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Why the Western Banking Cartel’s Gold and Silver Price Slam Will Backfire - And How You Can Protect Yourself from the Blowback

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by JS Kim, Managing Director of SmartKnowledgeU

 

Currently it seems as if the disinformation about the reasons why gold and silver paper prices have fallen so quickly seem to outnumber the real reasons at least 10 to 1 in the mass media and though there have been some solid commentaries already regarding the real reasons why gold and silver paper prices have fallen (that have zero to do with the rubbish the mass media is selling the public), I feel that one can never have enough articles that try to disseminate the truth, especially when the truth is being bullied into submission by those with captive platforms from which to sell their fake agendas. Thus, in this article, I will discuss the truth about the current banker executed gold/silver raid and why it will ultimately FAIL.

I wish to summarize the facts regarding why this paper gold and silver slam happened, including some of the information I was sending to my clients last week as this slam happened in real time, the usual suspects that were behind it, and why this slam will eventually result in massive failure and massive consequent devaluation of fiat currencies anyway. The reason I have opened up this first paragraph by constantly referring to a PAPER gold and silver price slam instead of a PHYSICAL gold and silver price slam is because massive premiums exist on physical silver and significant premiums exist on physical gold over spot prices of gold and silver. For all intents and purposes, the spot price is equivalent to the fake banker engineered price that cavorts across the ticker on your television everyday. But go to a dealer and try to buy at that ticker price and you will discover that it is a delusional fake price that no dealer is willing to kindly grant you. Instead, when I checked prices on 1-troy ounce American Eagle coins on Apmex last week, there was a 5.8% premium on gold coins and when the spot silver price had fallen to $22.99 an ounce earlier in Asia last week, Apmex was still listing their 1-oz American Eagles at $29.01, a whopping 26.2% higher than the spot price. Only a complete buffoon of economics, like Paul Krugman and his zombie followers, would ever believe that the price of real silver was $22.99 at any point and time last week.

 

How It Was Done and the FACTS About the Banking Cartel-Engineered Gold and Silver Raid

In any event, I will only briefly summarize the facts surrounding the recent gold/silver smash before moving on to the main and more important thesis of this article, and that is the expeditious path of fiat currency destruction that will be the blowback of this false illusory takedown of gold/silver prices that only exists in some hallucinatory world of illusions called the futures markets.

FACT #1: COMEX gold vaults were recently drained of 2 million ounces of physical gold in one quarter, the largest withdrawal of physical gold bullion from COMEX vaults in one quarter during this entire 12-year gold and silver bull. There has been speculation about the reasons that spurred these massive withdrawals of gold from COMEX vaults, but the most reasonable speculation is that no one trusts the bankers to hold on to their physical gold anymore, especially in light of Fact #2. Note below, that both registered AND eligible stocks of gold had heavily declined in recent months. Such an event signals a general distrust of the banking system from everyone holding gold in registered COMEX vaults.

 

comexaustocks

 

 

FACT #2: One of the largest European banks, ABN Amro, defaulted on their gold contracts and informed their clients that they would only settle their gold bullion contracts in cash and not in physical. So much for the supposed legality of financial contracts as a "binding" contract. So whether Fact #1 caused Fact #2 or vice versa is irrelevant. What IS apparent is that the level of trust in bankers to safekeep physical gold and physical silver is disappearing, as it should be, and as it should have already been for years now. But truth always takes some time to catch up to banker spread lies and that is what is happening now. I have been warning people never to trust bankers in deals involving gold and silver for years now, as in this article I wrote nearly four years ago informing the public that the SLV and GLD are likely a banker invented scam as well.

 

FACT #3: Silver fraud whistleblower and London trader Andrew Maguire stated that the LBMA was having trouble settling gold contracts in bullion as well and stated that institutions that asked for physical settlement “were told they would be cash settled instead by a bullion bank.” In plain English, this is a default. So Andrew Maguire reported that the LBMA had already gone into default. In light of Fact #1 and Fact #2, the dominoes were starting to tumble and the house of cards that the bankers had built in gold and silver paper derivatives to deceive and hide the true fundamentals of the physical gold and physical markets from the entire world was rapidly starting to crumble. A financial earthquake of magnitude 2.5 was quickly threatening to evolve into one of the biggest financial earthquakes of all time in which the world’s confidence in all global fiat currencies would effectively have a well-deserved funeral. Just see this video to understand why no bank account is safe today.

 

Who Did It and Why?

So what was a banker to do? The easiest answer would be to slam the paper gold and silver price so that profitable long contracts would quickly transform into unprofitable ones as a mechanism to stop physical delivery requests that would expose that the emperor indeed had no clothes. In other words, because the Western banking cartel-controlled COMEX and LBMA vaults had insufficient physical gold and silver for delivery and other banks were struggling to make good on the contracts they had signed with clients to deliver physical gold, they needed to stop delivery requests immediately. These are all indisputable facts, not speculation.

So this crisis quickly morphed into the conundrum of “How does one slam gold and silver prices overnight in a rapid waterfall decline?” Bankers needed to solve this puzzle as quickly as possible, and the Obama administration called a meeting of the following 15 bankers just one day prior to the start of the now infamous banker gold and silver raid:

 

Lloyd Blankfein, Chairman and CEO Goldman Sachs

Jacques Brand, CEO Deutsche Bank

Michael Corbat, Chief Executive Officer Citigroup

Jamie Dimon, Chairman, CEO and President J.P. Morgan Chase

Sergio Ermotti, CEO UBS

James Gorman, Chairman and CEO Morgan Stanley

Gerald Hassell, Chairman and CEO Bank of New York Mellon Corporation

Jay Hooley, Chairman, President and CEO State Street Corporation

Abby Johnson, President, Fidelity Financial Services, Fidelity Investments

Steve Kandarian, Chairman of the Board, President and CEO Metlife

Brian Moynihan, President and CEO Bank of America/Merrill Lynch

John Strangfeld, CEO, Prudential

John Stumpf, Chairman, President and CEO Wells Fargo

Jim Weddle, Managing Partner, Edward Jones

Bob Benmosche, President and CEO American International Group

 

As you can see, every US banker that you would expect to find at that meeting was in attendance, there to do "God's work" no doubt, as has been Lloyd Blankfein's preferred method of describing Goldman Sachs's work in the past. Was it mere coincidence that one day after this meeting, a gold/silver slam that required the cooperation and participation of all the major banks participating in gold/silver futures markets materialized? I will let you be the judge of the connection between these two events. Yes this raid was likely engineered at the highest echelons of banking, meaning the BIS, the Feds, the ECB, but they also needed their commercial agents in the commercial banking world to carry out their agenda.

