central banking leasing is not conspiracy, it’s a fact, no disagreement on that issue. Leasing has been going on for decades, so this is nothing new.
    I guess an important issue remains, is credit for having gold the same as having physical gold?  So far, the IOU is no different than having the gold, if everyone accepts the gold IOU as gold, there is no problem. Can this continue going forward?   No one knows, so far it doesn’t seem to be a issue.
    My point is, all of these “gold/silver inventories are running low” theories are out there for the whole world to see, it’s not a secret, so why doesn’t the price move higher?    Very few believe in the theory must be the conclusion. 
    If investories are really running low, does $1600 fix the problem?   Or maybe $1800?    
    Sprott, Kay, Maguire, Willie and others have put themselves into a corner, they are calling a rare event in the gold market, at the end of the day they are guessing that the gold is running low, and 6-12 months from now, can they really be making the same claims?     They are on borrowed time in my opinion.
    Will central banking leasing ever rock the gold market?     Hard to say would be my final conclusion.

    • @zman – thanks again for being among those that actually address arguments and advancing discussion intent on coming to better understanding.  You will recall that many months ago people started claiming you were a troll and I shot that nonesense down.  We all need contrary opinions to help second-guess assumptions and refine our understanding.
       
      That said, isn’t it obvious that having credit/IOUs for gold is vastly different than having physical gold?  The Germans and the Bundesbank certainly know the difference after the Fed basically told them to get lost! :-)
       
      Look, you’re right about some pundits being excessively frothy, but I would also say that part of the problem has been the way those pundits have been presented in terms of the communication concept known as “framing” w/ respect to how Eric King markets his editorial content.  There have been times when King has taken a simple statement by someone like Sprott, where Sprott would note (paraphrasing):  “Well, it’s possible that if “x” were to happen, we could see gold go into the stratosphere, at prices like $50,000 or other numbers some people toss around.”  Then, Eric King would put out a BS headline for his own marketing purposes:  “Eric Sprott sees gold going to $50,000.”  That’s wrong, and in the long-run, as can be seen by your correct exposition of the sentiment about all this crap, it only erodes the long-term credibility of Eric King and King World News.  But don’t make the mistake of translating that entirely on to Eric Sprott’s shoulders.  It’s not justified.  I will happily defend Sprott, Kay and Maguire along these lines because they are very careful with what they say and judicious with their analysis.  Willie, as much as I like what he has to say for the most part, does indeed go down rabbit holes that are not really relevant to the discussion at hand (markets/gold, etc) with prisons 5,000 feet under the sea, etc.  That’s not to say I diss conspiracy research because, in fact, I have 30+ years as what I consider professional research experience on political and economic conspiracies, using academic methodologies, investigative journalism and forensic tools.  Conspiracies are everywhere, but not everything is a conspiracy.  I digress.
       
      Bottom-line with respect to the price behavior point you make is that:  1) prices are in fact moving up now given the problems of the tight physical market and how that limits the ability of the cartel to play their games — and again, read very carefully what I wrote about the COMEX above because it gets into the mechanics of why there are limitations to what the cartel can do, and why gold and silver prices have moved higher this month despite expectations by nearly everyone and their dog to the contrary (and which I will also add that I forecasted, in advance; and yes, I, like other pundits, incorrectly forecasted that $26 silver would hold, but that doesn’t necessarily mean that I incorrectly understood market conditions, but rather, incorrectly concluded that the cartel wouldn’t go as far as they did to push prices down, below the cost of production, a level at which, shall we say, is just silly to argue is a long-term “just” “pure market driven” price by definition;  2) the paper markets continue to have the ability to keep prices lower than what would be generated from a fair and open market;  3) that reality is basically ignored by most other than the Asians who are hoovering up physical in response, but are not as of yet hoovering physical up at a rate fast enough to drag the paper market prices up further;  4) but it’s my view that you will eventually see your price confirmation and more “normal” market trading patterns eventually;  5) and don’t forget that “temporary backwardation” (see my explanation in posts above) and negative GOFO and $30+ premiums for gold in China vs. western paper-based markets are all simple, near-irrefutable manifestations of physical market tightness (only the nature of GOFO is fairly debatable given the fact that LIBOR is manipulated, and other subtle points that are beyond this post given how long my post is already)
      Hope that helps.
       
       
      Thanks again for your post.
       
      To all, I will have to get back to work – sigh.  So, no more posts from me here today, as addicting the distraction is.  Got to get back to work.    Thanks.
       

    • Wombat, Thanks for your response, and yes I agree, IOU gold and physical gold are two different things, I just wish the rest of the world thought the same, maybe one day.

