BANKERS STOP THE PANIC – DIG IN FOR RANGE-BOUND PLAY

People sometimes ask why I’m so interested in gold? I am not a gold dealer, mining executive or financial advisor and I’m not even trying to make money by selling a subscription newsletter. The answer is that I believe the world needs to return to the gold standard for a number of reasons too numerous to cite here. Also, from a legal standpoint, gold is the most obvious example of a corrupted market and that is inherently interesting to me.

Most rational people now know that gold is heavily manipulated but no one ever does anything about it. Unlike manipulators in stocks, bonds and most commodities, gold and silver manipulators no longer try hard to hide. Their activities are blatant, open and obvious. That makes the metal an excellent example of what’s wrong with markets in general.

It is, perhaps, not entirely fair of me to say that “no one ever does anything about it.” For example, there has been some effort to clean up peripheral aspects like the so-called “London Fix”. As inherently corrupt as its name implies, the “Fix” is the smallest part of the swamp. Ninety nine percent of manipulation is carried out via collusive trading on futures markets. Nothing has been done about that. So-called “regulators” actually enhanced the price-setting role of futures markets by  “reforming” the Fix!

One could go on and on about the inadequate response to corrupted markets. Careful analysis and understanding is a first step toward pushing for real reform. I reported, for example, a few weeks ago, in a prior article, that bullion banks were in full-blown panic mode. They were frantically closing massive numbers of legacy short positions, covering them into a series of convenient “flash crashes.” The sudden crashes happened for no apparent reason, but shell-shocked market participants, allowing positions to be closed “on the cheap.” I predicted that prices were about to rise significantly and they did. 

I won’t quadruple the size of this article for the purpose of discussing the gold swaps, or how stocks, bonds, commodities and gold prices can be easily catalyzed up and down. To gain an understanding of the process, I suggest you read the prior article (and other previous articles) as well as the novel, “The Synod” (eBook) (paperback). Suffice it to say that a careful look at this week’s CFTC Commitments of Traders Report shows that the situation has now reversed itself. Various speculators have dramatically changed their positioning, yet again, and so have the banks, as compared with the last three weeks. Why?  What does it mean?

At the close of business on Tuesday, July 25th (when the Commitments of Traders Report data is compiled), the so-called “managed money” (a/k/a the hedge funds that are not closely connected with a major bank) returned to betting that gold prices will rise (a/k/a “going long”) and began closing short positions in both gold and silver. So-called “commercials” (a/k/a bullion bankers and their controlled fund entities) were taking on new short positions. There are two possibilities as to why this is now happening.

First, whatever event might have been panicking the bankers could be resolved at least in the short run. That is not very likely because if they could easily control that situation, they wouldn’t have been panicking in the first place. The second possibility, which I consider to be much more likely, is that the banks simply opened a large number of highly transient short positions for the sole purpose of temporarily holding down gold prices during the crucial options’ expiration week (last week). Sharply higher prices would have resulted in massive losses on call options that they’ve written. If too many calls ended “in the money” the banks would have to pay out a lot of money.

Let’s assume they took on the new short positions to avoid huge losses on call options. Since they must eventually jettison them, doesn’t that mean prices must go up dramatically, very soon? No, it doesn’t. Not in the short run. So long as we have clueless fools, in the form of “managed money hedge funds”, using extreme leverage in the hope of getting rich quick, everything can be managed. A day or two of deep price declines, catalyzed by means of attacking over-leveraged long speculators, will do the trick. If done right, stop-loss orders will be triggered, prices will decline, margin call based forced selling will occur, prices will decline more, and finally panic will allowing shedding short positions cheaply.

The long run is a different story. The type of price decline catalysis that the manipulators engage in cannot be sustained over very long periods of time. Such tactics do depress prices in the long term, of course, by convincing ultra-conservative investors to stay away from the artificial volatility of gold, but that is already baked into the cake. There are still enough physical gold buyers, and the demand is still so much higher than the supply, that prices will rise slowly over a period of months, in spite of the short, but sharp “crashes” that are likely in early to mid-August.

Still, it is currently impossible to determine the exact motivation behind the change in positioning. I would advise caution because the manipulators seem to be doubling down on their game. It is likely that they will continue to engage in highly coordinated actions. The current coordinated strategy appears designed to keep gold prices inside a $50 to $100 trading range for a while. They’ll be able to make a considerable amount of money trading the ups and downs within that range. How long the range can be maintained will depend on whether and when large physical buyers raise their bids in order to get the metal they want.

The situation in silver and gold are very similar. The bullion bankers have reopened a lot of short positions in both metals. Conversely, clueless hedge funds have reopened a lot of long positions. Oddly, and there is no obvious explanation, the hedge funds have not opened enough long positions in platinum to offset the new shorts opened by the banks. The only explanation I can think of is that some of the new platinum shorts represent bullion bankers trading with each other. That implies wash trading designed to control prices.

Wash trading consists of trades between two or more closely coordinating entities, designed to create the false appearance of price movement or stability. It is designed to influence others to accept fake prices as real. If that is what is happening, it implies a continuing sense of desperation on the part of the manipulators. They usually stay within the letter of the law even while violating its spirit. Wash trading is overtly illegal and that is why so much effort is put into the more expensive process of catalyzing price movement by targeting stop-loss orders. Still, with the traders nominally employed by different entities, proving wash trading is very difficult.

To prosecute, you would first have to prove that there is a cartel that coordinates trading in order to influence prices. But, remember, the same cartel that trades platinum is also trading gold, a government sponsored activity. Second, even if you managed to prove collusion, you’d also have to prove the trades have no legitimate purpose. Meeting this dual burden is extraordinarily difficult. It is made even harder because such a prosecution would necessarily disclose the scheme behind controlling gold prices. A number of government officials would be implicated in that, and the scheme to control gold prices would collapse. The government officials are, for the most part, acting within the letter of the law. The US Gold Reserve Act allows them to issue gold swaps to help manipulate the gold market. However, disclosure would mean political and/or career suicide.

Regardless of what the banks and hedge funds are doing in the short term, it is still clear that US government-owned gold, and specifically gold swaps, are the key to the continuance of the current scheme of price manipulation. Without that gold flowing into the world market, there would be widespread shortages and defaults in delivery. When the “gold supplier of last resort” finally pulls the plug, the game will be over, at least until prices rise above supply and demand equilibrium. I estimate that equilibrium exists at somewhere between $1,500 – $1,600 per ounce right now.

If and when prices rise above equilibrium, it will be more profitable to manipulate prices upward rather than downward, assuming most legacy short positions have been closed. Until the huge legacy short positioning is reduced much further, however, you can expect periodic flash crashes and intense efforts at price control. In short, on the surface of things, the manipulators seem to be in control again. Except for what looks like a need to use wash trading to suppress platinum prices in line with the other precious metals complex, they look rather confident again.

I believe that gold prices will be managed within a range of $1,200 and $1,300 per troy ounce for at least a few weeks. The key players will rid themselves of the current increase in transient short positions, and continue the process of unloading legacy short positions. Because all three major precious metals are tied to each other through cross-trading, their prices will move along with the price of gold. Prices will be slowly pressured upward in spite of the fact that we should expect more transient downward hammering episodes.

