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The Great Comex Paper Gold Dump: Online Real-Time Physical Gold Price Datasource
For previous articles by the author go to: Gordon Gekko's Blog - http://www.gekkosblog.com
So, Gold is apparently “falling” again? But is it? Really?
Before we can answer that question, first we must ask - What is “Gold Price”? Even more significantly, why the hell is Gold and its price so important anyways?
So lets’ begin.
An Empire of Fraud and Deception
The US Government – operating today under the control of an international banking cartel – is running a global empire whose sole aim is to exploit the many for the benefit of the few. But because the people won’t be exploited willingly, you have to control them. Now, sure, you can use chains and whips like the good ol’ days, but then the slaves won’t be as productive and may even revolt if exploited too much. Indeed:
“None are more hopelessly enslaved than those who falsely believe they are free”
--Johann Wolfgang von Goethe
So massive lies and deception such as – it’s a “free society” governed by rule of law, it’s a democracy, the government is there to serve and protect you, you have a right to privacy, you can be a Bill Gates or a Warren Buffet too if you just.work.hard.enough., etc. – are used to first sedate the people and then they are raped and pillaged using the biggest deception of them all – the currency. Whether it is secret surveillance on a global scale, wars based on false pretenses, luxurious summits, Bilderberg conferences, massive transfer of wealth from poor to the rich – all of that is enabled by paper money – the US Dollar. Ever since its Gold backing was removed (first internally, then externally) the dollar is nothing but a worthless piece of paper which can be printed (or created digitally) in unlimited amounts by the Central Bank, therefore enabling the government and people who control the banks to appropriate unlimited resources from the global economy (since the dollar is the world reserve currency) for their benefit. Due to mass ignorance on monetary matters (deliberately fostered since the education system and media is also under the government’s - and by implication the cartel’s - control), people normally don’t pay any attention to it and continue to work and provide valuable output in exchange for worthless pieces of paper (for a detailed explanation of the paper money/debt fraud and the role of Gold, please refer to other articles my blog).
So for an empire based on lies and deception, the biggest threat is if the lies start falling apart. If you’re wondering why a “superpower” like the United States is so threatened and infuriated by the disclosures of an allegedly low level employee, wonder no more for more than the technical details, it is the fact that they expose the LIES, and thus threaten their control over the slaves.
Imagine how they would feel if the biggest of their lies underpinning EVERYTHING was exposed? Gold is the only standard against which the dollar’s value can be truly measured since all other currencies are unbacked pieces of paper as well (well, they are “backed” by the dollar, if that makes any sense). If the Gold price rises too much too fast, it would expose the worthlessness of their fiat franchise, the slaves will no longer work in exchange for it and which is why they need to keep it under control NO MATTER WHAT. This is why they have designed elaborate mechanisms in order to help hide the true Gold price. But, in the words of a true American Hero, Edward Snowden:
Truth is coming, and it cannot be stopped.
What is “Gold Price”?
What you – and the world at large – refers to as the “Gold Price” today is actually the price of "futures" contracts traded on electronic "futures exchanges" operating in various countries, primary among them being the COMEX in the US operated by the CME Group and "regulated" by the CFTC.
So what are "futures" and what is "spot price"? As per goldprice.org:
Futures contracts, or just Futures, are standardized contracts for delivery (the seller delivers) or receipt (the buyer receives) some fixed quantity and quality of a commodity. Futures contracts are available for each month of the year. For example, a contract for delivery of December wheat can be purchased in May the year before.
The "Spot Price" (price of Gold for immediate settlement/delivery) - the price used as reference Gold price throughout the world today - is simply the price of the futures contract of the "most active month" (most number of transactions) trading on the exchange, with the month referred to as "spot month".
(For those of you familiar with the futures market fraud, you can skip the next 2 sections).
