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Buy PHYSICAL Gold. NOW: The Discount of a Lifetime: Or Why You Must Abandon the Fake Paper Gold Market

Gordon_Gekko's picture




 

 

For previous articles by the author go to: Gordon Gekko's Blog - http://www.gekkosblog.com

 

They just showed their hands. The paper Ponzi pyramid is wobbling. It’s time to go in for the kill.

 

Let me explain. But first let’s get a handle on what’s happening:

 

“We’ve traded gold for nearly four decades and we’ve never … ever… EVER… seen anything like what we’ve witnessed in the past two trading sessions,”

 

Dennis Gartman, via The New York Times

 

“This is an orchestration (the smash in gold).  It’s been going on now from the beginning of April.  Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance…it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.

 

The exchange value of the dollar is (being) threatened, and if that collapses the Fed loses control over interest rates.  Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail.  So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.

 

And to help protect this policy they have convinced or pressured the Japanese to inflate their own currency.  The Japanese are now going to print money like the Fed.  They are lobbying the ECB to print more.  So I see this as a dollar protection policy...I know where the gold is coming from in the market, it’s just paper.  It’s naked shorts, there is no gold there.  If somebody wanted to take delivery on those contracts nobody would be able to provide it.  I don’t know what the source of the (physical) gold is...

 

..I think the power of the West has already been lost.  When you have off-shored your manufacturing and professional service jobs, you’ve hollowed out your economy.  So gold or no gold, the United States economy has been severely damaged and I don’t think it can recover...

 

This gold business (smash in price) is something to do with the dollar….They are trying to destroy gold as a (safe) haven from the dollar in order to carry on the Fed’s policy of negative real interest rates.  That is what is driving the illegal policy of selling naked shorts in order to manipulate a market.  If you and I were to do something like this without the government’s instruction or protection, we would be arrested.  So the fact that it’s illegal, being done by the authorities, tells me that they are seriously worried about the dollar.

 

(All emphasis mine.)

 

Paul Craig Roberts, Former Assistant Secretary of the Treasury (via King World News)

 

If there is one thing this latest shock-and-awe “theater” in the Gold market tells us, it’s that the government and banksters (i.e. the oligarchy) must be REALLY pissing their pants. It doesn’t show their strength – it lays bare their weakness. They just made it abundantly clear (again) how important Gold is in their scheme of things. A rapidly rising Gold price would reveal the utter fraud of their paper money Ponzi scheme and reveal them as simple hucksters, charlatans and scamsters counterfeiting money and hiding behind all the elegant regalia. The emperor would be naked. Can’t let that happen. The franchise of the paper dollar – arguably the most profitable franchise in history enabling theft on a global scale - must be protected at all costs. Something is or must be about to go seriously wrong with their empire of fake paper money (perhaps the recent gyrations in the JGB market is a tell).

 

With this recent paper Gold market “drama” they have only shown their desperation and weakness. The level of their desperation this time is so great that they had their bought-and-paid-for shills in the media mouthpieces attack and mock Gold and its buyers even before the sell-off (which further goes to proves that it was orchestrated; I’ll provide more evidence below). Consider this in an article “Lust for Gold” which appeared in the New York Times on the 11th April by none other than the lead bankster shill and cheerleader Paul Krugman:

 

After all, historically, gold has been anything but a safe investment…John Maynard Keynes famously dismissed the Gold standard as a “barbarous relic”, noting the absurdity of yoking the fortunes of a modern industrial society to the supply of a decorative metal…for a while, rising gold prices helped create some credibility for the goldbugs even as their predictions about everything else proved wrong, but now gold as an investment has turned sour, too. So will we see prominent goldbugs change their views, or at least lose a lot of their followers.

 

Its funny how the paperbugs liken Gold buyers to a cult, while not realizing they themselves sound like one, with their irrational faith in and defense of paper money (well, not completely irrational - they know where their next paycheck is coming fromJ). While I may provide a full rebuttal to Mr. Krugman in a later article (it barely deserves one, childish and inane as it is), I will point out this: If Gold is so inconsequential and such a “barbarous relic”, why is the government lapdog media busy trying to discredit it and all those who buy it? I mean just look at the sheer gloating:

 

From the Business Insider:

 

The WSJ also joined in the fun:

 

 

I’ll tell you why - because underneath all the bullshit they are spewing they know that buyers of Gold are not actually buying anything but voting against their paymaster government and bankster oligarchy. There is nothing spectacular about Gold except for its ability to reveal the truth about the scam being run by our ruling feudal masters, and this is the one and only reason why Gold and all those who buy it are so vilely derided by the establishment.

