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Morgan Stanley Redeems Paulson Investments: Explanation For Recent Gold Liquidation?

Tyler Durden's picture





 

In key news that may well be the missing puzzle piece to explain some of the very odd market moves in the past week, we just learned courtesy of CNBC, that Morgan Stanley's Wealth platform unit has finally, after months and months of considerations, pulled the plug on the fund that for the second year in a row is one of the three worst performing in the weekly HSBC report and is now redeeming. That in itself is not unexpected. What however is notable is that MS withdrawing hundreds of millions in feeder capital may well explain why gold has seen such a dramatic dislocation in the past week. Recall that at Paulson & Co, gold is not simply an investment - the bulk of direct gold investments at the once legendary investor are in the form of (largely underperforming) gold mining stocks - but an actual investment class. In other words, instead of being denominated in USD, investors are actually denominated in (paper) gold, with a fixed conversion into GLD at inception. This means that upon liquidation of gold-denominated shares, any gold-denominated shares, he has no choice but to sell GLD, and by virtue of this being the most liquid paper instrument in the PM space, gold. Does the massive gold dislocation in the chart below now make more sense especially since Paulson was aware of MS' intentions days in advance and traded, or in this case liquidated, appropriately)?

Spot the moment on the chart below where Paulson may have gotten the redemption fax:

 


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Wed, 12/19/2012 - 16:49 | Link to Comment ACP
ACP's picture

They're still fargin' iceholes.

Wed, 12/19/2012 - 16:53 | Link to Comment Pladizow
Pladizow's picture

This gold share redemption and GLD share sale was set up from the begining as another way to manipulate the metals.

Lets simply redeem at an opportune time and hit the metals in one more way.

Conspiracy?

Wed, 12/19/2012 - 16:59 | Link to Comment New World Chaos
New World Chaos's picture

Definitely conspiracy, but what kind of conspiracy?  I think the recent metals beatdown (despite QE4) is because we are on the cusp of an epic false flag and the puppetmasters want decent prices on some last-minute solid gold toilets for their bug-out submarines.

Earlier this year, I discussed the possibility of a false flag tactical nuke in the London financial discrict on Dec. 21.  The puppetmasters would do this to “vaporize” the gold which they already stole, destroy a lot of evidence, fake their own deaths, start a war with Iran, stampede the herd off the cliff on a date when they will be easily spooked, institute the NWO financial system, and crush any last vestiges of freedom.  This would explain the recent propaganda tours of the BoE vaults by the Queen and others.

I figured the nuke would be in a basement close to the Bank of England (perhaps in the Guildhall?) so as to keep the damage to a minimum, but I recently found some numerological alignments which suggest otherwise.  The occult puppetmasters believe the number 11 represents something which is imperfect and ripe for destruction.  Now, the sum of the digits in the date = 11, 12+21 = 33 (the Masons’ holy number), and [1+2][2+1][1+2]=333.

The exact time of the solstice will be 11:11:37.4, London time.  I think they would be bothered by the imperfection and see it as a deeper clue.  Shouldn’t it be 11:11:11?  Triple destruction at the triple rebirth of the Sun, followed by rolling out the NWO financial system three days later to represent the rebirth of Horus?  There is a way they could make it work:  Use local solar time.  This is the “natural” time.  I calculated the longitude at which the solstice occurs at 11:11:11 local solar time.  This only happens at EXACTLY 0.11 degrees west!  I used Google Earth to find significant landmarks along this line and found it intersects the Temple Church.  This is the most significant occult site in London.  There is no way the Templars could have known the timing of this solstice when they built the Temple Church.  Astronomical knowledge was simply not that accurate.  Even NASA didn’t know the exact time of the solstice until this year.  The significance of this alignment will not be lost on the occultist puppetmasters.  They will see Lucifer as begging for a false flag- or at least a sacrifice in the Temple Church!

If they set off a nuke there with the intention of taking out the Bank of England, the crater would have to be two miles wide.

 

Wed, 12/19/2012 - 17:02 | Link to Comment nope-1004
nope-1004's picture

Wed, 12/19/2012 - 17:12 | Link to Comment trav777
trav777's picture

teh goledz are ALWAYS redeemable for cash.  The problems start happening when that isn't true.  Things like gold and oil cannot go no-bid, but cash can.

Wed, 12/19/2012 - 17:22 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Humm, cash can go 'no bid'    Just ask folks with crap currencies that are trying to bid for resources that can get better bids elsewhere.

 

Hyperinflation economies are effectively 'no bid' economies for cash -- to the extent that anything can go 'no bid'

 

Wed, 12/19/2012 - 17:36 | Link to Comment FEDbuster
FEDbuster's picture

Damn, I thought my $100 trillion Zimbabwe bank note put me in the 1%.

Wed, 12/19/2012 - 17:58 | Link to Comment Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

My AG and AU are both no-bid!

Wed, 12/19/2012 - 17:07 | Link to Comment Catflappo
Catflappo's picture

NWC = (on) LSD?

Wed, 12/19/2012 - 17:11 | Link to Comment cifo
cifo's picture

GLD is the easy way to control the price of gold.

Wed, 12/19/2012 - 18:03 | Link to Comment tallen
tallen's picture

His net worth is 15 Billion dollars. Even at 10% of that he could have dumped 200k gold contracts (~1/2 this weeks gold volume).

Knowing his insider trading record, it really does seem incredibly likely.

Shame he'll never end up in JAIL. He deserves a good pound me in the ass prison.