  12. COMEX WILL DEFAULT??? HAHAHAH. HOW MANY TIMES HAVE WE HEARD THAT OVER THE LAST 4 YEARS. GIVE ME A BREAK. YOU SHOW SOME FANCY CHARTS AND EVERYONE THINKS THEY HAVE THE INSIDE SCOOP OF WHATS GOING ON. JUST LIKE THE SENSATIONAL HEADLINE THAT JP IS GETTING OUT OF THE COMMODITIES BUSINESS WHICH IS A NON EVENT AS IT ONLY REFERS TO BASE METALS. TO MUCH HYPE BY PEOPLE SELLING METALS FOR PROFIT.

    • @SLG
      No, No, you don’t get it. It is actually starting to falter right now. The same signs as the 1970′s are appearing again, but this time the economic rivals of the USA are swimming in US IOUs of all stripes, and are calling the PM’s to come to momma MUCH faster than it can be mined or swindled from other sources.
      …it IS collapsing, and it will all start to slide around late September is my prediction and by next year London will be yesterdays bullion market, and the BRICS and Shanghai Co-Op will have many customers show up at the door looking at the price on THEIR screens.
      Pity the West couldn’t stop the parasites. We could have been an example to the rest of the world, but instead they will never trust a White Devil ever again and will feel no pity for the sadistic system that collapsed on it’s own sword!

  13. LBMA is not an exchange. How many times!!!!! 
     
    Find out what the LBMA is, then write about it.
     
    The LBMA, some members do have the supply of bullion. Companies like Umicore, Metalor, cooksons gold, Baird’s of London, heraeus,  matthey etc do I need to go on? These companies are straight up bullion producers. And yet your ignorance continues saying the LBMA is nothing more than an exchange. Please…,do some research. Don’t peg bullion dealing banks in the same category as manufacturers. Shall I throw in BASF and pamp. Oh look I just did.

  14. What I’m trying to elaborate is huge change in the market. For example, when is the last time the Fed reserve has been audited? When is the last time other countries built up reality against another country, supported by truth? The old bumbbling hags in the elite are counting their days when the world gangs up on them.

  15. COMPETING CURRENIES are NOT fiat paper note…
    Real Money is tangible…. Intrinsic value that stands alone
    As long a the FED is able to hold its STATUS as Legal Tender, Gold and Silver have no chance.
    Demand determins value/price.

  16. Ok,
    so for those that are Christians, whether you’re like me and believe that we will escape the anti-Christ’s 7 year rule of terror, or whether you believe you’ll go through it (I feel sorry for you due to the stress you incur in prepping for something you won’t experience, but I digress), and in light of Willie’s claims that top bankers are devil-worshippers, and that we as Christians know that Jesus said things would only get worse and that the devil would only gain more and more control until Jesus’ return to crush him, what on earth makes you think that devil-worshipping bankers and their banks won’t survive and that the East will triumph ??? The devil’s running the show lol. The devil will be successful until Jesus comes back… we already know this… do you really think you can fight the devil and his devil-worshipping elitists with guns and metals? Sure I like firearms and metals, but really… the devil and his millions of demons are not scared in the least of your wafers, coins and ammo.
    Recall the book of Acts, where people who weren’t saved tried messing around with casting out devils, and the devil-possessed man beat them up and chased them off? That was one man … and the problem wasn’t that they didn’t have enough metals or ammo, but that they didn’t have Jesus.
    So, really, under a wicked world system run by the devil (East AND West)… you think millions of angry devils who know they have but a short time before Jesus’ triumph, working through millions of devil-controlled nuts, will be slowed down by stackers and preppers?
    My point is, sure, I support sensible and logical preparation for economic hardship and natural disasters, but for those of you who understand what this whole story is all about… what are the weapons of your warfare?
    II Corinthians 2:4-5: For though we walk in the flesh, we do not war after the flesh:(For the weapons of our warfare are not carnal, but mighty through God to the pulling down of strong holds;)

  17. Hmmm  I’m gone for 9 hours today and all heck breaks loose.  I haven’t seen so much heinie since—-I dont know when 
    After reading all of the posts and appreciating them as well, the civility is pretty darn decent
    I did get stuck at with the problem of oole dancers accepting slver coins in addition to folding money.  With a thong and  muscular glutes it  stands to reason that coins would be welcome. 
    As for Mr Kilty,  not so much. 

    • Yeah AGXIIK—quite a thread going here.
      Charlie—you are priceless!
       
       
      Mr Dubin—
      My appreciation for you continues to grow; Love this  site!
       
      For some reason it’s better to listen to Jim Willie than to read him.
       
      And as for GOFO/Backwardation—whoop-dee-do! Means nothing to me really.
       