 

In any event, the bankers above had to solve the conundrum of “How does one slam gold and silver prices overnight in a rapid waterfall decline?” Because this would be nearly impossible to accomplish if bankers actually had to sell real physical gold and physical silver to accomplish this, they resorted to massive intervention in their fraudulent paper derivatives futures markets. Anything becomes possible when you can just sell millions and millions of paper ounces of gold and silver backed by nothing but air to trigger stop losses on long contracts. By this time, I’m sure all of you have seen the chart that alleges that Merrill Lynch brokers sold several million ounces of paper gold ounces backed by nothing but air in a few hours, but here is the chart below that demonstrates the massive sale of imaginary gold for the few of you that may not yet have seen it. I don’t know if it has since been confirmed that Merrill Lynch was the agent that executed this dirty takedown, but obviously an agent of the Federal Reserve was used to instigate panic selling in the paper gold markets (and it was no surprise that Brian Moynihan of Bank of America/ Merrill Lynch was at a banking cabal White House sponsored meeting 24 hours prior to the gold/silver slam).

 

mlslam

 

The reason I say it is imaginary is because FACT #4, the 400 tonne sale of paper gold represented above, was not backed by a single ounce of physical gold. It was merely millions upon millions upon millions of paper gold backed by nothing but air that was sold into the market by an agent of the Federal Reserve. If you signed a contract to buy 6 million iMacs from Apple, and then Apple informed you that your only option was to settle in cash and take a multi-million dollar loss because they had just slashed prices of all iMacs because they never had any iMacs in their inventory at the time they singed that contract, would you not call that fraud? Of course the CFTC will tell you that futures contracts were never intended for physical delivery but only as a hedging mechanism, but when you short quantities of a commodity that does not even exist in real life, is that not as fraudulent a hedging mechanism as possible of which even the Devil himself would be proud?

I realize that the Apple example relates to long contracts and that the 6 million ounces of gold that Merrill Lynch brokers sold represented ounces of paper gold sold short into the market (backed by nothing but air), and that these two examples represent opposite sides of the contract, but the examples still very adequately illustrates the concept I wish for people to understand. Whether you are buying or selling something that does not exist is irrelevant. Both trades, one hypothetical (Apple), one real (gold) are still instances of fraud since ounces of air are being traded that present a make-believe picture of real physical supply and demand to the world.

In fact, since 2008, people that used to be honest about these fraudulent and criminal banking raids in gold/silver have now backtracked in their honesty and integrity for reasons only known to them. For example, in 2008, after another banker raid on gold/silver initiated fraudulently in paper markets, Donalde Cox of Coxe Advisors LLP stated that the highest levels of the Federal Reserve and US Treasury deliberately and artificially engineered the collapse in paper markets. He stated verbatim back then, “My attitude is, 'Goddamn it, they're good -- it was brilliant.'" This time around, however, thought the evidence is just as egregious and compelling, Coxe’s explanation of the gold/silver smash was “gold was ready for a pause”, implying, of course, that this smash was a natural event after a run up in gold price that was too high. Of course, just look at the facts, absent of all speculation in this article, and you can easily deduce that Coxe’s explanation is a bunch of rubbish whereas just five years ago, he was willing to relay the truth. This backtracking of integrity by media pundits has also created a lot of confusion regarding the true reasons for this current paper gold/silver price drop as well. So exactly who is buying the rubbish that the likes of Coxe, Krugman, and Blankfein are spouting? From the looks of the gold buying frenzy in Bangkok yesterday as well as reported buying frenzies in India, Hong Kong, China, Australia, the US, and countless other countries, almost no one. Below, is the gold buying frenzy that was occurring in Bangkok, Thailand last week due to the bankers' artificially-engineered low prices in gold last week.

 

bkkgoldbuying

 

Should Futures Markets Even Exist if its Main Purpose is to Aid and Abet Banking Fraud?

The CFTC states that “futures markets allow commodities producers and consumers to engage in ‘hedging’ in order to limit the risk of losing money as commodity prices change.” Again this is pure rubbish as bankers invented futures markets to manipulate prices of commodities to fleece and rape investors, period. Maybe a hundred years ago, the futures markets actually served this purpose, but today, this clearly is not the purpose of the futures markets. And considering what we know about the mechanisms of how the bankers took down paper prices of gold and silver so easily recently and the starring role that the fraud of futures markets played in this takedown, the larger more vital question is, "Should bankers be able to participate in futures markets and if so, should futures markets even exist?" Outside of precious metals, consider the wild volatility in the price of light crude oil from 2007 to 20ll when the oil price volatility was off the charts and oil went ballistic from roughly $50 a barrel to $150, then crashed to $35 then went ballistic to $120 again, and often with price movements occurring in rapid and stunning fashion. Does any fool actually believe that supply and demand determinants for physical oil were responsible for this massive volatility in crude oil prices within very condensed periods of time?

Furthermore, when bankers already have the price mechanism locked down for a commodity, is it just not a little curious and suspicious that NO futures market exists for such a commodity?

Diamonds are the perfect example of such a commodity. Bankers and diamond dealers already have the price mechanism locked up for this commodity and have destroyed any real secondary market for this commodity with clever marketing schemes like “diamonds are forever” and “diamonds are a girl’s best friend”, so they are unwilling to subject its price to any outside influences with a diamond futures market. Just read this article, “Have You Ever Tried to Sell a Diamond?” to learn why there are no futures markets for such a widely traded commodity such as diamonds.

Thus if prices of commodities are allowed to be manipulated by bankers for personal gain only and if the prices bankers constantly set for commodities have no semblance to the price that a free market would set for them through physical supply/demand determinants (as we can already see with the every widening divergences between physical and paper prices that I also predicted would happen years ago in this 2008 article "JS Kim Uncovers Four Parallel Markets for Gold: Asia Futures, NY Futures, Physical Bullion, Physical Coins"), then I say shut all of the futures markets down in both London and New York!

