There is No Shortage of Gold, Shortage Developing is a Shortage of Trust!

gold vaultGold is a physical commodity. Its owners are removing it from the tradable markets, squirreling it away in nooks and crannies where they feel it’s safe. This is not merely a phenomenon of differing interest rates. Real metal is being moved in the real world, and everyone would do well to understand why, and what it means.
Trust is collapsing, and for good reason. The foundation of the global financial system is the US Treasury bond. It is backed by nothing more nor less than the full faith and credit of a government with exponentially rising debt, and which has neither the means nor intent to repay. If you don’t trust that the US government can pay, then you can’t trust a bank deposit because the bank uses the Treasury as their asset. If you can’t trust a bank, then you can’t trust a gold futures contract.
It is in this light that one must view gold backwardation. In wheat or any other ordinary commodity, there is sometimes a state of shortage. When that occurs, anyone with the commodity can make a risk-free profit by decarrying it.
However, there is no such thing as a shortage of gold. There is a shortage developing—a shortage of trust. Decarrying gold does incur a risk. One may be giving up good metal for bad paper, and never be able to reverse the swap.
Unfortunately, with the collapse of trust comes the collapse of coordination of economic activity. The disappearance of gold from the monetary system will have momentous consequences.

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Gold & Silver Supply & Demand Report: Backwardation is Back!

MM4Last week, the prices of gold and silver were drifting slowly downwards until Friday morning. It’s not clear what the driver was (could be rumors of the German financial regulator starting to look at gold trading?) From around 7:30am in NY to 9am, the prices rose to above their close from the previous week. At the end of the day, the gold and silver prices were up $5 and 16 cents, respectively.
As with gold, the March silver contract is already feeling the strong pull of temporary backwardation. The May cobasis, for example, has collapsed back to levels of late November. The December cobasis has collapsed to levels last seen in April of 2013.
Is this the beginning of the moonshot rallied that is much hoped-for by the gold bugs?
Read on… [Read more...]

INSTITUTIONAL BUYING: The Coming Silver Game Changer

silver rushThe key to investing in silver is getting in before the big gains are made. The sector that will have the largest impact on future silver investment demand will be institutional buying.  According to Rick Rule of Sprott Asset Management, we may be witnessing the beginning stages of what could be a big move of institutional investors in the physical precious metal market.
The writing is on the wall.  The Fed & Western Central Banks are propping up the world financial markets by pumping in huge amounts of liquidity.  This policy has put into question the long-term viability of the Treasury & Bond markets.
Even though the East is participating in the Grand Paper Liquidity Scheme, they are forced to do so because the Dollar is still the global reserve currency.  However, as confidence in the Treasury & Bond markets begin to wane, we are going to see more institutions and retail investors rotate out of paper and into physical assets. [Read more...]

Jim Willie: I’d Welcome a Gold Move to $1450 & A Silver Move to $25!

jim willieThe Golden Jackass Jim Willie sat down with The Doc this weekend for an extraordinary interview regarding gold, silver, and what Willie believes will soon be a massive European banking collapse. 

Willie states that a Big European Bust is Coming- evidenced by the fact that European banks received $1.2 trillion from the NY Fed in January alone!
Willie states that the coming European bust will ignite a global Gold rush, a massive short covering rally, and will result in a powerful 30% to 50% rise in the gold price!

Willie also discusses gold and silver backwardation, the recent paper raids, and whether or not the metals face the risk of a 2008 type collapse as the Western financial markets go down in flames!

Jim Willie’s first of an explosive, 2-part interview with The Doc is below: [Read more...]

Keiser Report: Monetized Genocide

In the latest Keiser Report, Max Keiser and Stacy Herbert look at central banking monkeys performing cannonballs into the global dark pools, the backlash against quantitative easing and the Queen ticking off the Bank of England. In the second half, Max talks to economist Sandeep Jaitly of FeketeResearch.com about silver backwardation and a monetary path that will throw us *all* into such poverty that none of us will be able satisfy our ends. [Read more...]

Ned Naylor-Leyland: Gold & Silver Parmanent Backwardation Omen of Total Meltdown

Our friend Ned Naylor-Leyland of Cheviot Asset Management (who advised SD readers in June of the imminent launch of an ALLOCATED physical silver exchange in Asia) was on the Keiser Report today discussing unallocated versus allocated gold and silver bullion, and how permanent backwardation could be an omen of a total meltdown in the precious metals market.

Naylor-Leyland discusses MASSIVE physical strains in the silver market, as evidenced by 2 large silver purchases in London (5-10 million oz range) which the LBMA is REFUSING TO DELIVER OUTSIDE OF THE LBMA SYSTEM!!

 

MUST WATCH!!

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