If Silver Goes Down All Hell Will Break Loose In The Physical Market: Silver Investment Update
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London Trader - There are Tremendous Silver Shortages
King World News is receiving reports of significant waits for delivery of silver. Today King World News interviewed the "London Trader" to get his take on the situation. The source stated, "It is so tight, the silver market is so tight that we’ve been waiting three weeks plus, before this takedown, for deliveries of size to arrive. I’m talking about tonnage orders. This is also key, most of the silver being delivered was refined after the orders had been placed, and again, that was before the takedown. You can just imagine how long the wait times will be going forward."
"This game is getting so stretched that it’s going to break. You don’t think the Chinese know this stuff. If we get a close above the 200 day moving average in the mid 30’s on silver, watch silver immediately pop $2 or $3. Silver is totally incredible. There is nobody in COMEX silver contracts anymore, other than casino players. The only way they have been able to keep silver depressed is by borrowing silver from SLV to meet immediate demand. That’s the only reason silver isn’t trading $10 to $15 higher right now.
There isn’t enough silver for investors to buy (in large amounts) so they have been using SLV as a flywheel. SLV is over 20 million ounces short on the silver they are supposed to have in the vaults to back the shares which have been issued. The silver isn’t there. So there are people who purchased SLV to own physical silver, but all they have is shares that aren’t backed by the physical silver.
Part of managing the price of silver recently has been for the central banks to attack the gold market. But what is interesting is how this manipulation of the gold price was effected. Obviously, the bullion banks, which are working with the central banks, have inside knowledge as to the timing and just how much gold is going to be available to them.
So, in order for the bullion banks to maximize the effect of the physical gold they get from leasing, they add high scale paper leverage. They then short-sell just enough tranches of COMEX contracts to surgically take out three important support pivots....
"Each of those important support pivots that everyone is watching, like the 50 day moving average and so on, each one of those are taken out in the access market in the quiet trading, overnight, on three successive days. In other words, they take out these three important pivots, which turns the momentum buyers into sellers. It also gets a bunch of funds to start selling as well.
So using as little ammunition (physical gold) as possible, and in thinly traded markets, they take out these pivots. They smash the price, but leave just enough physical gold for going into the fixes because the smart buyers are saying, ‘I’ll take it at this price.’ So, as we go into the fix, they’ve provided just enough physical to satisfy as many of those buyers as they can. They then smash it right after the fix, again, with paper.
That’s what’s happened with gold and it’s the reason it has been manipulated down to these levels. It’s the only way they could do it, and it’s a sign of absolute desperation when central banks are willing to risk giving bullion banks gold they will never, ever receive back.
You don’t think the Chinese aren’t sitting here taking every single ounce of that leased gold? Of course they are. There were actually three enormous physical buy areas that they pierced, where, literally, there was tonnage ordered. I estimate well over 100 tons of physical gold was taken between the first pivot they broke, where these guys loaded up with discounted gold, and this stuff disappears from the West to the East.
These central banks had to be in desperation to allow this borrowed gold to be absorbed by foreign entities. They needed to raise dollars in a hurry and they are extremely afraid of gold going through the roof. I was very, very surprised they got as far as they did (driving gold lower). They had to use an awful lot of gold to do it."
Silver Wars – Attack On The COMEX, SLV And MF Global
by horse237, Video Rebel's Blog
It will be a long and twisted path in the silver and gold fields from where we are to where the bankers want to take us for still another fleecing. Hopefully, we can avoid the snare traps the Bilderbergers set for us.
First I want to highlight the recent attack and counterattack on the New York based COMEX metals exchange. Jim Willie said he believes JP Morgan ordered Goldman Sachs and Jon Corzine to take down MF Global because they feared the COMEX would collapse due to a shortage of silver bullion. The MF Global bankruptcy receiver took money from segregated accounts at subsidiaries but gave 1.2 billion dollars to Morgan for unsecured loans. They took money away from the people who had cash and wanted to take delivery of silver and gold bullion.
Jim Willie also says that the bankers on Wall Street and in Europe will be just flat out stealing money from your accounts and pensions. Governments in Europe have been taking money out of private pensions and giving it to Bilderberg owned banks. That is why the Senate and the House legalized warrantless arrest without judicial review. They need to shut you up when the fraud gets exponentially worse than it is now.
Bix Weir is a gold bug but has issued a call to investors to sell their gold and buy silver to break the manipulation of the bullion markets. Silver is a much smaller market and will be easier to break. Ten tons of gold is inconsequential but that could buy 500 tons of silver which could break the COMEX when combined with the other big buyers.
John Embry of Sprott Asset Management launched two attacks on the COMEX. First he filed with the Canadian government to buy 1.5 billion dollars in silver. The last time he did this he sent silver from $18 to over $30. More recently he asked large silver miners to store silver rather than to sell silver and hold cash. It is clear he wants to break the COMEX. If silver is withheld from the market by the miners, then a concerted demand for delivery of silver bullion will in my opinion push the price well past $50 an ounce. This will break the COMEX and the LBMA (London Bullion Market Association.) There is a lot a paper silver and gold out there. The fraud on Wall Street and the City of London is beyond the ability of a normal person to comprehend.
A surge in physical silver purchases will also break the ETFs GLD and SLV which use paper derivatives to simulate the spot price of silver and gold. A deep analysis of SLV reveals that their operating costs are covered from the sale of silver bullion.
I want to present some facts investors need to know.
UBS and Morgan Stanley have been sued for selling paper silver and representing it as bullion to customers even charging them storage for silver bars that never existed.
The COMEX trades paper silver on some days as much as the total amount of physical silver that is mined every year.
James Turk of Gold Money has said that half of the new money invested in bullion goes into silver and the other half into gold. For every ounce of gold mined only ten ounces of silver is mined. But silver has industrial uses that gold does not have. The above ground supply of silver has diminished 93% in the past 40 years. But the ratio of the price of gold to silver is 50 to 1. If gold and silver break free of the current manipulation, the price of silver should rise anywhere from 50 to 100% faster than gold.
Central banks have NO physical Silver to assist in the manipulation of the Silver market but they still have a lot of physical Gold (although much less than they claim).
The Italian government has been taken over by Bilderbergers and Goldman Sachs operatives. They just recently have been leasing out Italian and Spanish gold. As you know, leased gold is not bullion and can be sold five times in order to drive down prices. That is why gold has been going down of late.
When To Sell Silver And Gold
I see no near term sell signals as I do not advise anyone to trade gold and silver daily. Bullion should be held until a gold standard is set up. Walter Burien at www.CAFR1.com has a paper called ‘The Fifty Year Plan’ which is similar to an essay I wrote: A Fractional Reserve Gold Standard: The Next Big Fraud.
If a gold standard does come into existence, gold will have to at least double in price to make it work. That is when you need to sell. What you should buy is yet to be determined.
I do not personally favor a gold standard. But I have suggested that Russia, China, Venezuela and Iran open a network of oil bourses where all purchases are to be made in gold, rubles or yuan. The Chinese would have to revalue their currency upwards and fix it to the ruble. I wrote that essay as a strategic move to stop WW III.