Wed, 12/19/2012 - 18:55 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

I personally consider myself agnostic on gold, which is why my portfolio is 25% gold, 25% cash, 25% stocks, and 25% bonds.  Considering that this is basically a "I don't take any position one way or the other on anything", because really, who the fuck can actually predict the future, it's interesting that my gold allocation would put me in the "gold bug" category by the MSM.  

Sun, 12/23/2012 - 01:49 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

"because really, who the fuck can actually predict the future"

It's the repeating pattern from 277 weeks ago. Following high-line of the trend-channel. Picture here, price overlaid with ROC 277-week trend I just mentioned:

2012 06 18 277week roc 02 goldpricemodel 2011 Jan to 2012 Dec 28

here you see the matching of prices detected by this trend line & channel:

2011 dec 27 gold 01 | goldpricemodel | 277 week ROC visual confirmation

here you roll it out & compare with new data, so June's chart is added with data for Sep then again for Nov with a prediction slapped on there (colored shade-areas) just for fun (which is hard within the green/red high/low boundaries determined by math).

2012 09 18 277week roc 01 | goldpricemodel - http://stks.co/nAfJ

2012 11 05 277week ROC -goldpricemodel

You can follow the ROC changes 52 & 277 week here:

roc 52,277 weeks monitor $gold spot

and the roc 52-week pattern has been rolled out now to a prediction:

goldpricemodel 2013 roc 52-week as compared to 1980-present gold 52 week ROC 1980 to 2011

goldpricemodel 2013 projection

Wed, 12/19/2012 - 19:17 | Link to Comment greensnacks
greensnacks's picture

Treasury auctions for Dec total $539 BILLION!!!  And gold declines ... wait, what? http://www.treasurydirect.gov/RI/TreasuryAuctionResults.rss

Wed, 12/19/2012 - 17:11 | Link to Comment CPL
CPL's picture

...go to -->  www.4chan.org/x/

 

Lots of other guys there with crazy math building basement farday cages with tin foil hats to avoid the mayan rapture alien lizards.  You could contribute greatly in that forum, birds of a feather.

This forum however is only for tin foil financial talk until it's proven true months later.  So most of us have to stick around past Dec 21st to be smug when today's tin foil theories become tommorrows unfortunate marketplace reality.  So you might have to count us out in the rapture, we've all opened our mouths about future economic events.  

Basically most of us have prior committments to saying we were right, so you go on a head with the rapturing or number...stuff...thing.  We'll follow up later.

 

<gun fingers>

There you go champ.  See you on the 22nd.

 

Wed, 12/19/2012 - 17:35 | Link to Comment NotApplicable
NotApplicable's picture

Farday cages! Of course!

*runs off to hardware store*

Wed, 12/19/2012 - 17:42 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

Around here we just blast faradays with small game loads. No need to bring 'em back alive.

Wed, 12/19/2012 - 17:43 | Link to Comment NotApplicable
NotApplicable's picture

Are you a Grey?

Wed, 12/19/2012 - 17:55 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

No, I'm more of a mottled Pink.

Wed, 12/19/2012 - 18:07 | Link to Comment NotApplicable
NotApplicable's picture

*checks bio page on your blog*

Why indeed you are! Might I suggest more sun? ;)

Wed, 12/19/2012 - 19:54 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

Not really an option:

 

City           Sunny  Partly Sunny  Total Days With Sun

Pittsburgh     59        103                   162

 

 

Thu, 12/20/2012 - 08:27 | Link to Comment CPL
CPL's picture

My god...the sky, it's full of bits of clouds!!

 

A potent sign indeed that one should wax the car to properly cure the coat.

Wed, 12/19/2012 - 22:47 | Link to Comment americanspirit
americanspirit's picture

I'm just going to try to crawl into my microwave oven. That should ensure my survival. See you all after the 21st - somewhere. Thank god for GE.

Wed, 12/19/2012 - 17:43 | Link to Comment SafelyGraze
SafelyGraze's picture

+10 cpl

wow. re: 4chan -- that is the kind of thrizzle the w3bz waz made for.

below please to find highlights from misc threads on yonder site.

- I plan to ask k$sha on a date. what kind of flowers would you recommend?

- my sphincter hurts. no, not that one. what's going on?

- I am typing with my eyes closed to allow my spirit guide to communicate with you. his name is banebdjedet and he is a little pissed off.

- let's talk about funerals

- this cannot be mere coincidence: budget gadget bridget tonsil

- ouch. ouch. SHIT. ouch! 

 

Wed, 12/19/2012 - 18:31 | Link to Comment fuu
fuu's picture

/b/

Wed, 12/19/2012 - 18:23 | Link to Comment giggler123
giggler123's picture

What you on about, his math seems good to me, [1+2][2+1][1+2]=333 as good as any other finanicals on here, just missing a ZH graph so I thought I'd invest in protection from those rapture, lizard greenbacks by ordering myself a helmet from like wise knowledgeable people over at www.stopabductions.com

 

Wed, 12/19/2012 - 18:52 | Link to Comment CPL
CPL's picture

Looks legit....send them as much money as you can stuff into an envelope with no forwarding address and wait for a sign.

Wed, 12/19/2012 - 17:15 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Just north of the Temple Church?

Hatton Garden, the centre of London gold dealing and the powerbase of the LMBA.

NICE!!! ;O)

Wed, 12/19/2012 - 17:31 | Link to Comment New World Chaos
New World Chaos's picture

Thanks.  Didn't know that.  Is it perfectly north, so the 11's thing still applies there?   Maybe that is where the controlled demolition of the ponzi will begin.  No giant crater needed.  They must be scraping gold off the faucets right now.

Wed, 12/19/2012 - 17:35 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Yeah...pretty much dead north...Chancery Lane tube station is in the middle and the Central Line is the deepest tube line at about that point (actually at Holborn which is the next stop west) so could do some underground bang-thingie and still leave evryone in the City and rich bits (Royal Boroughs) okay.

