Where's The Bullion?

As we suggested yesterday, bubbles don't burst when supply is short. A "physical" shortage of BOTH Gold and Silver has been exposed by this unprecedented take down in these two Precious Metals. This physical shortage has also exposed the CRIMEX futures market for the fraud that it is as well. When the bullion banks are literally paying these criminals to sell Gold and Silver that doesn't exist, "Houston, we have a problem."

What happens next is anybody's guess. When you're dealing with government sanctioned fraud, it is impossible to take a position with confidence. Recent history would suggest though, that not only will Gold and Silver begin to rise shortly, they may rise at an accelerated rate yet seen in this Bull Market to date.

Physical Gold and Silver Bullion in short supply was the talk of the day. I have included links to five essays that discuss the real shortage of physical Gold and Silver that has left investors empty handed. The first essay by James Conrad, The Disconnect Between Supply and Demand in Gold & Silver Markets, is an absolute must read in it's entirety. In layman's terms, Mr. Conrad exposes for all to see, the fraud that is the Gold and Silver futures markets at the CRIMEX. There is no punishment severe enough for these Rat Bastids government sanctioned theft. But there is a way to fight back. Take delivery of the metal promised in a futures contract, and ream these vermin a horrifying death.

The Disconnect Between Supply and Demand in Gold & Silver Markets
by James Conrad

Contrary to the pundits at CNBC, Bloomberg, etc., the price of gold really has nothing to do with the value of the dollar or the value of oil. It doesn’t matter what the dollar is worth, in relation to euros, pounds sterling or Zimbabwee money. It only matters what supply and demand factors exist for gold. Yes, the demand will fall a bit if the price goes up, for example, in euros, because the euro has depreciated. But, what really counts is not what the euro, yen or dollar price is, but, rather, whether or not there is enough demand to soak up the available supply.

Gold is priced in dollars, but, so long as people holding either dollars, euros, yen, yuan or Zimbabwean money, are willing to pay whatever price gold is selling for, in an honest market, the price should rise. Obviously, enough people are willing to pay for gold and silver, at the previous $978 and $19.50 per troy ounce price, because the U.S. Mint could not source enough metal at those price, and had to suspend coin production.

This proves that people are more than willing to fork over, in whatever currency they are using, the previous prices for gold and silver, in such quantities, that a shortage was already existing, before the price collapse, especially in the silver market. It is true that people in poorer countries like India, might have back on their consumption.

But, while they were cutting back, demand and consumption of gold in North America, including Canada and the USA, was soaring. For example, before it suspended production of bullion coins, due to shortages, the U.S. Mint’s statistics show that it was printing 2.5 times as many gold coins, and almost 4 times as many silver bullion coins, this year, compared to last year. Gold and silver bullion, in bar form, was also flying off North American retail shelves.
Bottom line: Enough people were buying, when the price was high, to exhaust the supply. Basic economics says that, in a free market, this means the price must rise.

But we don’t live in a world of free markets. Instead, we are living in an Orwellian 1984 double-speak world. Welcome to the world of Fed/PPT, where 2+2=5, blue is yellow, and black is white. All things are as they say they are, rather than as they really must be. Welcome to the world of a controlled business media, where the pundits will do anything and say everything to convince you to forget your math, and your eyesight. No, they tell you. It really isn’t so. What you’re seeing isn’t the way it is. Believe, instead, what we tell you. We can do it! We have special skills. There is a new world order. We can make 2+2=5. Just give us your money, and we’ll show you how!

But, let’s return to reality. Right now, virtually no North American precious metals dealer can give you a firm delivery date on large quantities of silver. They have no stock to sell. This means demand is robust. On Friday, as the COMEX gold price was collapsing, the U.S. Mint suspended gold bullion coin production because it cannot source enough gold bullion! That could not happen if bullion banks were selling claims to real physical metal into the marketplace. Indeed, the Mint began rationing silver bullion coins two months ago, when it started having trouble sourcing silver bullion. Word from the Perth Mint in Australia is that it is taking weeks or months to take physical delivery of gold and silver, even though investors are already supposed to own that metal. Supposedly, it is simply being kept in the Mint's vault for safe storage. But, it is getting harder to take it out of “storage”. Meanwhile, as previously stated, Indian gold and silver dealers, wholesalers and banks all have empty vaults. None of this can happen if demand is down, and supply is abundant.

We have a disconnect between reality markets and fantasy markets. The COMEX and London Metals Exchange are fantasy markets controlled by the big bullion banks. They must be engaged in market manipulation, because nothing can explain a big price collapse, in the midst of widespread shortages and robust demand. A group of big financial institutions, deeply enmeshed in the global trading system, and heavily involved in the gold and silver market, must be deliberately inducing temporary panic, for their own purposes. These malevolent characters will eventually be able to buy back their short positions at low prices, and, possibly, also, even collect a significant long position. The process is a continuing one, and hasn’t stopped yet. On Friday, for example, the subsidy for leasing gold and silver was raised to very high levels.

It is obvious what they are doing. More important, however, is why? What does it mean? Well, the PPT bank executives are generally “people in the know” about financial events, before they actually happen, sue to close relations with regulators like the Federal Reserve, and FDIC. They folks are so desperate to cover short positions, that they are willing to spend a billion or so dollars, subsidize precious metal leases, to collapse the market, and destroy investor confidence. But, why? We know that the Federal Reserve, like other central banks, sees gold as a rival to the dollar. But, that’s not enough, because they’ve never attacked precious metals with such ferocity as now, and, if the Fed were directly involved, they could probably supply real metal.
If something terrible is about to happen in the financial world, the losses that big banks would take on their precious metal short positions would put most of them into bankruptcy.