I suspect some readers will object to this analysis. They will ask about the recent reports that suggest China’s demand for gold bars is up by 50%? Shouldn’t that propel gold to the moon over the next few weeks?  The answer is “no”. For one thing, the reports are fundamentally wrong. They are based on an assumption that China’s gold demand was in the 1,000 ton range in 2016, when the real demand was closer to 2,000 tons. And, the demand for gold bars, in particular, is just one element of overall demand. More importantly, however, real world supply and demand has very little effect on highly manipulated markets in the short run. It will profoundly affect long term prices, but not the prices that will be created over the next few weeks to months.

Frankly, I would be very surprised if we didn’t see a few flash crashes and similar “shock & awe” hammer-down events in early to mid-August. Bankers will want to unload the new shorts, and they are also going to want to get back into the important business of reducing their long term liability exposure to legacy short positioning in the form of futures, forwards and so-called “non-allocated storage”. The easiest way to accomplish their goals right now, with maximum profitability and the lowest losses, is to catalyze shock & awe declines to shell-shock the market. Excellent buying opportunities, therefore, may be in store for August for those who are smart enough to see through the facade. But, you’d better act on them the moment you see them, because they will fade away very quickly.

_________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE EDITION

ALSO AVAILABLE AT APPLE iBOOKKOBOBARNES & NOBLE AND OTHER FINE BOOKSELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

MASSIVE ADDITIONAL SHORT LIQUIDATION BY BANKS FORETELL A BIG RISE IN ALL PRECIOUS METALS PRICES

July 17, 2017

In my most recent commentary, “RECENT GOLD PRICE DECLINES = THE CUSP OF A MAJOR UPWARD MOVE”, I explained how stop-loss and margin call selling can help catalyze a huge decline, in highly leveraged markets like gold, silver and other precious metals.  Quick, massive and seemingly senseless price declines shell-shock market participants and facilitate the unloading of legacy short positions on the cheap.

Last week, I showed you how the CFTC’s “Commitments of Traders Report” corroborated the fact that the big bullion banks used the big sudden decline on July 3rd to massively reduce their long-standing legacy short positions. I predicted that the big decline on Friday, July 7th was going to be used to do more of the same. Now, we have the proof that this is exactly what happened.

I don’t have space to cover the entire process by which price falls are catalyzed. For a fuller understanding, I suggest that you read both last week’s article (and my other previous articles) as well as the novel, “The Synod” (eBook) (paperback).  Suffice it to say that the big decline on July 7th was used to close the book on yet an even more enormous number of legacy short positions, this time concentrating on silver and platinum, but also in gold.

The latest Commitment of Traders Report’s statistics were tabulated as of the close of trading July 11, 2017. As of that moment, the bullion banks had closed 2,823 platinum short contracts (141,150 troy ounces of platinum); 9,560 silver short contracts (47,800,000 troy ounces of silver) and 19,392 gold short contracts (1,939,200 troy ounces of gold.

The amount of platinum shorts they closed may seem very small, compared to what they did in silver and gold, but remember that it is a much smaller market. Platinum mines produce only 1/20th the tonnage each year as gold mines, and 1/180th the tonnage of silver mines every year. The numbers, with respect to all the precious metals, each represent a massive percentage of the total short position held by the banks. What makes it even more noteworthy is the fact that it comes on top of the massive percentage they closed last week!

The bottom line? The most knowledgeable people in the world must believe that precious metals prices are going to be rising fast and hard in the next few months. Otherwise, they wouldn’t be fleeing from short positions they’ve rolled over for years! Just take a look at the report…

Frankly speaking, no one in the world has a better handle on what is really going on in the precious metals markets than these bullion bankers. Don’t expect, however, that they are going to tell you the truth. Their analysts won’t be writing about how stocks of physical metal are growing perilously low, nor will there be any discussion of the massive excess of demand over limited supply. It simply isn’t in their interest to do so. They want profits, not losses. If they told you, instead of helping get rid of the short positions they are running away from, you would be helping to bid up the price. They are not ready for that. They need to jettison more short positioning first.

Look at what they do, not what they say. They are fleeing from long-standing downside bets they’ve rolled over, year after year, for many years. Some clueless hedge funds (the so-called “managed money”) are taking them over. They will pay an enormous price for doing that. Come mid to late August, for example, some of them are going to be forced to deliver real gold they don’t have. By October, some will be scrambling to source gold bars for delivery. Others will get out sooner than that, but they will pay a very heavy paper money price to do it.

_____________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE EDITION

ALSO AVAILABLE AT APPLE iBOOKKOBOBARNES & NOBLE AND OTHER FINE BOOKSELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

 

RECENT GOLD PRICE DECLINES = THE CUSP OF A MAJOR UPWARD MOVE

July 8, 2017

I received an email from one of my readers on the July 4th holiday. He expressed dismay at the recent gold take-down that occurred at the end of June and on July 3rd. I am sure he is even more distressed, now, with the huge take down that happened on July 7th. He wondered how bankers can still have the power to pull off big reductions in gold prices whenever they choose? It is a question that is flowing through the minds of many people. They are still doing it, in spite of a relatively successful ongoing lawsuit against manipulation of the London gold fix, and in the face of a gold-friendly Presidential administration.

All I can say is that patience is a virtue that is always rewarded. The people who are orchestrating these market manipulations, in the gold market and elsewhere, are extraordinarily ruthless and well-connected. The bullion banks are deeply enmeshed with governments throughout the Western world, and they’ve been doing this for a long time.

On top of that, they receive an average of about 7 tons of new gold every single day from the mining companies. It can be used to fill the extra demand caused by their shenanigans in the very short term. Also, it seems likely that they will continue to draw gold out of the US Gold Reserve. The fact that the gold market is tight, however, as illustrated by backwardation between the futures and the physical gold price in London, does imply that their access to the US Gold Reserve is not unlimited.

The reason they get 7 tons of new gold to play with, every day, is that mining companies are foolish enough to sell to them, at whatever price is created by the London “fix.” Regardless of the outward trappings, and even when it is cured of whatever corruption recently went with it, the fix is largely determined by manipulations on the paper gold market in New York (a/k/a COMEX). If mining company executives developed a backbone and took joint action to reject the legitimacy of COMEX pricing, the power of the banks over the gold market would end. Miners could refuse to sell their product at a fake price. If they did that, everything would change.

Unfortunately, these same miners also rely on these same banks to finance their operations. The banks are a source of ready cash to pay executive salaries. In addition, a bad recommendation from a major bank’s research department torpedoes a mining company’s stock price and cuts into the personal wealth of mining executives who are paid in part by stock bonuses. Adding to the problem, many of the banks are directly or indirectly represented on mining company boards of directors. In other words, the mining companies are not likely to take a stand against the manipulating banks.

The game would also come to a screeching halt if the flow of sovereign gold from America dried up. The fact that the not-so-elusive “gold supplier of last resort” is the US government is so obvious that it is almost laughable. US Treasury is supplying a huge amount of gold into the world market. No other entity could do it. Someone is supplying the massive gap between supply and demand that has existed since gold prices were taken down from their equilibrium point between $1,500 and $1,600 in early 2013.

