empty-vaultWith the price smashes of the past few weeks, the increasing desperation of the bullion banks seems palpable.
I now believe that we are truly witnessing the end of the era. We’ve all been waiting for the day when the fractional reserve bullion banking system would fail. I believe now that that day is very close. Maybe not next week or even next month but NOT 2017, either.
Sometime very soon, likely before the end of 2014.


 

Submitted by T. Furguson, TFMetals Report:

  • The raid Tuesday occurred just as price reached firmly above $1320 and the all-important down trendline.

  • The raid also occurred during a period of steeply falling GOFO rates.

How and why did this happen? Let’s start with the “why”.

As explained last week, bullion bank desperation is increasing. The gold vaults of London are nearly empty and there is little, if any, readily-leasable gold available for the banks to use to create paper metal.

  • Please watch thishttp://www.bloomberg.com/video/what-s-happening-to-all-the-gold-d33u1c23SDqA0p0e~9_INw.html
  • Please read this: http://www.ingoldwetrust.ch/alex-stanczyk-physical-supply-never-been-tighter)
  • And now go ahead and click the podcast player button. The voice you hear is Alasdair Macleod of GoldMoney. He was the guest for last week’s subscriber webinar and, unprompted, he twice addressed the “empty vault” story.
  • Additionally, the GLD has already been raided for over 550 metric tonnes of gold since the start of 2013. IF WESTERN INVESTMENT DEMAND WAS TO RETURN TO THE GOLD MARKET, from where would the gold come? As Ken Hoffman said in the video linked above, “there isn’t any gold left”. Therefore, price must be held back at all costs because sentiment must remain negative. When the charts look to turn positive, as in mid-March or earlier this week, desperate measures must be taken.

And now the “how”. With GOFO dropping each day, there appears to be no readily-leasable gold for the banks to use to create the naked shorts with which to bomb and raid the market. In fact, since last Tuesday, GOFO rates have fallen even further. Check this out:

One-month: -0.118% (the lowest since 8/22/13 and within spitting distance of the -0.1267% low since “the new normal” began back at the price lows last summer)

Two-month: -0.088% (more than double the lowest rate of all seen in 2014 and lowest since 8/23/13)

Three-month: -0.058% (4x the lowest it has been so far in 2014. This rate fell to -0.0917% on 8/22/13)

Six-month: -0.006% (the first time it has been negative since 8/23/13. The low last summer was -0.020%)

Twelve-month: +0.076% (this may seem like a lot but, as recently as 3/21/14, it was +0.174% and the lowest ot got in all of 2013 was +0.1283%)

 

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Of course, the usual disinfo suspects want to write this all off as a function of low LIBOR rates and ZIRP. I’ll simply ask you (and them) these two questions?

  1. If that’s the case, why did negative GOFO only become the norm last summer at the conclusion of the $600 selloff when ZIRP has been in place since 2008?
  2. Can you explain this chart?

And here’s some additional context…Note the blue circles within the green areas. It is possible for raids to occur within the general, negGOFO uptrend. But how? If readily-leasable gold is in such short supply, where are the contracts coming from that are being dumped in sufficient quantity to crush price and temporarily “break” the market? The answer is the huge, cornering NET LONG position of JPMorgan.

When they used the $600 selloff to flip from 75,000 NET SHORT to 75,000 NET LONG, I and many others thought it might be a sign that JPM had cornered the Comex gold market for the purpose of controlling it. Maybe they even planned to break the Comex and then take it over. Nope. I was wrong. We now know through the Bank Participation Report data that JPM has been liquidating this position over the past six months in a vain attempt to control the market, manage the ascent and manipulate investor sentiment. The latest BPR confirmed that their position has fallen to half of what it was at its peak late last year.

It was the absence of readily-leasable, central bank gold that left JPM as the manipulator du jour last Tuesday. I believe it was JPM which summarily dumped up to 10,000 contracts in the early Comex trading, breaking the market for 10 seconds.http://www.zerohedge.com/news/2014-04-15/gold-futures-halted-again-latest-furious-slamdown And it was mission accomplished. Price was driven away from $1320. It fell below the critical 200-day MA for a time and then closed below that important barometer on Thursday. The bullish sentiment of early 2014 still hasn’t returned even with the latest lousy employment report, the geo-political uncertainty of Ukraine and the dovishness of Chair Fellen.

