Monday, March 5, 2012

Lack of Physical Precious Metals Supply Dooms The Fractional Reserve Bullion Banksters ...tick-tick-tick-tick

A few days ago in a blog post I asked: Is The Demand For Physical Silver About To Overwhelm Supply?  After last weeks OBVIOUS Precious Metals Market manipulation, the only answer to that question has got to be yes.  The banks that have sold MILLIONS of ounces of Silver that they do NOT own have been exposed.

Silver's price breakout at $35.00 Wednesday, February 22, and subsequent short squeeze initiated Monday morning ahead of First Notice day to take delivery in the March CRIMEX Silver contract signaled that the criminal bullion bankers were indeed up the creek without a paddle.  Action, no matter how criminal, was needed to bail these pathetic bankers out of a situation that bordered on their annihilation.

The buying that the Silver market witnessed as trading opened last Monday was "panic buying"...the Silver train was about to leave the station.  As the momentum traders entered the Silver Market following the $35 price breakout, the shorts, already enduring pain, were forced to cover and add fuel to the fire a breakout in Silver had started.  The criminal bankers had no one to blame but themselves for the HUGE loses they were experiencing on their naked short positions.

But in true 21st century banking tradition, our bad bet bankers chose to make the honest Silver Market participants pay for the banks loses on their naked short positions by bombing the Gold Market with an outrageous mountain of paper Gold in an effort to chase March Silver Contract holders from their positions as Silver prices fell in sympathy with Gold.

From : [please subscribe]

Reported massive 31 tonne sell order triggered gold and silver price collapse

Does the crash in gold and silver prices, reportedly due to a single huge 31 tonne gold sell order, create a window of opportunity for precious metals investors?

Author: Ross Norman
Posted: Thursday , 01 Mar 2012

LONDON A reported 31 tonne sell order on the CME rocked gold which saw prices collapse from a high of $1790 in London hours to $1703 during NY trading, followed by a further dip to the low of $1687 in out of hours electronic trading. A fall of over 6% which erased roughly half of the gains since the beginning of the year.

Much has been placed on the testimony by Fed Head Bernanke but other markets saw less impact leading to suggestions that it simply provided an excuse for a particular "non US" fund to bail and take profits in dramatic fashion. It may be possible that the seller had hoped the 1,000 lot sell order would trigger stops and thereby exaggerate the move lower, allowing the buying to potentially come back in at a much lower price. Like the price, there is much speculation on their motive.

Ordinarily if a seller wanted to get the best price for his metal he would seek to finesse the selling over time, hunting out liquidity (finding people who are the other side of his sell order) and thereby ensure he gets the best possible profit. This seller was clearly simply out for effect…


You have to be kidding me! A hedge fund was waiting in the lurch waiting for Bernanke to speak and then dumps 31 tonnes on the market?

A single seller drove gold down as Bernanke testified

Submitted by cpowell on 08:32AM ET Thursday, March 1, 2012. Section: Daily Dispatches

11:35a ET Thursday, March 1, 2012
Dear Friend of GATA and Gold:

Friends have sent the full text of the CIBC gold market note from yesterday that was quoted in part at GoldAlert here:

The full text reads:

"Looks like a large seller of gold in the market, as a 10,000 contract traded, down-ticked the price by $40 per ounce, and represents 1 million ounces of gold sold. Roughly 200,000 contracts trade per day, but unusual to see such a large single trade. Not likely due to contract expiry either. Bernanke isn't really helping either, but we haven't seen any either-size transactions post the one big trade, so hopefully will see the price decline settle down. Shortly after the 10,000 order, which was closer to 11,000 contracts, looks like one size seller out there. Sold 1.8 million ounces of gold on the day. Smells like a liquidity squeeze."

That kind of selling certainly gives the impression of someone with immensely deep pockets trying very hard to drive the price down while a congressional committee was taking testimony from the world's leading central banker, Federal Reserve Chairman Ben Bernanke, who, perhaps not so coincidentally, also has immensely deep pockets.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

"Curiously I was logged into [1] at the time Bernank started speaking and huge offers appeared at exactly the same time in silver and then in gold - just as they appeared in the US futures market as described below In my view evidence of a very clearly coordinated intervention across all platforms."
Adam Cleary

One thing for sure though, it was no liquidity squeeze. That part was all wrong the way I see it. You don’t have liquidity squeezes when a market is on its highs, rolling along to the upside, and outside markets are all copacetic. Liquidity issues appear when there are cash crunches, and or, overall fear about losing too much capital is pervasive.

Never in financial market history has a market been so misreported. It is no wonder the general public is so gold/silver clueless. They listen to the likes of Dennis. I can’t recall ONE TIME when he was on CNBC that he was bearish when gold was rising and bullish when it tanked like it did today. It is times like this when investors ought to be taking advantage of the gifts The Gold Cartel is handing them. Actually, a number of them are, the ones who don’t watch CNBC. An email sent to CP and me yesterday:

I thought that you guys would want to know that we had nothing but buyers on this pullback today...all day and into tonight. We had very heavy gold and silver buying.
Best regards,
Dan Ward
True Metals Group

Jesse on the case…
01 March 2012
A Single Large Seller Smashed the Gold Market Yesterday: Dr. Evil Strategy?