Remember the words of Warren Buffett. Derivatives are the financial world’s weapons of mass destruction. Precious metals futures short positions are highly leveraged transactions that could cost hundreds of billions if the price of gold were to suddenly explode.
http://seekingalpha.com/article/91357-the-disconnect-between-supply-and-demand-in-gold-silver-markets?source=d_email


Silver Shortage Causes Price Disconnect
Many people agree there is a shortage of retail investor silver, but they get confused by the lower price. They think a lower price means more silver must have come into the market. That is not how our markets work. Our markets are affected by paper silver futures contracts, and very few people ever attempt to take delivery of that silver, they buy it on leverage, for the investment returns, not for real silver. So, some people can sell "silver promises" to excess, and never deliver, and if they sell more "paper silver" than exists, that can manipulate the price.
http://news.silverseek.com/GoldIsMoney/1219027615.php

Heavy demand for India gold amid dwindling stocks
MUMBAI (Reuters) - India's gold prices were higher on Monday as foreign markets rebounded, but heavy demand from investors and retailers left sellers with little stocks to offer, dealers said.

A dealer in a large bank said the delay in deliveries had increased to one month and premiums ruled to up to $2.5 an ounce against 80 cents in normal times.

"Demand world over has revived, so suppliers are having a problem meeting all the commitments," the dealer said.

Fuelling the heavy demand in the wholesale market, was the retail market that was seeing a rush from customers.
http://in.reuters.com/article/businessNews/idINIndia-35059020080818?rpc=401

Gold Hits "Supply Squeeze" in Europe and US as Private Investors Pile In Ahead of Seasonal Surge
This new bearish consensus on Gold – mirroring a 7% jump in the Dollar's trade-weighted index since this time last month – led hedge funds and other "large speculators" to close almost one-in-five of their bullish bets in the futures & options market last week.

Overall, says the latest data from US regulator the CFTC, the total number of live gold contracts now in play shrank by 11% in the week-ending Tues 12 Aug., taking "open interest" to its lowest level since Sept. 2007.

It's down by one quarter from the same time last month and smaller by one-third from the all-time peak set back in January.But while professional and institutional investors trading paper bets on the Gold Price scramble to reduce their positions, private individuals are creating a squeeze in physical metal right across Europe and North America.

The US Mint has reportedly halted sales of American Gold Eagle coins, and is said to be refusing new orders from gold bullion dealers.

Kitco Inc., one of the largest gold investment retailers in the USA and Canada, warns on its website that "due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products."

Once inventory is received there may...be delays in processing and shipping by our vaults."
http://news.goldseek.com/GoldSeek/1219065164.php

Unprecedented Investment Demand Leads to Supply Issues in Physical Bullion
Market
The massive disconnect between the physical market and the paper futures market continues. There is now an unprecedented situation where large wholesalers and retailers of physical bullion in the US and internationally are having difficulty keeping up with investment demand. Some are completely out of stock of some of the most popular bullion products such as gold Krugerrands (1 ozt) and gold American Eagles (1 ozt) and silver American Eagles (1 ozt) and silver bars (1 ozt, 10 ozt and 100 ozt).

There are similar issues internationally and The Times of India reports: "There is a shortage of the yellow metal in the bullion banks and traders."

There are now also significant delays in delivering bullion (usual deliveries of 5 to 10 days are now taking some dealers 4 to 8 weeks to make).

Large government mints and refiners are having difficulty meeting the demand and some are rationing supply to large dealers.Large wholesalers, retailers and institutions such as the Perth Mint are experiencing huge demand and even as spot prices have been falling sharply, there are little or no sellers and buyers are continuing to vastly outnumber sellers.

Another indication of the sharp tightness in the bullion market is seen in the fact that premiums are rising very significantly on nearly all bullion coins and bars. Wholesale prices for some bullion coins have risen 2% to 3% in a matter of weeks.

This huge demand is not being reflected in the futures market where the speculative hot money of large hedge funds and institutions with short term horizons is leading to materially lower prices. Leveraged margin players who were long have had their heads handed to them on a plate as the shorts are pushing prices as low as possible in order to maximise profits.

Clearly, this situation is not sustainable as ultimately the laws of supply and demand of the physical metal will dictate prices and not the speculative and manipulative antics of black box, momentum following traders.

Large, smart money is accumulating physical bullion away from the more risky leveraged casino that is the futures market. Thus, this latest of vicious sell offs is set to be another sharp correction in the gold bull market designed to as usual flush out the weak hands. The bounce when it comes will likely be just as dramatic as the shorts attempt to cover en masse. Should some large players decide to stand for delivery of near term futures contracts when they expire, then we could see some real fireworks and gold will be above $1,000/oz in very short order.
http://news.goldseek.com/GoldSeek/1219064400.php


Let's Be Hunts
Ask delivery of $12.80 silver and $790 gold, today. There are 300 million of us. A single ounce of physical silver for every man, woman and child in the United Snakes would squeeze these rat-bastards harder than the Hunts could ever do. There were two Hunt brothers in 1979. There are 300 million of us in 2008. Even in this country, there aren't enough jail cells to hold us all. And we could take their pants off, once and for all.
http://news.silverseek.com/SilverSeek/1219028976.php