 

The global economy is still in shambles and the oligarchy have shown that they can’t do ANYTHING of ANY real consequence except manipulating the public opinion – either via “market” shenanigans or media mouthpieces. Just think about it – a global empire, a powerful and apparently invincible oligarchy threatened by just an inanimate piece of metal. But they know that because all their power is based on lies and deception, a simple truth - the rising price of Gold indicating the massive dilution of currency - can completely destroy it. Having become thoroughly corrupt, impotent and incompetent, unable to fix anything (they couldn’t run a lemonade stand if their lives depended on it) and fast becoming desperate with Gold having risen more than seven-fold from about $250 in 1999 to $1900 in 2011 exemplifying the worthlessness of their paper money and reality catching up to them, they did the only thing they knew: attack the messenger - Gold. It’s a short term fix which perpetuates their paper money franchise and thus their power, but longer term it’s meaningless. It doesn’t fix the massive misallocations which have occurred and are occurring due to central control of money via the paper money system and it doesn’t change one bit of the truth of the present dilapidated state of our economy and society which is a direct result of it. In fact it’s making the situation worse as by not allowing the misallocations to correct and reallocation of capital to productive hands to occur, huge amount of scarce resources – both human and material – continue to be wasted on unproductive enterprises.

 

Unless and until the following factors are no longer true, there is and will remain a case for buying Gold. These factors did not vanish overnight because of a single orchestrated plunge:

1.      Exponentially increasing Government and private debt

2.      Exponentially increasing money supply

3.      Consistent rise in the price of items of daily need (yes I know there is no “inflation” but anybody who goes to the supermarket knows what a crock of bullshit the government CPI numbers are)

4.      Rising unemployment and falling incomes

5.      Corrupt government and politicians

 

The banksters are acting like a child throwing a tantrum because daddy (Gold) is going to take their toy (paper money) away from them, so they simply wail and try to hit back at daddy, as if that would accomplish anything. People who know the truth should simply sit back and laugh at the banksters and their shenanigans while using the opportunity to buy even more.

 

The Discount of a Lifetime

 

The way this price fall occurred makes it clear that there were NO fundamentals behind the move and, paradoxically, strengthens the case for Gold even further. Let’s take a look at exactly how this latest plunge in Gold price happened (via Ross Norman):

 

The gold futures markets opened in New York on Friday 12th April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract in what proved to be only an opening shot. The selling took gold to the technically very important level of $1540 which was not only the low of 2012, it was also seen by many as the level which confirmed the ongoing bull run which dates back to 2000. In many traders minds it stood as a formidable support level... the line in the sand.

 

Two hours later the initial selling, rumored to have been routed through Merrill Lynch's floor team, by a rather more significant blast when the floor was hit by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market - it had the hallmarks of a concerted 'short sale', which by driving prices sharply lower in a display of 'shock & awe' - would seek to gain further momentum by prompting others to also sell as their positions as they hit their maximum acceptable losses or so-called 'stopped-out' in market parlance - probably hidden the unimpeachable (?) $1540 level.

 

The selling was timed for optimal impact with New York at its most liquid, while key overseas gold markets including London were open and able feel the impact. The estimated 400 tonne of gold futures selling in total equates to 15% of annual gold mine production - too much for the market to readily absorb, especially with sentiment weak following gold's non performance in the wake of Japanese QE, a nuclear threat from North Korea and weakening US economic data. The assault to the short side was essentially saying "you are long... and wrong".

 

The CME's 10% reduction in the required gold margins in November 2012 from $9133/contract to just $7425/contract made the market more accessible to those wishing both to go long or as it transpired, to go short. Soon after we saw the first serious assault to the downside in Dec 2012, followed by further bouts in January 2013 - modest in size compared to the recent shorting but effective - it laid the ground for what was to follow. One fund in particular, based in Stamford Connecticut, was identified as the previous shorter of gold and has a history of being caught on the wrong side of the law on a few occasions. As baddies go - they fit the bill nicely.

 

The value of the 400 tonnes of gold sold is approximately $20 billion but because it is margined, this short bet would require them to stump up just $1b…. By forcing the market lower the Fund sought to prompt a cascade or avalanche of additional selling, proving the lie ; predictably some newswires were premature in announcing the death of the gold bull run doing, in effect, the dirty work of the shorters in driving the market lower still1.

 

(All emphasis mine.)