      Gold and silver still got crushed in the spring.
       
      Crushed!
       
      I mean like—-
       
      D E S T R O Y E D!
       
      Fortunately I do not measure in dollars…..but after giving it some thought, in a moment of clarity, I’ve concluded that all the ‘gurus’ were right all along.  They kept saying PM’s were going to -EXPLODE!
       
      And that they did.
       
      Both Gold and Silver Exploded…. and does not, by definition an explosion mean what ever exploded got destroyed?
       
       
       
      Still believe Silver will be $40 – $44 by Christmas….and if not you can still bop me upside the head…. & no helmut, Ed.
       
       
       
       

    • @4 oz
      The PERCEIVABLE ‘price’ of Gold and Silver got smashed, but to all those who never regarded the fiat conversion as a ‘price’ in the first place they have actually lost nothing.
      I had X ounces of physical Gold and silver in my safety spot, and the funny thing was that AFTER ‘the big smash’, I checked my stash and would you believe it I had exactly X ounces of Gold and silver left. Where was the ‘smash’?
      When we get a new national currency/s wouldn’t it be great if on the Note instead of a $ a Pound or a Euro sign it simply said OZ or Gram and at the bottom said 100% redeemable for Physical Metal? Then nobody would ever have to have the problem of trying to discover a ‘price’ because the ‘price’ would be the Weight which never changes.
      Also, the notes could be issued by multiple private banks per country, denominated by the name of the bank, and the Treasury Dept of the country would only be responsible for conducting audits and note printing issuances for each of the private banks for a fee, as well as bi-annual/quarterly audits where 100% of receipts would need to be backed by 100% physical vaulted gold, and any bank not having less than 99% of their receipt issuance in Gold would be put into receivership and the receipts called in for transferral to a competitor/s along with the bullion remaining … then court cases would commence and people would be put in jail and their personal property liquidated to make up the shortfall? Heaven forbid :P
      This way ‘Banks’ could be what they were always meant to be; ring fenced and fractional-reserve disabled. NO Central Bank would even exist. The banks could operate on fees only, and anything that is not a retail banking operation would exist outside of this solid money thus protecting the fruits of labour from parasitic economic co-dependence financial terrorism.
      I say we stop PRICING Gold and Silver in Fiat and start calling the PRICE the WEIGHT of the physical commodity. Gold and Silver IS Money, Fiat is a piece of paper. Fiat should be PRICED in Gold and Silver, not the other way around, and that way when Gold and Silver skyrocket and the LBMA and Comex finally are exposed to be an over glorified monopoly game with a JP Morgan moustache man sitting at the centre we can say … wait for it … FIAT JUST GOT SMASHED!!!! Do not pass go! Do not collect $200, Go directly to jail!!!
      Then I woke up out of a beautiful dream where the world was not full of sheisters and milk and honey rained down from heaven and a days labour paid more than a days expenses … ahhh, what could have been!!! Pity the sheisters hijacked the Govts of the Western world who all have massive arsenals of nukes and chemical weapons and auto-kill-drones and military police/security who answer to their uniforms and not social morality. HAPPY DAYS! :P … but true

  18. @Flying Wombat… as I warned, I get knocked off of most threads here simply by the clock. I wasn’t trying to ignore your request to clarify about support for JLee’s claim, rather, I had hoped that his initial response to you meant that the two of you would work it out directly. I see now that things seriously degenerated instead.
    I am not interested in getting in the middle of something, but it occurs to me that the misunderstanding is not a difficult one to solve – in fact, seems you have solved it yourself, as your guess(“Maybe you guys are thinking about the speculation…rather than standing for delivery”)is correct – the guy was just saying in technically invalid terms that the “hoax market” of COMEX practically speaking has eliminated delivery of physical, by a variety of subterfuge methods. I think most of us laymen understand his meaning straight up… whereas your acute sense of proper terminology disallowed comprehension of his point. That’s all. There’s nothing to ‘defend’ or support outside of that clarification. I’m a little embarrassed though about the way he has responded to your continued push for explanation. I have to disassociate myself from any further discussion on that bit of business.
    On the bright side, I’m glad that you filled us in on this thread with the background qualifications to your opinions. It goes hand in hand with what I was suggesting about the nature of pm sector analysis. Mighty thick on opinions, mighty thin on successful calls, for the most part.  You clearly saw my point and negotiated the distance between hubris and humility with a great deal of skill. I’m certainly here to learn myself, and have long seen the optimal discussion zone for what I need to know as a collegium of professionals and laymen working together as a team to put the puzzle pieces together. No one person, no matter how gifted, can wrap their head around the dynamics of the current geo-political situation which is driving the metal markets and everything else.
    I think I should stop there to keep my comment brief enough, but I hope you check back in to read my late reply, and we can in the near future take up the question of how much(if at all!)there is a “market” force actively driving things at this point. I noted with interest that you made a subtle allusion to that topic in your last reply. It’s one of my favorites currently.