Just speculating...not got a terrist bone in my body, in case anyone is snoopin...!

PS you ever been to Temple Bar? The church is a dead replica of the Temple of Solomon, only teeny weeny !:O) 

Wed, 12/19/2012 - 18:01 | Link to Comment New World Chaos
New World Chaos's picture

I have found that the London silver vaults are about 150m from the Chancery Lane tube station. 

Never been to Britain.  Couldn't pay me to go at this point.  Damn cops wouldn't even let me keep my pictures.

Wed, 12/19/2012 - 18:59 | Link to Comment reload
reload's picture

Silver vaults are full of beautiful antique cutlery, candle sticks etc. Not bullion . well worth a visit' I expect it will be open as normal on the 22nd. Incidentally, you can just buy a single Georgian tea spoon if you like....no need to be an Arab prince to shop there. Its more like a market with independent traders than a 'retailer' highly recommended as a London 'to do' list item.

 

 

Wed, 12/19/2012 - 19:02 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Have to concur.

Have bought and sold there meself. Well worth a visit :O)

Wed, 12/19/2012 - 17:26 | Link to Comment Ignatius
Ignatius's picture

+1 for creativity.

Where do you find the time?  I struggle to get lunch on the table.

Wed, 12/19/2012 - 17:30 | Link to Comment New World Chaos
New World Chaos's picture

They cut my hours way back because my productivity sucked.  Spent too much time researching conspiracies.  I am scraping by but refuse to go on the dole.

Wed, 12/19/2012 - 17:41 | Link to Comment FEDbuster
FEDbuster's picture

Another brave soldier in Alex Jones Infowar.

Fri, 12/21/2012 - 05:16 | Link to Comment New World Chaos
New World Chaos's picture

Thanks.  Anyone still here, scroll down to the end of this now-dead thread for a manifesto on our victory conditions.

Wed, 12/19/2012 - 18:00 | Link to Comment Pareto
Pareto's picture

I'm thinking you live somewheres in Colorado or Washington state.  thats ok.  I wish I did too.

Wed, 12/19/2012 - 18:14 | Link to Comment New World Chaos
New World Chaos's picture

Even better- I live in New Zealand.  But CO and WA would be great places to live if I wanted to live in America.

Wed, 12/19/2012 - 18:14 | Link to Comment giggler123
giggler123's picture

Wow you've given this a lot of thought, no day job??  Ok that was harsh, sorry but what's the point in a NWO if you've nuked your world?  London being epicenter.

 

If this was a Jewish event not Mayian I'd say odd's on your half right.  Feel free to post back here in a few days time when I'm wrong and your proved right but don't expect a reply since I've probably been taken out in said nuke.

Wed, 12/19/2012 - 18:32 | Link to Comment jballz
jballz's picture

I no get my twenty.... Now i cannot has my two??!?

It ain't easy bein a chronic hedge fund loser,

Yes it is.

Speaking of losers, Give your bullshit conspiracy rants a rest.

Gold will be a million bucks an ounce some day and these assholes will be screaming manipulation. Gets old...

Wed, 12/19/2012 - 19:20 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

It might go the other way, you know.

If you missed it, the theme to the Olympics was Sing. Pay attention to the lyrics; the entire pagent was actually a rather touching homage to humanity 2.0+, and to something else.

She might surprise you.

Wed, 12/19/2012 - 17:04 | Link to Comment nope-1004
nope-1004's picture

So Paulsen was selling in the after market, after Bernocchio's speech?  And he sold so quickly so as to send price down a vertical mine shaft on the 2 min chart?

I don't buy it.  Even Mossad's exit from GM is done over 12 months or so, because liquidating in a very short period of time doesn't yield optimum bid price.  Silver and gold have the banksters in a pickle.  The desperation evident in price activity is not just some large entity selling, in my opinion.  Look back at the chain of events and how the propaganda machine was hard at work dissing PM's around QE4.  The same shit just so unbelievable coincided the night they found and killed Bin Laden, both silver and gold were taken to the wood shed.

This is high level, top notch government intervention in the name of USD reserve status, as well as to protect the "print to infinity" policy that must now occur to avoid a US default.

 

Wed, 12/19/2012 - 17:05 | Link to Comment duo
duo's picture

They will also say "look at the price of gold" when you pay $10 for a loaf of bread next fall, and the chained inflation still reads 2%.

Wed, 12/19/2012 - 17:09 | Link to Comment kliguy38
kliguy38's picture

Please........let's not inject logic into this explanation......we all know Paulson would liquidate in thinly traded markets

Wed, 12/19/2012 - 17:19 | Link to Comment Boston
Boston's picture

What's more important, the precise reason for the takedown, or the fact that you're being given an opportunity to buy at a lower price?

I just placed my first orders for physical since July....for both Ag and Au. And if the "sale" continues, I'll just thank the "markets" and buy more!

Wed, 12/19/2012 - 17:56 | Link to Comment Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

+1 same here.  Just got back from the local coin store with 60 more silver eagles.

Wed, 12/19/2012 - 17:40 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Agree. Silver was just about to kiss $50 and pass it's all time high in USD and they announced they just put a hit on Bin Ladin...who everyone forgot about and thought was dead years gone by. If your going to kill a Bull you need specataculor distraction. On the bright side I bought silver today at $31.20 spot. Happy to keep buying the at this level and lower. What the hell else am I going to to with my clownbucks? 

Wed, 12/19/2012 - 17:14 | Link to Comment spankthebernank
spankthebernank's picture

For the love.... let them crush the price.  I for one, will stack, and stack and stack, and stack, and stack.....