How Its Supposed to Work
Now, in theory, the futures price should accurately reflect the price at which one can obtain the actual physical metal since the futures contract is a legally binding contract to deliver the actual commodity. The exchanges have registered warehouses where the commodities with the requisite specs stated in the contract are stored to be delivered, should the buyer (remember this for later) choose to stand for delivery. A point to be noted here is that the futures exchanges allow trading on margin, i.e., you have to put up only a fraction of the actual contract value to trade, whether buying or selling (the amount of margin is decided by the exchange). If you're selling you can go "naked short" (sell a contract without possessing any Gold, only putting up a cash margin). So this type of contract trading on cash margin has a loophole in that a player with sufficiently deep pockets could overwhelm the market by introducing a large supply of contracts (buy or sell) causing panic selling or buying and unduly influencing the price to their benefit. Trading on margin facilitates this because for a big player putting up 5-20% cash margin is easy (even if it's in the billions), but procuring a large quantity of raw material, especially something like Gold, is rather difficult and subject to rules of nature. But the price manipulation can't last forever because at some point either you have to come up with the Gold (if you're selling) or front the full amount and take delivery (if you're buying) unless you choose to roll your position to another month. Now rolling over isn't without costs so if a player manipulates the price, it's usually for a short duration to profit from the price move and then they cover their position, at a profit of course. But the exchanges have safeguards against this in the form of position limits (no. of contracts bought/ sold at any given time) and also there are numerous regulations which obligate the exchange and its regulator to monitor trading activities and look for signs of fraud and manipulation. Hence normally such manipulation shouldn't be possible, and if it happens, is detectable and can be stopped.
So everything looks good, people are trading, real price discovery is happening, price manipulators are at bay, people are playing fair, Obama is bringing hope and change, there is freedom in the US of A, and everybody can live happily ever after.
How It Actually Works
Unfortunately, reality is a b**ch.
Now, what if there was a sufficiently large entity - so powerful as to be able to control the exchange and its regulators - having access to unlimited money with vested interest in manipulating the price - not for a short term cash profit but for other motives and a longer duration. Would that be possible?
Think about it. But even if it's possible, why would somebody want to manipulate the Gold price? That too, for a long duration and not for a cash profit (because it already has unlimited cash). Who would want such a thing and what would they gain from it if not cash profits? Cui Bono? Does anyone/anything come to mind? Who has "unlimited cash"?
Yes, that's right - the Federal Reserve. Now the Fed is just a front - collectively it can be referred to as the banking cartel or banking mafia which includes entities such as JP Morgan, et. al.
These guys are sufficiently powerful and have a fairly strong motive in controlling the Gold price because Gold competes with the worthless paper currency issued by them. A rising Gold price signifies declining value and confidence in their paper money franchise. They have to protect it at any cost. If this sounds too conspiratorial, well, I only have one word for you: PRISM. For a detailed explanation of why this is the case, please refer to these articles here, here and here.
They exploit the following loopholes to achieve their objectives:
1. Most people trading futures end up NOT taking delivery. A majority are simply speculators interested only in profiting by betting on the price movements (and some hedgers who do not wish to go through the hassle of taking delivery) trading on margin. The bankers know this.
Hence there are a lot more paper contracts floating around than there is real Gold. They are betting most won't bother and so far they seem to be right. Take a look at this extract below (via maxkeiser.com):
... COMEX continues to hold its place as the largest and most sophisticated meeting place for buyers and sellers to express their gold price opinions, in the form of bids and offers, on what the price should be. COMEX remains the beating heart of gold price discovery.
Gold futures contracts are referred to as "paper-gold" because the size of this market is said to be over 100 times larger than physical gold available...open interest on the COMEX, at the time of writing, accounted for over 85% of demand on the gold futures market, so COMEX receives the most examination here. In theory investors are able to take delivery of the futures contract on expiry, although few do, instead choosing to roll the contract...the fact remains that all the long positions on COMEX cannot be settled in gold.
2. As explained above (I suggest you read the whole article), Comex operated by the CME Group in the US is the primary futures exchange for Gold and is the trendsetter for Gold prices worldwide. They control the price on Comex and the rest of the world follows.