I don’t want to get into the details of the gap between supply and demand. Nor do I have space to describe in detail exactly how gold is manipulated. Doing so would make this article too long, and I’ve already done it. My past articles and the thriller novel, “The Synod” (eBook) (paperback), provide the information you need. But, to put things in context, I will say this. The US government is supplying location swaps on gold stored inside the official US gold reserve to the Bank of England. The British central bank, in turn, is releasing gold bars into the market in London. Those gold bars do not belong to the UK. They belong to customers of the Bank of England. That’s why they need the location swaps.

The policy of occasionally using the US gold reserve to suppress gold prices is an old one, going as far back as the 1970s. There is documentation of a huge swap that happened between the US Treasury and Bank of England in 1980, just about a month before the collapse of gold prices from their height of $850. However, the huge gap between supply and demand since 2013 means that the policy was vastly expanded under Obama. Again, I can’t triple the size of this article by going into the specific details here, and you can read my past articles and The Synod (eBook) (paperback) to find out everything you need to know.

When the Trump administration finally gets around to reversing Obama’s secret executive order, which began authorizing this liberal gold swap policy in April 2013, the price of gold will soar. At the moment, it seems, that is not going to happen overnight. The attention of the Trump administration has been diverted into a myriad of squabbles. Key players, who might otherwise be active in reviewing matters that would bring an end to this short-sighted foolishness are too busy putting out petty political fires. An enormous flow of American treasure continues to flow out of the United States.

That said, the manipulating banks know that the game ends when US gold swaps end. That means they must allow prices to rise before that happens. Otherwise, they’ll be at risk of holding enormous short positions at the worst possible moment. Right now, they are continuing to make money by painting the tape and trading gold as non-connected people react to it. They are also very busy ridding themselves of legacy short positions. In other words, they are “making hay while the sun shines.” Plenty of money can be made by artificially inducing movements in the paper gold market.

Bullion bankers are getting rid of legacy short positions by carefully orchestrating their price attacks. The basic game is simple. Manipulators initially sell enough additional short positions to cause a price decline sufficient to trigger the stop-loss orders of leveraged speculators. They know the price points at which speculators have concentrated those orders. That’s because the speculators are either directly or indirectly (though a clearing broker) customers of the manipulating banks.

Once the first set of stop-loss orders is triggered, prices are catalytically dropped much further than the manipulators could achieve directly. The bigger fall in prices also catalyzes further drops because it causes more automated stop-loss selling, and finally the triggering of automated margin call selling. This adds to the downward pressure. Prices drop still further. That leads to more stop-loss selling, more declines, more margin call selling and, finally, after the process burns itself out, the tape ends up painted with a spectacular price drop.

The price instability causes panic among speculative long buyers in the futures markets. Secondarily and temporarily, it will also catalyze some physical buyers to lower their bids, in the hope of getting a cheap buy. That relieves some physical demand pressure ordinarily caused by a massive price drop, in the very short run. Meanwhile, in the midst of the chaos, the manipulating entities slowly and deliberately liquidate the new transient short positions and also get rid of huge numbers of the legacy short positions they may have been rolling over for years.

The most recent “Commitments of Traders” report, issued by the CFTC on July 7, 2017, proves that the bankers are doing exactly what I have described. By the end of trading on July 3rd (the date the data was collected) the so-called “commercials” (a/k/a bullion banks) had shed 10,176 and the swap dealers (divisions of those same bullion banks) had shed a whopping 27,701 short positions. That’s a total reduction of 37,877 short positions as of the end of trading on the July 3rd smack-down date!!

The price smash allowed bullion bankers to shed 3,787,700 troy ounces worth of bets that gold will decline. In other words, that one day of “playfulness” allows them to avoid losing more than $1.1 billion dollars on COMEX alone, assuming the price of gold rises by $300 by the end of the year. Indeed, we have no way of knowing what they were doing in the London market, because the information is kept secret. The over-the-counter leveraged forwards market is five times as big as the more visible COMEX. That means that the bullion banks probably avoided more than $6 billion dollars in losses by pulling their stunt on July 3rd.

It didn’t stop there. They did the same thing on July 7th. You can be absolutely sure that they shed tens of thousands of additional short positions on that day, too. That’s because the tape was painted again, in virtually the exact same manner, resulting in the same type of panic and forced liquidation among leveraged long speculators. The so-called “managed money” (a/k/a hedge fund managers) took on a lot of the short positions. Some of them are going to be called upon to deliver a lot of real gold come August. It is gold they don’t have, obviously.

Let’s take a look at the Commitments of Traders report…

The bullion bankers would not be shedding huge numbers of short positions if they thought the price was going to go down a lot further. They obviously know that prices are about to go up. Meanwhile, the hidden gold flow from America to the rest of the world keeps the scam in play. That hemorrhage of gold, from the USA, is partially illustrated by data that is publicly released. From January to April 2017, for example, a net 88 tons of gold flowed out of the USA, according to the US Geological Survey. If this pace continues, and it has been very steady month to month, a net excess of 264 tons of gold will leave the USA in 2017. That is more gold than all the mines in America will produce!

Note that the vast majority of gold exported from the USA is NOT in the form of gold ore or dore (gold that hasn’t been fully refined yet). Yet, a vast majority of the world’s refining companies are based in Switzerland, not the USA. In spite of that, the United States is mostly exporting pure gold bullion. I believe that part of that comes from deliveries on the COMEX exchange, which may be directly supplied by physical gold in the Federal Reserve’s basement vault in NYC. Once delivered on COMEX, apparently, that gold is probably being shipped overseas. Another part may be gold bars provided directly to big New York banks to fill orders by customers overseas.

At any rate, these statistics ONLY account for visible gold outflows in the form of bars of gold that are leaving the USA because they have been shipped directly to commercial buyers. “Monetary” physical gold transactions (gold passing between central banks) and gold “swaps” are not accounted for. Gold swaps, which are almost certainly the main method by which gold is delivered from the US Gold Reserve to the world market, via the Bank of England, are also absent from the statistics.

A “location swap” is an agreement to supply gold in one location in exchange for a lien on gold in another. The gold upon which the lien is placed is usually located in an inconvenient location (a/k/a Fort Knox, West Point, The Denver Mint etc.). Taking the gold directly out of the US holding areas would involve demobilization of army units, a public spectacle. The public nature would insure a huge political fight and the inability to keep the activity a secret. In contrast, at the Bank of England, gold bar movement can be kept entirely secret under British law, and its vaults are convenient because they are located in London, where all the bullion banks are headquartered.

The gold swaps are a proven fact. In 2009, in responding to a Freedom of Information Act request, the Federal Reserve admitted to having extensive gold swap records, but refused to provide them. It claimed that “exemption 5 of the FOIA” made them exempt “confidential communications with another federal agency.” No doubt, the “other agency” is the US Treasury, which actually owns the gold. In subsequent litigation, a final order was issued by a federal judge requiring the Fed to produce one document which did not directly relate to gold swaps.

