Tuesday, January 21, 2014

Precious Metals Manipulation At Risk Of Failure As Physical Supplies Running Out

The manipulation of the gold market by the U.S. Government and the Federal Reserve has been going on for decades.  If you are reading this, you are most likely very aware of this suspicion fact.  Others who have aided and abetted the Federal Reserve and the U.S. Government  over the years, and are the suspected accomplices in this Global Fraud are JP Morgan, Goldman Sachs,  Barclays Plc , Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA.

I prefer to think of this "manipulation of the gold market" as a coordinated effort to "suppress" the "price" of Gold.  For if this were a real "manipulation" of the Gold Market, how could the manipulators run out of Gold?  The manipulators stopped selling "physical" Gold months ago, and resorted to selling Gold which they didn't own doesn't exist to maintain the "false impression" of a weak Gold Market based solely on a sliding "price" over the past two years.

How could the "price" of Gold be falling if demand is at all-time highs?  With the illusion of unlimited Gold to sell in the "Gold Futures Market", created by selling non existing Gold, the above mentioned banking entities, along with the blessings of the U.S. Government have created the largest "reverse bubble" the financial markets have ever witnessed.

Reverse Bubble?  Yes!  Rising demand for Gold as the price has been artificially driven down has created a scenario for one of the greatest short squeezes of ALL-TIME.

Join me as I connect the dots to The Beginning Of The End Of The Global Gold "Price" Manipulation.

Metals, Currency Rigging Is Worse Than Libor, Bafin Says  Jan 17, 2014 7:11 AM ET

Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.

The allegations about the currency and precious metals markets are “particularly serious because such reference values are based -- unlike Libor and Euribor -- typically on transactions in liquid markets and not on estimates of the banks,” Elke Koenig, the president of Bonn-based Bafin, said in a speech in Frankfurtyesterday.

Koenig is the first global finance regulator to comment publicly on the investigations as probes into the London interbank offered rate, or Libor, expand into other benchmarks. Joaquin Almunia, the European Union’s antitrust chief, said this week that its preliminary probe into possible foreign-exchange manipulation covers similar practices as in the regulator’s probe into Libor-rigging.

Investors should short Deutsche Bank AG (DBK) stock because of probes into currency manipulation and as a rally in banking shares reverses, Berenberg Bank said in a report today. “The investigations by regulators into the bank’s foreign-exchange trading remain a significant risk considering Deutsche is the world’s largest foreign-exchange dealer,” Berenberg said.

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."  - Eddie George, then Governor of the Bank of England, 1999

The Hows and Whys of Gold Price Manipulation

January 17, 2014
By Paul Craig Roberts and Dave Kranzler

The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them “too big to fail.” Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks’ balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused by the financial crisis.

The Fed’s policy of monetizing one trillion dollars of bonds annually put pressure on the US dollar, the value of which declined in terms of gold. When gold hit $1,900 per ounce in 2011, the Federal Reserve realized that $2,000 per ounce could have a psychological impact that would spread into the dollar’s exchange rate with other currencies, resulting in a run on the dollar as both foreign and domestic holders sold dollars to avoid the fall in value. Once this realization hit, the manipulation of the gold price moved beyond central bank leasing of gold to bullion dealers in order to create an artificial market supply to absorb demand that otherwise would have pushed gold prices higher. The manipulation consists of the Fed using bullion banks as its agents to sell naked gold shorts in the New York Comex futures market. Short selling drives down the gold price, triggers stop-loss orders and margin calls, and scares participants out of the gold trusts. The bullion banks purchase the deserted shares and present them to the trusts for redemption in bullion. The bullion can then be sold in the London physical gold market, where the sales both ratify the lower price that short-selling achieved on the Comex floor and provide a supply of bullion to meet Asian demands for physical gold as opposed to paper claims on gold.

The evidence of gold price manipulation is clear. In this article we present evidence and describe the process. We conclude that ability to manipulate the gold price is disappearing as physical gold moves from New York and London to Asia, leaving the West with paper claims to gold that greatly exceed the available supply.

Former Assistant Treasury Secretary Paul Craig Roberts is making some bold new claims about the Federal Reserve and its official government gold holdings. Dr. Roberts contends,“They don’t have any more gold. That’s why they can only give Germany 5 tons of the 1,500 tons it’s holding. In fact, when Germany asked for this delivery last year, the Fed said no. But it said we will give you back 300 tons . . . . So, they said we will give you back 20% of what you trusted us to keep for you over the next seven years, but they are not even able to do that.” Dr. Roberts goes on to say, “The stocks of gold at the Bank of England seem to be disappearing. The stocks of many of the gold trusts, such as GLD, are being looted . . . all of this gold is disappearing into Asian markets. The entire West is being drained of gold.” According to Dr. Roberts, this is an inflection point for the gold market. Dr. Roberts says, “The reason is: the ability to supply large amounts of gold to the bullion dealers to sell has diminished with the supply of gold and silver. What the Fed did was turn to massive ‘naked shorts’ of gold futures contracts. They don’t have the real gold . . . so they come in and dump contracts, say in a period of 6 minutes, that are three times the amount of gold COMEX has to make delivery. . . . So, it drives down the price of gold. That’s how they got the price down from $1,900 to $1,250.”