3. Since they (indirectly) control the exchange and its regulators (Crimex Comex and the CFTC), position limits don't apply to these guys. They're above the law. They can issue an unlimited supply of paper contracts whenever they wish to suppress the price and if required, can indefinitely roll over till the longs bleed dry. If you don't believe this, please explain how this happened.
Yes the longs can stand for delivery but most are heavily leveraged so few do. In a panic, even if it's manufactured, everyone bolts for the door.
4. If you have never taken delivery from the Comex, I suggest you give it a try. It's not easy. Even though the Comex is the primary price setting venue for Gold, the people in charge there have done their utmost to make it a huge hassle to take delivery. This is intentional. The promoters of Comex DO NOT want you to take delivery, but only gamble in their casino. If they win, great; if not, they can always pay you off in freshly printed casino chips (dollars) - just don't ask them for the Gold. If you did, the whole enchilada would come falling apart.
Disconnect Between Physical Gold and Gold Futures Price
But this manipulation is not without consequence and cannot go on forever, no matter how powerful they are. The bigger the manipulation, the greater the blowback. To explain things better, read the following (from one of my previous articles):
Anyone who has actually traded the Gold futures market for any length of time knows that this [manipulation] 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.
What’s happening in Gold futures market right now (and has been forecasted before) appears to be the beginning of “the disconnect” between “Paper Gold” a.k.a. futures and “Real Physical Gold”. Entities who:
- Were/are solely in the game for cash profits and don’t understand the fundamental basis for buying Gold but ride the price trends in the futures casino
- Have realized that the paper gold is nearing its end game and want to be solely be holding the physical
- Have been holding futures but are unable obtain physical Gold from the Comex
- Need to liquidate futures positions to obtain dollars (for whatever reasons, e.g. funds which need to return money to their investors in dollars, morons going to dollar as a “safe-haven”, etc.)
are in the process of dumping paper Gold (including the fraudulent GLD ETF) en masse along with the bullion banks (ala JP Morgan) who have a vested interest in keeping the price low. This is what Andrew Maguire had to say recently regarding the physical market:
Just off wholesaler calls. Most are too busy to talk at this time, but today (Thursday) will be the largest volume day this year and possibly 2 years. Central bank purchases are almost certainly far in excess of paper sales. We are so close to the marginal cost of production that my contacts are saying the gates are wide open here to purchase all physical that is available....
Continued paper market supply saw another + 45 tons sold into the rise ahead of Thursday’s fix and then in size directly post the fix. These were immense amounts of paper gold hitting the market, yet there is absolutely zero physical gold for sale and nothing but buy orders in the wholesale market.
We are below the true costs of production for both gold and silver and it makes a good deal of sense for the central banks to be taking all that is offered. Fundamentally this will have a significant catch-up impact.
Needless to say we are getting reports of extremely large allocations of gold, but also far larger direct producer deals being struck outside the paper markets. The one question is, just how long this paper market selling can continue to drive price when such a massive transfer of physical is underway?
(All emphasis mine)
There are strong hands and intelligent minds out there who know the truth and do not sell at every hint of a falling price. They care only about accumulating the physical metal – as insurance in case of system failure - not about short term paper profits. In fact, many of them will NEVER sell; only buy whatever the price as long as this fiat money regime lasts. That is why the price has been rising for the past decade even with heavy manipulation happening on the Comex. Moreover, the Comex doesn't operate in a vacuum. If the price is suppressed there, the buyers - aware that it is available at a discount - will flock there and demand delivery. If it can’t deliver, a break will occur in the prices being quoted on the Comex and the prices being quoted in the real world for the real metal as people dump the future contracts and try to find the physical elsewhere. This will render the futures prices worthless. By some accounts, the Comex is already under increasing pressure for delivery of the metal. So much so, that if you look at the Gold stocks inventory report published by Comex, they have recently put this disclaimer ON THEIR OWN warehouse stock report:
The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.
For questions regarding this report please email Registrar@cmegroup.com or call (312) 341-3370.
I suggest you call that number right away because if they don't know what's in their own inventory, then who does?