 

If someone is selling anything, the rational thing to do would be to get the best price possible, right? Would you get the best price if you sell your lot in one go flooding the market? Would you want to overwhelm all the bids and crush the price? Yes, but only if exactly that was your objective – to crush the price. Nobody sells 400 tons (!) of gold in one go if they are trying to get the best possible price. So this wasn’t a case of varied market participants selling their gold holdings having considered the fundamentals for Gold and arrived at the conclusion their long position didn’t make sense anymore. This was a case of concerted selling by one single entity whose sole intention was to drive down the price. Not only that, nobody sells $20 BILLION worth of Gold in ONE GO without some sort of state/CB backing. You think some piddly hedge fund manager would have the balls to do this while risking prosecution and jail time? So not only was this market manipulation, but state-sponsored market manipulation completely unrelated to the reality and the fundamental basis for buying Gold, which remains as strong as ever.

 

But it gets better. While this is the probably the most spectacular takedown of the Gold price ever, but by no means is it the first or the only one. Anyone who has actually traded the Gold futures market for any length of time knows that this happens on a regular basis. So basically the government/Central Banks use the paper gold futures market as a price control mechanism for Gold (of course, they can’t impose price controls on Gold overtly as it would reveal the lie - if Gold is a barbarous, meaningless relic why would you need to impose price controls on it?). But what happens when price controls are imposed on something? Shortages start to occur resulting in an even greater moonshot in price than would have otherwise occurred. A “black” market (which is actually the free market at play and depicts the true price of the commodity) eventually emerges where it sells at a premium to the official price. There are two reasons for this:

1.      Buyers - aware that the commodity/good is available at a discounted price - beat a path to the door of whoever is foolish enough to sell it at the government mandated price. Availability at that price soon runs out.

2.      The good becomes even scarcer as the costs of producing and selling it are no longer covered by the government mandated price. Aware of this, sellers withdraw from the market and demand ever higher prices for the good.

 

And remember: for marketable goods, the “out” is money, but the only “out” for money is a superior form of money. When the paper currencies become unstable, the only “out” is Gold so you can be sure there will be no lack of buyers, only sellers – and there is no upper limit to high it can go. Theoretically, the price will be infinity when no seller is willing to sell Gold in exchange for paper. You want to be “out” of paper before we reach that event horizon.

 

If the rigging in the futures market keeps continuing, the futures price at some point will decouple from the physical and become meaningless. This is exactly why you should use this opportunity to buy as much physical as possible at discounted prices while there are foolish sellers still willing to sell at the stated official (futures) price. I’m sure many of you remember Gold’s spectacular fall from about $1000 to $680 circa 2008. How many of you have regretted not buying at those levels while you have been watching Gold’s inexorable rise since? You’ve been waiting for a price drop, haven’t you? So what are you waiting for? We saw the same scary headlines in the MSM that we are seeing now with the same bullshit reasons – while the reality hasn’t changed ONE BIT. Some media mouthpieces are proclaiming a bear market in Gold has begun while others are hoping that their paymasters’ moronic ideas are finally working but remember this is the same media that sold you real estate before the bust, the same media that sold you DOW 36000, the same media that sold you Obama’s “hope and change” and has pilloried gold and gold buyers whenever its price crashes but has been largely silent throughout the past 13 years of the gold bull run. There’ve been many of you saying Gold is too expensive and waiting for an opportunity to buy in. Well, the banksters in using the futures market as a propaganda vehicle against Gold have unwittingly provided you with one. Overcome your fears for fortune favors the brave. It’s time to go in for the kill.

 

Don’t Pick Pennies In Front of The Steamroller – Get Out Of The Paper Markets

 

First, you must be clear why you are buying Gold. Sure, paper gains are nice to have but are only a side effect. The real reason is this (from one of my previous articles):

 

Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right - Gold. All the world’s capital – trillions, perhaps quadrillions of it - will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.

 

In other words, wealth preservation in the face of a currency collapse and an insurance policy against the idiocy and depredations of our monetary masters.

 

For those of you who have read my work, this current smash shouldn’t come as a surprise. In fact – not to beat my own drum – but if you understood and followed my advice, you would have been out of the paper markets and not affected one bit by these shenanigans. If you wish to trade the paper market for short term paper gains, by all means do it (at your own risk though - and you just saw what that “risk” looks and feels like), but in the end always – ALWAYS – convert those paper gains to real profit by buying the physical metal because Gold will never ever attain its true price in the futures markets. They can always issue an unlimited supply of naked paper contracts. The following extract from one of my previous articles explains the reality of the futures market:

 