Wed, 12/19/2012 - 17:18 | Link to Comment noob
noob's picture

"They're still fargin' iceholes."...

Moroneys best bits (Johnny Dangerously)

Wed, 12/19/2012 - 19:41 | Link to Comment dugorama
dugorama's picture

Are we suggesting that Paulson may have traded on insider information?  That would be illegal!

Wed, 12/19/2012 - 16:50 | Link to Comment Xibalba
Xibalba's picture

MS bottom, Paulson bottom, Brown bottom.....Kardashian...um I 'mean..which one of these is not like the other? 

Wed, 12/19/2012 - 16:54 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

MS = cunts

Paulsen = cunt

Brown = Scottish cunt

Fuck them all to hell and back!

Edit: Ooops...forgot one...

Kardashian = thick cunt ;O)

Wed, 12/19/2012 - 16:53 | Link to Comment new game
new game's picture

i didn't see any fax here!

now i'm getting very, very upset over this oversight.

Wed, 12/19/2012 - 16:56 | Link to Comment scatterbrains
scatterbrains's picture

Who's going to be redeeming next and which way is their boat listing so I can move to the other side ?

Wed, 12/19/2012 - 16:57 | Link to Comment new game
new game's picture

we all be leaning over board grabbing for our sinking pm-s!!

life jackets ahoy mate!

Wed, 12/19/2012 - 16:57 | Link to Comment LoneStarHog
LoneStarHog's picture

This Paulson character should be prevented from owning/playing the game of Monopoly.  I am sick of the names Kardashian and Paulson.

Wed, 12/19/2012 - 16:58 | Link to Comment SilverMoneyBags
SilverMoneyBags's picture

Buy physical. It can't be manipulated.

Wed, 12/19/2012 - 17:07 | Link to Comment Bastiat009
Bastiat009's picture

But it can be sold ... and bought. It's a market, a very small market. Price fluctuations happen.

Wed, 12/19/2012 - 17:18 | Link to Comment jomama
jomama's picture

erm, but the price in bennybux can be?

Wed, 12/19/2012 - 16:59 | Link to Comment new game
new game's picture

i now feel much better knowing what may have happened- how about you?

Wed, 12/19/2012 - 17:01 | Link to Comment I Am Not a Copp...
I Am Not a Copper Top's picture

I demand an investigation into who in the hell allowed the market to sell off into the close.  THIS IS BULLSHIT!!!!  IT IS NOT ALLOWED!!!!

Wed, 12/19/2012 - 17:01 | Link to Comment buzzsaw99
buzzsaw99's picture

it didn't take carnac to make an educated guess the selling was due to paulson

Wed, 12/19/2012 - 17:22 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Me too, BS99, I totes saw this coming and said nothing, like you, and, like you, I have been chuckling to myself on a retroactive basis for some time now.  I will update you when I am dead right again, on a backwards basis, some time in the future.

Wed, 12/19/2012 - 17:27 | Link to Comment buzzsaw99
buzzsaw99's picture

i have mentioned soros and paulson a number of time over the past few days pinhead. you are just sum dum fuk i don't even know who you are and i can tell that much.

Wed, 12/19/2012 - 17:52 | Link to Comment kliguy38
kliguy38's picture

You really think anyone gives a shit here about your prognostications........snore

Wed, 12/19/2012 - 17:05 | Link to Comment falak pema
falak pema's picture

has paulson done a mega dump of golden shiny?

He and Soros of Mordor?

Sauron's ring Yikes! 

where is Frodo??? to save gold?

The ugly face of ZIRP HF financing when the asymptote emerges... and people lose their "iron" Oligarichal nerves.

When thieves fall out...as margins compress.

Wed, 12/19/2012 - 17:04 | Link to Comment nahshal
nahshal's picture

Invest in gold? I persevere hearing on CNBC that gold isn't cash. Even Kudlow same that gold is for the tip of the planet play. for more detail visit this site. fly38

Wed, 12/19/2012 - 17:08 | Link to Comment MeanReversion
MeanReversion's picture

This article is absurd. Selling GLD no more effects the price of gold than buying or selling SPY affects SPX levels. It's an instrument that is purely derivative of the underlying asset and market makers are allowed to ensure it tracks the underlying.

Now if new GLD shares are created while gold is added to the trust, then theoretically that acquisition will of course have some impact on the market, but GLD follows gold, not the other way around

Wed, 12/19/2012 - 17:15 | Link to Comment cifo
cifo's picture

Not really a derivative. GLD is supposed to hold physical gold.

 

Wed, 12/19/2012 - 17:25 | Link to Comment MeanReversion
MeanReversion's picture

Well physical gold doesn't actually trade. A share in GLD IS basically a claim to gold in the trust. A share in GLD is a derivative instrument in that sense. Bear in mind you can't redeem GLD shares unless you mean certain minimum share thresholds, so the overwhelming majority of people will ever have a paper claim to a beneficial interest in the trust assets.

Wed, 12/19/2012 - 17:42 | Link to Comment NotApplicable
NotApplicable's picture

Basket redemption for "physical" is for 50k shares, and requires a club card.

At this point I'd assume any real physical has been swapped out for Comex paper by the criminals in charge... er, I mean the "custodians."

Wed, 12/19/2012 - 17:40 | Link to Comment NotApplicable
NotApplicable's picture

physical gold = Comex paper.

Care to reasses your view?

Wed, 12/19/2012 - 17:25 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

"market makers are allowed to ensure it tracks the underlying."

Allowed, yes.  Limited to, no.

Price discovery follows: I have real physical gold, I won't sell it until you beg me for it.  Price = what I want it to be.