The Fed’s successful resistance to the FOIA request does NOT mean that there are no gold swaps. On the contrary, it proves that there are gold swaps. The judge examined them, and the plaintiff’s attorney was not allowed to do so. Apparently, the need to keep the information secret is considered so important that the powers-that-be literally were willing “to make a federal case of it.” But, the bottom line is that the Great Game will end as soon as the very liberal Obama-era gold-swapping policy ends.

In my opinion, the big price drops in late June, July 3rd, and July 7th all revolve around a concerted and coordinated effort to reduce legacy short positions in the gold market. Something big is about to happen. There is panic within the banksters’ ranks. In response, they do what they always do. They launched a coordinated attack, sowed fear into the hearts of non-connected speculators and investors and succeeded in massively reducing their overall short position. Collusion to smash gold prices worked out beautifully. And, working hand in glove with deep state bureaucrats, no regulator will ever question what they did.

Keep in mind that the biggest banks in the world continue to gobble up gold. In June, for example, the Bank of Nova Scotia, one of the biggest bullion banks, bought a net 44,900 ounces or just under 1 and a half tons of pure gold bullion on COMEX alone. That adds to the huge quantities of physical gold already purchased by the likes of Goldman Sachs, JP Morgan Chase, HSBC and Scotia in the past.

CME, Inc., which runs the COMEX exchange, was also a big buyer, again. It bought just under 1/10th of a ton of gold this past June. That is a huge amount of gold for an exchange operator to buy. It is also bizarre for an exchange operator to be buying it. CME has made large purchases in virtually every major delivery month since June 2016. That is NOT normal activity. As recently as 2015, the CME didn’t purchase gold. There is no reason to buy it now because CME, Inc. is not an investor, a bank or a gold dealer. Clearly, the exchange is acting in a manner that implies that a major supply disruption is on the way. Major disruption will be the inevitable result of a cessation of US government sponsored gold swaps.

At the current price, supplying the gap between supply and demand, the “gold supplier of last resort” would have to spend something like 1,000 tons of gold to support the bankers. I don’t think the Trump administration is willing to do that. Even under the Obama administration, the physical market was tight. That implies, as I have said before, that access to the US Gold Reserve is not open-ended. When the American gold swaps finally end, we will start seeing a significant price spike.

From the standpoint of the foolish hedge fund managers who are taking on the short positions, difficult delivery months lie ahead. There will be a cash settlement of non-allocated claims in London. There will be a myriad of delivery defaults by dealers at COMEX. However, CME, Inc. is going to be using the gold it is now accumulating to backstop some of those failures. If they cover most of them, unfortunately, the dishonest price setting mechanism that is COMEX will retain its credibility.

Attempts to control the rising price of gold will periodically continue. “Shock and awe” campaigns facilitate short covering and gold accumulation by insiders. I continue to believe, however, that gold prices will go up this year until they reach the point of natural supply/demand equilibrium, which I estimate to be somewhere between $1,500 and $1,600.

The take-down style we’ve seen in the last two weeks tends to be followed by delivery of large quantities of physical gold to the banks in the subsequent delivery month. I expect some major fireworks by August even if the Trump administration still has not cut off the flow of American gold by then.

_____________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE EDITION

ALSO AVAILABLE AT APPLE iBOOKKOBOBARNES & NOBLE AND OTHER FINE BOOKSELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

 ______________________________________________________________________

SIGN UP BY COUNTRY LINK FOR AMAZON’S “MUSIC UNLIMITED”! 

FREE TRIAL OFFER! CANCEL WITHIN 30 DAYS AND OWE NOTHING.  

USA       UK       CANADA      GERMANY      ITALY      SPAIN    OTHER

PRESIDENT TRUMP, “MAKING AMERICA GREAT AGAIN”, THE GOLD STANDARD AND A 230% INCREASE IN PHYSICAL GOLD BAR DELIVERIES – ALL CONNECTED?

February was an extraordinary month…

President Trump was busy issuing executive orders and reversing those issued by his predecessor. Gold prices have been steadily climbing. The secret Obama executive order, which must have opened the US gold reserve to the banksters, does not appear to have been reversed quite yet. When it does happen, it should spark some mild price fireworks, as the manipulators dump remaining short positions. In the meantime, in all likelihood, the manipulators are loading up on as many physical gold bars as they can, at the lowest possible prices. It is, I believe, an indirect courtesy of the US government, thanks to the actions of the previous President.

It would appear that America’s treasure continues to be drained away at a fantastic rate, although as we will discuss later, there is a hesitancy to commit to future orders growing fast in London. In spite of the delay in reversing Obama’s executive order, gold’s price and timing continue to follow the pattern I described in an article in November. Probably, that’s because although it isn’t closed yet, the US Gold Reserve could be closed at any moment.

The price attacks will continue but are temporary and opportunistic. They will be geared more toward the collection of a few quick bucks and/or the collection of some discounted physical gold bars than trying to make a long-term impact on gold prices. Most likely, that’s because the recent updraft in gold prices is driven by physical demand. Physical buyers are thrifty people who stop buying when prices go up too fast. Their resistance doesn’t last forever, but they do need to get used to significant price hikes.

We know that physical buyers were ready to pay much more for gold just a few years ago. Based on the gold market of 2012, the point at which physical supply and demand balances in the longer term, was somewhere within the $1,500 – $1,600 range. Since nominal earnings are universally higher now than they were 4 years ago, it shouldn’t take too long for people to get used to the higher prices. The willingness to pay a much higher price has already been demonstrated. Downward biased manipulation can only be partially effective without government subsidies and support.

The recent price attacks can safely be viewed as the transient events that they are. It appears that the banksters are simply attacking highly leveraged get-rich-quick schemes for the short-term benefit of doing so. Such speculators are fools, who face bankruptcy from small price movements, and must run at the slightest negative price pressure. If they think gold will go down, they quickly take the opposite side from their usual bullish view and try to get rich quick that way. The problem for them is that they are being tricked. The manipulators want to buy physical gold bars at rock-bottom prices and transient price attacks in paper-based futures markets helps them do it.

The manipulators are being careful not to push gold prices below the hard physical buying orders. Manipulators piled on last Thursday, for example, with staggeringly large waves of short selling designed to torpedo prices. Gold and silver tend to follow the similar patterns of manipulative activity, and the exact numbers have actually been already documented in the silver market. Approximately 151 million troy ounces of paper silver were “sold” in a space of 45 minutes from 11:25 am to 12:10 pm, almost four times the amount of silver produced by the top mining company in an entire year! The net effect was a steep price decline and a great deal of cash to fill the pockets of manipulators. We can presume that the same thing happened with gold. Then, on Friday, the very next day, prices went right back up.

In spite of the effort being put in, Thursday’s manipulation event has no legs. By April, the folks who did it will have slowly bought back all the short positions they took on to do it. In contrast with the way they torpedoed prices, they will buy back the shorts in a slow and orderly manner that affects prices as little as possible. They will then likely stand for delivery of gold they purchased at rock-bottom prices from a shell-shocked market filled with hapless non-connected hedge fund managers. The hedge fund managers and their clearing brokers will scramble around searching for physical gold to meet delivery obligations. Overall, the process will help keep prices moving steadily upward over time.