Of course they do realize the seriousness of the Gold situation. If they keep printing to infinity, the currency will eventually collapse against Gold. They are scared and desperate enough that they are thinking of using Volcker’s playbook of letting the interest rates rise figuring maybe that will keep the Gold price in check and the scam may continue. They just floated a trial balloon in the form of fed taper talk just to see how it might work. And boy, it doesn’t look good. Either way - interest rate increase or not - the economy is fried (which tells you why they are so interested in having laws and tools at their disposal which will help them control the populace – so they can perpetuate their power through an economic collapse which is sure to occur). And no, rising interest rates won’t save them because the amount of rise needed to stave off Gold is so high that it will probably kill everyone on the planet – either that or people dump the worthless dollars and move to a Gold based system. Bottomline is, whether they like it or not, the world is going to have a debt jubilee with all the fiat currencies rendered worthless. He who has the Gold will make the rules.
The tail is wagging the dog right now. Nobody – NOBODY – in their right minds is selling the physical. This is all futures movement, which as pointed out above, maybe 100 times larger than the physical market. We have to go through this phase to get to the other side. Think of this as a cleansing process. The fake futures market needs to die before true price discovery can begin. But this process offers a great opportunity to those who recognize it (for a limited time only though). We don’t know how low the futures will go, but there will be a futures price below which the physical won’t be available. Even though gold is already below its average cash cost, we don’t know that level since paper speculators outnumber physical holders by a large margin, so the accumulators of the physical can keep getting the stuff for cheap as long as there is metal available. There is no single one defined moment of the beginning or the end of the disconnect. It’s already started happening on some scale in most countries. With so-called "premiums" hovering around 20-25% for a long time now, silver futures are already worthless for physical buyers in many countries such as India. Premiums on Gold have also soared in India, one of largest physical buyers, while imports and gold coin sales to the public have been practically halted:
India's biggest jewellers' association has asked members to stop selling gold bars and coins, about 35 per cent of their business, adding its weight to government efforts to cut gold imports and stem a swelling current account deficit.
By the way, any guesses why that current account deficit is exploding out of control? That's right - in their greed, the Indian government printed too much local currency, and now they want to the people to be obedient little slaves and stop buying Gold! Bending over must be easier. Of course the "jewelers association" doesn't have a clue.
So, we have tumbling prices (yes, the Indian currency has fallen, but Gold has fallen more, so its gotten “cheaper”), yet no physical available, at least in India. Go figure. Soon this phenomenon will be seen in every country around the world.
Online Physical Gold Price Datasource – Real Gold Price
I’d like to first define what is “Real Gold Price”:
Real Gold Price is the price at which the Real PHYSICAL Metal is available for delivery to the buyer's own PERSONAL possession and is the ONLY ONE that matters. It is NOT the Comex Futures price.
Currently the difference between the two prices (futures vs. physical) is referred to as "premium" that you have to pay over "spot" (Gold futures price). But whatever the nomenclature, the fact remains that the paper Gold price no longer accurately reflects what you have to pay in the market to buy the metal. It’s becoming meaningless for people who want the real stuff. Hence, yours truly has created a reference database/datasource that will accurately track and record in real time the price of real physical Gold. The data is sourced from what the major Precious Metal dealers are charging buyers to deliver real physical Gold to their own possession. It is important to note here that this does not include dealers/suppliers who are running some kind of allocated/unallocated scheme because until and unless the buyers have the metal in their hands, there is no guarantee that the metal has not been sold multiple times over or if indeed it even exists. The supplier may be able to provide a lower price for "the physical" if they are running such a scheme (and given today's rampant fraud in ALL markets, it is more likely than not that most are).
Now anytime the price falls, there is available in real time what price the real metal is going for (I try to get the cheapest price for a given denomination, with the only condition that the dealer is currently shipping the item. Readers will have to help in this endeavor i.e. finding the lowest real price for different denominations). People will be fooled no more by prices of worthless paper contracts.
