gold


Gold is up nearly 21% from its December 2015 lows. Moreover, silver has added an impressive 28% to its price during the same timeframe. Most notably, the HUI gold and silver mining index is up over 100% during this period…

Source: Gold And Silver: Bull Markets Are Just Beginning | Gold-Eagle News

This news item will have HUGE repercussions through the PM markets in the days and months to come. Australian Bullion Dealer ABC Bullion has advised that one of its suppliers has provided them photographic evidence of a tungsten filled 1 kilo gold bar discovered this week. The bar passed a hand-held xrf scan which showed 99.98% pure AU. The tungsten was only discovered when the bar was physically cut in half.
After numerous reports of 400oz tungsten filled bars being discovered in Hong Kong, this is the first documented and verified report with photographic evidence that has been made public.

This from ABC Bullion:

“Many pundits in the gold commentary space have commented on tungsten filled gold bars for many years, most notably Jim Willie, whilst the following does not prove his theories that US Treasury gold is compromised, it certainly makes the case more compelling.

ABC Bullion received the following email from one of our trusted suppliers this week.

Note:
It was not ABC Bullion that purchased this bar, the email and photos were sent to us as a general warning.
I xxxx’ed out the city’s name to avoid any second guessing as to the name of the dealer.

19/03/2012:

Attached are photographs of a legitimate Metalor 1000gm Au bar that has been drilled out and filled with Tungsten (W).

This bar was purchased by staff of a scrap dealer in xxxxx, UK yesterday. The bar appeared to be perfect other than the fact that it was 2gms underweight. It was checked by hand-held xrf and showed 99.98% Au. Being Tungsten, it would not be ferro-magnetic.

The bar was supplied with the original certificate.

The owner of the business that purchased the bar only became suspicious when he realized the weight discrepancy and had the bar cropped. He estimates between 30-40% of the weight of the bar to be Tungsten.

This is very worrying and reinforces the lengths that people are willing to go to profit from the current high metal prices.

Please be careful.”

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In a two-part essay posted at 24hGold, the economist Antal Fekete provides a compelling interpretation of the gold price suppression scheme, which is also a scheme for the support of U.S. government bonds.
Fekete writes:

 “The government has the following desiderata: 
 1) To have a floor below the bond price
 2) To have a ceiling above the gold price
“Indeed, without such a floor and ceiling, the bluffing epitomized by check-kiting could be called, and the international monetary system would unravel. 
“To promote these desiderata, the bond and the gold markets are manipulated. It is true that the Treasury and the Federal Reserve prefer not to play a direct role in it. Speculators are induced to do it for them through the lure of risk-free profits
“Simply put, the role of the derivatives market is to make phantom bonds available to buy, and phantom gold available to sell, for the benefit of speculators. It is no problem to make speculators want to buy phantom bonds. They have the incentives. They know that the Federal Reserve is going to buy, rain or shine. This offers a risk-free opportunity for profits. All the speculators have to do is to pre-empt Federal Reserve purchases — that is, to buy beforehand. So let them. 
“The tricky part is how to make speculators want to sell phantom gold. This problem is solved by setting up a gold mine as a front, beefing it up as the world’s largest gold-mining concern, and letting it introduce a phony hedge plan.

Fekete adds:
Clandestine government policy to manipulate the bond and gold markets is revealed by statistics on the number of outstanding contracts in derivatives, showing an inordinate open interest in bonds on the long side and in gold on the short side. Neither has any rhyme or reason to exist, in view of the underlying economic reality. What is more, the long interest in bond and short interest in gold derivatives are increasing exponentially, far outpacing the amount of bonds in existence and the amount of gold available for delivery. 
Moreover, there is an extreme concentration of derivatives in the hands of three or four firms — namely, concentration of long bond and short gold positions.”

Part I is headlined “When Atlas Shrugged: The Lure and Lore of Risk-Free Profits” and it is at 24hGold HERE
 

Part II is headlined “When Atlas Shrugged: Gibson’s Paradox and the Gold Price” and it is at 24hGold HERE

James Turk interviews Matterhorn Asset Management‘s Egon Von Greyerz (one of the most brilliant minds in precious metals today) on the importance of owning physical gold (and silver of course) OUTSIDE the banking system.