Wed, 12/19/2012 - 17:29 | Link to Comment buzzsaw99
buzzsaw99's picture

beg you? hahahahahahaha!

 

MOTHER FUCKER I WILL NEVER NEED GOLD YOU DUMB FUCKING CUNT!!

Wed, 12/19/2012 - 17:36 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

You won't, but Ben & Jamie will. 

Wed, 12/19/2012 - 17:38 | Link to Comment buzzsaw99
buzzsaw99's picture

dream on plankton boi

Wed, 12/19/2012 - 17:31 | Link to Comment Tyler Durden
Tyler Durden's picture

Uhm, you realize you are about 100% wrong? The underlying does not move the market? Perhaps it is time to move beyond 1995.

Reflexive moves in the underlying based on uber levered derivatives is precisesly how the market is moved these days.

You do realize that the entire market is moved simply by dint of the ES - this is why companies plunge by 10-20% on earnings when the blended hopium average never matches up with the underlying cashflows.

Still no bells ringing? Look up JPM CIO, where Bruno Iskil moved the entire investment grade market by selling and selling and selling IG9, up until the point where he ran out of cash and the market blew up in his face.  Yes, it blew up in the end, but he was in charge for a good 6 months!

Wed, 12/19/2012 - 17:47 | Link to Comment IridiumRebel
IridiumRebel's picture

"Über levered"

Love it.

Wed, 12/19/2012 - 17:49 | Link to Comment NotApplicable
NotApplicable's picture

To me, the idea of denominating a fund holding GLD, in GLD is a disaster waiting to happen.

Is there any rational reason one would do this? Or was it just another sucker-bet for those who would play the paper gold game, a step removed?

Wed, 12/19/2012 - 17:50 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Nice. Someone please forward this comment to Mish, Denninger, Kid Dynamite, the Screwtape Files crew, or any other blog that talks about GLD and SLV being legitimate and trustworthy PM investment vehicles.

Wed, 12/19/2012 - 18:13 | Link to Comment MeanReversion
MeanReversion's picture

"True" derivatives are an entirely different animal. Take puts and calls and max pain theory, you very often see a relationship with where a stock like AAPL will settle often between strikes with high open interest. Coincidence? Probably not. There's quite likely inherent manipulation of the underlying to benefit option sellers. Same with IG9. Market participants who know a large trader is making large bets would sensibly take the flip side including taking opposing positions in the underlying.

SPY and GLD are basically depository receipts. I use the term derivative instruments loosely with such ETFs. There's a huge difference between what's basically a wrapper instrument and conventional derivatives which are true credit instruments. Sales of gold futures will impact GLD but not the other way around. GLD doesn't hold gold futures (according to the Prospectus), if it did we'd potentially have a different story.

Wed, 12/19/2012 - 23:59 | Link to Comment cifo
cifo's picture

With all due respect, wake up to reality. GLD may have been created just for this purpose, to influence (manipulate) the price of gold.

Wed, 12/19/2012 - 17:09 | Link to Comment razorthin
razorthin's picture

Explain silver.

Wed, 12/19/2012 - 17:45 | Link to Comment NotApplicable
NotApplicable's picture

Blythe.

Next question?

Sun, 12/23/2012 - 20:42 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

more detail please? I provided plenty in my reply. Wondering if you can elaborate some on it.

Sun, 12/23/2012 - 21:00 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

I learned to do this in school, quickly forgot it without practical application & was reminded by a helpful article (Silver Breaks its Golden Shackles : Adrian Douglas virtual price of silver scatterplots ) from Adrian Douglas of GATA. My findings are as below:

Silver moves with gold like this: 2011 dec 27 gold 07 | goldpricemodel | silver gold scatterplot 10 years

see, all tangibles have relative value but all have real intrinsic value vs fiat paper that has no limits at all on quantity, therefore no limit to the debasement in normal terms. In extreme terms there's always another limit to encounter, a chaotic boundary of confidence loss. Many factors dictate where this boundary will be at any given moment but on the other side of the boundary the currency (or many) in question ceases to exist. It's just an historical footnote of continued currency failures.

BEFORE that event however we see the ratio of tangibles, in log-log scale scatterplots, vary depending on available supply with available benefit based on current technologies for each. Gold & silver are money but they serve OTHER purposes & that dictates variability in how each moves together. They always move together.

I will not bore you with deeper theory of how & why. I don't even know all those answers. What I do know is the scatterplots show you HOW MUCH they move, and when, so you can do something about it now in terms of investing.

Currently the last 60 days is showing me a 2.35 power. This means silver moves like a 2.35 etf for gold, whereas the actual 2x ETF for gold UGL attempts to move 2.00 or something like that. This is NOT a "multiplier" like "10% x 2 is 20%". Not at all. It's powers. It works like this:

g_ratio = gold_now / gold_past

s_ratio = silver_now / silver_past

log(s_ratio / g_ratio) = 2.35 (last 60 days, max to min).

Over a longer period (months) it looks like 2.26.

The big red sloped line in the 10 year scatterplot linked about shows something more around 1.3.

These numbers always indicate a SLOPE on the scatterplot. Positive slope is from bottom left to top right.

OVER-Performance in silver vs gold is a positive slope exceeding 1.0.

To properly draw the slope on the scatterplot ensure the ratio for each grid-marker is the same % change. For example, if you want 10% jumps between grid marks you'd just log (1.1) since 1.10 is 10% additional to 1.0.

Now ensure gold & silver are both on this axis. A diagonal line connecting these grid-points is a 1.0 slope. The typical slope for silver is 2.0. Obviously you can see a lot of variation with certain price-regions on the 10-year scatterplot.