For now, the prices are in USD and dealers are also mostly US based, but any dealer can be included as long as they are delivering on time and have price updates online. You can check out the website here:
More details such as how the data is collected and displayed etc. are available on the site, but just to give a preview, this is how the charts look like:
The site tracks prices for a variety of gold product denominations. Here are what the current real world prices for those denominations look like:
*Comex price for denominations other than 1 Oz were obtained by multiplying by the appropriate factor (pls see website for more details).
As you can see, everything is on a “premium”!
If you look at the charts data, you will see that the real price right now closely tracks the comex price with almost a fixed difference (represented by the rolling average). It is my opinion that as the futures market breaks apart, two things will happen:
1. The fixed difference will increase
2. The patterns might diverge as well
Indeed, if you look at the screenshot below for the 5 oz product, the premium jumped from the day before even as the Comex price remained almost the same:
Of course, the data collection has only started since 13-Jun-2013, so I will be learning alongwith you. I’m sure there will be many things to see for the raw data doesn’t lie.
The site is a version 1.0, so I’m sure there are many improvements/features that may be needed. Please feel free to email me whatever feedback or questions you have about the site and I will respond as fast as I can. If I get many questions, I will put up a FAQ. Contact info is there on the site.
I remember some technical analysts looking at the Gold price chart and declaring that Gold is now in a bear market. I fully agree. Because the chart they are looking at is, in fact, the Gold futures price chart, which will continue to be decimated. There is no chart out there for the REAL physical Gold price which will continue to be bought as insurance against the stupidity of man and as protection from the depredations of paper money producing Central “Banks”.
This empire of tyranny and violence can only be defeated by elimination of ignorance and deception and bringing out the truth – in EVERY aspect - whether it is mass state-sponsored surveillance or fake futures exchange prices. Hopefully this website will help in exposing the biggest fraud of our times.
___________________________________________________________________________________________________
Some parts of this article have been included from “What is Real Gold Price?” section of the website, also authored by yours truly.
Note: I realize some of the "premium" part is due to fabricating costs for the item, but how much fabricating cost can there be for a simple bar or coin? And what is Comex selling? An unadulterated sea of Gold?
Also, some people are suggesting that these premiums are merely dealer profit margins. Sure, the profit margin is part of the premium, but is not the whole premium IMHO. Otherwise how do you explain a 20-25% premium in case of Silver (in many countries)? Surely it is not entirely the dealer's margin. Anyways, as I said, we only care about what price we can GET the real stuff, not some idealistic notion of a price.
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peter schiff calls it the tapering of the taper talk
"Gold will go nuts" ....and the gold Trolls will *poof*......vanish. The silver lining to the SHTF is that for once, in a very, very long time, reality and a bit of truth will be exerted.
Without doubt there will be a huge manipulation attack minutes before the announcement.
excellent.
long and short of all this is-
paper gold = phys gold plus premium to get your hands on it. call it the "handling charge"
Actually:
phys gold = paper gold plus premium to get your hands on it
Reread the article.
Great article. Gold is being managed EXACTLY like money where fractional bankstering turns 1 dollar into 100.
Paper ETFs turn one oz of Gold into 100 via Fractional Gold Bankstering. This is going to mean that there will be a difference not only between physical and paper, but between leveraged paper and paper back by physical. So ETFs like SLV will separate from entities like CEF. That will be the final rollover for central gold bankstering
BwaaHaaHaa....
I just ordered moar dirty, yellow barbaric relics.
(more evil laughing)
I could not resist the yellow metal that drives the white man crazy.
I know for a damn fact if somebody turned a spade over on an unknown vein of Au in the country out here, there would be a lot of people heading that way with shovels, no matter what some price is on a crooked exchange, or how many TV idiots say Au is toast.
Lawng Live Americuh!
exactly. "who gives a phuck." you get more at a cheaper price. sounds to me like you should be pro cabal actually.
I have a different take. Instead of buying gold as the author recommends, I'm going to do something even better, start my own personal federal reserve. I'll call it "Bank of Free Wary"
Dead men don't need gold, don't you know? Get life insurance STAT! Unhappy car accident or dronestrike imminent ...
