Thursday, March 29, 2012

Jim Willie - The Gold Groundhog Grind

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From Jim Willie,

A very important objective change has taken place in the gold market. Its price is not moving above the resistance established in the 1600 to 1900 wide berth range. Its price is not moving below support in the same wide permitted range. When the gold price has approached the 1800 level recently, all manner of naked soldiers emerge with imaginery swords to whack the price down, to bring it under heel. The ruse has a high cost in the real world though, as the gold cartel has been forced to shed an enormous supply of gold as punishment for each naked short episode. The opponents to fraudulent controlled manipulated markets have emerged in force to respond. They fight from the East. They fight for a fair and equitable market. They are poking holes in the floor of the syndicate helm where legs fall through. Demand for the gold core has become acute with pitched battles. The financial presss reports none of it. In desperation, the cartel has conducted regular and routine raids of the Exchange Traded Funds, using shorted shares as the ticket at the rear dock window to cart off gold bars. What a corrupted bill of lading. Meanwhile, the major gold suppliers from mine output appear to be on the defensive or actually on the ropes. The deficit in silver only punctuates the precious metals shortage, as investment demand ramps up. The dutiful lapdog press prefers to tell the story of reduced jewelry demand, without noting how it emphatically signals the powerful bull market. The stories rely on the public being poor students of history. Still, the underlying forces behind the Gold & Silver bull markets remain a team of horses, the 0% cost of money and the debasement of currency in sovereign bond redemptions. The system is broken. Long live the new system that comes, based upon gold and barter, as the USDollar loses its vital ticket in global trade settlement.


The battle has expanded. It is no longer solely on price. It has focus on draining the crooked camps of their physical gold. The latest wrinkle is the revelation that the derivative sector is as corrupt as the bond core, as banks are liable for hundreds of $trillions they cannot pay following years of hefty ripe fees taken in. The constant backdrop since 2008 is that the big Western banks are almost all hollow bankrupt insolvent and moribund operating zombies. The talk of tight lending standards is intended to conceal their deep insolvency and inability to serve as the economic credit engines. The lack adequate reserves to serve as system lenders. They are slowly having their gold removed, methodically bank by bank, as a consequence of their insolvency and ruin, aggravated by their derivative exposure. The newest agent in the game is the anonymous London Trader, whose activity has been nicely chronicled by King World News in a series of interviews. A central bank has been buying with both hands with lust for the yellow metal. What great news for gold investors, an enforcer.

The Gold Wars have significantly changed in the last two years in particular. From 2004 to 2009, the battle was to win a fair higher gold price. No longer. The war has turned the corner and reached an end game scenario. The objectives have changed. The tactics used have been altered. The upper hand by the Good Guys against the Crooked Boyz is evident. Some new confusion has entered the room. The objective is to remove gold from the bullion bank inventories and major bank inventories, all of it. This is a new battlefield in the war. Being a Zombie bank means losing all the gold in reserves, in a time hourglass process that reflects the reality of their balance sheets. By the end of 2013, no big bank will own any physical gold. They cannot defend against off-side positions in the sovereign bond market and the currency market. See what happened to JPMorgan in such a case, as it preyed upon MFGlobal accounts. Other big banks are losing all their gold from the balance sheet. UBS is a dead body on the field, their false story of a rogue trader having provided a little distraction. Few if any financial press stories are honestly told anymore. Certainly not the Libya story, where 144 tons of gold were confiscated as war booty by London. That supply filled some gaps but only temporarily.

Price implications are part of the sacrifice, as the Good Guys will help to push down the Gold price at times in order to kill a gold cartel player. Like right here, right now. Every couple months (the last being in January), a massive group of orders must be filled at a low price, for the benefit of the Good Guys, with an evil player in a vulnerable position, who knows he is dead and must forfeit its gold. The gold market stalls until the hairball is passed and another gold cartel player is gutted, carried off the battlefield under the cover of press darkness. Therefore the Gold price stays down until the order is completely filled, and only then will recover a couple hundred dollars in price per ounce, but only after this gold cartel player is killed off. The player will be identified later, in the fair market obituaries known to the internet journals. The tombstone epitaph will be carved by an Eastern hand. The US press would never report on a cartel bank having to sell $70 to $100 million worth of gold bullion to remove their big off-side position in bonds or currencies. The Good Guys have put in a series of escalating orders at low prices, from extremely well funded accounts whose war chests boast tens of $billions. The damage done to the gold cartel is immense, yet not adequately reported. The pattern showed itself in January, when after a similar event, the gold price moved from roughly 1600 to almost 1800. By February 29th, the cartel leaped on the day into position to conduct one of the largest naked short events in history. The press never seemed to catch wind, since paid not to notice.