The futures market is nothing but a tool for the dollar managers (US Government/Fed/Bullion banks) to manage/control the price of Gold. Any rational observer with an iota of brain who has watched the gold market for any reasonable length of time can tell that the price is intentionally driven down during the Comex trading hours. If you don’t believe this, either you’re in denial or worse – collusion - and IT WILL end up costing you big time. Given the massive, concentrated and long-term (the entire past decade - they haven't been net-long - not once - during that time period) nature of their short positions, it really isn’t that hard to deduce that the banks do not nearly have enough metal to cover their shorts and that the sole intention of the massive short position is to control the price. Whenever the price rises (or threatens to rise) the big bullion banks ala JP Morgan create massive naked shorts introducing fake supply of Gold in the market, thus driving the price down. “But the price has been rising for the past decade, hasn’t it? So how can you say they are driving it down?”, many people ask. Well, the constraint on the bullion banks has been the availability of the physical metal. If the metal is not available, the fraud of the paper market is exposed and they lose their price managing ability. So they allow the price rise to a level at which there are some weak hands willing to sell and then they hold it there till all the sellers have been exhausted (I am assuming the Fed has already sold all the US Gold during the past decade). So strong are Gold’s fundamentals that despite the massive rigging, all they have been able to do is slow its rise. The weak hands who sell the physical metal at every price rise have helped them in this endeavor. But soon, as the bond market implodes, they will run out of sellers. Treat the availability of real metal at today's paper price a gift and buy as much as you can.

 

To those who think that the Comex shorts will be crushed one day and the price of paper Gold will do a moonshot, to them I will say that you are dreaming. The Comex shorts will be crushed, but not in their own casino! If and when a majority of paper Gold longs demand delivery a force majure (who do you think the US Government will side with?) will be declared with cash settlements and/or offers of equally worthless GLD shares (don’t tell me you didn’t know about this). By some accounts, this is already happening. What will happen to the paper price then? That’s right – it will utterly collapse even as the physical’s price is rocketing. Paper gold holders will dump it all to buy the physical – which, unfortunately – will most likely not be available at all…in light of the sum total of the recent developments mentioned in this update I think it is too risky to be trading right now and one should just sit 100% in physical Gold and some currency for day-to-day needs…Trading paper markets for paper gains is like picking up pennies in front of the steamroller. It’s time to stop trading and just buy the physical metal….

 

They don’t have nearly enough Gold to cover all the contracts they’ve sold in the market. If you’ve bought one, stand for delivery. I’m sure many will be offered cash premiums in place of Gold. Refuse. Demand the metal. This is the right time to tighten the screws on them while they are vulnerable having sold 400 tons of non-existent Gold in the market. Getting out of the fake paper market and collapsing it will have a threefold benefit:

1.      Buying physical with cash preserves your anonymity and safeguards your wealth in your hands away from the prying eyes of the looters posing as “the government”.

2.      Counterparty risk is eliminated as there is none. You’re home free.

3.      The fake paper market will collapse due to non-availability of the physical and non-participation of the majority. The sooner it happens, the sooner Gold will attain its true value and the emperor will be naked for all to see. This fake money system needs to collapse so the work of reallocation and rebuilding can begin. The cancerous tumor of banksters needs to be eliminated from the economy.

 

Make no mistake, this is a war. A war for your freedom, liberty and life. They have won the battle but they are not going to win the war. It is upto you to make sure they don’t take you down with them. Those buying gold are not in it for the short term pleasure of paper profits but because they understand that it is the only way to safeguard your wealth and a claim to a chair when the music of the paper pyramid Ponzi finally stops.

 

To me, the only question is: Who Would I Trust With My Wealth?

 

This:

 

Or This:

 

 

The best time to buy is when there is blood in the streets. That time is NOW.

 

So don’t panic. Just buy the physical, sit back, relax and enjoy the show!

 

 


 

1. Some people may find this description of events to be too “conspiratorial”, but rest assured, if anyone does the diligence, I’m sure they won’t find things differently. This is how things are “done” in the “markets” today.

 

 

 

 

 

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Wed, 04/17/2013 - 07:51 | 3460061 Doctor of Reality
Doctor of Reality's picture

I'll be concerned when the rats like Krugman begin to exit the US. Their unethical and IMMORAL lies will have destroyed many a sheep's life savings. 

Wed, 04/17/2013 - 07:59 | 3460075 Doctor of Reality
Doctor of Reality's picture

Krugman looks like my 10 year old son when he tries to lie to impress me. I know he only wants praise, but I educate him on the destructive and seductive power of lies. Krugman is a very poor liar, but he'll maintain his lies until he's taken away in cuffs... and then he'll shit his pants. His problem, he believes in government so much that he'll protect it until the end. It's where his ego gains strength, as he's the government... he's a "very powerful man" and a legend in his own mind. Reality has no hope against such mental ilness. Sad, because like most, he probably started out with nobel intentions. Just as Obama and many others on both sides of the fence did as well. 