If the manipulators play their game right, even as hard physical buyers raise their bids, the artificial price of gold will be kept just a little bit above the physical bids. The risk they face is only from miscalculation. For example, some unanticipated event could happen that creates a sudden and unexpected willingness, by physical buyers, to raise their bids. Thus, there is always an element of uncertainty.

Recent dramatic events at COMEX futures exchange, however, increase my level of confidence in my current forecast. As I reported last month, we saw a 729% increase in the demand for delivery of physical gold at COMEX during off-month of January 2017, year over year. This month (February) was a major delivery month, and there was another 230% increase in the delivery of physical gold bars. The huge increase in gross demand for actual physical gold bars is impressive. However, it is not the amount that was purchased but, rather, who was doing the buying that is the most important factor.

The biggest banks in the western world continued to be the biggest physical gold bar buyers during February. In many cases, their own customers are being called upon to deliver the bars to them. In total, about 18.66 metric tons worth of physical gold bars were delivered on COMEX in February. That compares to 7.99 tons delivered in February 2016. The net increase totals out to be 233% year over year, which is enormous.

HSBC, in particular, was the biggest single buyer this month. HSBC bought just over 10.62 tons worth of physical gold bars. Neither it nor its customers delivered much gold to speak of. As was the case when it made massive purchases in 2015 and 2016, these gold bars are now an asset of the bank.

J.P. Morgan was also one of the huge buyers this month. It didn’t buy quite as many gold bars as it did, last month, but it purchased about 2.4 additional tons. In contrast, J.P. Morgan’s customers were called upon to deliver about 10.95 tons, perhaps part of which went into the bank’s own asset base. As the customers scrounged around to find gold to deliver to the banks, they probably propelled gold prices upward in February.

As was the case last month, Scotia Bank was also a big net buyer. It bought about 1 ton of physical gold. Last month, it purchased 3.82 tons.

Oddly, CME, Inc. was also a significant buyer. It has consistently been a significant gold bar purchaser throughout 2016. Like Goldman Sachs, HSBC, J.P. Morgan, Scotia and others, it has been stocking up. The exchange operator didn’t buy as many gold bars as a “too-big-to-fail” megabank, but its purchases were enormous, and way out of line from a historical perspective. Remember, the futures exchange operator is not a bank, a hedge fund or an independent investor. It has no obvious reason to buy physical gold bars — except one which we will discuss in a moment.

CME, Inc. bought about 1/3rd of a metric ton in 2016. This past month, it purchased another 62 kilograms. In comparison, it bought only 5 gold bars in all of 2015. The exchange is contractually liable on any default in delivery by clearing members. There hasn’t been any default yet. However, the fact that the company is now buying so many gold bars implies that it is preparing for that to happen. It seems to be planning on weathering a major supply disruption.

If some of the COMEX clearing members end up defaulting on delivery, the exchange is on the hook to supply either gold or the cash value of that gold at the time of default. It is perfectly legal for the exchange to pay customers cash, instead of the gold they contracted for, BUT if the company does that, COMEX will be discredited as a forum for price discovery. Its usefulness for market manipulation purposes will end forever. All of which brings us to the celebrated London-based metals market whistleblower Andrew McGuire…

Mr. McGuire has a history of accuracy in his description of what is going on behind the scenes at the London precious metals market. In a recent public interview, he stated that a huge crisis is in the offing. London gold dealers don’t have enough gold to meet demand. Most of the “gold” controlled by LBMA banks is actually not theirs. It is all “stored” under “non-allocated” storage contracts. These contracts give banks the right to use the gold in any way they want, including selling or leasing it.

Apparently, they’ve been selling and leasing the gold they don’t own for many years. All of it is spoken for, and there isn’t any left. With no stockpiles of their own, and facing the prospect of being cut off from the US Gold Reserve, they seem ready to default on metal delivery obligations. McGuire says that the banks are on the verge of declaring a cash settlement of all gold obligations. Because of the clever lawyers who wrote the contracts, however, this will not equal a legal default.

All the non-allocated storage contracts have a clause that allows for the “substitution” of cash in settlement of gold obligations. If McGuire is right about an oncoming crisis in London, and a cash-based “reset” is about to happen, what CME, Inc. is doing makes perfect sense. Most smaller COMEX dealers refuse to tie up cash on vaulted gold and simply wait until the last minute to buy gold to make deliveries. But, after the de facto default in London, physical gold will be unavailable at any price. These firms will be unable fulfill COMEX delivery obligations.

An educated guess would be that CME, Inc.’s motive, in buying so much physical gold, is to prevent collateral damage to the COMEX exchange’s reputation. Meanwhile, the big banks’ motivation may also revolve around an expected London default. Most of the same players operate in both NYC and London, but COMEX is the more critical market for price manipulators because it is there that world prices are set. The same people who now manipulate gold prices downward will probably turn to upside biased manipulation once the government’s subsidy ends. To profit from price manipulation, they must be able to control prices.

Continuing the credibility of the COMEX futures market, in spite of a massive London default, will enhance its dominance in price discovery. COMEX has always been the key to controlling the price of gold, in spite of the fact that the London gold market is five times larger. The London price and the world price of gold are primarily set by banks and hedge funds fighting with one another at the futures exchange. If the futures exchange allows a large scale default, it will end up as discredited as the LBMA in London.

Here is the bottom line. When the appropriate time comes, LBMA obligations can be cashed out, and the organization can be closed down. But, if COMEX is discredited, the primary profit-making vehicle will be lost forever. In contrast, by preserving COMEX in spite of the collapse of the London market, attention can be quickly shifted toward upwardly biased manipulation activities, and profit can be preserved. Meanwhile, in the shorter run, there is the prospect of selling gold bars to the hedge funds and smaller COMEX clearing members around the time of the London default. Thus, buying gold bars now, for later sale, is going to be an extraordinarily profitable gambit.

In the face of the oncoming massive upward “reset” in the price of gold, I am reminded of a recent article in Forbes magazine. The author urged President Trump to bring back the gold standard in order “to make America great again.” According to the article, there are only three choices open to President Trump.

First, muddle along under the current “dollar standard,” a position supported by resigned foreigners and some nostalgic Americans—among them Bryan Riley and William Wilson at the Heritage Foundation, and James Pethokoukis at the American Enterprise Institute.

Second, turn the International Monetary Fund into a world central bank issuing paper (e.g., special drawing rights) reserves—as proposed in 1943 by Keynes, since the 1960s by Robert A. Mundell, and in 2009 by Zhou Xiaochuan, governor of the People’s Bank of China. Drawbacks: This kind of standard is highly political and the allocation of special drawing rights essentially arbitrary, since the IMF produces no goods.

Third, adopt a modernized international gold standard, as proposed in the 1960s by Rueff and in 1984 by his protégé Lewis E. Lehrman …and then-Rep. Jack Kemp.

Of course, to bring back the gold standard, the price of gold versus the US dollar must be reset much higher. If Mr. McGuire is right, however, the implosion of the London gold market will do just that. It will also bring the role of gold as money back into the world’s consciousness. A massive one-off price reset will happen, dramatically devaluing cash currencies including the US dollar. Going back to the gold standard might end up being enough to offset the enormous debts built up under decades of incompetent economic management.