I would prefer a debt free currency like the Greenback and a ban on fractional reserve banking.
My regular readers know that I do not expect the New York or the European Bilderberg banks to go bankrupt. They will be bailed out by Ben Bernanke. The money supply will grow so fast that I expect hyperinflation within 16 months. I define hyperinflation for an international reserve currency like the dollar as beginning at 25%. I do not expect the dollar to collapse until after the 2012 American elections. I think Bernanke will paper the world between now and then.
As I said yesterday, I expect prices to go so high that for a lot of Europeans and Americans food will only be a distant memory.
I should warn you that I am led to believe that the Bilderberg crowd or at least a faction within it wants the COMEX and the LBMA to fail right along with the dollar, the pound and the euro. Running house prices up and down by selling fraudulent mortgages ruins tens of millions of families but it gives bankers more power. Just as running stock prices up and down has done. Or running your national currency down to zero value. Running gold and silver up and down is just one more swindle.
Bilderbergers enjoy inflicting pain and ruin on the common folk as much as they do stealing their money.
Warning: There is a lot of money out there yet to be stolen so don’t expect a collapse next week. And there is a lot of money to be made for the bankers if markets swing wildly between highs and lows.
CAUTION: I am not a financial adviser. I an not qualified to give you advice. And I do not know your situation. Please consult a professional.
___________________________
SLV Short Position Update
By Theodore Butler|
December 19, 2011 - 8:02am
The latest short position report for stocks was released earlier in the week for positions held as of Nov 30. This was the report that I had speculated would show a decline in the short position of SLV, the big silver Exchange Traded Fund (ETF). Contrary to my expectations, the short position for SLV increased by more than 2.2 million shares to 25.2 million shares. This represents almost 25 million ounces of silver. http://www.shortsqueeze.com/?symbol=slv&submit=Short+Quote%99
I had originally speculated that the short position in SLV would be lower in this report because the price of silver had experienced a fairly significant decline of roughly 10% ($34 to $31) within the reporting period. Most often, similar to what occurs on the COMEX, short positions expand on price increases and decline on price sell-offs. This is at the heart of the silver manipulation. To illustrate that point, the headline number in the CFTC’s Commitment of Traders Reports (COTs), the total net commercial short position, declined by 5,500 contracts from Nov 15 to Nov 29. The total COMEX commercial net position reduction was the equivalent of 27.5 million ounces, representing a 21% reduction over the two weeks. The reduction in the COMEX commercial short position was ten times greater than was the increase in the SLV short position in equivalent silver ounces, just to keep this in proper perspective. To be sure, had the COMEX commercial short position increased during that silver price decline as did the SLV, then I would have really been surprised; but that didn’t happen. Overall, the commercials were able to rig lower prices and speculative long liquidation as is their custom.
December 16, 2011
For subscription info please go to www.butlerresearch.com
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The Comex Exposed
From Dave In Denver, The Golden Truth
just saw another "worse than 2008" post linked on Zerohedge.com. I don't know about anyone else, but I just don't find that commentary helpful. That's old news. It's no-value-added to comment on that.
I was going to post on the ECB Long Term Refinancing Operation (LTRO) today and explain why it's just another "back door" QE operation, but I'm too busy to get into that at the moment. I'll try to post something on it tomorrow. I explained in a comment response under yesterday's post what the basics are.
At any rate, celebrity hedge fund manager Kyle Bass has been commenting lately on the reasons to be diversifying heavily into physical gold and silver and why it is important to avoid using Comex futures contracts and ETFs for this purpose. The bottom line is that they are derivatives of owning real gold, not valid substitutes. In fact, they are fraudulent substitutes and we have seen from the MF Global abortion that even owning warehouse receipts entitling you to delivery of bars is no longer a valid claim on Comex gold.
Bass' firm apparently went to do an informal audit of the Comex: The Comex had $80 billion of open interest vs. $2.7 billion of actual gold inventory. That means that actual gold at the Comex is less than 4% of the potential outstanding claims. It will only take one big delivery month 4% of the open interest decides to stand for delivery and the Comex is busted. You'll see he also comments that the bars that were owned and supposedly allocated for Bass' firm were scattered all over the vaults. This is bad.
If this concept doesnt' horrify you, then carry on watching reality TV and worry about Kate Middleton's pregnancy. Those are the important topics anyway, right? Who cares about the fact that bankers and politicians are openly stealing your wealth.
Here's the video and it's well worth taking a 2-minute break from MTV to watch:
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Buy Silver…Now!
By Matt Badiali, for The Daily Reckoning
You see, silver has more than 10,000 uses. It’s one of the world’s best conductors of heat and electricity. Inventors filed more patents on silver uses than any other precious metal in the world. And when silver is used for most industrial and technological purposes, it is used up forever… It simply costs too much to try to recycle the tiny bit of silver from every cell phone or casino chip.
I’m not saying industry is going to use up all the world’s silver. That simply can’t happen. But scarcity is a real issue.
Our rapid consumption of silver leaves very little to meet any uptick in demand from investors. A spike in interest will send prices spiraling higher…
Here’s a breakdown of the silver market. The table below shows the percentage of the total amount of silver consumed by each category over the past four years…
As you can see from the table above, only 12% of the silver supplied to the market made it to bullion in 2010. That means only a little more than 100 million ounces of silver became bullion for the entire investing world.
That’s a tiny fraction to sop up all the investment interest in the world.
Of that silver, about 43 million ounces went to exchange-traded funds like the iShares Silver Trust (SLV) and the Sprott Physical Silver Trust (PSLV).
That means you could buy all the extra silver bullion for about $2 billion. We could buy all the surplus silver bullion from the last four years for about $10 billion.
That’s the same as the market value of the iShares Silver Trust today. If you wanted to build another silver fund, you couldn’t. There just isn’t enough silver bullion out there to fill the order.
Even trying to amass that much physical silver would send the silver price soaring. It’s a simple market fact… When there is more demand than supply, it drives the price up.
And the economic problems confronting Europe and the United States have increased interest in precious metals… Silver gained a colossal 174% from August 2010 to April 2011.
In May 2011, however, the price collapsed 31% in just four weeks. The bull market simply ran up too far, too fast… and the decline wiped out many highly leveraged silver traders.
The big money is tiptoeing back into silver.
Last month, commodity trading advisors, pool operators, and hedge funds — the “big money” — weren’t interested in silver AT ALL…
But as they move back into the market, silver prices could soar. Let me show you what I’m talking about…
Jason Goepfert created SentimenTrader, a service that tracks investor sentiment toward various asset classes. According to Jason, silver just bounced off its most pessimistic reading in four years.
The so-called “commitment of non-commercial traders” hit 10,352. That’s incredibly low. The last time sentiment numbers were that low was in August 2007. Six months later, the price of silver was 59% higher. It rose from $12 per ounce to $19 per ounce.