Wed, 04/17/2013 - 12:03 | 3461268 KnightTakesKing
Wed, 04/17/2013 - 14:27 | 3462326 Jonas Parker
Jonas Parker's picture

Please, don't insult Baghdad Bob!

Wed, 04/17/2013 - 08:46 | 3460202 marathonman
marathonman's picture

Doc, if you think Barack Obama ever had good intentions, then you should have the Board revoke your license to practice.  A freaking choom smoking grifter from the political swamps of Chicago that grew up with Acorn sueing banks under the CRA to get them to lower their lending standards.  From that to political office with Bill Ayers a known domestic terrorist and Tony Rezko a felon convicted of corruption.  He never faced a real opponent in his rise through the ranks as he undermined his opponents and got them disqualified.  Then the financial bombs he and the Democrats set up finally blew in September 2008 just weeks before the election and that poor squish McCain didn't have a clue.  To think that Obama ever had good intentions is naivete beyond belief.

Wed, 04/17/2013 - 13:46 | 3461989 donsluck
donsluck's picture

Liar. It was Bush who gave away 700 billion (after persuading the Congress). The Dems may have laid some of the groundwork, but it was Bush who led the charge. Put credit where it's due.

As for O'bummer, he is as dangerous as they come. By pacifiying the Dems, he removed all obsticals to a police state. No more red, no more blue, vote green!

Wed, 04/17/2013 - 08:03 | 3460090 Ghordius
Ghordius's picture

Dr. Krugman wants us eurozoners to break up, now - and do monetary policy in the sensible way

Wed, 04/17/2013 - 07:50 | 3460058 Rory_Breaker
Rory_Breaker's picture

Gold, Bitchez!

Wed, 04/17/2013 - 07:50 | 3460056 eddiebe
eddiebe's picture

I'm in.

Wed, 04/17/2013 - 07:47 | 3460049 Fred C Dobbs
Fred C Dobbs's picture

I agree and will be buying more on payday Thursday. 

Wed, 04/17/2013 - 07:47 | 3460048 TLT
TLT's picture

Excellent post, GG.

Rising gold prices make people wonder why. That's why CB's have mantained low gold prices for so long.

The next months may be the last opportunity to buy physical. We must be near the "game over" or "big reset". The last image couldn't be clearer.

I just regret not having more "worthless paper" to buy physical at this point.

BUY PHYSICAL GOLD. NOW.

Wed, 04/17/2013 - 09:23 | 3460378 taraxias
taraxias's picture

Excellent indeed.

I've been loading up on physical since the $500+ price days because of Mr GG's wisdom posted on here and I owe him my gratitude. My children will too, I'm sure.

Well done Mr. GG, well done. 

Wed, 04/17/2013 - 07:47 | 3460045 Cantankerous Canuck
Cantankerous Canuck's picture

This guy does our cause no good.  He's an idiot.

Wed, 04/17/2013 - 17:36 | 3463005 Solon the Destroyer
Solon the Destroyer's picture

To the Cantankerous Canuck... Agreed! From your post, you are obviously pro-precious metals, yet your comment is getting monkey-hammered like Gold in an overnight market...  But I feel the same way as you...

There is at least one HUGE assumption in this article that the author is passing off as fact.

It's guys like this that get us 'Bugs laughed at.  That assumption is the ongoing chorus sung and re-sung by the manipulation theorists...

That the shorting is naked.  Nothing could be farther from the truth... the writing is covered and ironically those writing the options want the public to believe that they ARE naked and not covered (because it creates a supply of muppets).

In that way the unstoppable long term price increases in PMs can be slowed and controlled and risk-free profits taken by playing the price ranges.  The bigger the monkey-hammering, the bigger the profit-taking.

Now normally, the big commercials would want their monkey-hammering to be a lot less obvious so as not to kill the goose laying all the pretty eggs... so this recent episode does open up some questions of motive other than profit, but those motives are generally the same as they have always been... to coax PMs out of the hands of the weak and gather them into the hands of the strong (the big commercial banks, bullion banks etc).  This is also the reason for the disappearing cost basis in gold.  It's a bribe to get you to give up your gold. (this motive is also the reason why Bernanke is happy with the pump to the stock market while refusing to admit it is a pump).