For people that claim permanently shuttering futures markets would hurt the producers that need to “engage in ‘hedging’ in order to limit the risk of losing money as commodity prices change,” I don't believe producers of commodities would be hurt at all, and here's why. If allowing producers to engage in hedging were the true purpose of the futures markets, then I say keep them open. But to say that is the true purpose of the futures markets is comparable to believing the rubbish that the US Federal Reserve prints on their website of their mission being to establish “price stability” of the US dollar even though they have deliberately engineered a 98% plunge in USD valuation over the last 80 years! If you were to shut down the London, New York and Shanghai futures markets for gold and silver for just three months, and radically higher prices for gold and silver would result as a consequence of their closure (of which I’m positive would happen since the bullion banks are perpetually short millions of paper gold and silver ounces that don't exist in the real world in the futures markets), then what you are forcing producers to do is to use futures markets not to hedge against changes in the prices of their commodities but instead to hedge against the fraud committed by bankers. 

 

Should hedging against the fraudulent price moves engineered by bankers really be a good reason to justify the existence of futures markets?

If you were to shut down the futures markets and let free market and only supply/demand determinants of the physical commodity set prices instead of supply/demand determinants for paper oil, paper gold, paper platinum, etc. etc. backed by nothing but air, I guarantee that the world would receive not only a radical restructuring of all commodity prices but also commodity prices that would be far more stable and far less volatile, two conditions that would provide great benefits to producers. Thus the best way the CFTC could serve commodity producers at this point would be to completely shut down the COMEX (but of course we all know the probability of this event is less than the revival prospects of a flatlining ER victim).

 

The Gold & Silver Bull Have Been Sighted In Physical Markets and is Still Strong & Robust

So yes, contrary to the kool-aid the media is selling the public, the gold and silver bull is still fiercely alive and well. Yes, this correction in gold is greater than past 20% corrections, but when collapse of the global fiat Ponzi scheme and loss of control of all financial markets was at hand for the global bankers, desperate times call for desperate measures and thus, using the mechanisms I described above the bankers executed a 5-day price slam equivalent to 7 standard deviations of the 5-day price move in gold over the last 20 years. For those that still incredulously believe all the media rubbish and the big commercial banking lies about gold and silver, just check out this article I wrote all the way back in 2006, called "Has the Commodities Bubble Burst? No, no, no!", in which I called out Morgan Stanley Steven Roach’s pure propaganda announcement that a “commodities bubble” had burst. In fact, these rubbish calls of gold and silver collapsing back then were being made by big global commercial banking firms because of a 20% pullback in gold price from $728 to $583 in a few months. My response? I stated, “I’ve dug deep enough down into the rabbit hole to know that gold will rise much much higher in the future.” So yes, I believe a $817, or 140% increase in the price of gold from $583 to its current price of $1400 is a “much much higher” price and all the people that called me a fool for stating this 7 years ago are the EXACT same people, aka banking shills, calling me a fool for stating that the gold and silver bull are still alive and well.

 

The Blowback: The Days of Re-hypothecation Coming to an End

But how will the banker price manipulation of commodity prices that have zero basis on the reality of free market dynamics of the real physical commodity in the real world finally backfire in their criminal faces? Here’s how its likely to go down in the gold/silver world. As I wrote more than 4 years ago, the divergences between real physical PM prices and fake banker manipulated spot paper prices will continue to grow. Secondly, if we were to assume that the reason COMEX inventories plunged prior to the gold/silver slam down were attributable to peoples’ deteriorating trust in bankers to hold their physical gold and silver (a very healthy distrust by the way), then we can safely assume that the same entities that withdrew their physical gold and silver from the banking system will not return and store any of their physical gold and silver within the global banking system in the future. This will prevent bankers from re-hypothecating physical gold and physical silver and selling the same gold ounce and the same silver ounce over and over to multiple persons and accounts as they have been doing for decades. Or if instead, the banks up their re-hypothecation schemes and sell the same ounce of gold 10 times instead of 5 times due to their physical gold and physical silver reserves diminishing, then smaller withdrawals of physical PMs from their vaults will result in greater stresses on their abilities to suppress the price of gold and silver in the months ahead.

 

Thirdly, I really don’t believe the central purpose of this gold/silver takedown was simply so the COMEX and LBMA could replenish their raided physical gold and silver inventories at much lower prices. This could not possibly have been the central purpose of the price raid in my opinion as the bullion banks have unconditional support from the Central Banks to continue their fraud in every capacity. Thus, if they simply needed to buy more inventory, Central Banks would have merely continued their counterfeiting scheme and extended an open credit line to these bullion banks (if they were needed) and thus the raided COMEX and LBMA warehouse could have been easily replenished at even higher gold and silver prices. A more reasonable explanation, in my opinion, is one of the following two explanations:

 

ONE, the physical gold and silver inventory that the COMEX and LBMA needed to replenish their inventories was not available for sale, i.e. no one was selling physical gold and silver in the large quantities they needed, and since so many entities were asking for physical delivery of PMs that had been re-hypothecated over and over, the COMEX and LBMA could no longer shift physical gold and silver in and out of various vaults to cover all deliveries. Thus, the bankers needed to slam prices to convince holders of physical to panic sell their metals to replenish their inventories. However, since as I’ve explained above, this price slam was executed in paper markets and the only selling bankers accomplished was to force liquidation of long contracts of paper ounces of gold, these actions still would not have released more physical ounces to the market. In fact, all initial reports from regional physical bullion dealers and out of the LBMA pointed to just the OPPOSITE EFFECT of massive decreases in physical supplies of gold and silver due to extremely strong buying from sovereign institutions and retail individuals alike. Even with anecdotal reports of bullion dealers being depleted of their physical silver and gold inventory that can be confirmed by visiting these dealers’ online websites that list nearly all bullion silver and bullion gold as “SOLD OUT”, some bullion dealers may perhaps be listing inventory as “SOLD OUT” when they may just be unwilling to sell at such artificially set low prices.