There are a variety of reasons to liquidate a large position.

But whatever the reason, no experienced trader would take a very large position into a thin market and then just dump it at the market, if they wanted to achieve some sort of reasonable economic benefit from selling that position, unless they were under duress, or had some other motive than profit. Such a trade is called 'selling against yourself.'

Usually one diversifies their positions slowly and carefully, selling some and buying others without roiling the markets. At some point their trading becomes know, but by then it is fait accompli.

Unless of course they have a strategy to lose some in one market while making huge profits and buys in others at cheap prices, as in the case of the mining sector for example. Here is one old hand explaining how funds rig the markets.

A trader who was being paid to obtain the best value for the seller would be fired if they simply dumped a large position in the market, driving the prices realized down almost 10 percent in less than an hour.

The same situation occurred at roughly the same time in the silver market, as hundreds of millions of paper ounces of silver were just dumped in the market in less than an hour, breaking the price down dramatically.

Such unbridled selling triggers other selling, as the complex web of trades and relationships drive other parties to liquidate their positions and trigger stop loss orders.

I have described in the past how the big trading desks use the Dr. Evil tragedy to artificially disrupt markets. Regulators are in place to prevent such things from happening.

And this is the story of the economy and the governance of the US markets today. There is little rule of law, only the power of size. And it will get worse as the paper game comes closer and closer to default.

Personally I think there were multiple reasons and beneficiaries from yesterday's market action in the metals. When the word goes out from some powerful party, others in the market find out and craft their own strategies and trades to benefit from this insider information. This is how outsized profits are made.

I believe that some parties who were heavily short silver were staring into the abyss, seeing a first delivery notice going out into a paper market that is many multiples of their ability to deliver silver into it. And a default of a major commodity exchange would have disastrous results for the confidence in the markets, already stretched thin by fraud and scandal.

So let's see what happens. Because when these things happen, these artificial market operations, they only tend to reinforce the primary trend, the shortage of real bullion caused by many years of price manipulation and underinvestment. And when that tide of corruption goes out, 'we will see who was swimming naked,' as someone who some years ago owned a huge amount of silver, and then capitulated under duress and sold it, once said. And he remains bitter about it to this day.


Folks a 31 tonne sell order in Gold, an order that hit the market in one fell swoop at 10AM [exactly as Ben Bernanke stepped before Congress to deliver his annual assessment of the economy] is the equivalent of OVER ONE MILLION ounces of Gold.  Outrageous!

Even more shocking than this single Gold order was to learn that over 500 MILLION ounces of Silver trade on the CRIMEX last Wednesday.  Only 700 MILLION ounces of Silver are mined globally each year, and 500 MILLION traded in ONE session on the CRIMEX?

From King World News

Today billionaire Eric Sprott told King World News that a staggering 500 million ounces of paper silver traded hands during the takedown in the metals this week.  Eric Sprott, Chairman of Sprott Asset Management, had this to say about what took place the day of the plunge in gold and silver:  “I can only imagine it’s the same forces that for the last twelve years have been at work in the gold market, trying to keep the volatility very large on the downside.  As you are aware, we hardly ever get days when you get an intraday $100 rise in gold.  When we look back at what happened (on Wednesday) we saw huge sell orders in gold and silver.”


Did you buy "physical"Silver today?  I did as prices retested last Wednesday's lows just before the CRIMEX closed this afternoon.  Could prices continue lower...sure.  It just doesn't seem likely though.  has a criminal hit in the price of Silver ever resulted in a drop in DEMAND for REAL PHYSICAL SILVER?  NO!  Demand always increases when prices drop.  The hit in both Gold and Silver may have gotten the criminal bankers out of the kettle, but the water is still boiling people.

Bernanke’s B.S. Bludgeons Bullion
Written by Jeff Nielson 

Gold and silver prices plummet because the U.S. economy is so healthy that the Federal Reserve won’t have to print any more money, and so there won’t be any more inflation. Lol! While it made good fiction for the mainstream pablum-dispensers, it certainly has no connection whatsoever with the real world.

The U.S. economy is “healthy”? As I have pointed out on previous occasions, 0% interest rates are nothing less than an economic defibrillator – a (temporary) desperation measure to attempt to breathe life into a dying economy. Permanent 0% interest rates simply mean that economy is already dead, as we have seen with Japan. All that remains to be done is to put these zombie-economies out of their misery, through debt-default followed by massive restructuring.

As I have stressed in my recent commentaries, it is also beyond absurd for B.S. Bernanke to pretend that the Federal Reserve has ceased its money-printing orgy. The gravity-defying U.S. Treasuries market provides conclusive, mathematical proof that such a claim is tantamount to an admission of massive fraud.