Funny, you never see an article from a goldbug that starts "The price of gold is rising again - but is it really?"
Estabolishing a value in a false paridigmn, is what is being called to task. Applying this falicy can be used to manipulate any commodity; it just so happens this is about gold. Eventually potable water might be the comodity.
I've said it before... Any stacker that does not have at the least a water filter and/or a still is misguided.
And at least a 1000 calories a day for...???
Might just keep you out of Camp Fema.
You're getting it all wrong my friend. It's not about Gold. It's about exposing a SCAM, whatever it may be. It just happens that the currency scam is the biggest one out there, yet the most hidden - a beautiful paradox - and therefore happened to grab my attentiion. Of course, if, let's say, in an alternate universe, high gold prices were being somehow used to run a scam, people like yours truly would be starting their articles that way. Get it?
"You're getting it all wrong my friend. It's not about Gold. It's about exposing a SCAM"
Ah - for me, it's about the gold.
For me its about returning honesty to the financial system.
when the wolf on wall street is dead
Same thing.
g.g. agreed-the scam, but short of being on the run, i really do not know how to achieve the goal of discrediting(exposing) their scam when the majority are basically dumb fucks(by choice or birth), and do as they do (habitual) without question. people work their whole life without questioning - who am i really working for? i mean really - your very existence for what? someone elses gain and control over you!!! and, as one gets older, one realizes - i get one wack at it all. but it is never too late to wake the fuck up and op out within reason and gain freedom of time and labor to enjoy moar of life without bondage to the system...
choices, each one all adds up to the whole-what percentage of each day is spent jp chasing money to buy shit to exist.
how is getting more for less a scam?
more for less could be considered a scam
in a situation where
even more for even less would have been possible...
Devaluation is the only way out....it will co ntinue despite the temporary strong dollar. Higher interest rates will rip CBs face off. They goota keep the rate intensely low.
It's a paper price, it doesn't matter. The physical price is in the drivers seat and price discovery outside the bullshit metal houses has been established.
$1390.00 troy oz Gold... not GLD.
$30.00 troy oz Silver... not SLV
ETF's are paper, physical is metal in hand, 2 entirely different things. Use the ETF spot price to purchace from their institutions. It's a buying opportunity, not a sign of price destruction.
COMEX is ready to fold at the begining of their next contract offering. They don't have inventory on hand to honor next months warrants.Shaking weak hands comes to mind.
Free market has established an autonomous price and it's working just fine.
Keep stackin and disregaurd their behind the scene power play to destroy any competing currencies.
http://silvergoldbull.com/silver-bull/silver-bars/1oz-new-johnson-matthey-silver-bar
I'm seeing 23.81 cad , 22.59 usd at this moment. That's a far cry lower than 30/oz. When you wrote your comment (time stamp) it was even lower.
Go look at the global free market prices convertedvinto USD. Also, check Ebay and Craigs list are represenative of the pricing I posted above.
that IS a free market price quoted in USD.
Able to be delivered promptly.
Happening in the paper price, now so u lose 2 times.
it isn't, so I win twice.
If you read any of my comments, you'll know that I'm 100% behind the 'paper markets are fraudulent and used to manipulate the price lower' thesis. That said, I can buy silver from my local guy for 24, and walk away with it, or pay 23 up front and get delivery in 4 weeks. Granted, the premium's huge, but I think that's because my guy's a shitty hedger, if he hedges at all, and price drops like the past 2 weeks are killing him. He has to charge the premium just to limit his loss, but he can do it because there's sufficient demand. So I would say there's SOME disconnect between physical and paper price, but the reason for it has more to do with the limits on most of the smaller dealers in how effectively they can hedge rather than a real separation between physical and paper. It's going to take a Comex or LBMA default to break the paper market, until then I don't think the dealers really understand what's being done to them, and if the paper price doesn't bounce for them they're going to go broke chasing it down (trying to compete against the bigger online dealers who can hedge effectively, but still use the paper price as their marker).