Thus I’m not buying the story that the banks didn’t want to buy more gold/silver at higher prices because more physical buying would have sent the price higher and that is the reason they slammed prices. If significant physical buying of gold and silver was a catalyst to send spot prices of gold/silver higher, then spot prices of gold/silver would have been steadily and significantly increasing for a steady 12 consecutive months at least. Physical gold and silver buying will eventually stabilize and send even paper gold/silver prices steadily higher but likely only when the disparity between physical and fake paper prices becomes large enough.

 

Thus, explanation number TWO may be more reasonable, and that is the bankers executed a gold/silver slam to prevent large scale defaults of physical gold/silver delivery on the COMEX and LBMA that would have caused a consequent catastrophic devaluation of all major fiat currencies simultaneously and major global bank failures; and to convince people that gold and silver are no longer safe havens and to keep them pumping their fiat into global stock markets that are likely to catastrophically crash sometime within the next 18 months. However, while the accomplishment of the above two objectives have kept the majority of people compliant within the global financial Ponzi scheme, the subsequent structural damage inflicted upon the global financial system was enormous.

Because the enormity of this most recent price raid in gold and silver will undoubtedly

(1) very significantly contract physical gold and silver supply; and

(2) contract the physical reserves under control of the Western banking cartel to re-hypothecate gold and silver

these two consequences will eventually erupt into a full blown default of the LBMA and COMEX and a realization from all global citizens that the banking emperors of this world indeed have no clothes.

In other words, the current executed banker raid in gold and silver will have the same long-term success rate as a doctor that tries to save his patient from the venom of a Malaysian Blue Krait snake bite by applying tourniquets that redirect the venom from the patient’s heart to the patient’s liver and kidneys. The patient would die within two hours if the venom reached the patient’s heart but may live an additional 4-6 hours before dying if the venom is redirected to his other organs. Not a solution but just a delayed inevitability. This is what the bankers have just done with their recent price slam. They have no anti-venom for the misery they have deliberately created, and the death of their fiat currency system is now inevitable and unavoidable, a consequence of the fact that the bankers have just STRENGTHENED the gold and silver bull by strengthening the bullish dynamics of the REAL PHYSICAL gold and silver markets with their executed raid in THEIR FAKE PAPER gold and silver markets.

In conclusion, the bankers may have delayed the default of the LBMA and COMEX with their ingenious 100% paper executed slam of gold and silver, but the mechanism they used to achieve their success is likely to ensure and expedite the circumstances necessary for the absolute failure of the LBMA and COMEX and the consequent failure of all global fiat currencies. Thus, please never be misled by all the white noise of mass media propaganda or from major commercial banks like Goldman Sachs when the topics of gold, silver and paper money are concerned. It is just a matter of time before the bankers themselves suffer the dire blowback consequences of the recent fraud regarding their slamdown of paper gold and silver prices. However, because one of the blowback effects of the Western banking cartel's gold and silver price slam will be the purchasing power destruction of all major global fiat currencies, best to convert the majority of your fiat currencies into physical gold and silver now, including any holdings in the GLD and SLV, before it is too late. (Copyright: 2013 SmartKnowledgeU. This article may not be re-published on other sites and is subject to the terms of the re-publishing rights published below.)

 

About the Author: JS Kim is the Managing Director and Founder of SmartKnowledgeU, a fiercely independent research & consulting firm whose mission it is to help Main Street protect their wealth by exposing the lies of Wall Street. Follow us on twitter @smartknowledgeu and subscribe to our YouTube channel by clicking here.

 


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Thu, 04/25/2013 - 00:03 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

I propose a new kleptodigital currency, the PudPog™. The algorithmic soundness of this currency is derived from Pud-mining ZH comments, extracting unique time & article URL signatures for Pud-trolling comments and will be produced into rehypothecated trolling to other comment sites. Once propagation of each unique message has attained coverage of at least 1% of the entire Internet it will be considered a valid PudPog™ and henceforth is an additional unit of currency. Then I will start a Zimbabwe-note to PudPog™ exchange server at www.pullingyourpud.com

Any venture capitalists here wanna join in?

:D

Tue, 04/23/2013 - 07:44 | Link to Comment The Clever Guy
The Clever Guy's picture

I have real money (Gold and Silver) backed by guns and bullets. Keep stacking because this is just the beginning. The ending will be VERY ugly.

Tue, 04/23/2013 - 09:12 | Link to Comment d edwards
d edwards's picture

Right on, bro'! You're going to want some food also. Freeze dried lasts a long time if needed.

Tue, 04/23/2013 - 07:40 | Link to Comment Thoresen
Thoresen's picture

Currently in the UK I can buy gold sovereigns at just over spot. However silver Britannias are about 30% over spot, and 20% VAT also has to be added. So you can more or less take the spot $ price and know that you will have to pay that number in £.

30% disconnect between paper and physical silver. (Atkinsons charging £22.24 inc VAT).

Alternatively, I can go to goldmoney and pay £15.74 inc 4.24% commission, and pay no VAT if  ask them to store it. Will goldmoney be around and accessible on line when I need to sell?

Tue, 04/23/2013 - 06:13 | Link to Comment fijisailor
fijisailor's picture

I think that the manipulators figure that the buying frenzy will subside as long as they maintain the price in the low 1400s.  Then they figure the supply-demand situation will go back in their favor again.  Then they will crash it again and it'll be time to buy again.

Tue, 04/23/2013 - 03:46 | Link to Comment MythicalFish
MythicalFish's picture

Only a complete buffoon of economics, like Paul Krugman and his zombie followers, would ever believe that the price of real silver was $22.99 at any point and time last week.

 

JS,

It WAS at $22, and you could have bought it and converted it to physical bullion. Seriously! The cost involved is not trivial, but nowhere near the mark-up for a collector's item like a silver coin. More like 20-50c/Oz on 10,000+ ounces, plus your own costs of transport, storage, armed guards etc (whatever may be appropriate). This could add up to substantial amounts of money in say Seoul or Bangkok, but in NYC or London it should be very manageable. One or two London Good Delivery Bars (approx 2 lots of COMEX each) are usually the minimum to convert paper to physical, but a lot of "paper" vaults and products, as well as the futures contract, allow physical settlement.