I went all the way back to 2002 and found that silver sentiment bottomed near 10,000 six times… On average, the price of silver rose 33% in the next six months and 54% over the next year. This chart shows the last four times it bottomed…
Here’s how the silver price performed after each of the last four times silver sentiment bottomed out…
The best return came after Bottom No. 2, which coincided with the US banking/credit crisis. Silver soared an eye-popping 405%, including its parabolic rise in 2010.
As those numbers indicate, silver is one of the most volatile assets in the world. Over the last year, silver has seen massive price swings, including an 81% rally and two 30% drops. That forced many traders to liquidate their silver holdings in order to meet emergency short-term requirements. (Plus, the debacle at commodity broker MF Global has scared many folks out of the market.)
But the long-term drivers of gold and silver’s uptrends are still in place. Enormous and growing Asian economies like China and India are getting richer…and they have deep cultural affinities for precious metals. Plus, the Western world has lived way beyond its means for a long time…the debts and liabilities it has taken on can only be paid back with devalued, debased money. This is bullish for “real money” assets like gold and silver.
With sentiment so negative toward silver (and just beginning to turn back up), it’s a great time to take a position in this long-term bull market.
If gold and silver prices are nearly certain to rise over the next few years (and probably rise dramatically), the simplest way to play that trend is to buy bullion…real, hold-in-your-hand silver coins.
And I recommend everyone do just that… Buy some silver and store it away.
THE HAT TRICK
LETTER PROFITS IN THE CURRENT CRISIS.
by VictoryIndependence on Dec 11, 2011
There simply isn't enough physical silver to deal with the demand of a fiat
currency crisis. As the paper silver market pushes prices down, all hell will
break loose in the physical market.
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London Trader - There are Tremendous Silver Shortages
By Eric King
"This game is getting so stretched that it’s going to break. You don’t think the Chinese know this stuff. If we get a close above the 200 day moving average in the mid 30’s on silver, watch silver immediately pop $2 or $3. Silver is totally incredible. There is nobody in COMEX silver contracts anymore, other than casino players. The only way they have been able to keep silver depressed is by borrowing silver from SLV to meet immediate demand. That’s the only reason silver isn’t trading $10 to $15 higher right now.
There isn’t enough silver for investors to buy (in large amounts) so they have been using SLV as a flywheel. SLV is over 20 million ounces short on the silver they are supposed to have in the vaults to back the shares which have been issued. The silver isn’t there. So there are people who purchased SLV to own physical silver, but all they have is shares that aren’t backed by the physical silver.
Part of managing the price of silver recently has been for the central banks to attack the gold market. But what is interesting is how this manipulation of the gold price was effected. Obviously, the bullion banks, which are working with the central banks, have inside knowledge as to the timing and just how much gold is going to be available to them.
So, in order for the bullion banks to maximize the effect of the physical gold they get from leasing, they add high scale paper leverage. They then short-sell just enough tranches of COMEX contracts to surgically take out three important support pivots....
"Each of those important support pivots that everyone is watching, like the 50 day moving average and so on, each one of those are taken out in the access market in the quiet trading, overnight, on three successive days. In other words, they take out these three important pivots, which turns the momentum buyers into sellers. It also gets a bunch of funds to start selling as well.
So using as little ammunition (physical gold) as possible, and in thinly traded markets, they take out these pivots. They smash the price, but leave just enough physical gold for going into the fixes because the smart buyers are saying, ‘I’ll take it at this price.’ So, as we go into the fix, they’ve provided just enough physical to satisfy as many of those buyers as they can. They then smash it right after the fix, again, with paper.
That’s what’s happened with gold and it’s the reason it has been manipulated down to these levels. It’s the only way they could do it, and it’s a sign of absolute desperation when central banks are willing to risk giving bullion banks gold they will never, ever receive back.
You don’t think the Chinese aren’t sitting here taking every single ounce of that leased gold? Of course they are. There were actually three enormous physical buy areas that they pierced, where, literally, there was tonnage ordered. I estimate well over 100 tons of physical gold was taken between the first pivot they broke, where these guys loaded up with discounted gold, and this stuff disappears from the West to the East.
These central banks had to be in desperation to allow this borrowed gold to be absorbed by foreign entities. They needed to raise dollars in a hurry and they are extremely afraid of gold going through the roof. I was very, very surprised they got as far as they did (driving gold lower). They had to use an awful lot of gold to do it."
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by horse237, Video Rebel's Blog
It will be a long and twisted path in the silver and gold fields from where we are to where the bankers want to take us for still another fleecing. Hopefully, we can avoid the snare traps the Bilderbergers set for us.
First I want to highlight the recent attack and counterattack on the New York based COMEX metals exchange. Jim Willie said he believes JP Morgan ordered Goldman Sachs and Jon Corzine to take down MF Global because they feared the COMEX would collapse due to a shortage of silver bullion. The MF Global bankruptcy receiver took money from segregated accounts at subsidiaries but gave 1.2 billion dollars to Morgan for unsecured loans. They took money away from the people who had cash and wanted to take delivery of silver and gold bullion.
Jim Willie also says that the bankers on Wall Street and in Europe will be just flat out stealing money from your accounts and pensions. Governments in Europe have been taking money out of private pensions and giving it to Bilderberg owned banks. That is why the Senate and the House legalized warrantless arrest without judicial review. They need to shut you up when the fraud gets exponentially worse than it is now.
Bix Weir is a gold bug but has issued a call to investors to sell their gold and buy silver to break the manipulation of the bullion markets. Silver is a much smaller market and will be easier to break. Ten tons of gold is inconsequential but that could buy 500 tons of silver which could break the COMEX when combined with the other big buyers.
John Embry of Sprott Asset Management launched two attacks on the COMEX. First he filed with the Canadian government to buy 1.5 billion dollars in silver. The last time he did this he sent silver from $18 to over $30. More recently he asked large silver miners to store silver rather than to sell silver and hold cash. It is clear he wants to break the COMEX. If silver is withheld from the market by the miners, then a concerted demand for delivery of silver bullion will in my opinion push the price well past $50 an ounce. This will break the COMEX and the LBMA (London Bullion Market Association.) There is a lot a paper silver and gold out there. The fraud on Wall Street and the City of London is beyond the ability of a normal person to comprehend.
A surge in physical silver purchases will also break the ETFs GLD and SLV which use paper derivatives to simulate the spot price of silver and gold. A deep analysis of SLV reveals that their operating costs are covered from the sale of silver bullion.
I want to present some facts investors need to know.
UBS and Morgan Stanley have been sued for selling paper silver and representing it as bullion to customers even charging them storage for silver bars that never existed.
The COMEX trades paper silver on some days as much as the total amount of physical silver that is mined every year.
James Turk of Gold Money has said that half of the new money invested in bullion goes into silver and the other half into gold. For every ounce of gold mined only ten ounces of silver is mined. But silver has industrial uses that gold does not have. The above ground supply of silver has diminished 93% in the past 40 years. But the ratio of the price of gold to silver is 50 to 1. If gold and silver break free of the current manipulation, the price of silver should rise anywhere from 50 to 100% faster than gold.
Central banks have NO physical Silver to assist in the manipulation of the Silver market but they still have a lot of physical Gold (although much less than they claim).
