Precious Metals Fund Manager: Ecuador’s 13 Tons of Hypothecated Gold Likely Sent to Russia!

goldRegarding Goldman Sachs’ hypothecation of Ecuador’s 13 tonnes of gold:  Ecuador has 26 tonnes in total.
You don’t manipulate the market with 26 tonnes.  China withdraws over 30 tonnes per week from the Shanghai Gold Exchange.  Then there’s India.  Then there’s Russia.  Then there’s Viet Nam (Viet Nam is the 5th largest gold importer in the world – that’s a fact).   Then there’s all the other gold-buying countries.  At least 50 tonnes of gold gets bought every week.  This is gold that has to be delivered.
Coincidentally, or not coincidentally, Russia bought 25.5 tonnes in April.
My bet is that Goldman may have needed that gold from Ecuador to deliver to Russia.  


By PM Fund Manager Dave Kranzler, Investment Research Dynamics:

Friday was the monthly Government non-farm payroll report folly. The best part about is that is gives us the entertainment content of watching CNBC’s Steve Lieman and Mark Zandi make absolute idiots of themselves.

The big media spin is that, supposedly, the economy has finally “recovered” the number of jobs that had been lost 2007. Even if that were true, big deal. If you look at the labor force participation rate, it’s at a 62.8% – a level last observed in early 1978 (Link), which is when most households were still one-worker families. Since 2007, 12.8 million people have disappeared from the labor force (retired, disability insurance, student loans, stopped looking/welfare).  If you factor in population growth, getting back the jobs lost since 2007 is pathetic.  And most of those jobs are lower-paying, temporary, or statistically created by the Government’s “birth/death model.”

As for Goldman Sachs’ hypothecation of Ecuador’s 13 tonnes of gold:  Ecuador has 26 tonnes in total. You don’t manipulate the market with 26 tonnes.  China withdraws over 30 tonnes per week from the Shanghai Gold Exchange. Then there’s India. Then there’s Russia. Then there’s Viet Nam (Viet Nam is the 5th largest gold importer in the world – that’s a fact).  Then there’s all the other gold-buying countries.  At least 50 tonnes of gold gets bought every week.  This is gold that has to be delivered.

Coincidentally, or not coincidentally, Russia bought 25.5 tonnes in April. My bet is that Goldman may have needed that gold from Ecuador to deliver to Russia.  If not Russia, then to any of the other buyers I mentioned above.  It’s not the Govt of Viet Nam that buys gold. It’s the people. They want the real stuff, not a paper certificate.

Finally, we know the Bank England was missing 1300 tonnes of gold after the April 2013 $200 price takedown.  It takes 1300 tonnes to manipulate the market, not 13 tonnes.Goldman has hypothecated 13 tonnes of gold from Ecuador that Ecuador likely will never see again.

How come no one is asking about the 1500 tonnes of German Govt gold that is missing from the Fed? How come no one is asking about the 1,000+ tonnes of gold that the Italian Govt keeps at the Fed?  Ecuador’s 13 tonnes gets bought and delivered in less than 1/2 a week.

Finally, Zerohedge posted a piece by Charles Hugh-Smith in which he avers that the U.S. dollar is in an uptrend.  He’s wrong.  And it shows the problem with taking geometric shapes from 5th grade geometry and imposing them on the price-charts of things traded in  the financial markets.  Here, have a look:

(click in graph to enlarge)

Untitled

I’m not saying that the U.S. dollar won’t go into an uptrend, but I am saying that it is definitively NOT in an uptrend.  It needs to get over 81.53 before we can start debating “uptrend/no uptrend.”

I would bet against that happening – short of Fed manipulation.  As you can see, the accumulation/distribution line is indicating that the dollar is now being sold in greater quantities than it’s being bought plus the RSI and MACD momentum indicators are rolling over.  You can see the accum/distro line is actually rolling over on a 1-yr chart.

I stopped reading CH-S quite some time ago and that’s an example of why.

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Comments

  1. If meeting demand takes events like this, it’s not going to be long before the house of cards comes a tumbling down.

  2. The US Dollar Index is irrelevant as it only measures allied fiat currencies against each other. Not even China / Russian fiat currencies are included. So really, the Europeans, Japanese, British, and Americans simply manipulate the index to stay at the desired level. It has no meaning at all. Even talking about it is a waste of time. 

  3. I’m beginning to think all these quote “experts” are in on the scam by the way they play along with this phony announcement about Ecuador selling her sovereign gold to Goldman Sachs.  Back in 2012 (see my previous posts) Ecuador demanded repatriation of her sovereign gold.  They never got it.  Venezuela asked first and got hers.  Germany asked second and received a little bit back.  Ecuador was third in line and got zip.  Ecuador knows her sovereign gold is gone(stolen).
     
    http://www.zerohedge.com/news/2012-10-31/it-begins-ecuador-demands-repatriation-one-third-its-gold-holdings
     
    Certainly the “analysts” remember this and can connect a few dots???  Guess not.  Ecuador knows her sovereign gold held in trust by the NYFed is gone.  This “liquidity” deal with Goldman Sachs is nothing more than a cash settlement and a message to other countries that the NYFed will only settle your sovereign gold account in cash.
     
     
     

    • @UglyDog, I think your explanation is best.  Plus that way no need to explain FAST Delivery, it was actually NO Delivery.  And as is customary in Forced Majeure, the entity taking cash gets paid a small premium as hush money so you don’t hear much about it.  Thus, no news is not proof it isn’t happening.  I think London not delivering anymore is a huge tipping point.  It clearly says what was happening, and what can’t happen.  The game is up.
       
      Failure to deliver is getting pretty popular throughout the world and the manipulation efforts look to be shooting blanks.  There might be more big smashes, but they will only be met with more phys buying which brings the end of manipulation even closer.  I can’t imagine any serious PM investors not getting the message.  I’ve got my account set up with the Doc…….bring it on, I’m a keystroke away from adding phys on every smash :-)

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