The smash of last Tuesday also provided “cover” for a huge raid of the GLD on Wednesday and Thursday. After vomiting up 8.39 metric tonnes of gold from its “inventory” Wednesday and another 3.20 mts on Thursday, the total alleged holdings of the GLD fell back to just 795.14 mts. This leaves the “inventory” of the GLD down YTD by over 3 tonnes. This while price is up $94 or about 8%!

Clearly, the GLD is still being used to provide much-needed supply for Asian demand. However, as Ken Hoffman said, “there is no gold left (for Western demand)”. Thus, even with prices rallying in 2014, no new gold has found its way into the GLD “inventory”.

I’ve often said that it is unwise to ever give date and price in the same sentence. Therefore, I only do it when I feel extraordinarily confident that I am seeing things clearly. I’m willing to do so now, however, but it’s a little different this time. Rather than price, it’s a general market condition.

I now believe that we are truly witnessing the end of the era. We’ve all been waiting for the day when the fractional reserve bullion banking system would fail. I believe now that that day is very close. Maybe not next week or even next month but NOT 2017, either. Sometime very soon, likely before the end of 2014.

 

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Now, I may end up looking quite foolish by 12/31/14. You’ve heard me say countless times that “you should never underestimate the power of TPTB to hold things together”. However, in this instance, I’m confident that the jig is almost up. Why?

  • JPM doesn’t have an infinite amount of longs to dump. Their remaining position is likely under 30,000 contracts.
  • Negative GOFO persists as the new normal, present more than half the time since 7/5/13.
  • Chinese/Asian demand will not cease and is up considerably versus 2013.
  • Indian demand is likely to ramp significantly higher after the elections conclude.
  • Fighting/controlling/manipulating “Western” investment demand is a losing battle as price cannot be driven to zero.
  • Recognition that “the vaults are empty” will be generally accepted as true by later this year.
  • A dollar/petrodollar crisis is very likely in the coming months.

All of these factors will soon combine to break the desperate hold of The Bullion Banks. That said, as their hold frays, you can be certain that they will attempt increasingly desperate measures to hang on. Therefore, you must be prepared to endure these assaults and remain steadfast. Those that do, and those who continue to use the remaining hours to stack and prepare, will find themselves protected against the financial calamities that will most assuredly follow.

Remain calm and stack on.

TF

By subscribing to Turd Ferguson’s premium service, “Turd’s Vault,” you’ll get extra, value-added content that you won’t find anywhere else on the Internet. Members receive Turd’s insightful chart analysis, frequent podcasts covering market news, weekly podcasts with special guests, plus other helpful information, all available on a dashboard only available to gold members.

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    • Sooner or later Ranger all,  say again ALL available gold will be in strong hands…..and lol I know you aren’t selling…..

    • paper market will not crash,…. cause it is paper market. what will happen is disconnection. from the real to the fiat.
      I am pretty sure the disconnect moment will hit when then smash silver to 5 bucks or under. LOL
      As long as miners and some people are selling at the price they set on the “market” they will keep playing the same old game.

  1. The paper has already collapsed, imagine the Wizard of OZ and Tito pulls the Curtains back  and exposes the luciferians .
    with Tito being the Victims & families  Nice if we had a Block Buster Movie about the suspected  Ponzi Inc.

    • I also thought that may be a REASON, but I’m not so sure, now that Belgium, that’s right Belgium, is the No. 3 holder of USTs and they, one would surmise, would be antsy and cause this type of an uproar more so than the Chicoms (er, can I say that?).
       

  2. Ok He who has eyes see! He who has ears listen  Ezekiel 38 , The King of the True North Russia in the North Pole busy building bases for their Subs .. Missiles .guess who’s the King of the South ? Maybe Israel , Africa  ? But the End is NEAR for some imo.

  3. Turd, interesting thoughts about JPM. Thanks. I’m seeing gold miners show a little more confidence to invest in increasing production so maybe they know a little something about future prices.

  4. The thing is T.F. is not a market professional or a central banker or one of TPTB.  He’s just a guy like me who really studies the PM space.  So, his guess is as good as mine.  But, it’s a guess, perhaps an educated guess.  But, it’s still a guess.  Now, if someone really in the know like a little Timmy Geithner or a Gordon Brown came out and said to expect LBMA failure by end of 2014 I would sit up and take notice.