The Italian government has been taken over by Bilderbergers and Goldman Sachs operatives. They just recently have been leasing out Italian and Spanish gold. As you know, leased gold is not bullion and can be sold five times in order to drive down prices. That is why gold has been going down of late.
When To Sell Silver And Gold
I see no near term sell signals as I do not advise anyone to trade gold and silver daily. Bullion should be held until a gold standard is set up. Walter Burien at www.CAFR1.com has a paper called ‘The Fifty Year Plan’ which is similar to an essay I wrote: A Fractional Reserve Gold Standard: The Next Big Fraud.
If a gold standard does come into existence, gold will have to at least double in price to make it work. That is when you need to sell. What you should buy is yet to be determined.
I do not personally favor a gold standard. But I have suggested that Russia, China, Venezuela and Iran open a network of oil bourses where all purchases are to be made in gold, rubles or yuan. The Chinese would have to revalue their currency upwards and fix it to the ruble. I wrote that essay as a strategic move to stop WW III.
I would prefer a debt free currency like the Greenback and a ban on fractional reserve banking.
My regular readers know that I do not expect the New York or the European Bilderberg banks to go bankrupt. They will be bailed out by Ben Bernanke. The money supply will grow so fast that I expect hyperinflation within 16 months. I define hyperinflation for an international reserve currency like the dollar as beginning at 25%. I do not expect the dollar to collapse until after the 2012 American elections. I think Bernanke will paper the world between now and then.
As I said yesterday, I expect prices to go so high that for a lot of Europeans and Americans food will only be a distant memory.
I should warn you that I am led to believe that the Bilderberg crowd or at least a faction within it wants the COMEX and the LBMA to fail right along with the dollar, the pound and the euro. Running house prices up and down by selling fraudulent mortgages ruins tens of millions of families but it gives bankers more power. Just as running stock prices up and down has done. Or running your national currency down to zero value. Running gold and silver up and down is just one more swindle.
Bilderbergers enjoy inflicting pain and ruin on the common folk as much as they do stealing their money.
Warning: There is a lot of money out there yet to be stolen so don’t expect a collapse next week. And there is a lot of money to be made for the bankers if markets swing wildly between highs and lows.
CAUTION: I am not a financial adviser. I an not qualified to give you advice. And I do not know your situation. Please consult a professional.
___________________________
SLV Short Position Update
By Theodore Butler|
December 19, 2011 - 8:02am
The latest short position report for stocks was released earlier in the week for positions held as of Nov 30. This was the report that I had speculated would show a decline in the short position of SLV, the big silver Exchange Traded Fund (ETF). Contrary to my expectations, the short position for SLV increased by more than 2.2 million shares to 25.2 million shares. This represents almost 25 million ounces of silver. http://www.shortsqueeze.com/?symbol=slv&submit=Short+Quote%99
I had originally speculated that the short position in SLV would be lower in this report because the price of silver had experienced a fairly significant decline of roughly 10% ($34 to $31) within the reporting period. Most often, similar to what occurs on the COMEX, short positions expand on price increases and decline on price sell-offs. This is at the heart of the silver manipulation. To illustrate that point, the headline number in the CFTC’s Commitment of Traders Reports (COTs), the total net commercial short position, declined by 5,500 contracts from Nov 15 to Nov 29. The total COMEX commercial net position reduction was the equivalent of 27.5 million ounces, representing a 21% reduction over the two weeks. The reduction in the COMEX commercial short position was ten times greater than was the increase in the SLV short position in equivalent silver ounces, just to keep this in proper perspective. To be sure, had the COMEX commercial short position increased during that silver price decline as did the SLV, then I would have really been surprised; but that didn’t happen. Overall, the commercials were able to rig lower prices and speculative long liquidation as is their custom.
Still, I find the increase in the short position of
SLV to be odd. During the reporting period, the price of gold also declined as
much as $100. In contrast to the increase in SLV, the short position in GLD, the
big gold ETF declined by 30% in the period from 22 million shares held short to
just more than 15 million shares. The much smaller gold ETF, IAU, run by
BlackRock (which is also the sponsor of SLV) witnessed a decline in its short
position of 75%. (You can verify the specific numbers in the above link by
inserting the stock symbols).
The decline in the GLD short position reduced its
percentage of total shares outstanding to 3.5%. The increase in the SLV short
position increased its percentage share of total outstanding shares to 7.8%. Due
to the nature of hard metal ETFs, I believe there should be little or no short
position allowed in these highly-unique securities, say of no more than 0.5% to
1% of total shares outstanding. To every shareholder of hard-metal ETFs, like
SLV, GLD and IAU and others, the prospectus promises that there will be a fixed
amount of metal behind every share issued. The existence of a short position
effectively increases the shares outstanding (on an unauthorized basis) and the
shorted shares have no metal backing.
The essence of my criticism of SLV shorting involves
two things. An allegation of fraud and misrepresentation to SLV shareholders
because metal can’t possibly back the shorted shares and that the short position
is manipulative to the price of silver. That’s because the short sellers are
shorting SLV shares because they won’t or can’t buy the physical silver as that
would cause the price of silver to rise. Even though it was higher earlier in
the year, the 25.2 million share short position in SLV is still outrageously
excessive by any reasonable standard. I believe that BlackRock, the SLV sponsor,
is negligent in not protecting the interests of shareholders and is violating
its fiduciary responsibility for allowing such an excessive short position to
exist. (Yes, I will be sending this to BlackRock’s chairman and
president).
The issue of short selling in silver can be confusing,
so let me try to make it clearer. In derivatives, like COMEX silver futures or
options contracts, shorting is required. There must be a long and a short in
order to create a contract. If there were no shorting, there would be no market;
period. I’m not opposed to shorting in futures in general. My allegation of
manipulation in COMEX silver revolves around the unusual concentration on the
short side by a few commercial players, most notably JPMorgan. Concentration is
the point in futures, not the act of shorting.
In the stock market, there is a different set up.
Short selling is not required in securities for the market to exist, as it is in
derivatives. Companies issue shares to investors and those securities trade on
exchanges and over the counter. It is not necessary for there to be a short for
every long in stocks, as it is in futures and derivatives trading. While legal,
short selling in securities is restricted by share borrowing requirements and
other measures. I’m not interested in discussing the merits of stock short
selling or lack thereof; my intent is to show that shorting in futures is
different mechanically than shorting in stocks. Why I am so opposed to short
selling in hard-metal ETFs, like SLV, is for completely separate
considerations.
The hard-metal ETFs are incredibly unique securities
in the universe of stocks. I believe that this uniqueness accounts for much of
the negative commentary about SLV and GLD, in particular. Of the total universe
of tens of thousands of different stocks in existence, only a very few are
hard-metal ETFs. Even expressing it in an actual percentage is hard. In
addition, the hard-metal ETFs are relatively so new to the investment scene that
their short history makes them difficult to put in proper perspective. GLD has
been around for seven years, SLV for less than six years. Yet in that fairly
limited time, each has become the largest publicly owned stockpile of gold and
silver on earth. It seems clear that the idea of owning gold or silver by means
of owning a stock appealed to a great number of investors. This has nothing to
do with whether you should own these securities; that’s up to you. But you can’t
objectively analyze silver or gold by ignoring the two 800 lbs gorillas in the
room.