It would also be possible to buy from an intermediary with real-time pricing, like a national mint. Last week, Perth Mint (who ship to my location in Asia) offered 100 Oz bars at around $22.65/Oz (Aussie 22) plus shipping plus insurance, 2-3% of the total, i.e. $23.50/Oz tops to hold it in your hands. (some countries charge VAT/GST)

I think introducing the "phyzz vs paper" argument, and talking about air markets and real markets fails to address the real issue, and it will play into the hands of the big banks by confusing people about what and who controls the price of PMs as it instils fears it may become worthless in the paper markets. Because silver cannot go to 0 for paper, no way. You can buy as much as you want near the paper price and take it into your home. This is actually great news! No need to wait for stock at the coin dealer etc

Yes, the market is manipulated and there is collusion by big "non-commercial" (i.e. not hedging) players to move the price one way or the other (usually down). What is important, IMO, is not to confuse people by false arguments, but present them with the fact that this is a tremendous buying opportunity if you don't buy on margin, you don't buy marked-up trash, and you don't buy from crooks. Get a few guys together and challenge the 'bullion banks' by buying bulk.

By the way, I personally think gold is better than silver, as it is easier to store or hide in an emergency, but this is of course up to everyone's preferences, and in terms of exchange for goods or services, silver may be a better replacement for fiat currency if that is what you want it for.

 


Tue, 04/23/2013 - 03:22 | Link to Comment bhakta
bhakta's picture

Excellent article and very revealing. Hope many will read and pay attention.

Tue, 04/23/2013 - 02:54 | Link to Comment Alan.s
Alan.s's picture

Perth mint today has immediate delivery au but 6 week delay on 100oz ag

Tue, 04/23/2013 - 02:16 | Link to Comment The Second Rule
The Second Rule's picture

JHK's take on the great gold swindle from Clusterfuck Nation: http://kunstler.com/blog/2013/04/aftershocks.html

Tue, 04/23/2013 - 01:40 | Link to Comment joak
joak's picture

Thanks for this (once again) great article !

Tue, 04/23/2013 - 01:23 | Link to Comment Izznogood
Izznogood's picture

Just one question: If this massively coordinated conspiracy was for real, wouldn't at least one person (marginally) involved on the inside blow the whistle?

Mon, 04/22/2013 - 22:41 | Link to Comment CustomersMan
CustomersMan's picture

 

I think it was Bill Black who produced an excellent video on how the futures markets used to be roughly 70% legitimate users of the specific commodity and 30% spec's.

 

Then after some rules changes in the 90's and then after 2000 it went to 80% spec and only 20% real.

 

The video is a few years old but still it gives a great background for what we see now and why.

Mon, 04/22/2013 - 20:36 | Link to Comment SILVERGEDDON
SILVERGEDDON's picture

When the Klingons from Uranus start to make a stink, there is only one thing to do.

Wipe them out.

With good toilet paper.

Benjamins, that is.

Shove that up your cake hole, bankster motherfuckers, then pour gasoline on it, light it on fire, and run around in circles until the flames go out.

Oh. Wait. You all are doing that already.

Tue, 04/23/2013 - 00:12 | Link to Comment moonstears
moonstears's picture

rant=plus 1

Mon, 04/22/2013 - 21:11 | Link to Comment sun tzu
sun tzu's picture

I have a feeling that when the banksters run out of gold for physical delivery, the government will ban private ownership of gold and set the buyback price at $1,000/oz. The banksters will not go down in flames alone. They will take the entire world's economy down with them.

Mon, 04/22/2013 - 19:50 | Link to Comment geewhiz
geewhiz's picture

Now this post is something you can take to the bank. Oops, can't use that saying again.

Mon, 04/22/2013 - 19:32 | Link to Comment F em all but 6
F em all but 6's picture

Spent the last 30 minutes reading posts. Laughed so hard a few times I damn near choked.

I moved into the physical market in 02. Silver at 5, gold at 300. All in with every last FRN to spare. My opinion.  Volatility will become the new norm as the corrupt banksters manipulate the system into anarchy. A means to an end for them as the reset, as they see it, is the New World Order. Might as well profit via rape and pillage along the way. No person here can stop it. So what do we do? Stockpile. Buy the dips and keep your head low. Sooner than later, the engineered collapse will occur. And when it does, NO amount of paper will be accepted by those in possession of what you need. An exception to this may be the final settlement of previous contracts denominated in dollars.

 

So my answer to the problem of PM manipulation. Go ahead, crash the whole thing again. Drive it back down to 5 bucks an ounce and watch me convert every last POS FRN into PM. And as for taxation on gain? I believe that when it comes to the point where we really need to exchange our metal for the other things we need to sustain our life, there will be no need to create a paper trail in the process. Gold and silver have been used as a medium of echange for thousands of years. Wishful thinking by corrupt and evil people can not and will not change this. They think of us as cattle. And that will be their undoing when the stampede begins.

And in the midst of the anarchy, Fuck em all but 6. And save those for pallbearers

Mon, 04/22/2013 - 19:57 | Link to Comment geewhiz
geewhiz's picture

Millions of antisemenetics stampeding like bawling cattle over the chosen. That can't happen, God will protect them because they are doing his work.

Mon, 04/22/2013 - 19:27 | Link to Comment tony bonn
tony bonn's picture

i love you smartknowledgu!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Mon, 04/22/2013 - 18:30 | Link to Comment wtlf555
wtlf555's picture

Don't get me wrong I'm rooting against the cartel but I see no reason why they can't be succesful as they were in the 30's. What I believe will happen is that every attempt will be made to drive down paper gold. When the physical/paper spread becomes untennable the government will make the purchase or sale of gold by individuals illegal. It worked in the 30's and I see no reason why it will not work again. Get the price down to a reasonable amount declare all sales illegal and then give the indivual the choice:

1) Turn in your gold to the US for $800/oz

2) Keep it - becomne a criminal and risk prosecution - unlike in the 30's the gov't WILL prosecute this time around

3) Try to get it to a country where you can sell it. Since most countries will act in unison it will be almost impossible to get it to the few (Russia) that trade - and accumulate

 

 Those who believe physical gold is the panacea are crazy. Great you have $500,000 stached in gold - you're a criminal and you can't sell it for the rest of your life and try and put it in your pockets and travel out of the country LOL

 

Tue, 04/23/2013 - 07:52 | Link to Comment The Clever Guy
The Clever Guy's picture

Just like it is now IMPOSSIBLE to sell heroin, cocaine, marijuana, guns, etc., etc., ad infinitum. The fact is, black market items command a much higher premium than 'legal' commodities. Nice try, however, your argument = EPIC FAIL.