Isolating this down to predictable multi-month time-windows is how I map my gold price model to a silver price model. I have the math today to do it but I'm too busy to make that picture. The gold one is this:

goldpricemodel 2013 projection

The silver mapping is around 28.50 silver with 1600 gold and 47 to 49 silver with 2000 gold and 2400 gold yields 72 to 75/oz silver. Using the math given about you should be able to mark any place on the gold graph with a silver price. This equation can help:

17 x (gold_price / 1274) 2.31 = silver price

approximately.

gold silver crossplot adrian douglas gata web_copy

This picture is what Adrian Douglas of GATA produced for an earlier time period. The methodology is the same. His article is here: More Forensic Evidence of Gold & Silver Price Manipulation

Whereas in Silver Breaks its Golden Shackles : Adrian Douglas virtual price of silver scatterplots Adrian Douglas determines silver has broken free, I determine in time series & scatterplots of silver vs gold have since shown only a refitting of the shackles.  So long as fiat currency does exist this shall be the case for ALL alternative monies from tangible goods, and all tangible goods period. My alternative take on the same "breaking of shackles" allowed me to map gold to silver prices ( 2011-3-30 silver price model parameters based on Adrian Douglas scatterplot ) for extremely accurate time-sensitive predictions that year. I continue to do so today.

You can see I revised use of a single slope through a cloud of data to using multiple slopes laddering up the data-cloud. Each rising slope was nearly the same; each declining slope was nearly the same. Both-increasing is in green, both-decreasing is in red. The slopes are not so different but it makes a $2/oz or more difference in silver-price computation so I prefer to be as accurate as possible.

Wed, 12/19/2012 - 17:09 | Link to Comment dcb
dcb's picture

I honestly don't understand this post esp this part

, t"hat Morgan Stanley's Wealth platform unit has finally, after months and months of considerations, pulled the plug on the fund that for the second year in a row is one of the three worst performing in the weekly HSBC report and is now redeeming. That in itself is not unexpected. What however is notable is that MS withdrawing hundreds of millions in feeder capital may well explain why gold has seen such a dramatic dislocation in the past week."

Wed, 12/19/2012 - 17:10 | Link to Comment AgShaman
AgShaman's picture

Morgan Stanley:

Our most profitable platform going forward will most likely be our precious metals "products"....

We will be happy to make large purchases on behalf of our clients....

and of course, we will need to charge some fees to account for the "storage" of those PM's

Wed, 12/19/2012 - 17:11 | Link to Comment Kreditanstalt
Kreditanstalt's picture

These clowns can't play with most of my gold holdings...I still have exactly the same number of ounces as I did before...

Wed, 12/19/2012 - 17:20 | Link to Comment Boston
Boston's picture

I have more ounces today than I had yesterday.......

Wed, 12/19/2012 - 17:13 | Link to Comment Kreditanstalt
Kreditanstalt's picture

Must have missed the memo...

Wed, 12/19/2012 - 17:14 | Link to Comment apberusdisvet
apberusdisvet's picture

It's getting close boys and girls.  Does the new copper ETF for JPM augur this criminal leaving the silver arena for greener pastures?  Super tightness in the silver market these days.  Force Majeure by the COMEX, anyone?  Funny thing on gold; future production, at current prices could actually decrease YOY; look at South Africa; earnings reports on the big cap miners; no Russian or Chinese gold reaches the free market these days and may never again.  How many tons at Fort Knox, or are there only bio weapons stocks there as many have claimed?  When China achieves 4000 tons will they announce and ask the West to show it's stack?  That could be interesting.

Wed, 12/19/2012 - 17:29 | Link to Comment ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

".  Does the new copper ETF for JPM augur this criminal leaving the silver arena for greener pastures?"

 

Why can't they manipulate both?

Serious question actually.

Wed, 12/19/2012 - 18:15 | Link to Comment Al Huxley
Al Huxley's picture

They can, of course.  It represents an expansion of their fingers into new and exciting markets.

Wed, 12/19/2012 - 17:15 | Link to Comment Quinvarius
Quinvarius's picture

Not the Paulson selling rumor again!  This must be the 5th time I have heard it in 3 years.  Not that it wasn't true every time. 

Wed, 12/19/2012 - 17:22 | Link to Comment NEOSERF
NEOSERF's picture

And while I get the "buy PMs as inflation hedge" idea, the fact that you can't eat it and that the price is dictated in a largely illiquid overleveraged "market" that in the middle of a panic is as likely if not more likely to have margin calls left and right wouldn't let me sleep well.

Wed, 12/19/2012 - 18:01 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Gold is not an inflation hedge.

You still don't get it.

Wed, 12/19/2012 - 18:04 | Link to Comment NotApplicable
NotApplicable's picture

While the paper gold game may go on for a long, long time (thank Corzine), at some point, physical will completely disconnect from it, never being available anywhere near the spot price (at least not without a massive premium).

You'll know it's getting close when the US gov suspends minting of all silver and gold eagles in order to "combat money laundering by terrorists."

Wed, 12/19/2012 - 18:06 | Link to Comment tickhound
tickhound's picture

Interesting... My MS bud told me Monday he was on conference call regarding a new Sprott IPO?? Prospectus or some shit?/ involving client investment into precious metals... includes platinum and palladium. 

Said stressing "physical delivery" was the theme... and apparently not related to phys or pslv.

Just got off the phone with him.  He's gonna print it up for me.  He was unaware of this Paulson shit.

I dunno.  Throwing it in here.

What I DO know is that MS keeps its own plebes duuuumb.

Update:  Confirmation that SPrott is to expand "opertions" to include platinum and palladium.  That is all.