Now the cost basis has been sliced pretty fine and the bribe isn't working as well as it has in the past... so we may see more episodes of this sort of monkey-hammering in the future, and we would have to take those episodes as the large commerical interests using their large covered shorts to entice gold out of its hoards for the risk-free profits they seek and to satisfy their quest to amass ever more of the shiny metal.

And I also don't buy the completely speculative allegation that the US has sold all of its gold.

Military leaders... Generals, admirals etc... tend to be students of military history. No military leader who has any passing knowledge of military history is going to let its government sell all of its gold.  You don't have to look too far back to find wartime examples of gold being the only option for a sovereign buying war materials.

Fri, 04/19/2013 - 20:17 | 3474946 MeelionDollerBogus
MeelionDollerBogus's picture

excuse me? 100 tons is dumped immediately followed by 300 tons in just 3 hours time window? What supplies did this come from? Vault? No. Mines? No. cash4gold? No. Do you know what dates are on those contracts and if so do you believe that gold is deliverable if requested on those dates? No.There is no such supply available for comex delivery. There is no such mine supply available either. That’s years of supply in just hours traded. Scrap gold is where the bulk must be sourced or it can’t be sourced and that makes it naked shorting.

Wed, 04/17/2013 - 21:40 | 3464448 Cantankerous Canuck
Cantankerous Canuck's picture

Thank you Solon.  Wow, I cannot believe how my comment was misunderstood by so many ZHers.  I do indeed believe in (and hold) precious metals for their ability to protect and preserve my wealth.  I also believe this set-back has been completely manufactured and will be viewed from a much greater height once it's well in the rear-view mirror.  My issue was with the style and content of Gekko's writing.  His article just has the kind of shrillness of tone that makes us all look like tin-foil hat wearers.  How did you all miss that?

Fri, 04/19/2013 - 20:16 | 3474940 MeelionDollerBogus
MeelionDollerBogus's picture

didn’t miss it, it isn’t there. What was written is verifiable fact. Without divergence whatsoever.

Wed, 04/17/2013 - 17:37 | 3463390 tenpanhandle
tenpanhandle's picture

Please excuse my ignorance, I have a question.  How can comex paper be covered when their supply is reported and easily seen and there is 10X that in comex paper contracts sold?

Wed, 04/17/2013 - 19:15 | 3463494 Solon the Destroyer
Solon the Destroyer's picture

1. The big institutions and other big players have been playing this game for a long time and have been using that time to accumulate.  As Prof. Fekete warns, analysts should be far more concerned about the dangers of concealed concentrated long interest than they should be of concealed concentrated short interest.

2. If they are institutional in nature the players cover it with leased sovereign gold, if necessary and even client gold. Thus risk-free. To them.

3. Some nations coughChinacough are engaging in this game and can obviously cover their short, take their profits, and then buy and take delivery of more. If they have a large pending order direct from a mine or another sovereign that is say set at some future price, they can also use this gaming to affect the cost of that delivery.

4. Volume of transactions is not a substitute for volume of supply, but looking at it that way is a common error.  One also has to remember that smaller players like hedge funds ARE leveraging.

Wed, 04/17/2013 - 21:20 | 3464375 Imminent Crucible
Imminent Crucible's picture

You think this trading is covered by physical gold? Are you serious? You're aware that Tuesday's Comex volume of 454,957 contracts represents 1415 tonnes of gold? That today's volume was more than 600 tonnes, on top of Friday's 500 or so. Monday's trading volume alone represented 39.84 million ounces.

The Comex holds a total of about 9 million ounces of gold, and less than 3 million of that is registered and deliverable.

You need to spend a little time with Harvey Organ.

Wed, 04/17/2013 - 22:28 | 3464677 Bay of Pigs
Bay of Pigs's picture

+1

He lost me at "manipulation theorists". That dude is smoking crack if he cant see whats going on here.

Wed, 04/17/2013 - 13:04 | 3461665 donsluck
donsluck's picture

"Our cause"? And what would that be? Mine is making and preserving capital. What's yours?

Wed, 04/17/2013 - 11:49 | 3461167 DaveyJones
DaveyJones's picture

Gordon's been around here a long time (longer than 2 weeks) and has proved himself over and over.

now what was your point? 

Wed, 04/17/2013 - 22:28 | 3464668 BigDuke6
BigDuke6's picture

Aye davey
And was it not Gordon who uttered the famous words

'When the gold mothership takes off , many will be left behind'

:)

Wed, 04/17/2013 - 14:09 | 3462183 Bay of Pigs
Bay of Pigs's picture

Miss was talking to the clueless numbskull Canuck, not Gordo.  