Mon, 04/22/2013 - 21:35 | Link to Comment Papasmurf
Papasmurf's picture

Not gonna happen.  Too many in banking have gold as their eject seat.

Wed, 04/24/2013 - 18:21 | Link to Comment wtlf555
wtlf555's picture

If it can't happen - why did it work from the 30's to the 70's. You probably don't have experience from that time period but those ignoring history are condemmed to repeat the same mistakes. Look I'm ticked that it will come to that. I'm just telling you that history shows most people will follow laws even if it's not in their interest. Gold was illegal in the US. You are probably young so let me make it clear YOU COULD NOT BUY A GOLD EAGLE P E R I O D ! before 1974. Why don't you brush up on history by reading this http://en.wikipedia.org/wiki/Executive_Order_6102

The if it was an epic fail tell my why everyone who held gold at about $35 turned it in to the government at $20

Your understanding of what the masses can do in the black market is not epic but a fail none-the-less. try buying your groceries with your heroine and you'll soon realize its limits for barter

Mon, 04/22/2013 - 18:30 | Link to Comment JackP
JackP's picture

Excellent article, Mr. Kim.  Great work!

Mon, 04/22/2013 - 17:51 | Link to Comment pbr streetgang
pbr streetgang's picture

THE SILVER   MARKET MANIPULATION  IS CRIMINAL. INDICTMENTS ARE WARRANTED. ROBBED MY RETIREMENT LAST WEEK WITHOUT THE COURTESY OF A REACH AROUND! ALONG WITH HELP FROM MONEX METALS ,(AVOID THEM,)THE ABOVE MENTIONED "ARTISTS" WILL BE RESPONSIBLE FOR MY BANKRUPTCY.NICE JOB A!@#$%$. THIS WORLD IS FUBAR! HAVE A NICE DAY

 

Mon, 04/22/2013 - 16:42 | Link to Comment StarTedStackin'
StarTedStackin''s picture

The rape of PaulCraigRoberts continues on ZH.......

 

 

 

PaulCraigRoberts.org

Mon, 04/22/2013 - 16:00 | Link to Comment Racer
Racer's picture

Haven't been able to buy any gold and just a little silver for days now on major UK gold dealer site

Mon, 04/22/2013 - 16:43 | Link to Comment StarTedStackin'
StarTedStackin''s picture

Can get all you want via interwebz.....my site has sold out of sunshines but still has numerous rounds, and bars.....Free shipping 2

Mon, 04/22/2013 - 16:06 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

If you ever wanted to bust the paper market this is it. I'll harp on silver but my basic premise I believe is on the money. You can't price the paper market at production cost or below. The physical market is not going to sell at their cost period from the miner to the refiner, refiner to bullion dealer, bullion dealer to retail customer. That is basic business 101 you need to make a profit to stay in business. When the supply runs short and the physical market is decoupled from the paper at higher prices the paper people who get wise to it are going to go shit I can get physical silver cheaper if I call in my paper right now for delivery and resell on the open market for a profit. Once the delivery doesn't happen or the bullion banks only settle accounts in cash then the fun really starts once that ball starts rolling. Gold or silver either way the paper market has to come into line with the physical prices or the paper market gets busted. You'd be an idiot to hold paper at a cheaper price than what the open market is for physical. I'd be flipping that paper for physical then selling said physical to the bullion dealers for a profit then reinvesting back into paper; wash rinse repeat. For silver paper is $23,xx retail in physical is around $30.xx right now and that is at a premium spot above pricing not normal spot above market pricing. Take delivery on paper sell for around $25 - $26. The demand is there right now.

Mon, 04/22/2013 - 17:24 | Link to Comment RMolineaux
RMolineaux's picture

Have you taken any significant deliveries in actual silver metal lately?

Mon, 04/22/2013 - 14:30 | Link to Comment rosiescenario
rosiescenario's picture

Nice article JS Kim....I have been reading your material over several years and find it most logical.

 

Here is one thing that I really have trouble grasping: Why do the pm dealers even reference the fraudulent prices set in the paper pm markets? If the dealers are seeing demand for the physical exceeding what they have on hand or can shortly obtain, why do they not resort to auctioning off their pm's?

 

I am really having trouble understanding why this is not happening at the dealer level.....if you have buyers lined up ten deep and you are running out of pm's to sell them, why would you not just start to auction it off to the highest bidder?

 

It goes without saying that the mining companies would also do far better if the endless supply of paper pm was eliminated. Supposedly the futures market is a means for them to hedge their production costs, but the reality is that the market is being manipulated and is causing them far more harm than good. That being the case, then the only beneficiaries of the paper market are the scammers who are not producing a damn thing but ripping off everyone else.

Wed, 04/24/2013 - 23:59 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

#1

I think that hedging with paper contracts auctioned without COMEX or HFT fraud would be great. We need to arrest those who commit fraud or abandon markets / mechanisms dependent on frau

#2 if it comes to true hedging of true cost of mining, wouldn’t it make sense for the miners to hedge ENERGY cost? After all, aside from LABOUR which one can’t do without, one can’t do without diesel, gas, oil either for the machines, right? Right. By some estimates (David Morgan) around 25% of mining cost is energy cost. Hedging / controlling energy cost would then assist mining cost to be down therefore product output to be more profitable.

#3 of course I fully support the auction model, that’s supposed to be what the market actually is, so the very notion it is not now is very deeply concerning to market legitimacy.

Mon, 04/22/2013 - 22:11 | Link to Comment dunce
dunce's picture

As far as i can tell dealers have no control of spot prices but the premium is based on what they feel is their personal risk. They only make money by moving the metal and take a risk every time they buy unless they have a buyer with ready cash on speed dial to take it off their hands. They may have a personal stash, but they are selling a service as much as  the product is that is incidental. They can not allow themselves to be victims of the bankers.