 

Wed, 12/19/2012 - 17:26 | Link to Comment Bastiat009
Bastiat009's picture

So when Paulson sells GLD, SLV falls ... mostly at the close of the NYMEX, two days in a row ... and that hurts the US$ too. Living is learning they say.

Wed, 12/19/2012 - 17:59 | Link to Comment fuu
fuu's picture

Dude you don't even know what day it is.

Wed, 12/19/2012 - 17:28 | Link to Comment Piranhanoia
Piranhanoia's picture

How much gold in the gld?    Selling gld will only have an affect on gold prices as long as the curtain can be kept closed to your little dog toto.

Wed, 12/19/2012 - 17:32 | Link to Comment unirealist
unirealist's picture

Look back at last year's chart.  Gold fell all through December, so that instead of a stellar year (2011) it barely eked out a small percentage increase.

Same will be true this month, barring some black swan.  TPTB just can't afford to have gold and silver outperform all other investments by a large margin.

I expect both gold and silver to fall a lot more.  Look at silver today!  What the hell?  Let's face it: the manipulators have almost total control over PM prices.

For now. 

Wed, 12/19/2012 - 17:37 | Link to Comment AgShaman
AgShaman's picture

December is the big delivery month....

all the players at the casino know this

and all of us pikers at the LCS appreciate it

Sun, 12/23/2012 - 04:25 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

the year-by-year pattern is actually like this:

http://flic.kr/p/dvDHfM , bigger picture http://flic.kr/p/bNoznc , even bigger http://flic.kr/p/dvKxxw

Gold could drop to 1556, maybe 1560. Then gold will rise to 2100, maybe unstable in March but stable by June.

The manipulators have gained & lost control. They gained the ability to repeat entire segments of price-charts spanning years to retain a long-term dollar control factor. They lost the ability to hide it by depending on this precise pattern which can't be hidden, and so it is NOT hidden anymore. By that nature we can jump ahead of it.

No longer is this chasing nickels in front of stream-rollers. Not when you know weeks, months or years in advance what price is coming next & the date to go with that price.

Wed, 12/19/2012 - 17:37 | Link to Comment debtor of last ...
debtor of last resort's picture

Where's the gold? Burned together with the rest of the paper you fool.

Wed, 12/19/2012 - 17:41 | Link to Comment youngman
youngman's picture

Gld  is down..mybe because of the fund liquidation...but why would CEF and PHYS be down too???? The seem to be all riiding the same horse...

Wed, 12/19/2012 - 17:55 | Link to Comment NotApplicable
NotApplicable's picture

Because when one goes, it opens up the opportunity to take down the others. That "same horse?" It's called fear of the Fed (Benron's magic checkbook).

This is the age of the mo-mo chasers. Trying anything otherwise is to expose yourself to seemingly infinite risk.

Remember, these people are all dangerously leveraged, else they'd never have made it this far in ZIRP World.

Wed, 12/19/2012 - 18:21 | Link to Comment devo
devo's picture

If they really want people out of gold/silver, higher prices, not lower. Lower just brings in more buyers. Price out joe sixpack and he won't even look at PMs. He'll be forced to hold dollars.

Wed, 12/19/2012 - 22:53 | Link to Comment The Joker
The Joker's picture

SSSHHHHHHHHHH!  Damn it.

Wed, 12/19/2012 - 18:36 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

I don't buy this excuse either.

 

Learn what the USA Exchange Stabilization Fund (ESF) CAN DO AND DOES DO.... with this sleaze fund and who is in charge and acting agent.

Enjoy the read.

Go to USA Treasury site and learn up the ESF.

The FED has a site they brag it up on too....

Wed, 12/19/2012 - 19:00 | Link to Comment Wipewithpaper
Wipewithpaper's picture

GREAT, I can buy more now and get rid of my fiat toilet paper

Wed, 12/19/2012 - 19:36 | Link to Comment Wanton1
Wanton1's picture

Calling Mr. Corzine.

Wed, 12/19/2012 - 19:58 | Link to Comment Venerability
Venerability's picture

Tyler,

Thank you.

This qualifies as what Zero Hedge was designed to do. Hard-hitting breaking news before everyone else gets it.

Note, though, that Idiotic and Banal as I acknowledge it is, there has also been an undue effect on the thinly-traded Gold and Silver stocks, especially, from another one of those ridiculous and truly harmful "Market Game" contests college kids and teeny-boppers gravitate to.

They cannot generally make real trades with real money.

But they can propagandize for or against their favorite stocks, currencies, and ETFs pretty much day and night on every single Internet site that allows them to do so, skewing Markets shamelessly in the process.

Seeking Alpha is now so badly edited, especially in the materials sectors, that it has allowed LEGIONS of Gamers without real skin in the game to post there and now - often, in fact! - post as "Contributors."

This is a horrible state of affairs.

Anonymity is fine up to a point. I use an Alias, but it connects easily to my real bio, and everyone knows who I am. (As with many of the frequent posters at ZH and SA.)

But if Gamers not "betting" with real money are to be allowed on financial sites, they must at least be somehow forced to flesh out bios to the point where readers can easily gauge their truthfulness and importance or lack of importance to Markets.

Make Barracuda223 confess in an easily accessed bio that he is a sophomore at the University of West Virginia majoring in computer science, so readers can gauge as they will his Seeking Alpha "Editor's Pick" story, "Gold is Dead and Buried, Facebook Forever." 

Wed, 12/19/2012 - 20:54 | Link to Comment Michelle
Michelle's picture

Where there's Paulson there's a broken "investment".