Wed, 04/17/2013 - 17:38 | 3463394 Solon the Destroyer
Solon the Destroyer's picture

The only clueless numbskulls are those voting him down. From his comment, he is obviously FOR physical gold.  He just disagrees with the writer of the article who is passing speculation off as fact.  Nothing numbskull about that at all.

Fri, 04/19/2013 - 20:17 | 3474947 MeelionDollerBogus
MeelionDollerBogus's picture

Harvey Organ’s research shows it is not speculation. You show where this supply is coming from. China doesn’t even export gold forget selling it on COMEX for delivery or cash.

Given total supply sold all at once that further DOES show it’s no hedge fund because they don’t have that much supply, it’s no mine because they don’t, so that leaves only the CENTRAL BANKS and we already know which ones are now net importers / buyers of gold and which are not. Nothing smaller than a central bank of a RICH NATION could possibly have this supply, and those which could can LEASE it with GOFO yet still keep it on their books.

Wed, 04/17/2013 - 08:45 | 3460194 Manthong
Manthong's picture

Again.. wisdom from the north..

http://dailybail.com/home/must-see-gold-stupidity-from-tv-reporter.html

foolishness from the east..

 “(Reuters) - When he woke up to news of a collapse in gold prices, Yujiro Yamashita, 63, made his way to Tokyo's posh Ginza district to buy the precious metal for the first time in 20 years.”

http://www.reuters.com/article/2013/04/16/us-japan-gold-idUSBRE93F18I20130416

Wed, 04/17/2013 - 08:18 | 3460121 Miss Expectations
Miss Expectations's picture

Says the asshole who's been here 2 weeks and 6 days.

Wed, 04/17/2013 - 21:49 | 3464489 Cantankerous Canuck
Cantankerous Canuck's picture

And you've been here 3 years and 4 weeks Miss.  You'd think by now you'd have developed some eloquence, Even if only through osmosis. 

Fri, 04/19/2013 - 20:17 | 3474949 MeelionDollerBogus
MeelionDollerBogus's picture

fight club rules, this is ‘eloquence’ & once you have a better look around you’ll realize this comment needs no /sarc.

Wed, 04/17/2013 - 17:31 | 3463348 tenpanhandle
tenpanhandle's picture

I think "our cause" meant his and Krugman's.

Wed, 04/17/2013 - 08:13 | 3460104 fonzannoon
fonzannoon's picture

You are an idiot. This may be the best single article on gold I have ever read. It's got it all. What an awesome work.

Wed, 04/17/2013 - 21:53 | 3464501 Cantankerous Canuck
Cantankerous Canuck's picture

It's nothing but other people's writing strung together with conjunctions.  So in that sense, yes, it's a Greatest Hits album.

Thu, 04/18/2013 - 09:54 | 3466130 tango
tango's picture

But so are many of the posts. Ilene borrows extensively as does the guy always pushing his firm.  GW's rants many times are nothing but copy/paste, etc. On a site where serious discussion must contend with moronic comments for attention, the amount of original, thinking commentary is necessarily less than some of the more cerebral places.

Wed, 04/17/2013 - 18:11 | 3463639 jimmytorpedo
jimmytorpedo's picture

I think Cantankerous Canuck is referring to the guy who says "Gold Bitchez!"

I used to thin the same until I realized Bitchez are hot women who dig gold for me.

I liked the article.

I also now like gold bitchez

Wed, 04/17/2013 - 11:44 | 3461131 machineh
machineh's picture

His logic is the same as buying tech stocks in May 2000.

Follow his advice and lose another 50 percent.

Fri, 04/19/2013 - 20:19 | 3474956 MeelionDollerBogus
MeelionDollerBogus's picture

no it’s precisely the opposite. Selling / avoiding gold is what puts you to seek the same bubble that was 2000/tech, which is now 2013 equities and was 2006 oil (margined trading) & housing (high debt, low ability to pay, intent to flip like a ponzi). Gold is the opposite of all of these. Your eyes are slammed shut tight to reality.

Wed, 04/17/2013 - 20:22 | 3464193 Henry Chinaski
Henry Chinaski's picture

I have lost more than 50% on some investments.  Fortunately, being diversified, some things go up when others go down.  Overall #winning.

Thu, 04/18/2013 - 09:57 | 3466143 tango
tango's picture

True, but I still - after all these years - think the key to successful investing is having a strategy for Bear markets (and diversification).  Anybody can make money in good years and those who do their DD can make money in sideways years.   It is the down times that crush the investor.  Unless there is a clear plan of action, you're destined to do the yo-yo trick with investments.