Mon, 04/22/2013 - 16:36 | Link to Comment fijisailor
fijisailor's picture

Some of the dealers are doing just that.  CHeck ebay.

Mon, 04/22/2013 - 15:03 | Link to Comment ronaldawg
ronaldawg's picture

Very well written article and logically consistent.

Mon, 04/22/2013 - 14:13 | Link to Comment kchrisc
kchrisc's picture

I think the whole thing is ironically and tragically funny.

They are manipulating the PMs to try to prop-up and save themselves but are really just handing the rest of the keys to the kingdom over to foreigners, especially the Chinese.

The tragedy is that all of it is happening on the backs of the American and European people. That is until the guillotines come out and masonry walls become even more useful than normal.      hujel

Mon, 04/22/2013 - 16:47 | Link to Comment calltoaccount
calltoaccount's picture

here's one unindicted crim who appears to prefer China to his own country:

Blackstone Founder Stephen Schwarzman Creates $300 Million ChinaProgram To Rival Rhodes Scholarship

Huffington Post ‎- 1 day ago By partnering with the prestigious Chinese universitySchwarzman said he hoped the educational program would train future world leaders ...

Mon, 04/22/2013 - 13:51 | Link to Comment StarTedStackin'
StarTedStackin''s picture

I've been scoffed at

and I've been lied to

Mon, 04/22/2013 - 13:40 | Link to Comment Hongcha
Hongcha's picture

An excellent summary by Mr. Kim.

Mon, 04/22/2013 - 11:23 | Link to Comment Hulk
Hulk's picture

Excellent article JS Kim, perhaps the fools playing the futures markets will grow tired of getting raped by the banksters. Playing a market were the price is "fixed" by the banksters ??? Fucking fools...

Mon, 04/22/2013 - 13:16 | Link to Comment barkster
barkster's picture

The Seven Steps:

 

1. Ramp stocks

 

2. Slam gold so it is not seen as alternative investment.

 

3. "Leak" talk of bail-ins so people feel cash not safe.

 

4. Everyone buys stocks with their unsafe cash.

 

5. Stocks allowed to crash. Everyone exits to cash with massive losses.

 

6. Saudis announce will sell oil in euros and yuan - dollar crashes and population totally impoverished.

 

7. Mission accomplished.

Mon, 04/22/2013 - 13:55 | Link to Comment StarTedStackin'
StarTedStackin''s picture

6. ??????Euros???????Put down the crackpipe.

Mon, 04/22/2013 - 13:20 | Link to Comment debtandtaxes
debtandtaxes's picture

2.5  Slam bitcoin so it is not seen as alternative investment.

There. Fixed it.

Mon, 04/22/2013 - 14:55 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Funny how it dropped down to $65/bitcoin at the bottom, and now it's been trading at about $120 pretty steadily.  For a fellow currency backed by nothing, it sure caught a remarkably high floor vs. the USD.  That tells me pretty much everything I need to know about whether I should convert my USD into stuff of value.  

 

Mon, 04/22/2013 - 11:22 | Link to Comment dizzyfingers
dizzyfingers's picture

Bastiat:


CAFR Basics by Walter Burien - CAFR1.com  


I gave replies to several threads on the RP Daily and figured it would be good to do so under its own Subject thread on this date, 01/26/13. So please share the following with all of your contacts Nationally: Many are not happy after learning the "name of the game". It is all about wealth transfer. Your wealth into the government's coffers. The key points to look at to determine if your local government is racketeering for profit are: 1. What has been the growth of the "annual take" over 5, 10, 15, 25-years. The easiest reference point there is looking at the total budget each year for a city, county, school district, or state and then the population growth within the state, and then the income / gross sales increase of the private sector. I will give one example that is not the exception, but the rule: ARIZONA on the State level: When looking at the state CAFR data from 1983 in the Statistical Section of the 1992 CAFR (goes back ten-years), the budget was about 2.3-billion dollars - page 159 (Expenditures) http://cafr1.com/STATES/ARIZONA%20DIRECTORY/ARIZONA%20STATE%... Jump ahead to 2008 (25-years later)as seen in the 2009 CAFR http://www.gao.az.gov/financials/CAFR/FY09CAFR-051110.pdf the budget - page 240 (total primary government expenses) was now 29.6 billion dollars. So here we have over a 1000% increase in "the take". Now let's look at the population and income increase over the same time period: 1983 population from the latest (1980) census data = 2,718,215
1983 income average = $11,030 - page 163 **Noted on the top of page 164, 4 out of 5 of the top employers were government As of 2008 as seen in the 2009 CAFR: 2008 population = 6,500,180 - page 266
2008 income average = $34,335 - page 266 **Noted on the bottom of page 266, 3 out of 5 of the top employers were government and 6 out of the top 10 were government So the population a little over doubled and the personal income a little over tippled. I note that a very large percentage of the work force were government employees. So here we have the example of "State" government increasing their "take" by 1000% with the population's increase of income being about 300% and the population head count increasing a little over 200%. This is a factor of about "3 to 1" in 25-years per the "take" accomplished by government on the state level over the income increase on average the people accomplished. Now keep in mind with the 1000% increase of the state's "take", a substantially higher percentage of the individual's income is deducted / reduced from the average showing of $34,335 so if that is factored in, the population's income increase was not 300% but more like 200%, or growth in the State government's take of 4 to 1. Keep in mind also we are not accounting for the increase in the "take" over the same time period on the City; County; School District; and Federal levels that would diminish / reduce that $34,335 further which if factored in would bring that ratio probably to "5, 6, or 7 to 1" Now you know why Gorbachev went democratic for the Soviet block countries over two decades ago. Our government in the USA had the better blueprint for the complete takeover and control of the people, wealth of a country, and control of a nation than the antiquated communist principle of operation ever did. As the people of this country were masterfully entertained into distraction, illusion, and selective presentation "due to the money involved", the wealth of a nation was taken from them one bit at a time, each and every year compounded. Only one side of the coin was presented of "justifying the increase of the take" while the other side of the coin was diligently with intent never mentioned by all involved, "income Growth from within and the systematic takeover of the nations wealth / productivity value". The "valve" on that process "of the take" out of continued greed and oppertunity was turned up to full steam in 2001 with 911 and then again in 2008 with the housing market bubble burst. Both incidents were masterfully orchestrated allowing for "massive" wealth transfer to take place into the coffers of government ownership... As I have brought forward now on the http://CAFR1.com site over the last ten-years, collective government, one little bit at a time over the decades has taken over the wealth of the nation. Collective government over the decades now "Owns it all" by investment and perpetuated increases in their gross income. The entire wealth of the private sector has diminished in comparison to collective government to be insignificant in comparison. REMEDY? I have brought that forward for over five-years now: The drain of taxation needs to be removed and the population needs to become the "First Line Beneficiary" of the wealth amassed by collective government. TRF - Tax Retirement Fund management designed to cancel out all taxation through the consolidation of the collective government investment wealth held combined with contributions made from government enterprise operations. In this fashion government operating expenses are met and the population has the ever oppressing burden of taxation taken off their shoulders. Additionally it motivates government to downsize becoming more efficient and creates a prospering economy for the next thousand years with all now on the "same page". (The City of Mesa,AZ has been doing this in part now for 40-years) * No taxation and the population maintains their productivity value and wealth; ** Unlimited capital reinvestment growing in the TRF accounts for investment with the industrial and financial industry groups; *** Government administrations having a steady and good income from the TRF management principle of operation to meet general purpose operating budgets. A Win - win, for all involved and a very prosperous economy for the next 1000-years to boot! A conservative estimate of the collective investment wealth amassed held both domestic and international by US local and federal government (about 184,000 separate operations large and small) is 110 trillion dollars in value +. In 2007 the investment return accomplished by collective government on those domestic and "International" investments was about 5.4 trillion dollars (China investments "in China" giving some of the best returns) with never a mention or even a cognitive though generated in the population's mind by any government representative; political party; media talking head; or controlled education per this issue due to the money and control involved. The symbiotic relationship between the aforementioned over the last several decades is firmly in place and stringently managed for not a mention that would generate a cognitive thought of the "basics" involved here, and again done so by them "due to the massive money and control involved" The public was masterfully played very well here by the heads of the aforementioned as "useful idiots" as the takeover of the wealth was facilitated. TREASON: "Treason doth never prosper; what's the reason? For if it prosper, none dare call it treason." Sir John Harrington, 1561-1612 As of this week I have moved forward getting sponsorship with the intent of taking an extended trip to Washington, DC. Starting as the first step, I will make a 1-hour presentation before the US Senate during open session per implementing the TRF management principle to phase out and then eliminate all taxation. I wonder if Ron Paul while I am in DC can get me 1-hour before the House during open session to make the same presentation? If yes great, if no, why not? While there I will try to brief as many individuals; committees; and interested parties as possible. Anyone who is interested in sponsoring this trip to DC for Walter Burien - CAFR1, as of 01/25/13, I have put up a sponsorship link towards the top of the http://CAFR1.com front page. I am looking to raise $40,000 by 02/15/13 and then I will move on the trip. The funds are 20K for the trip and 20K for carry through upon return. I am ready to make the path towards ending all taxation become a reality, are you? Please visit the http://CAFR1.com website when you get a chance and if you decide to become a sponsor for the CAFR1 DC trip, I thank you in advance for your assistance in this matter. It is time, and long overdue to return ownership of this country back into the hands of, too the direct benefit of "We The People" of the United States of America. And I note: So help me God. Truly yours, Walter J. Burien, Jr. - CAFR1

Submitted by CAFR1 on Sat, 01/26/2013 - 13:49 in Daily Paul Liberty Forum

 

Mon, 04/22/2013 - 22:22 | Link to Comment dunce
dunce's picture

Colorado some years ago had a law limiting budget increases  to population and income increases and it seemed to be working. The law was later gutted because it was working and the politicians elected later could not be content with common sense limits on govt. growth. The first erosion was in the education budgets of course because local areas could vote to exceed the limits and none dared be accused of being against education, you know it is for the children and why do you hate children. The democrats are in control and telling rape victims to pee or vomit on their attackers. they are serious even if it sounds like SNL.

Mon, 04/22/2013 - 11:04 | Link to Comment yabyum
yabyum's picture

Regardless of the spreads in paper vs.phyzz, the real beatdown is in the miners. You don't suppose some one is getting ready to pounce on some real bargains in the known producers?

Mon, 04/22/2013 - 15:03 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

I really don't.  The miners ultimately operate at the pleasure of the governments that have granted them licensure.  So, in addition to the risk of owning common stock in a brokerage account, you're additionally dealing with the counterparty risk of various governmental entities, as Barrick can very recently attest to.  And even if you have the government feeling friendly towards international precious resource extraction companies, you may also have to deal with unions/strikes.  Finally, even if they can consistently resolve governmental and labor issues, you have the international banking cartel fucking with your prices to the point that it was recently below the marginal cost of extraction.  

 

 

Mon, 04/22/2013 - 10:53 | Link to Comment Stuck on Zero
Stuck on Zero's picture

J.S. Kim -- great work!

 

Mon, 04/22/2013 - 10:45 | Link to Comment Trampy
Trampy's picture

Thank You for your excellent post!

Nice to see others using the word zombie instead of sheeple.  re " ... Krugman and his zombie followers"

More importantly, there seems to be a SYSTEM-WIDE disconnection between "consensus reality" as seen by the herd versus the very disturbing worldview of the many (here at ZH) who are capable of independent thought.

I've been reading ZH for years but have only recently began posting here.

When Richard Gage came to talk about ae911truth.com he spent half of his time talking about possible explanations for what, in my view, equates to mass hypnosis--which comports with (most) Amerikans being transformed into zombies.

When Gage asked the audience who has been shunned by friends of family as a result of what they know or believe about the events of that day 2/3 of the audience raised their hand, including Gage and his architect host.  Gage said that most of his family no longer speak to him.

While the common boat accidents should of course never be discussed in polite company i'm very interested in hearing about how the many non-zombies here can possibly have peace and happiness while knowing that Amerika is now a full-on Fascist tyranny where the "news" is mostly psyops and Bread & Circuses.

 

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