__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOKSELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

JP Morgan Silver Manipulation Lawsuit Revived By Appeals Court!

On June 29, 2016, US District Court Judge Paul Engelmayer dismissed a lawsuit against JP Morgan Chase & Co. which alleged that the bank had engaged in extensive manipulation of the price of silver, in violation of both state and federal  antitrust laws. The plaintiffs appealed. On February 1, 2017, the US Appeals Court for the 2nd Circuit Court of Appeals held that their complaint contained sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This reverses the lower court and revives the lawsuit.
.

In other words, JP Morgan is now back on the “hot seat”. The most important result of this important decision is that the bank will be forced to face the process of “discovery”. Lawyers have a number of tools with which to ferret out the truth. JPM will face interrogatories, subpoenas, depositions and requests for documents. That means internal documents will be pried open.

Is JP Morgan the sole entity responsible for silver price manipulation? We don’t know that. Furthermore, our system of law and justice tells us that everyone, even mega corporations, are innocent until proven guilty. That having been said, the evidence that both the gold and silver market is being heavily manipulated is very strong.  A lot of fingers have pointed to JP Morgan but, in my view, much more than one bank is responsible. There are a number of other banks that are already being sued in other lawsuits.

The results of discovery may further implicate other banks and brokerage houses. It could make it possible to extract trading information from the Commodities Futures Trading Commission (CFTC), which improperly closed its own investigation of silver trading. The same issues are now being investigated by private sector lawyers who have no interest in cashing in on the possibility of future employment with the bank.  Maybe, this will help to drain the swamp.
.
You can read the appellate court decision, in its entirety, by clicking the link below.
.
__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOK SELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

COMEX PHYSICAL GOLD DELIVERIES RISE 729% YEAR OVER YEAR!

Written by:  Avery B. Goodman  (01/29/2017)

The price of gold has been generally following the predictions I made on December 9, 2016.  So far, so good…

A lot of non-connected hedge funds and other speculators are now heavily short gold. That includes many people who are writing negative comments about the metal, and paying others to write negatively.  They have been drawn in by entities who know better, and who are heavily connected to the US Treasury, Federal Reserve, Bank of England, ECB, etc. The latter have likely closed most of their unhedged short positions even as the speculators have increased theirs.

The well-connected have known the gold jig is up for a very long time. They have engaged in what appears to be an attempt at a very organized and deliberate position change. A number of big banks, such as J.P. Morgan, HSBC, Goldman Sachs and others, for example, made huge purchases of gold bullion banker’s bars. They still have big problems from their past activities, but not so much on futures and forwards markets. The remaining problem comes in the form of a huge uncovered “short” position via massive tonnages of  gold inside London-based “unallocated storage” schemes.  It is possible that the unveiling of the new so-called COMEX “spot” silver and gold contract, as well as the huge physical gold purchases by big banks has been designed to shift this remaining risk.

The temporary downturn in gold prices, last week, is meaningless. It seems quite clearly to have been orchestrated by a few big options sellers. These smarmy folks always use automated trading software, around options expiration week, to trigger stop-loss orders and margin calls. It is done to temporarily push down paper gold prices, for the purpose of avoiding payouts on call options. Generally speaking, gold speculators buy many more gold calls than puts, so paying out on a rise in gold prices usually costs a great deal more than paying out after a fall in gold prices. The incentive to manipulate prices to prevent options from ending “in the money” is huge.

COMEX February options expiration day was the 26th of January, and it was the day of reckoning when buyer and seller determined how much, if anything, was owed on the matured options contracts. It is also my understanding that many of the privately negotiated “calls” at the various London’s LBMA member banks expired on the 27th. If the options dealers had not launched a coordinated attack on gold prices last week, a huge number of their “call” options would have expired heavily “in the money”. That would have meant billions paid out. Naturally, since casinos always make sure that the house never loses, the payouts won’t happen, thanks to the manipulations.

The most important thing to realize is that price manipulations, around options expiration, are always pure paper plays, and have no legs. However, they won’t end simply because access to the US gold reserve is cut off.  Such activities will continue until gold options are made illegal, or the people responsible are criminally prosecuted. A change in Presidential administrations may bring a lot of macro-level reform, including replacement of the people at the very top of the totem pole. However, regulatory staff members remain the same, as do the attorneys who work for the Department of Justice. So long as men and women continue to enter and exit federal agencies through a revolving employment and “consulting” door, into banks and brokerage houses, no serious prosecution is ever going to happen.

Far more important than the temporary manipulation of options dealers, however, is the physical market for real gold. January is an off-month for deliveries at COMEX. However, the number of gold futures contracts that stood for delivery this month resembles an active delivery month. That is interesting because COMEX has always been primarily a paper based exchange. Physical delivery is the exception rather than the rule. Delivery has always been theoretically possible, but it has been rarely done. In January 2016, for example, the holders of only 172 COMEX futures contracts demanded physical gold. In comparison, by January 27, 2017, the holders of 1,254 COMEX futures contracts held them to maturity and demanded their gold! That is a whopping 729% increase yoy!

We’ll see what happens in February. There are already an unusually large number of February contracts remaining open on Friday, a day before the first notice day. Monday is the first notice day for the February delivery month, which has always been a major one. This month is shaping up to be mildly historic in size. The overall delivery size looks like it will be at least as big as December, 2016, even though December is normally the largest delivery month by far. One thing is clear. As of Monday morning, holders of matured futures contracts are going to have to put up or shut up. They must either deposit sufficient cash to pay for the gold in full, or face involuntary liquidation.

No matter how massive the physical delivery demand may be, there is always the possibility that dealers will try to attack prices early in the month. They often do this. I believe that the reason revolves around the desire to buy physical gold bullion, from mining companies and others, at a rock-bottom price. They will do everything they can to create a fake price so long as it doesn’t cost them too much. The trouble for them is that, this month, it may cost them more to do it than they save from the results.

There always seem to be a number of “stragglers” among the contracts that are open on the first day of delivery. These speculators cannot afford to pay for their gold, but seem to foolishly hold onto their contracts anyway. They end up involuntarily liquidated and that process will always facilitate downward price manipulation. Because of the prospective size of February’s physical delivery (which is probably mirrored at the LBMA in London), however, gold prices should be resilient to this type of manipulative activity.

I think the rise in gold prices will begin, in earnest, somewhat earlier than usual this month. It should occur, at the latest, by the middle of the month, or even a lot earlier, as opposed to the typical late-in-the-month price rise that often occurs during big delivery months. The massive and very unusual physical demand in January is likely to have exhausted many of most easily accessed supplies, which will make it particiularly difficult for banksters to maintain such shenanigans.

Looking further out, as I have said before, other precious metals prices in 2017 will also be driven upward, by being cross traded with gold, as a result of the closure of the US gold reserve. A vast majority of the people surrounding President Donald Trump are not inclined to allow continued drainage of America’s golden treasure. Incoming Treasury Secretary Mnuchin has given lip service to the “strong” dollar policy, but both he and President Trump have stated that the US dollar is now overvalued. The impact of lower exports and higher imports on GDP has already showed up in dismal GDP performance numbers.