My dealer is clueless.
Wait until futures contracts are up on silver. Manufacturing needs alone will drive the physical price back up once the miners have to sell at below production cost. The commodity price for manufacturing in a lot of cases is currently price locked like fuel in the airline industry or like home heating oil when you buy from a large company.
Welcome back! Glad to read about my fav metal.
Interesting read...not sure what to think or believe. However, my gut tells me that something is really rotten in Denmark. I'll keep my metals and flush the paper.
For me, the biggest takeaway from this excellent article is the Federal Reserve's 'moral hazard.'
Since they pay nothing to print the money they would use to buy gold and silver, the metal price is irrelevant. There's not a lot of skin loss if they take a dollar cost beating on the gold. They have the gold, they can make more dollars.
Since the 'Federal' Reserve is just another name for the major international banks, I have to assume that a lot of that loose gold is ending up in the hands of the people who own those banks. (Barbarous relic indeed! The truly wealthy know better.)
And since they can print the money that they buy it with, it would be insane NOT to hack the price of gold to the nub and gather it all up from the shaky hands of a spooked financial world. When the 'price' of gold goes back up, these guys will be GODS.
Once the Comex goes tits up, gold traders will need another place to get their continual price updates. My vote is for Gordon Gekko's charts as the undisputed true finder of precious metal prices. What the hell, it's got more integrity behind it than the Comex numbers.
Gordon, it would be great to give the option to embed your chart in other websites. I will definitely link to it, thanks.
Sure, I'll try to figure out if/how it can be done.
Great Research, Thanks, Gordon!
I posted on another thread we needed to hear from you, and Bingo!
Now, let's go after the Banksters!
As i see, the "premium" is nothing special, it's the same principle that apply when you change currencies in a bank or in a currency-exchange-shop, there is always a kind of "premium", that is the cost for the service, aka the profit of the gold-shop in the gold case.
It's a real nice story, lovely one the one that say the physical price and the futures price are "not the same", but is untrue. If you go to buy physical gold, you are going to pay the actual spot price for it (plus some "premium", this is the personal profit of the gold-shop, and every gold-shop owner decide which kind of premium apply, if any).
Last, this Comex and their supreme power of sell or buy "unlimited" quantities of gold-futures contracts, forgive me but this is just bullshit (i appreciate your article and your ideas etc., no offense here!), i agree there are a few very big players out there, their actions can and do have an extreme impact on the gold-price, say that the comex have the utmost total exclusive control of the gold (international) market is just too much crazy.
Conclusion: it's a shame that this precious metals are loosing value soo fast.
are they going to 0? i don't think so
there will be a rebound to 1500 area? possible
even 2000 and more? possible
or is this just a bubble getting bursted (forget about 1500 ever again)? possible
anything is possible, the gold market is like any other market, unforecastable in the long term, nobody have the total control of it, and remember nothing last forever, i would say there is even the possibility of gold to become a worthless metal, if we look at it as a huge bubble (why not? after all you cannot eat gold, you cannot drink gold, you cannot do anything useful with gold, it's just a metal). In the past 20 months it have lost almost 40% of its value, other 20 months like this and we can consider it a worthless metal.
Apart from these possibilities and scenarios (very provocative and obscene for the common ZH reader), my experience suggest me that we're going back to 1500$/oz, so BTFD can be appropriate, the only problem is about the huge current volatility that let margin-trading very riskious, so be careful!
spaceduck;
Indeed, the "premiums" Mr. Gekko shows on his site are very low - dealer profit margins which seem VERY reasonable to me. Of course, do not know what premiums are in other countries. Earlier this year, after "crash"??? in metals prices premiums at local dealers were much higher than that - I suspect, because they were holding stock they wanted to minimize their loss on. Will have to see if premiums locally are as low as he shows.
Have no idea of where the monetized debt money, gold money exchange rate (ratio) may go in the future. Could be 3500:1 (as Sinclair claims), or 35000:1, or 350:1 or 35:1. The people who manipulate these things don't keep me in the loop nor ask my opinion on what to do.