    • As would we all @UglyDog.  I agree and suggest that educated guesses are really about all we have to go on.  Yes, there IS a lot going on in the PM space but much of it is done in darkness.

  5. For anyone who blinked and missed Russian President Vladimir Putin’s swift seizure and annexation of Ukraine’s Crimea region, there’s now a giant silver coin celebrating the Kremlin leader for bringing the territory “back home.”
    The coins issued by the Art Grani foundry in the Russian city of Chelyabinsk feature Putin’s bas relief image on one side and a map of the Crimean peninsula on the other.
    “Crimea’s reunification with Russia was a historic event which we decided to embody in a souvenir collection of coins,” Vladimir Vasyukhin, director of the Ural Mountains foundry, told the Itar-Tass news agency.
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    Mr Vasyukhin last year visited Crimea and returned with fond memories of the peninsula, Komsomolskaya Pravda reported in its article on Tuesday about the new coins.
    “And just like that the peninsula has come back home to Russia,” Mr Vasyukhin said of the annexation last month. He added that with the recovery of the territory, Putin had “demonstrated the qualities of a wise strategist and politician.”
    The unilateral annexation has been condemned by most world powers as a violation of international law in changing another country’s borders by armed force.
    Russian troops deployed throughout Crimea in late February, occupying military, transport and communications sites ahead of a quickly staged referendum in which 97 percent of those who voted declared support for secession from Ukraine and annexation to Russia. Two days after the March 16 vote, Mr Putin signed documents to make Crimea part of Russia again.
    The peninsula that has hosted Russia’s Black Sea fleet throughout its history was part of Russia for centuries before Ukrainian-born Soviet leader Nikita S. Khrushchev transferred it to the Ukrainian Soviet Socialist Republic in 1954. It made little difference to which republic the peninsula belonged when all 15 were united within the Soviet Union. But after the Soviet breakup in 1991, Russia was forced to lease back its military bases from Ukraine and lost governing authority over the predominantly ethnic Russian population of 2 million.
    The first issue of 25 of the commemorative coins, which are the size of a hockey puck and weigh 1 kilo each, will be given to Kremlin officials, Itar-Tass said.
    Neither the foundry nor the Russian news sources that wrote about the special “Crimea 2014 Collection” said how much the coins will cost or when a broader quantity will be available to collectors and the general public.
    Los Angeles Times

     

    Read more: http://www.smh.com.au/world/putins-crimea-seizure-the-coin-20140423-zqy08.html#ixzz2zlnxqVre

  6. If one makes a serious effort to plumb the depths of the banknote scheme, it can be seen that fractional reserve lending is an intermediary band-aid on the scheme’s core defect, to increase loan volume (interest fund creation) in an environment where rates can not be raised without exacerbating dangerous developments in desired ‘macro-economics’.

    This is the problem with equating finance and economic theory between the specie and banknote schemes. They’re two wholly unique paradigms susceptible of different reactions from any particular stimulus. Some mere symptomatic display is treated as a cause, wasting time and endeavor for those captured by the presumption.

  7.   OK kids, here’s the ONE THING that you must keep in mind above all else; ALL of these numbers are just fictions, totally made up nonsense that is created by fraud with rigged up computer programs!!  They have absolutely no real meaning in the larger scheme of things.  There are no real debts ANYWHERE in the world, unless they were incurred within the very strict confines of what constitutes a bona fide contract.  If you look in a law dictionary, you can find out EXACTLY what those confines are, there are only 5 of them, but their opposites can be expanded out a bit to include fraud, threat, duress, coercion, mistake, illegality, impossibility, illegality, insanity, age of minority or immorality.  No alleged contract can stand in the face of even just one of those terms, let alone any grouping of them. 
      In short, what is the EXACT AMOUNT of fraud that ANYBODY has the right to commit?  What is the EXACT AMOUNT of fraud that ANYBODY has an actual obligation to endure?  What is the BASIC PREMISE that is being operated off of, in the instant case?  Out here in the real world, those three questions are to lieyers what Kryptonite is to Superman!!  If you ask them of yourself at least 10 times a day, you will soon understand them and then be able to think with them, and your mind will be free at last!!
    Randy

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