Political cooperation with bankster driven gold price manipulation has always been primarily driven by a desire to stabilize and/or prop up the exchange value of the US dollar. Since America’s leaders now want the dollar down, not up, giving access to the US gold reserve makes no sense. It will be cut off as soon as Obama’s gold-related executive orders come to Mr. Trump’s attention. That should happen a few days after the new Treasury Secretary is confirmed.  I have no doubt that the dealers are acutely aware of the fact that Obama’s not-so-secret orders, opening up the gold reserve to gold location swaps and other access, are now history. Downward price manipulation, at the current low pricing point, will become difficult or impossible. In the absence of the US Gold Reserve, prices must rise substantially before highly profitable manipulative activity can begin again.

The reversal of Obama’s executive orders are likely to be as much of a secret as the executive orders themselves were. I don’t expect any formal announcement as such. When it does finally happen, however, there should be a sudden price surge. That doesn’t mean gold is suddenly going to rise to $5,000+ per ounce. That will eventually happen. However, normal markets do not rise like rocketships. Prices may rise by $75 to $100 over a week or two. That is healthier than a massive $300 overnight skyrocket. Massive quick increases in any asset price, in the absence of some unusual major outside event, is the result of upside oriented market manipulation.

We will eventually see a lot of upside manipulation in gold prices (followed by repeated short price collapses) as manipulators turn their attention to profiting, in a different manner, from price volatility. The key point is that when gold prices finally move above the equilibrium point between supply and demand, they can be pushed upward, and then allowed to fall, without any need for physical gold. Until that change in orientation, however, we will see prices driven upward solely by the continuing excess of physical buyers over sellers.

Note that physical precious metals buyers, unlike futures market speculators, are thrifty people who don’t like overpaying. This won’t stop the early stages of a fast price rise, but it will begin to put downward price pressure, in the short run, if prices go too far too fast. Physical buyers stop buying when prices rise very fast. They will resist purchasing until they get used to new prices. The process requires time. That’s why gold price destabilization, rather than price suppression, is the primary goal of gold market manipulators. I expect the price of gold to rise slowly but steadily back to its prior supply/demand equilibrium point (somewhere between $1,500 and $1,600 or a bit higher).

If major upside manipulation events begin or a major outside event occurs, like a major default on corporate and government bonds, widespread insolvency of pension plans and/or the demise of the Euro currency, the sky will be the limit. Evidence of fiat currency instability will be so high, once the Eurozone collapses, that a much higher floor will be put underneath precious metal pricing.

__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOK SELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

 

WILL INDIA REALLY HAVE MUCH IMPACT ON GOLD PRICES IN 2017?

Written by: Avery B. Goodman

There seems to be some new, seemingly crazy, action by the PM Modi administration in India every day. Last month, for example, they capriciously demonetized the primary forms of cash used commercial transactions in India. It was a stupid thing to do. At the least, it was carried out in a very incompetent manner. It led to chaos, as banks and citizens ran out of cash. Some truckers were even unable to find sufficient cash to pay for fuel and had to abandon deliveries. It was a bit crazy… and economists now expect the demonetization of 86% of India’s money supply to cost several GDP percentage points. Not the smartest way to a run a country. Certainly not a wise method of developing one.

Once someone gets a bad reputation, like that, it is easy for people to believe the worst about him. Whether he deserves it or not, Indian PM Modi has gained the reputation of a madman, or a fool in some western business circles. Naturally, therefore, that has made it easier to plant stories in the business news media hyping up some additional alleged madness. The Indian Finance Ministry, in a show of determination, stated on December 1st that new rules would require that gold be purchased out of income disclosed on prior tax returns, or using exempt income that isn’t taxable (like agricultural income), or using reasonable household savings, or must be “legally inherited from explained sources.”

Contrary to the hype, the supposedly “new” rules actually change nothing. No doubt, the Indian government will become more aggressive in enforcing the law. However, the “new” rules are merely a restatement of old rules that already existed. It has never been legal to defraud the Indian government of taxes. It has never been legal to buy assets, be it gold or anything else, with the proceeds of tax fraud. The newly announced rules are essentially a “press release”, a public relations notice, designed to appeal to less wealthy Indians, who have long been irritated by the ostentatious displays of wealthier neighbors.

In truth, the Indian government has added protection that didn’t exist before. For example, each married woman is protected from being required to show how she managed to get up to 1/2 kilo of gold, worth about $18,000. That’s a huge amount of money in India. Each unmarried woman has the right to not be questioned about up to 1/4 kilo or $9,000 worth of gold, also a huge amount for the country. Each man has the right to keep up to 1/10th kilo or about $3,600 worth. No questions will be asked about such amounts, even if the stuff really was bought with black money. On top of that, an unlimited amount of inherited gold can be kept, free and clear, and tax policemen now have the discretion to “look the other way” at even higher amounts.

Obviously, the Modi government cannot hope to win reelection if it terrorizes the whole Indian population. Even if it wanted to do that, India’s constitutional protection against illegal search and seizure, while not as strong as in the USA, is still substantial. The government does not have an unfettered right to invade people’s homes, businesses and safe deposit boxes simply because it wants to. It faces the same problem as tax authorities in the USA and elsewhere. It must justify such a search and obtain a warrant in all but the most unusual situations.

Indian law can be summarized as follows:

“Legislative intrusion [into the right of privacy in India – AG] must be tested on the touchstone of reasonableness as guaranteed by the Constitution and for that purpose the Court can go into proportionality of the intrusion vis-à-vis the purpose sought to be achieved. (2) So far as administrative or executive action is concerned it has to be reasonable having regard to the facts and circumstances of the case. (3) As to judicial warrants, the Court must have sufficient reason to believe that the search or seizure is warranted and it must keep in mind the extent of search or seizure necessary for protection of the particular State interest. In addition, as stated earlier, common law did recognise rare exceptions for conduct of warrantless searches could be conducted but these had to be in good faith, intended to preserve evidence or intended to prevent sudden anger to person or property.”

Under Indian law, like that of the United States, people are deemed innocent until proven guilty.  The state must prove that black money was used to buy gold before it can be permanently seized. Don’t get me wrong. I have little doubt that Indian tax police will target and be unfair toward certain people, especially ostentacious rich ones who support the opposition. It will also target businesses that are washing demonetized notes, especially those exchanging them for gold. But although the flamboyantly rich, and black market traders, buy what seems like ridiculously large quantities of gold, the vast majority of gold demand comes from tens of millions of average middle class people. The government won’t be bothering them. It also won’t be bothering rural farmers who purchase about a third of the gold imported into India each year. I might add that the income of the farmers is agricultural income and exempt from tax.

Indian tax authorities have always sought warrants to search and seize gold from targeted people. It has been doing that for decades. For example, all the way back in 1996, under the now-opposition Congress Party, it seized 28 kg. worth of gold, allegedly purchased with black money acquired through bribery. The gold bars were in possession of the ostentatious widow of the late Tamil Nadu chief minister J Jayalalithaa at the time of seizure. The case is still pending in the very slow Indian court system.