But, what I do know for certain is that the purchasing power, the exchange rate between real gold money and real things, is currently at levels in the ball park with 2000 years of history. If you ask how many pounds of wheat bread could I buy with a $5 AU piece in 1893 vs. today, or, how many gallons of olive oil could I have bought with a solidus in Constantinople in 500 AD vs. today (with the same coin). or. how many felling axes could I have bought in London in 1622 vs. today with the same coin then an exnange rate of 1100:1, 1200:1, 1300:1, 1500:1 in monetized debt units is in the ball park.
If AU falls to 750:1 it will be cheap, cheap, cheap when measured in real things you can purchase with it, or, conversely, real things will be very, very expensive when measured in real money. at 2000:1 (given current real price levels-conditions) things will be cheap, cheap, cheap when measured in real money. When you figure things this way, you will tend to save your money (save AU, or, AG) when prices of real things are high, and, conversely, to spend your AU or AG when real things become cheap.
"Conclusion: it's a shame that this precious metals are loosing value soo fast."
lol...price & value are not the same thing, not even close.
Is gold a better value now with its price lower or is the stock market a better value with its price higher?
How about that Caddy you been eye-ballin on the car lot...does the value of it, increase or decrease with its price tag? That is, if today you drove by and five thousand dollars has been knocked off its price, did its value change?...its the same car as yesterday isn't it?
Clearly you prefer to pay more to get better value so you missed out on the Caddy's higher price yesterday...bummer ;-)
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Great article Gordon.
as gold prices fall other prices must fall as well. cash is becoming VERY valuable here...and with interest rates soaring in spite of the dollar rising you VERY much want to be in cash. the easiest proxy for cash of course is equities. the Fed has just bankrupted the United States "in the name of Exxon Mobil." discussusions about "relative prices" strikes me as...wholly irrelevant.
Cash is good to have on hand for short to mid term but it is certainly not good as long term savings. It is being inflated away. That is a simple fact.
Or or you a deflationist/paper humper?
It will come in very hndy when there is a liquidity freeze and everyone scrambles for cash and no one has access to it. Cash will be king, but then the system will be flooded with cash as all that overseas money floods back to buy things cheap and the Fed prints infinite amounts. Then it's over.
They are doing everything in their power to prevent all other prices from falling. They are so terrified of deflation they would digitally print and stack in the cloud (counterfeit) any amounts to offset it.
Making real cash worthless at some point...IMHO.
But you're right, equities are a proxy for hot cash in the cloud ;-)
Exactly. Our debt based system has reached it's natural debt limit. All debt based systems are constrained by the real assets backing that debt.
In the efforts to create a growing debt pool and "growth" in the economy our dear leaders have jury rigged debt based on other debt based on even more debt but the real assets underlying everything are still the same. What we have now is a Jenga tower so high and so tilted that any small wobble of the table will causes everything to collapse.
One failure of even a small country, bank, or insurer can cause a daisychain of collapse. Everything is dependnet on everything else and everything else is broke because it's all built on unpayable debt.
What the system requires is a total reset but until then TPTB will do everything in their powers to sustain the unsustainable, which only makes everything worse and the reset more painful.
All debt based systems are constrained by the real assets backing that debt.
That's it in a nutshell. A bookie will give you credit to the extent that you have legs to break and kneecaps to crush. Beyond that you are on your own. The key to the game is to get lines of credit from different bookies without the others finding out. In the financial markets that's called rehypothecation. Now all the players are becoming obvious. That's deadly.
And these "real assets" are in a constant state of flux as well. If you've been urban exploring lately in just about any major city in the US, you will see rot and decay everywhere. That crumbling shit is collateral/assets on somebody's books at many multiples of what it could be sold for . . .
I state the same thing in a slightly different way... the crony profiteers are claiming gains by stripping the copper piping out of the house called these united States of America. The tools? Labor arbitrage enabled by fiat manipulation. Or burning the furnishings and calling it a heating system, etc