Mystery and Intrigue in the Gold Market

 

Liebovit VR Gold Trader
Monday, August 15, 2011

 

Politicians, governments, media, etc. seem to overlook the true value of precious metals and try to deter individuals from owning them. This has been going on for centuries. Most recently, the United States government prohibited American citizens from owning gold between 1933 and end of 1974.
They continue to mislead people into believing that paper currencies are the real wealth. We hear from the chairman of the Federal Reserve, Ben Bernanke, that gold is not money, just “tradition.” Despite Bernanke’s comments, gold is indeed a currency that competes with government-issued currencies and helps determine not only the value of those currencies but also the level of interest rates and the value of government bonds.
Do they inject this propaganda to take attention away from what the central banks are actually doing with gold and the price of gold? Are they really overlooking or ignoring the true value of gold, or is this smoke and mirrors in front of what they are actually doing?
The gold-exchange standard protected citizens from hyperinflation and other abuses of monetary policy. President Nixon ended the gold-exchange standard on August 15 1971, which meant the end of direct convertibility of the dollar to gold. This removed the restrictions put on governments and central banks as to what they could do with the money supply.
Central banks want to continue to expand the money supply but not face the consequences. They seek ways to force down the price of gold because the price of gold is an indicator of central bank monetary policy.
How do the central banks continue to increase money supply while trying to keep the price of gold down?
The most common policy is to lease gold to a specialized group of insiders known as bullion banks. The central banks call this leasing, but it is operationally a form of gold sales.
The central bank leases gold at well under 1 percent per year to bullion banks. Bullion banks then sell the gold into the private market, take the money, and invest it in government bonds or other investments that pay far more than 1 percent per year.
That gold is gone. To get the gold back, the central banks would have to demand payment in gold by the bullion banks. The bullion banks could not repay this gold without going into the gold market and purchasing it. This would drive up the price of gold. It would bankrupt the bullion banks.
So central banks do not require the bullion banks to repay the gold the bullion banks borrowed. The central banks simply roll the loans over, year after year, and the bullion banks invest the money they get from selling the gold. These central bank sales are not recorded as sales by the central banks. The public remains oblivious.
The central banks maintain the fiction that they still own the gold. They report their holdings of gold as not having changed. But from an economic standpoint, the gold is gone and there is no possibility of central banks will ever get it back from the bullion banks.
Another way central banks and governments battle investors in gold is to announce from time to time that they are contemplating the sale of gold. This scares some gold investors, who sell. By threatening to sell gold, central banks are attempting to push down the price of gold.
The latest example of this came at the G20 meeting on April 2. An announcement was made that the International Monetary Fund would make available special drawing rights (SDRs), which serve as money for central banks. To raise some of this money, the IMF was to sell some of its gold. That was the official announcement.
The IMF has been threatening to sell gold for years. To do this takes a majority vote of the member nations of the IMF. It is clear that the member nations are willing to allow the IMF to do this. Previously, this was not clear.
Why would a central bank or the IMF say in advance that it planned to sell a large portion of its gold holdings? When a large holder of commodities is going to sell into the open market, he does not announce this in advance. His goal is to maximize the money he gains by the sale of the asset. If he warns the world how much he plans to sell and over which time period, this will depress the price if the sale constitutes a significant quantity.
It is economically irrational for a seller of commodity to say in advance how much he plans to sell. I say “economically irrational” on the assumption that the goal is to make a profit. But if the goal is not to make a profit but rather to harm people who hold a particular commodity as an investment, the announcement makes good sense.
A rising price of gold warns the public that the government’s tax policies and the central bank’s monetary policies cannot be trusted.
How do we believe our governments when they tell us that precious metals have no real value even as foreign governments and foreign banks continue to buy billions of dollars of the metals and some are even buying mining companies and mines to ensure continued supply?
In April 2009 China announced that its gold reserves had increased by 76 percent, from 600 tonnes to 1,054 tonnes. For the previous six years China had been reporting to the IMF only 600 tonnes. Had China acquired those 454 new tonnes only in the past year? Experts believe that China acquired those 454 new tonnes over at least several years, largely by purchasing the production of China’s own fast-growing gold mining industry.
Global financial institutions continue to create paper contracts not backed by the physical metals. Is this their way to show plenty of supply in order to keep prices down so that they can continue to accumulate the bullion?