The idea that the Indian government will terrorize a lot of middle class Indian families, looking for illicit gold, is ridiculous. The announcement is being intentionally used for its shock value and has been deliberately misconstrued. Remember, misinformation is one of the most powerful tools used during major market manipulation events. Misinformation can and is used to panic people, especially over-leveraged gamblers. If they swallow the nonsense, and it appears gamblers in NYC and London are swallowing it right now, the open interest in gold derivatives can be reduced at a minimal cost. That lowers the exposure of casino banksters to higher gold prices.

Once you look at the what is really going on, you see a very different picture from the one that is hyped by naive western speculators who spread the stories, and the manipulators who invent them. In truth, India recently scrapped disruptive requirements that required 20% of all imported gold to be re-exported. According to a highly placed Reuters’ source, they will scrap other gold import limitations next week. It will soon be considerably easier to import gold into India. If not for the demonetization that reduced the money to buy with, demand would immediately rise. As it is, demand will still rise, though it may fall marginally in the short term. Let’s face it, after the recent actions of the Indian government, few law abiding (or non-law-abiding) people are going to be saving rupees.

It is important to take the trouble to carefully calculate the true Chinese gold demand, because once you do that, everything becomes crystal clear. You need to correct for the intentional or unintentional, but nevertheless massive, multiple under-count errors made by GFMS. Once you do the numbers, you’ll find that the end result is a huge gap between worldwide gold demand and supply. It is so large, in fact, that not even the complete elimination of the 800 tons of gold that India might normally be expected to buy this year, would fill it.

In other words, even if India somehow didn’t buy one more ounce of the yellow metal, there would still be an unfilled gap of nearly 1,000 tons at prices below $1,200 per troy ounce. Notably, this demand calculation does not include the possibility of increased demand for gold in Turkey. Its citizens have just been instructed by their President Erdogan to “buy gold and lira”, not foreign currencies. The numbers also exclude next year’s probable increase in Islamic gold demand now that the “Shariah gold standard” has finally been set. No consideration is also given to the probability that instability in Europe, especially due to the upcoming election in France, could massively increase demand in that nation.

Gold prices will begin to climb sharply once the current manipulation event runs its course. An objective look at the real numbers makes it clear that some entity has filled a huge and growing supply gap for at least 4 years running. That not-so-mysterious entity, in all probability, is the US Treasury, which is accomplishing it mostly through arrangements with the Bank of England. There is little question that very large swap liens, taken against gold reserves held at Fort Knox, have been deployed to fill the gap.

Things are changing. First of all, even if the willingness to piss away America’s gold were still there, at the current burn rate, the entire gold reserve will be gone within a maximum of 2-3 years. However, the new Trump government includes several highly placed gold standard supporters, most notably the man who is shaping up to be the single most powerful influence on President-elect Donald J. Trump, Vice President-elect Mike Pence. The speed by which casino bankers lose unfettered access to America’s gold will be based primarily on how fast Trump can reverse the Obama era executive orders.

The quasi-secret order, allowing access to America’s gold reserves, was probably signed on April 11, 2013. As soon as they get to it, it will be reversed. The Obama era, during which our golden treasure was foolishly pissed away in profit-making schemes, concocted by NYC and London banksters, is now over. That is the fact that will dominate pricing in 2017 and beyond, not whether India changes its gold imports by a few 100 tons of gold, more or less. It is impossible to know the exact bottom in a market manipulation. However, now or soon is the time to buy, not sell. For a more detailed explanation of what is happening with respect to the Trump administration and our gold reserves, click here.

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!

THE MYSTERIOUS CASE OF 186 TONS OF MISSING GOLD!

The British Office for National Statistics just admitted that it miscalculated British imports by some £6 billion pounds sterling! Guess what they missed?  That’s right. What else? You guessed right — gold!  It always seems to be gold. Hmmm…

Anyway, it depends on the exact day each ounce of gold was imported, but generally speaking, that money adds up to about 186 tons of gold bullion. The uncertainties of Brexit seem to have caused a massive surge in gold demand in a very short period of time. It’s a huge amount of gold, and it compounds the point I have been making for a long time. World gold demand far outstrips supply.

Is the U.K. destined to replace China as the world’s largest gold buyer?  Doubtful.  Tiny Britain, of course, is not normally a gold buying nation. It’s per-person gold demand has always been far smaller than countries like Italy, France and Germany. When the zombie Euro finally comes to an end in 2-3 years, and is buried, keep this in mind. If people in tiny normally gold-phobic Britain can buy 186 tons of the pretty yellow metal in just 3 months, can you imagine what is going to happen when the second biggest trading currency in the world ends?  There will be 340 million people suddenly stuck with national currencies they have no faith in.

What will they buy? You guessed right again!

As Europe moves further into perceived monetary instability, gold demand will skyrocket. I calculated in previous articles, that if the price of gold remained under $1,200 per ounce, the not-so-mysterious gold supplier of last resort would have been on the hook to supply up to 1,345 tons of gold last year. But, that’s not all, folks! The 2014 Society of Mining Professors report, using data from Credit Suisse, Morgan Stanley, Société Générale (SG), AME, and Bloomberg, determined that world gold supplies (from mines, scrap recovery, ETF sell-offs, and hedging) were about 4,476 in 2012, 4,850 in 2013, 4,155 tons in 2014, and will be 3,845 tons in 2015 and 3,585 tons in 2016.

Lets add 186 tons worth of this previously unknown British demand, and subtract 260 tons from supply. The result is that some “not-so-mysterious supplier of last resort” will need to pony up as much as 1,790 tons of gold to keep prices under $1,200 per troy ounce. All of this comes at a time when the banksters’ “Patsy” has just gotten a new papa. He doesn’t like the fact that she’s been abused for so long and he says as much. Whether it’s China or the banksters, this new papa ain’t nearly as dumb as the old one. They’ve abused the sweet thing, pretty badly, over the years and he isn’t gonna’ let her date them anymore.

To be fair, supply may be a bit higher or lower than was estimated and the same can be said for demand. I used the older numbers because I didn’t want to sit for an hour or two finding the most recent ones. You can use my prior work as a template, and update everything yourself, to get the exact numbers. But, any discrepancies are not significant enough to materially change the outcome or the point. There is an enormous gap between supply and demand which someone has been filling. When they stop, and they are about to do just that, prices will skyrocket. How far they will go is anyone’s guess, but up they must travel.

As stated, previously, once Donald J. Trump takes office, it is almost certain that the official US gold reserves will be closed off. Is it any wonder that the manipulators recently engineered a long squeeze in gold prices for the purpose of bringing down prices so they can exit less painfully? They want out and for good reason! There is simply no way to meet the kind of demand we are seeing for gold at its current price without further raids on the US gold reserves. Remember, the same banks that manipulate COMEX prices would also be forced to ship physical gold to buyers in India, China, Turkey and, yes, now the U.K.!  They can’t avoid it, because if they do, the whole rotten system will be discredited.

Conclusion? Gold prices are headed strongly upward in the near future.

________________________________________________________________

Buy SynodBREAKING NEWS!!

“The Synod” pierces “Top 100 Financial Thriller Bestsellers” list!

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A perfect gift for the holidays!