Deutsche Bank reports surprise loss as legal costs mount

19 January 2014

Deutsche Bank has reported a surprise loss for the fourth quarter of 2013, after releasing its latest results before they were expected.

Overall Deutsche said it posted a pre-tax loss of 1.153bn euros for the final quarter of 2013.

The bank said that litigation costs and restructuring had weighed heavily on its financial performance.

Also in December it was among six banks fined $2.3bn (£1.4bn) by the European Commission after been found guilty of colluding to rig two global interest rate benchmarks.

Deutsche Bank suffered the largest fine of the six - 725.36m euros - over rate fixing.

For the year, it has set aside 2.5bn euros for various lawsuits.


Deutsche Bank To Withdraw From Gold Fix Amid Probe

Published January 17, 2014

Deutsche Bank will withdraw from gold and silver benchmark setting, or fixing, amid an investigation by German regulators into suspected manipulation of precious metals prices by banks.

Deutsche, one of five banks involved in the twice-daily gold fix for global price setting, said it was dropping out of the process after withdrawing from the bulk of its commodities business.

"Deutsche Bank is withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business," the bank said in a statement on Friday.

"We remain fully committed to our precious metals business."

In mid-December, German banking regulator Bafin demanded documents from Deutsche Bank as part of a probe into suspected manipulation of benchmark gold and silver prices by banks, the Financial Times reported, citing sources.


Shortage of large gold bars leads to rare London premiums

Posted on January 15, 2014 by Eddie van der Walt
London 15/01/2014 – The London bullion market has seen intermittent shortages of 400-ounce bars, traders in the City told FastMarkets, pushing premiums for physical delivery for these large bars as high as 50 cents.

This shortage may have been driven by several factors, including a scramble for physical delivered material after the end of the year and reduced availability due to good delivery bars flowing from London to the Far East, they suggested.

“There is a shortage of big bars, especially good-delivery 400-ounce bars,” Bernard Dahdah at Natixis said. “One part of the problem is that large quantities of these bars that have come from ETFs, have now been moved to be re-refined into three-nines bars of smaller sizes and are therefore no longer available to the London market.”


Germany Has Recovered A Paltry 5 Tons Of Gold From The NY Fed After One Year

Submitted by Tyler Durden on 01/19/2014

On December 24, we posted an update on Germany's gold repatriation process: a year after the Bundesbank announced its stunning decision, driven by Zero Hedge revelations, to repatriate 674 tons of gold from the New York Fed and the French Central Bank, it had managed to transfer a paltry 37 tons. This amount represents just 5% of the stated target, and was well below the 84 tons that the Bundesbank would need to transport each year to collect the 674 tons ratably over the 8 year interval between 2013 and 2020. The release of these numbers promptly angered Germans, and led to the rise of numerous allegations that the reason why the transfer is taking so long is that the gold simply is not in the possession of the offshore custodians, having been leased, or worse, sold without any formal or informal announcement. However, what will certainly not help mute "conspiracy theorists" is today's update from today's edition of Die Welt, in which we learn that only a tiny 5 tons of gold were sent from the NY Fed. The rest came from Paris.

As Welt states, "Konnten die Amerikaner nicht mehr liefern, weil sie die bei der Federal Reserve of New York eingelagerten gut 1500 Tonnen längst verscherbelt haben?" Or, in English, did the US sell Germany's gold? Maybe. The official explanation was as follows:

The BlazeTV, Glen Beck


Century-Old London Gold Fix Said to Face Overhaul Amid Scrutiny

By Suzi Ring, Liam Vaughan and Nicholas Larkin Jan 21, 2014

Banks are considering an overhaul ofLondon’s century-old gold benchmark used by miners, jewelers and central banks to buy, sell and value the precious metal, according to a person with knowledge of the process.

The five banks that oversee the so-called London gold fixing -- Barclays Plc (BARC), Deutsche Bank AG (DBK), Bank of Nova Scotia, HSBC Holdings Plc (HSBA) and Societe Generale SA (GLE) -- have formed a steering committee that’s seeking external firms to advise how the process could be improved, according to the person, who asked not to be identified because the review isn’t public.

The fixing is a rate-setting ritual dating back to 1919. Representatives of the five member banks spend from a few minutes to more than an hour on the telephone discussing buying and selling gold. The method has faced scrutiny in recent months, with regulators in London, Bonn andWashington -- who are already looking into manipulation of interest rates and currencies -- investigating how prices are set in the market.


COMEX Gold Stocks At Record Lows As SGE Volumes Surge 61%

Technically, gold is looking sounder. Support is at $1,220, $1,200 and of course what appears to be a double bottom at $1,180/oz. A close above $1,270 could see gold quickly move to test resistance at $1,300 and $1,330.

The supply demand fundamentals of the gold market remain sound with the flow of gold from West to East.

COMEX gold stocks have fallen to new record lows (see chart) showing demand for physical bullion remains very robust. Indeed, the scale of the fall in COMEX gold stocks since 2007 and which accelerated in early April 2013 is important to note.


Gold Should be at $1800 Based on the Fed Balance Sheet Alone

Submitted by Phoenix Capital Research on 01/20/2014

Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.

Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver. However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.

Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today (see below).

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