Because the hard metal ETFs are so new, so big and so
unique when compared to all other securities, it is easy to overlook other facts
unique to them. What accounts for their success is the convenience they offer of
holding metal. Every shareholder of every hard-metal ETF believes in the
representation of the prospectuses promising a fixed amount of metal for each
share issued. Quite simply, every hard-metal shareholder believes metal backs
the shares they own and the sponsors foster this belief. But the short selling
of hard-metal ETFs completely negates the premise that metal exists behind all
shares. Short sellers of hard-metal ETFs do not deposit metal and this results
in the creation of shares with no metal backing.
Nowhere is the situation more critical than in SLV.
Starting this year the short position in SLV has grown dramatically, from around
13 million shares to a peak of 37 million shares in the spring. Not only is the
percentage of shorted shares of total outstanding shares higher in SLV than in
any other hard-metal ETF, it is higher for a very unique reason – there is not
enough physical silver available to allow for the normal issuance of shares as
dictated by the prospectus. Aside from the harm short sellers are having on SLV
shareholders, these short sellers are also manipulating the price of silver. If
they had to go out and buy 25 or 37 million ounces of silver to issue shares as
dictated by the prospectus, the price of silver would have soared. Instead, the
SLV short sellers are helping to manipulate the price of the metal itself by
defeating the intent of how shares should be issued.
This is not the first time I have raised this issue.
Back in the summer of 2008, when silver was near the $20 mark, I wrote how the
short position in SLV had grown to 25 to 50 million equivalent silver ounces,
which was unprecedented at that time. This was back when Barclays still owned
SLV and naked unreported short selling was prevalent. This naked SLV short
selling played a big role in the collapse of silver from $20 to under $9 back
then, just like the SLV short selling this year has contributed mightily to the
collapse in silver from $49 to under $30. Certainly, the percentage decline in
prices is strikingly similar between 2008 and this year. It is no coincidence
that the price collapsed in 2008 and 2011 when the short selling in SLV was at
an extreme. http://www.investmentrarities.com/ted_butler_comentary/06-16-08.html
In 2008, there were no good records to verify my
claims that SLV had such a large short position; it was my own proprietary
research. At the time, many doubted my premise because of the lack of
verification. Short selling data reporting has improved immeasurably since then
and today I can provide links to back up my numbers (see above). But the story
was the same then and now. I believe the big COMEX short seller JPMorgan had a
major role in the SLV short selling back then and this year as well. I can’t
prove that, but the regulators can easily do so and I have complained to the
CFTC and the SEC about this coordinated short selling in silver, both on the
COMEX and in shares of SLV. I don’t think this should be too complex for them to
grasp. I’ll create a paint-by-the-numbers coloring book if
necessary.
That an unusual and extreme amount of short selling
should appear in the two most important silver trading entities is beyond
coincidence. The concentration on the COMEX and the amount of short selling in
SLV is stark, verifiable and visible to all. Both will tell you all you need to
know about the unusual behavior of the price of silver when analyzed with a
common sense filter. But the greatest lesson of all is what all this short
selling should tell you about the future behavior of silver
prices.
More than anything else, this need by a few commercial
crooks to have to resort to excessive and manipulative short selling should tell
you about the real condition of the physical silver market. It is because the
silver market is so tight and that large quantities of real silver are
unavailable that the commercial crooks have to sell short so blatantly. If you
can’t sell the real thing, you sell the next best substitute. Without the COMEX
and SLV short selling, the price of silver would be dramatically higher. Since
there has never been a legitimate explanation for the concentration on the COMEX
or the excessive short selling in SLV, I am convinced both forms of manipulation
and fraud are coming to an end, as the scrutiny increases. You should not let up
in complaining about these crooked shorting mechanisms or in acquiring the cheap
silver they have created.
To write to the chairman and president of BlackRock,
sponsor and owner of SLV, and ask them to protect the best interests of
shareholders by eliminating the excessive short selling in shares of SLV, please
use these addresses –
Laurence.fink@blackrock.com Laurence
Fink, Chairman and CEO
Robert.kapito@blackrock.com Robert
Kapito, President
Ted ButlerDecember 16, 2011
For subscription info please go to www.butlerresearch.com
___________________________
The Comex Exposed
From Dave In Denver, The Golden Truth
just saw another "worse than 2008" post linked on Zerohedge.com. I don't know about anyone else, but I just don't find that commentary helpful. That's old news. It's no-value-added to comment on that.
I was going to post on the ECB Long Term Refinancing Operation (LTRO) today and explain why it's just another "back door" QE operation, but I'm too busy to get into that at the moment. I'll try to post something on it tomorrow. I explained in a comment response under yesterday's post what the basics are.
At any rate, celebrity hedge fund manager Kyle Bass has been commenting lately on the reasons to be diversifying heavily into physical gold and silver and why it is important to avoid using Comex futures contracts and ETFs for this purpose. The bottom line is that they are derivatives of owning real gold, not valid substitutes. In fact, they are fraudulent substitutes and we have seen from the MF Global abortion that even owning warehouse receipts entitling you to delivery of bars is no longer a valid claim on Comex gold.
Bass' firm apparently went to do an informal audit of the Comex: The Comex had $80 billion of open interest vs. $2.7 billion of actual gold inventory. That means that actual gold at the Comex is less than 4% of the potential outstanding claims. It will only take one big delivery month 4% of the open interest decides to stand for delivery and the Comex is busted. You'll see he also comments that the bars that were owned and supposedly allocated for Bass' firm were scattered all over the vaults. This is bad.
If this concept doesnt' horrify you, then carry on watching reality TV and worry about Kate Middleton's pregnancy. Those are the important topics anyway, right? Who cares about the fact that bankers and politicians are openly stealing your wealth.
Here's the video and it's well worth taking a 2-minute break from MTV to watch:
___________________________
Buy Silver…Now!
By Matt Badiali, for The Daily Reckoning
12/08/11
Silver is an amazing metal…which is why it’s likely to soar over the coming years…
You see, silver has more than 10,000 uses. It’s one of the world’s best conductors of heat and electricity. Inventors filed more patents on silver uses than any other precious metal in the world. And when silver is used for most industrial and technological purposes, it is used up forever… It simply costs too much to try to recycle the tiny bit of silver from every cell phone or casino chip.
I’m not saying industry is going to use up all the world’s silver. That simply can’t happen. But scarcity is a real issue.
Our rapid consumption of silver leaves very little to meet any uptick in demand from investors. A spike in interest will send prices spiraling higher…
Here’s a breakdown of the silver market. The table below shows the percentage of the total amount of silver consumed by each category over the past four years…
As you can see from the table above, only 12% of the silver supplied to the market made it to bullion in 2010. That means only a little more than 100 million ounces of silver became bullion for the entire investing world.
That’s a tiny fraction to sop up all the investment interest in the world.