Maximum bond prices at a time of maximum supply defies every economic principle in the books. Maximum bond prices at a time of maximum supply, when the largest buyer (China) has been selling Treasuries for more than a year, when the “economic surpluses” which financed Treasuries-buying have nearly vanished, when Treasuries auctions have been rigged so that no one knows who the buyers are, and at a time when the U.S. economy is obviously and hopelessly insolvent defies legality.

Someone, somehow is financing the totally opaque purchases of $trillions in U.S. Treasuries, and the list of suspects is rather short: the Federal Reserve. If the Fed is not financing those purchases with its officially/legitimately created funny-money then it must be doing so in some less-than-legitimate manner.

More broadly speaking, it demonstrates the terminal stupidity of the entire mainstream media that they could believe anyone claiming there will be little-to-no-inflation, in a world of deadbeat-debtors – who can only continue to finance their economic Ponzi-schemes through exponentially increasing their money-printing (and thus diluting their currencies, and thus producing inevitable inflation).

The only other mathematically-possible scenario is debt-default: bonds immediately going to zero (or close to it). Otherwise, exponential money-printing takes the underlying currencies to zero, also making the bonds worthless. Either way we are 100% certain to get to the same result. Paying maximum prices for any of these paper time-bombs goes well past idiocy and all the way to deliberate economic suicide.

As I have explained on a number of previous occasions, in either a debt-default or hyperinflation scenario gold and silver prices will explode in an equally exponential manner – again as a function of basic arithmetic (along with supply and demand). Thus the long-term upward revaluation of precious metals is as certain as sunrise following sunset.

With the supposed “reasons” for gold and silver prices going lower being exposed as ridiculously fraudulent propaganda, once again we are left no explanation other than market manipulation to explain the abrupt plunges in the prices of gold and silver – just as they had achieved technical break-outs indicating that prices should move substantially higher.

With both the fundamental factors and the technical factors absolutely and unequivocally bullish, there is no conceivable, legitimate explanation for the price moves seen on Wednesday. While it may frustrate the readers who send me their mail seeking guidance, I have essentially ceased any/all short-term predictions for the precious metals sector. My reasoning is elementary.

Market manipulation is both an exogenous and arbitrary event. As such, the timing of manipulation events can never be predicted – except as a response to any/every potential break-out with gold, silver or the mining stocks. The Catch-22 here, however, is that while we know the banking cabal will attempt to manipulate the market lower any time there is a break-out, sometimes they succeed and sometimes they fail. And when they fail, the train has left the station, and it’s never coming back.

Equally, whenever any “manipulation operation” is underway, both the duration and intensity of the event are also arbitrary, and thus these factors (as a matter of logic) can also never be predicted. Given these parameters, investors have two (and only two) strategies open to them.

They can continue to attempt to play the swings in the markets (knowing those swings are absolutely unpredictable). This is nothing less than pure gambling, and thus (in my own humble opinion) plays directly into the hands of the banksters.

The other alternative is to recognize we cannot predict the unpredictable, and are thus relegated to playing “pure defense”. In this context, this would seem to dictate a strategy as simple and conservative as dollar-cost averaging (or some close proxy). Remember that as long as we are able to exchange (worthless) paper for (valuable) metal at all that ipso facto this means the metal is “cheap”. Ignore the market fraud of the banksters. Ignore the wild gyrations in prices – and just keep buying real, “physical” bullion.

The Achilles Heel of the banksters is that they require significant amounts of real bullion to leverage in their illegitimate paper manipulations, and you cannot leverage zero. When the banksters run out of bullion, their paper-fraud schemes come to an end.

The latest desperation attack on the gold and silver markets is equivalent to pushing down (very hard) on a spring. Ultimately there is always a counter-reaction to such economic force – even if it is delayed. That counter-reaction will inevitably mean an even more violent explosion upward in prices. While we should avoid trying to time these manipulated markets, there would seem to be no more fortuitous time to buy than right after another of the banksters’ fraudulent take-downs.

Bon appetit!

Enjoy the Central Bank Party While It Lastsby Peter Treadway of TheDismalOptimist

Bernanke’s little head fake of last week in not mentioning a QE3 can be taken with a grain of salt. The US has another $1.3 billion projected deficit to be financed and the fragile US recovery cannot stand a rise in short rates. A war with Iran would make the US deficit so much worse. The US unemployment picture is not as pretty as the recent decline in the official U3 rate to 8.3 percent would suggest. For one thing the Labor Force Participation rate continues to move downward. The broader and less quoted U6 rate which includes people who have given up looking for work for January is 15.1 percent. Bernanke knows the numbers. And recent Treasury data show some fall off in Chinese buying of US Treasury securities. US short rates will not rise and Treasury auctions will not fail. Not if the Fed can help it. The Fed will print.


Silver and gold to EXPLODE higher and why the monetary base will never shrink!

Got Gold You Can Hold?

Got Silver You Can Squeeze?

It's Not Too Late To Accumulate!

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