In 2000 CPM Group, a commodities market research, consulting, asset management, and investment-banking firm) released a document stating, “With the start of the London Bullion Market Association’s release of monthly trading data, the market has become aware that 100 times more gold and silver trade hands each year, just in the major markets, than is produced or used. Some market participants have wondered aloud how 10 billion ounces of gold could trade via the major markets each year, compared to 120 million ounces of total supply and demand, while roughly 100 billion ounces of silver change hands, compared to around 628 million ounces of new supply.”
Years ago GATA disclosed that the IMF, the leading compiler of official gold reserve data, allowed member nations to count gold they had leased, gold that had left their vaults, as if it was still in their vaults. The effect of this accounting fraud was to deceive the gold market into thinking that central banks had much more gold left with than they really did.
While the major gold and silver exchange-traded funded frequently report their metal holdings, studies by GoldMoney founder James Turk and former GATA board member Catherine Austin Fitts and her lawyer, Carolyn Betts, suggest that this data is unreliable too. For the major ETFs won’t disclose exactly where their metal is, and indeed their prospectuses say it’s OK for the ETFs not even to know where their metal is kept among custodians and sub-custodians.
And the custodians for the major gold and silver ETFs are, perhaps not so coincidentally, also the two major international banks that report having the biggest short positions in gold and silver, short positions that give these banks and metal custodians a powerful interest in suppressing the price of the assets they supposedly are holding for investors who want those assets to rise in value.
The biggest so-called “physical” gold market in the world is the one run by the London Bullion Market Association. The LBMA publishes statistics on how much gold and silver is traded by its members. But these statistics show spectacular volumes, more metal than could possibly exist. Of course much of this metal could be sold and resold back and forth many times every day. But an expert in that market, Jeffrey Christian of the CPM Group, acknowledged at the March 25 hearing of the U.S. Commodity Futures Trading Commission, as he had acknowledged in that explanatory report published in 2000, that the London bullion market is actually a fractional-reserve gold banking system built on the presumption that most gold buyers will never take delivery of their metal but rather leave it on deposit with the LBMA members from whom they bought it.
“Why is gold such a mystery? Why is it, along with silver, kept such a mystery? It’s because the two precious metals are not only money but, from the point of view of free individuals, the best sort of money, less susceptible to what governments see as the most desirable quality of money — the susceptibility to control by government and particularly its susceptibility to devaluation. You can print or otherwise issue gold and silver derivatives to infinity, but not the metals themselves.”
What will this do to the price of gold and silver when the holders of these paper-backed securities realize that the actual supply does not meet the demand, that they will not be able to receive the bullion they paid for? We are already seeing the results of the increased demand as the price of gold continues to move higher.
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The July edition of the journal of the Gold Standard Institute leads off with an essay by financial writer Louis Boulanger, who argues that while people may ignore reality, they do so at great peril, as there is no guarantee that reality will ignore them. 
Boulanger concludes that the Internet revolution is moving sovereignty away from the state and back toward individuals — which is, of course, the moral claim for ensuring that the precious metals trade freely as independent currencies. May it come to pass in our time. 
You can find the July edition at the Gold Standard Institute’s Internet site HERE
A “full-scale financial war” is raging around the world and gold is the secret weapon, geopolitical analyst James G. Rickards tells King World News today.
Rickards says China’s new gold exchange is retaliation for the refusal of the United States to restrain paper currency and help control inflation. He agrees that the exchange has the potential to explode demand for gold.
As for the proposal for Switzerland to create a “parallel” gold-backed franc, Rickards says it would create a massive case of Gresham’s Law, where everyone would dump the unbacked franc for the gold-backed franc. Indeed, Rickards says, the first country that goes to a gold-backed currency will have the only currency anyone wants, the strongest currency in the world. Swiss legislators, he adds, can’t possibly understand the global implications of the proposal.
Holes in the fiat currency dike are popping out all over the place, Rickards says, and in the face of the collapse of their paper currencies, governments will either have to convert their currencies to gold or resort to unprecedented coercion, outlawing gold or punitively taxing it and imposing capital controls.
As usual Rickards has thought things through far more extensively than most analysts. You can listen to his interview at the King World News Internet site HERE

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