Wed, 04/17/2013 - 13:50 | 3462010 NotApplicable
NotApplicable's picture

Except that tech stocks never commanded a higher premium in light of falling prices.

Yes, the "correction" may well not yet be over, but it won't be the same as in the case of one who bought a tech stock that died along the way (there's a huge difference between holding something down and propping something up).

The only flaw I see in GG's entire article is the advice to stand for delivery in an effort to break the system. Just like Celente, you're gonna get Corzined if you try it. Besides, given that a force majure (or manure, according to spell-check) is their only out, it still works in their favor, as you're only affecting their timing, and doing it in tiny amounts compared to what we saw last Friday.

Fri, 04/19/2013 - 20:19 | 3474958 MeelionDollerBogus
MeelionDollerBogus's picture

agreed: I wouldn’t stand for delivery because I wouldn’t dare put good money into a crooked criminal system in the first place. MF Global proved delivery won’t be forthcoming, if you kick your feet down and demand it they’ll bulldoze your accounts into bankruptcy. No thanks, the MF Global account-holders didn’t win a battle for us much less the war, for all their losses and they were IMMENSE losses by % or by raw dollars (5 to 6 digits each, the biggest I know of).

Wed, 04/17/2013 - 07:39 | 3460038 FreedomCostsaBu...
FreedomCostsaBuck-o-Five's picture

Being new around here I think it goes something like this:

"GOLD! Bitchez..."

Wed, 04/17/2013 - 13:03 | 3461649 donsluck
donsluck's picture

I have another perspective. The smart money may be leaving in recognition of impending rising interest rates. Consider Reggie Middleton's little online calculator indicating that interest rates for non-insured deposits should be about 45% in Europe. Stateside, there may be a similar bank failure that will lead to un-insured depositor seizure. If it does happen, interest rates are indeed headed up, and gold values will descend at rates above 6% or so.

In other words, if the PTB really loose control, we will be swept up in deflation. Gold will head down.

Fri, 04/19/2013 - 20:19 | 3474960 MeelionDollerBogus
MeelionDollerBogus's picture

Not quite: interest rates can go up while bonds go bidless, whereas a constantly bid market for bonds with high rates backed by the central banks fund rates being in the 5% to 10% range would kill gold & silver trade for fiat. What’s likely is that governments go tits up bankrupt by raising rates voluntarily, and that bonds go bidless again leading to bankruptcy for EVERY government on Earth if the market shoves up rates demanded IN DEFIANCE of central bank rates (e.g. Fed funds rate). This means a bet against gold for higher rates is a bet FOR the collapse of almost every government on Earth but ALL the rich ones. ALL without exception.

Yet, in the past multiple government collapses has instead been strong for gold in trade-power which then means there is NO case for gold to be avoided.  One day if real labour participation goes up, real unemployment goes down, real debt goes down, real productivity goes up, inventories are not far over what’s needed for selling AND finally rates go up THEN ,and only then, can we avoid / ignore the trade of gold & silver.

We’re not there by a long shot.

Wed, 04/17/2013 - 20:16 | 3464165 Henry Chinaski
Henry Chinaski's picture

The dual mandate is a bitch. It ain't easy to destroy the dollar and crush the price of gold.  Pick one, bitchez!

Wed, 04/17/2013 - 14:46 | 3462469 Debugas
Debugas's picture

banks will not be paying even 4% deposit interest rates simply because they can not find credible borrowers

Thu, 04/18/2013 - 09:48 | 3466114 tango
tango's picture

That's not necessarily true (about credible borrowers).  It's the new mandates that have hampered borrowing.  We (business and personal) deal with local banks so when we went to refinance some condos I thought, a cinch.  Our credit ratings are 800+, large salary, no debt beyond these yet it took over a month.  We had to absurd questions ("Why are you living where you do with such a big income?), many phone calls, a ton of paperwork (passports, W-2, 1040, SSN authentication, etc before it was done.    

How in the world can folks with normal credit ratings and income ever get a loan?  Reminds me of the BOJ desperately debasing the currency to increase inflation but making things are so high that nobody can afford to buy.  LOL  Introducing the problem within as part of the solution.

Wed, 04/17/2013 - 12:35 | 3461453 TalkToLind
TalkToLind's picture

Silver, Bitchez!

Yep, you can do that too.

Wed, 04/17/2013 - 10:12 | 3460615 RSBriggs
RSBriggs's picture

Pretty much, but work on bolding the Bitchez!

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