    • @hedgey – Well, ultimately, given JLee’s rather unusual personality (I’ll leave it at that), I think my final comment to him here pretty much speaks for itself.  It’s his loss.  Anyone that freaks-out as he did when someone points out an error deserves pity, not scorn.

      The confusion about what is and isn’t a cash or futures market isn’t just an issue of semantics or a fumbling around with what happens when someone is bribed with extra cash to take a cash settlment versus phsyical gold delivery.  Actually understanding the difference is important when trying to understand how and when the COMEX might actually default and switch to a cash market.  I’ve written enough in posts above to explain the difference and in fact why current COMEX conditions are under stress.  We are indeed moving down the road towards a possible (indeed, probable) default.  Timing and the outcomes that spin-out from that event are not easily predictable, but I’ve got a pretty good idea what that potential future looks like and it’s not pretty.  It’s something I’ve discussed from time to time on SilverDoctors — and will do so going forward.

      Thanks,

      Eric

    • I think it’s also worthwhile to mention that there are true cash settled futures contracts, where the final settlement price is based on some index of prices that supposedly give an accurate representation of the underlying product.  I find these are more prone to manipulation imagine if your firm was among those who was included in the settlement price determination!

      At least in a physically settled market you have the option to take the physical if you don’t like the settlement price.

  19. >>>It means people tend to regard the stated official price of Gold as being more than a set of numbers posted on a marquee billboard by a bunch of sadistic avaricious bankers whose personal lives of $200 lunches and private basement rituals would make for horror films.
     
    PRIVATE BASEMENT RITUALS: Bingo, the only way to enforce loyalty in a system of communal banking crime is for these high level complicit ‘executives’ to all have pictures or dirt on them committing ‘communal crime’ such as lurid sexual acts and child abuse which can be used against them (shown to their wives … leaked into the press) if they decide to turn whistle blower. Ritual abuse of children to make business contracts is so common amongst western oligarchs that it is hard to explain to someone who is good at heart how on earth a human being could sell their soul like this. Just remember that they make $millions in annual bonuses that we hear of, but because they are IN the system they can fractionally create many times the legal money they get their hands on in the real banking system by multiplying it in the off-shore shadow banking system that they are ALL connected to … they then leak this shadow banking credit into 3rd world countries to purchase REAL commodities, and then price-offset so that they pay no tax on either end of their trades … they know how to ‘wash’ shadow credit. They are all sheisters and the worst level of sadists that anyone can imagine. The Dutroux Affair in Brussels is just one example of the child sex rings that they operate in, and that case was shut down at EVERY level within the establishment of Brussels – Police, Justice System, Parliament AND Media – They ALL covered it up and made sure that it didn’t explode in a real court hearing … which means that it penetrates into every level of Govt. It ain’t just Brussels it is the entire Western world.
     
    There is no better way for a cabal of criminals to ensure that NO honest people are infiltrating their inner sanctums than to make every entrant take part in one or more extremely serious child sexual abuse acts. No honest and moral person who was trying to gain a position as an insider or spy would do such a thing as it is a point of no return, which is why it is so effective as a method of screening applicants. It is so much more widespread than people would believe, and it is incomprehensible for most people to even believe … which is of course how these people get away with it in the first place. Taboo subjects NEED to be discussed, because unless they are discussed they will continue to become more and more prevalent.

  20. willnotbeaslave
    Jimmy Saville, the famous comedian and even more, the imfamous child rapist and pederast, died recently. His molestations number in the hundreds. He continued these activities for his entire life.  He was a predator on even sick children in cancer hospitals. He preyed on the weakest of the children while creating an image that he was a protector of children. His enablers were  ‘legion’ and included politicians, TV stars and the elite on England. His chief enabler what reputed to be  Chuckie, Prints of Wails. 
    Princey must have  taken romance lessons from Woody Allen when Chuckles bagged Diana.   Woody found is easier to marry a mom, Mia Farrow, and begin getting it on with Mia’s daughter, Soon-Yi.  
     Yi and “Woody,’ quite apt name if you ask me, married in 1997.  Must be nice to be rich and famous.  Must be nice to get your freak on with your girl friend’s daughter.   If you have enough money Mr. Happy gets to go anywhere he wants in the wonderful world of Woody Allen.  Jimmmy ‘Let Jimmy Fix It’ Saville took it to the next level

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