Of that silver, about 43 million ounces went to exchange-traded funds like the iShares Silver Trust (SLV) and the Sprott Physical Silver Trust (PSLV).
That means you could buy all the extra silver bullion for about $2 billion. We could buy all the surplus silver bullion from the last four years for about $10 billion.
That’s the same as the market value of the iShares Silver Trust today. If you wanted to build another silver fund, you couldn’t. There just isn’t enough silver bullion out there to fill the order.
Even trying to amass that much physical silver would send the silver price soaring. It’s a simple market fact… When there is more demand than supply, it drives the price up.
And the economic problems confronting Europe and the United States have increased interest in precious metals… Silver gained a colossal 174% from August 2010 to April 2011.
In May 2011, however, the price collapsed 31% in just four weeks. The bull market simply ran up too far, too fast… and the decline wiped out many highly leveraged silver traders.
The big money is tiptoeing back into silver.
Last month, commodity trading advisors, pool operators, and hedge funds — the “big money” — weren’t interested in silver AT ALL…
But as they move back into the market, silver prices could soar. Let me show you what I’m talking about…
Jason Goepfert created SentimenTrader, a service that tracks investor sentiment toward various asset classes. According to Jason, silver just bounced off its most pessimistic reading in four years.
The so-called “commitment of non-commercial traders” hit 10,352. That’s incredibly low. The last time sentiment numbers were that low was in August 2007. Six months later, the price of silver was 59% higher. It rose from $12 per ounce to $19 per ounce.
I went all the way back to 2002 and found that silver sentiment bottomed near 10,000 six times… On average, the price of silver rose 33% in the next six months and 54% over the next year. This chart shows the last four times it bottomed…
Here’s how the silver price performed after each of the last four times silver sentiment bottomed out…
The best return came after Bottom No. 2, which coincided with the US banking/credit crisis. Silver soared an eye-popping 405%, including its parabolic rise in 2010.
As those numbers indicate, silver is one of the most volatile assets in the world. Over the last year, silver has seen massive price swings, including an 81% rally and two 30% drops. That forced many traders to liquidate their silver holdings in order to meet emergency short-term requirements. (Plus, the debacle at commodity broker MF Global has scared many folks out of the market.)
But the long-term drivers of gold and silver’s uptrends are still in place. Enormous and growing Asian economies like China and India are getting richer…and they have deep cultural affinities for precious metals. Plus, the Western world has lived way beyond its means for a long time…the debts and liabilities it has taken on can only be paid back with devalued, debased money. This is bullish for “real money” assets like gold and silver.
With sentiment so negative toward silver (and just beginning to turn back up), it’s a great time to take a position in this long-term bull market.
If gold and silver prices are nearly certain to rise over the next few years (and probably rise dramatically), the simplest way to play that trend is to buy bullion…real, hold-in-your-hand silver coins.
And I recommend everyone do just that… Buy some silver and store it away.
___________________________
By:
Jim Willie CB, GoldenJackass.com
Divergence between
paper gold and physical gold price is happening, the process begun. Actual
physical shortages have kept the price up. The naked shorting of futures has
kept the paper price down. The fraud cases and lawsuits, with no hint of
prosecution, provide the levered force to create much wider divergence, as
traders and entire firms depart the tainted crime scene that is the COMEX. Trust
has vanished along with private accounts. At the center of the backdrop for the
divergence, apart from the criminal events, is the economic deterioration and
asset market downdraft. It leads to margin calls, loan payment obligations,
fading investor confidence, negative sentiment, and a desire to avoid loss.
Hence the huge liquidity concerns, selling of good assets that command a strong
price, and central bank encouragement of gold sales even with lease. These
forces conspire to push down the gold futures price from the discovery process,
called the paper gold price. These forces, although real, are exaggerated by the
Syndicate to explain all. On the other side is the desperation among central
bankers to cover debt securities up for sale or rollover funding. They resort to
utter hyper inflation by monetizing the many types of government bonds. They are
obligated to aid their banker cohorts, and thus purchase truckloads of badly
impaired sovereign bonds and other collateralized bonds. Over time these
sovereign bonds have proved toxic. The
compelling need to stimulate economies, to redeem toxic bonds, and to
recapitalize and nationalize the big banks adds to the monetary inflation
outcome. Therefore, two sides are in opposition in a battle to the death of
one or the other. No middle ground can be achieved, not any longer. It is the
quintessential battle between monetary hyper inflation and restoring bank system
integrity to avert collapse. The insolvency has recently met illiquidity. The
battle features strong forces on each side. The divergence between physical and
paper gold price is widening.
The incurable
speculator junkies committed to the addictive leveraged game rigged by the
Forces of Evil seem stuck at the casino tables, where fingers are lost, finally
entire hands and arms. If their practice was to purchase physical, they could
benefit from the paper price swoon, and join the Forces of Good team, rather
than fighting the evil side on their dominated turf. To be sure, many aware
analysts in the news maintain a small gold position in COMEX that is rolled over
constantly. Many have physical positions but keep with the paper trades as a
hobby, better described as an addition to the juice. Leverage cuts both ways.
Their continued activity has left them exposed to theft, while knowing the
criminality was widespread within the arena. So many players and firms are
departing the arena altogether like Ann Barnhardt of BCM Capital. The divergence between physical and
paper gold price is widening.
The desperation of
the bad team is growing. The gold cartel has benefited significantly from the
fresh Libyan gold supply (144 metric tons) and Greek gold supply (111 metric
tons), not to mention the ample Dollar Swap Facility. It is the bankers New
Gold, as reported by intrepid Jeff Neilson. In a fresh sign of bankster
desperation, the lease rates for gold have been pushed down to net negative
levels. The fresh supply from the two broken nations has greatly aided the
COMEX, providing new cannon fodder. Perhaps more wars to liberate the oppressed
can be conjured up, to release more tyrant wealth. It is not a coincidence that
negative gold lease rates came when Libyan gold was made available (heisted) and
when Italian sovereign bonds went into critical DEFCON mode. The gold supply
helped to aid the lack of bond demand. The gold lease story is analyzed more
fully in the December Hat Trick Letter.
INELASTICITY
BLEMISH
A preface is
warranted. The paper Gold market is very different in its internal dynamics from
the physical. The paper Gold market shows signs of inelasticity that borders on
comical. Witness the low demand in 2001 and 2002 when Gold had a paper price tag
at $300 or less per ounce. Witness
nowadays the amplified selling when the paper price declines. The leverage
from the corrupted paper mechanisms forces margin pressures and sales. The
leveraged game goes opposite to the real world of price mechanisms. On the
upside, global demand rises with a rising physical price, called the gold fever.
The inelasticity on the supply side is prevalent in the paper market, while the
inelasticity on the demand side is prevalent on the physical market. To confuse
the mix, mining firms realize some inelasticity as price falls, they are stuck
with a liquidity crunch on their forward sales ruin. A huge amount of money is
required to cover their losses, urged on by Wall Street advisors. Their mining
operations suffer from lack of funds, and projects are curtailed. The
paradoxical differences in dynamics help to push the gap between the paper and
physical Gold price. The incompatible forces work to rip apart the COMEX. The
divergence between physical and paper gold price is
widening.