Nothing new on this Modus Operandi, used heavily for over three years. The game is easy. The ignorance is widespread. The gold analysts barely notice, certainly not the deaf dumb blind Adam Hamilton. The cartel wrote the GLD and SLV prospectus. They permit shorting of shares for some odd reason, yet pose in legitimacy. They permit satisfaction of short shares in the removal of bullion from inventory. They might not permit altered bar lists that bear no consistency, but that is convenient to cloud the loading docks from which bars are removed in high volume. The gold and silver supply in a pinch for cartel banks is the very metal that stooge nitwit naive folks believe they indirectly hold by exercising their lazy fingers to punch in GLD or SLV while eating at their desks. The smart investors, the intrepid winners, they own vaulted accounts of physical metal in safe distant lands, untouched by the vagaries of paper certificates, the ultimate in forged wealth. The ETFund investors are victims to be revealed at a later date, when those corrupted funds trade at a 25% discount to the spot price and the differential is blamed on something lame like accumulated management fees. The march of lawsuits will make for great theater, possibly more entertaining than the MFGlobal & JPMorgan criminal travesty. The metal taken from these Exchange Traded Funds will soon gather much attention, and high time!

Pull my finger

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Start polishing your investment strategy

From:The Australian
March 27, 2012 12:00AM

Do you stack?
BEWARE of entering ABC Bullion at 88 Pitt Street, Sydney. If you're not inadvertently locked in a room that displays gold and silver bars, you may very well be kept in a small, windowless conference room by Brett Le Brocque.

Le Brocque is ABC Bullion's chief investment officer. He is very bullish on silver.

Gold will preserve one's wealth, the boyish Le Brocque proclaims, but "silver will make you rich".

"In the next four to five years," he predicts, "silver will outperform gold like it did in the 1970s."

Between 1971 and 1980, the price of silver skyrocketed 39 times. That was largely due to the Hunts. Nelson Bunker Hunt and his brother William Herbert Hunt tried to corner the silver market. Their efforts boosted the price from $US11 to $US50 an ounce. The silver price collapsed on March 27, 1980, on a day known as "Silver Thursday".

There were lawsuits against the Hunts, who borrowed heavily to finance their silver purchases.

The Hunts, the inspiration behind the soap opera Dallas, were forced into bankruptcy and barred from commodity trading by the US government. Le Brocque is happy to write off the Hunts as an aberration.

Silver is 415 per cent below its proper inflation-adjusted price, he claims. It "should be" $US164 an ounce, Le Brocque says. Silver is trading about $US32 an ounce.

Moreover, Le Brocque says, the price of silver historically has been linked to gold at between 10 ounces to 16 ounces of silver to one ounce of gold.

Today it takes about 51 ounces of silver to buy one ounce of gold.

Eric Sprott, who runs Toronto-based Sprott Asset Management LP, reckons silver is due for a bull run. Sprott says silver will reach its all-time high this year because of widespread nervousness about the fundamental health of the world economy, prompting many to hold precious metals.

Few investment vehicles offer silver exposure, but there is a pure silver exchange-traded fund, iShares Silver Trust.

Listed on the New York Stock Exchange with the ticker SLV, it has a market value of about $US11 billion.

SLV owns 60 per cent of all the silver bars above ground, says Savneet Singh, chief executive of New York-based Gold Bullion International.

But Singh believes ETFs aren't transparent, insured or have geographic diversity or the option to hold the physical asset. Investors can buy silver futures contracts through CME Group. But there is a risk that a call for the physical metal may not be met in times of market disruption, according to Singh. Gold Bullion International has a platform that allows investors to gain exposure to silver.

Singh says his company offers investors transparent pricing, liquidity, a place to store the metal, the ability to buy it online and to have their holdings insured.

One of the world's big four accounting firms, Singh says, counts each bar of silver. KPMG audits the count. Investors can pick the location and delivery of the metal.

Gold Bullion International has more than 1000 clients and is on the platform of one of Wall Street's most recognised brokers.

"There is always a huge fear of how much silver there is above ground," Singh says. Silver "is a play on gold more than anything else". Le Brocque agrees. "We're in a commodity cycle," he states. Stocks are "buy, hope and hold" he says. Now firmly into his pitch, Le Brocque says every currency, except one based on silver or gold, has fallen to zero across time.

During the past eight years 77 currencies, including the US and Australian dollars, the yen and the euro, have fallen in value compared with gold and silver, according to Le Brocque.

"What's in your wallet is not a store of value. If you want to buy money, buy silver."   

BRICS to change world economy

As billions of people in the BRICs nations are dragged out of poverty they go from fighting to meets their needs to trying to fulfill their wants. Wants usually come at a high cost. It is believed that to bring the poorest in the world up to the same standard of living of the "poor" in an OECD country will take 5 Earth's worth of resources. So here we are faced with a two pronged attack on precious metals. We have the poor grasping at wants that often contain or use a precious metal in the manufacturing process affecting the Silver, Platinum and Palladium markets, and billions of people being able to have enough money to save their excess in culturally accepted forms such as Gold and increasingly Silver. This trend can only increase, billions of poor have seen the ads, they want to be like us, and they, and the rest of us will pay the costs of this desire.

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