ILLICIT USAGE OF
CLIENT FUNDS AS COLLATERAL
The hypothecation
battle will bring sufficient publicity to help the divergence along. As more
assets are seen as committed, involved, and tainted in the process of grabbing,
snatching, and securing collateral, even by illegal means, the physical assets
will be removed from the system. Parties
will remove accounts and metal from the COMEX in response from basic
self-preservation. On the investment and speculation side, harm has been
rendered to managed risk. The client funds have begun to flee. The protection
and security of money in private accounts has been under siege in recent weeks
since the MF Global crime scene was established and the yellow tape cordon has
been put in place. Investors are pulling money out of hedge funds at a rapid
rate. The COMEX will be increasingly
isolated. Clients funds were redeemed to the tune of $9 billion in October,
almost four times as much as they pulled in September, according to Barclay
Hedge and TrimTabs Investment Research. Investors in October yanked more from
hedge funds, setting a single month high over the last two years.
The redemptions are
the largest for the hedge fund industry since July 2009, when $17.8 billion was
returned. The Barclay Hedge office put lipstick on the corrupt pig by commenting
on how investors have lost patience with lackluster investor returns. To be
sure, the average hedge fund is down by about 4% this year. The global hedge
fund industry size has been reduced to $1.66 trillion, still sizeable. It is
always interesting, if not amusing, to read the spin from the isolated corners.
Hedge funds are seeing capital depart for the simple reason of moving away from
crime centers. In the process the COMEX is being isolated. With increased
isolation comes the easily recognized fraud. Look for some major stories soon
about the raids to the GLD and SLV inventories by their custodians engaged in
naked shorting. The Exchange Traded Fund fraud story is analyzed more fully in
the December Hat Trick Letter. The divergence between physical and paper gold
price is widening.
DYNAMICS OF PAPER
VERSUS PHYSICAL BASIS
Grand divergence
dynamics are becoming clear. Ann
Barnhardt explained in detail how the COMEX will go away. It will not default,
but rather fall into irrelevance. She laid it out in credible detailed form
with numerous factors coming to play. The COMEX might still suffer the shame and
spotlight of criminal prosecution. It will more certainly suffer from being
ignored and shunned. The physical basis market will not respond to the declines
in the paper futures market. The current dominant market will go away due to
lost integrity and eroded trust. The consequences and implications of the recent
major scandal and coverup are enormous, staggering, and sweeping. The changes
from the MF Global failure and theft of private segregated accounts will come in
time, perhaps accelerated by another similar event to slam the message home. The
Syndicate has turned desperate, resorting to theft in the open daylight, which
has resulted in direct consequences. Hundreds of COMEX clients waited in line
for delivery of gold, and had their wallets stolen by JPMorgan. Their Gold &
Silver set for delivery found its way into JPMorgan accounts at the COMEX. The
details of the missing silver then reappearing silver is discussed in the
December Hat Trick Letter. The slow mentally overlook this fact. The alert who
point to fraud consider it a smoking gun. On its face, evidence mounts that JPMorgan simply
converted 614k ounces of MF Global client silver into JPM licensed vaults.
Big hats off to the Silver Doctors for excellent financial fraud forensic
analysis. Do not expect prosecution over the crime, for MF Global, for JPMorgan,
or for the accomplices in London, not even Jon Corzine. The Fascist Business
Model in the Untied States does not permit prosecution. The bigger the crime,
the more likely the perpetrator is in control of the government high offices,
the financial ministry, the printing press, or the
regulators.
Ann Barnhardt
explained how the COMEX will fade away into oblivion. Its final chapter will be
marred by a grand price divergence, where the futures market price
declines from shunned avoidance, while the cash physical market price holds
steady then rises. Many including the
Jackass had thought that a slew of delivery demands would force a drain in their
gold & silver inventory, eventually leading to a slew of lawsuits, together
to shut them down as a corrupt enterprise arena. The MF Global theft reveals the
alternative route that seems more clear. The gold cartel led by JPMorgan and
secretly by the USFed will not go quietly. They have resorted to theft of
private accounts on the open stage. The money is not missing. That is the lie.
It is held in JPMorgan accounts in London, where fraud laws are more relaxed. We
have seen this Madoff movie before, but it will be shown on the silver screen
again. The divergence between physical and paper gold price is widening.
The backlash has
begun and will gain strength. Barnhardt offered many cogent arguments with
detail on how the COMEX will be ignored
from distrust and suspicion of further thefts, as clients remove funds and close
accounts. Here are her main points. They apply to Gold & Silver. She has
the Barnhardt weblog: http://barnhardt.biz/
- Arbitrage is set to
kick in. Players will buy at the cheaper corrupt paper market in COMEX and sell
in the higher honest physical market, wherever brokers can match to make deals.
(It is the same phenomenon that ripped the Euro sovereign bond market apart, as
the German Govt Bond yields remained much lower than the Spanish and Greek.)
They will take advantage of a strong basis, buy at the discount offered by
COMEX, and sell into the cash spot physical market.
- A linchpin holds
the market together. Keeping the futures markets tied to the underlying cash
physical market is the fact that the futures contracts permit taking delivery.
That delivery mechanism just broke as
linchpin in full view. The futures market has lost viability and
trustworthiness because of the MFG collapse and theft.
- The entire delivery
mechanism has been corrupted and undermined. Taking delivery has meant a holding
of physical metal bars is stored in a certified vault with your name attached.
No longer are such holdings considered safe. Thefts occurred, and lawsuits have
occurred to decided upon ownership of bars in dispute.
- The de-coupling
process comes when arbitrageurs finally
lose all confidence in market interaction dynamics, as the cash market will
lose connection on price from the futures market. Players will not be willing to
take the risk of having their money, positions, and physical metals stolen or
confiscated.
- As players flee the
futures market, the paper futures prices will decline. The cash physical market
will hold steady. The divergence will come and be noticed, then be widely
publicized. The players will realize that the physical market is the only
remaining game to be played with honest rules in effect. The cash dealers will ignore the futures
prices, no longer a valid price discovery, seeing that market demand for
their physical inventory is robust, and maintain their prices steady. Later,
they will even raise the physical prices. Then later still, the parabolic spike comes for physical Gold
& Silver.
THE GREAT SHUN BY
MINERS
Asset management
funds are appealing to mining firms for direct metal supply. They are bypassing
the COMEX in a new trend. It is a natural development, as miners seek a fair
price and the funds seek a reliable supply. The COMEX is cut out of the process.
The Sprott Funds have revealed how they sourced their precious metal from mining
firms last year. The official exchanges are being cut off, a form of isolation
as a result. The divergence between physical and paper gold price is
widening.
See the Ashanti
story as typical. The COMEX is seeing reduced supply lines, reduced operations,
more criminal implications, horrible publicity, and fewer clients. Criminal
fraud does that, as lawsuits will follow like cold rain. The trend shapes up
well for higher gold & silver prices. Mark Cutifani is CEO of AngloGold
Ashanti, a $16 billion mining firm. He said, "Major [asset management fund] buyers are
finding it is hard to get physical gold. People are coming directly to us
[for large gold purchases,] people who want tonnes of physical gold, people with
serious financial muscle, because they are finding it is very difficult to
secure the volume of gold they want. That is something we have noticed over the
last 18 months, and it has been increasing in the last six months. People are
finding its hard to get physical gold." The clear message is that the COMEX
has no spare available metal at all.
Cutifani has good insights into the commodities and precious metals markets,
and describes a fascination new trend regarding the global picture. He pointed
out that major gold buyers are emerging from the Middle East and Asia. See the
Bull Market Thinking article (CLICK HERE).
NEW MARKETS
FLOWERING
New gold centers
are forming, where the safety is most assured. Hong kong and Dubai have emerged
as reliable honest brokers, and will continue to provide valid safe haven.
Switzerland, London, and other locations are fading fast. They are the corrupt
centers where fascism has become prevalent, laced through the financial
system.Takahiro Morita, the Japan director of the World Gold Council, reported
that Japan's gold exports in the 10
months ended October totaled 95.6 metric tonnes, their highest level since
2008, when it registered at 95.5 metric tonnes. People who bought gold and
jewelry in the 1980 and 1990 decades are selling back what they purchased,
according to precious metals traders. Japan has turned into a big exporter.
Contrast to the official side. Central bank purchases have risen by 114% over
the previous quarter. Purchases by central banks could hit 450 metric tonnes
this year, concludes the investment research at the council. The volume
represents the highest level of central bank buying since at least 1970, perhaps
the greatest in recent history. A veteran gold trader with actual experience in
these locations pitched in to explain. He said, "These are not sales in Japan. They are
exports, an important distinction. Many investors are busily relocating their
precious metal bullion to Hong Kong and Dubai UAE. Look for Dubai to be the HK
of the Middle East. The Chinese have made that decision, and it is being
implemented with lightning speed." Most of the relocation from Japan shows
up as exports, which require payments.
October imports
into China from Hong Kong rose 50% over September, and up 40-fold from last
year. The more attractive fair price paid in Shanghai reached $50 above the
corrupt controlled London price. The arbitrage has been very active. Chinese
gold imports from Hong Kong hit a record. The Financial Times reported Chinese
gold imports from Hong Kong hit a record high in October and astoundingly, they
accounted for more than one quarter of the entire global demand. Data showed that China imported 85.7 tonnes
of gold from Hong Kong in October, up 50% from the previous month and up more
than 40 times from October of last year. It marks the fourth consecutive
month that China's gold flows from Hong Kong have hit new highs. The article
noted that the price arbitrage between London and Shanghai was favorable for
Chinese imports during late September and early October, giving astute clever
traders an edge. Gold on the Shanghai
Exchange traded up to $50 per ounce above the main global market based in
London, a record price difference. Purchases from China have fallen since
October, as the recent strength in the USDollar has made gold more expensive.
Also, considerable new strain has been felt inside China in recent weeks.
Conclude that price arbitrage has begun to show itself across international
boundaries. The divergence between physical and paper gold price is
widening.
ONE GOLD EVENT, THE
BIG SQUEEZE
No gold chart will
be shown in this article, out of disrespect deserved for the COMEX criminal
activity. A story was recounted in recent days from my best source of solid
reliable gold information. The aware gold community has overlooked a phenomenon
that might be more profound in action here and now. A major squeeze is on that capitalizes on
the artificially low COMEX price and the higher honest physical price. The
Barnhardt effect can be seen, or at least recounted. A gold trader informed that
some multi-$billion purchase Gold orders have been in the process of filling at
or near the $1600 price per ounce. The price must remain near $1600 to complete
the orders and permit them to clear. Call it Agent2000 who seeks the massive
amount of Gold, one of the Good Guyz. The name fits since their goal is to force
the Gold price back over $2000/oz after the sale transaction clears. Since so
large, the orders take time to fill completely. The low-ball buy orders have
been filling for over two weeks. At the
same time, the Agent2000 buyer has enlisted the aid of numerous assistants to
push down the paper Gold price by putting extreme pressure on some bad players,
some nasty types from the usual list of suspects in the Western banking
sector. These bankers are being squeezed out of their gold, as they contend
with deep insolvency, reserves requirements, falling sovereign bond values,
depositors exiting, and more. They are players in what has been widely called
the Gold Cartel. The Jackass term has been applied in a wider sense, as they
have been part of the Syndicate that reaches into the Wall Street banks, the
defense contractors, news media, and big pharma.
The other side of
Agent2000 is where additional intrigue lies. He (they) have buyers lined up on
the physical side some deals ready to close at $1900 per ounce. Later the price
will push over the $2000 mark. The buyers are ready. One must infer that the
buyers have a great deal of money ready to devote to the battle. Maybe some is
piled up to escape the clutches of the cartel, removed from the system. Maybe
some is piled up at a major new slush fund to do battle with the cartel at their
own game. Maybe some is piled up and kept out of sight from greedy hands in
government officials, like off-shore in the Caribbean or sequestered in the
Persian Gulf. This story might be perplexing to many in the gold community since
the Good Guyz are pushing down the Gold price in order to facilitate a gigantic
order that will work toward crushing the cartel by draining their gold. Their
gold cannot be drained without the completion of a great many orders. It is only
natural to attempt to achieve the lowest possible price. If the gold cartel
insists on pushing the price down, then they open the door for major volume
sales at the artificially low and very much bargain price. It is happening, but
the gold community does not enjoy the symptoms of the
process.
So a huge huge huge
buyer of gold is busy, and a multi-$billion order is working through. The buyer
demands a $1600 price, while on the other side of the table Agent2000 has a sale
lined up for the same metal at a $1900 price on physical. The trade will take gold bullion from the
Bad Boyz hands and put it into the Good Guyz hands. In the process, the COMEX
supply lines will be drained more. This is consistent with mining firms
removing supply lines to the COMEX. The Agent2000 buyer is pushing price down,
squeezing some evil parties hard, crushing testicalia along the way. He (they)
describe to the distressed seller at $1600 that pressures will continue until
the deal is closed. The seller is in tremendous pain with open distress showing.
So many assume the Bad Powerz are pushing down the Gold price. Not so!! This
event and transaction displays how some pain comes in many isolated cases of
Good Guyz pushing the Gold price down to empty the Bad Powerz vaults. My source
would not reveal the identity of Agent2000 or the location of the squeeze. It
seemed like London. The money is not exclusively coming from China. Word has it
that Russia is also applying the pressure, with some Chinese teamwork. The
Competing Currency War has a new major flank. The divergence between physical
and paper gold price is widening.
THE HAT TRICK
LETTER PROFITS IN THE CURRENT CRISIS.
home: Golden Jackass website
subscribe: Hat Trick
Letter
Jim Willie CB,
editor of the “HAT TRICK LETTER”
___________________________
GOT GOLD YOU CAN HOLD?
GOT SILVER YOU CAN SQUEEZE?
IT'S NOT TO LATE TO ACCUMULATE!
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