 

Thu, 12/20/2012 - 10:14 | Link to Comment DowTheorist
DowTheorist's picture

Hopefully, Paulson accounts for GLD weakness because the charts are flashing danger, at least for paper gold. Gold violated its November 2 lows a couple of days ago. Silver, until now, refused to do so. By not confirming, silver has averted a primary bear market signal for both gold and silver. However, if Silver violates its November 2 lows, then a primary bear market for both precious metals will be flashed. This wouldn't be a good omen for those traders with a short and medium term horizon invested in paper gold.

 

http://www.dowtheoryinvestment.com/2012/11/dow-theory-update-for-nov-12-...

 

 

 

 

Fri, 12/21/2012 - 05:11 | Link to Comment New World Chaos
New World Chaos's picture

OK, here’s my LONG 2012 manifesto now on the record but not hogging an active thread.

 

 This is a major convergence and fork in the timelines of the World Tree.  The unseen struggle for the soul of this planet has come to a breaking point.  More than any other time, this is the time when we collectively choose between freedom or slavery, love or hate, knowledge or ignorance.  Freedom, love, and knowledge are really the only victory conditions.  There are many tortured paths to this goal, and the Universe will choose which path to take.  But we are not helpless- perhaps just one individual can increase the probability of the desired outcome IF it is realistic in the first place.  Then we cast the Ring of Power into the lava.  How about this:

 

 VICTORY CONDITIONS, PART I:  GLOBAL AWAKENING THE NEXT FEW YEARS

-There will be no nuclear or biological apocalypse.  America and Russia will pull back from the brink like they did during the Cuban missile crisis.  The elites' plan to kill most of humanity and enslave the rest will blow up in their face.  Rothschilds will be hunted like Nazis.

-Major false flag(s) are inevitable.  At least one must be stopped and exposed.  This will eventually lead to a new, vigorous 9/11 commission. Heads will roll.

-The next Zionist-inspired war looks inevitable.  When it happens, I hope Iran closes the straits of Hormuz, Russia and Venezuela re-enact the "who run Bartertown" scene, and China dumps Treasuries. Simultaneously.  $25 gas would get this party started.

-No more than 200 million dead from starvation, gulags, plagues, etc.  Probably unrealistic to push it lower than this but we need to avoid their 80% apocalypse at all costs.  Bankers, politicians, cops, Zionists, bureaucrats, and their assorted thugs, toadies and paid shills all do not count towards the 200 million.

-Due to unpredictable long-term health and environmental effects, nukes must be kept to a minimum.  It is unlikely we will have none.  Let's say no more than three nukes is a victory.

-A collapse is inevitable.  It is better to have a short, sharp collapse in which many corrupt institutions burn, rather than the drawn-out collapse which would allow the elites to consolidate power.

-Bernake will secretly bail into a European bank run, causing a derivatives blowup, massive worldwide bank runs, and government bankruptcies.  People must realize that the developed world's financial system is a giant pyramid scheme.  People who are productive and self-sufficient withdraw from the system rather than feed the Beast.  Worldwide bond markets will crash.  Bondholders must learn that getting wiped out is their punishment for supporting tyranny.

-America will most definitely attempt widespread use of all the fascist laws they recently passed.  Can’t be stopped.  Our victory condition is that it will lead to revolution.  Let the puppetmasters make the first move and lose their legitimacy with the sheeple.  Let hyperinflation hit first.  It will make it harder to pay goons and harder to rewrite history afterwards.

-In the long run there are few paths to freedom in which the sheeple do not suffer.  This is the fault of the sheeple.  The Universe itself has already selected a glorious win condition without the Illuminati and since the sheeple fight against this, they are expendable.  They never wanted freedom anyway.  Fuck 'em.  Their venal stupidity must be punished.  Karma, bitchez.

-Sheeple must see their entire life and ideology as a carefully manufactured web of highly profitable lies.  Hardship is the only way the sheeple will take a long hard look in the mirror and realize that THEY have been their own worst enemies.  Conservative sheeple must see the war on terror as a fraud used to justify turning their beloved police state turn against them.  Liberal sheeple must see their beloved Messiah wielding the billy club and using socialism to enrich the oligarchs.

-The low-ranking bulk of the military will defect from the Pentagon, sack the Federal Reserve, fight cops, Blackwater and other Rothschild-funded psychopaths specifically pre-selected for killing Americans.  America will avoid a loss of life and infrastructure on the scale of the first civil war.

-When it all comes apart, the Illuminati must start finking on each other.

-Mind-boggling documents must come out during the revolution.  Lucifer’s guts will be hanging out all over the place.  It will become widely accepted that most conspiracy theories were true and that pre-2013 consensus reality was thoroughly fake.  People everywhere will wake up screaming in their Matrix pods.

-It must be generations before the elites get the Matrix back up and running- that will be enough time to get some of us off this rock and secure our transhuman destiny among the stars.  The Universe's purpose for us is that we help to build its emerging mind.

-I am pretty sure the whole Fulford/Cobra/David Wilcock/Drake/Galactic Federation crew is misinformed and/or running a psyops.  Maybe the puppetmasters want us to turn the other cheek rather than stage a global French Revolution.  I will embrace alien hippies/mass arrests/Divine Intervention as a victory if it comes true, though I suspect we will only have freedom over the puppetmasters’ dead bodies.  If there are no universes in which the pig-men let up, then there will be no universes in which they live.  If they get slaughtered en masse, I will shed no tears for them.

-Alien hippies are still an essential, if not the most important part of the victory condition (for reasons which I will explain some other time).

-End the Fed.  End debt money.  Global debt jubilee.  End the EU.  End the war on drugs.  End the war on terror.  Get our cosmic consciousness back, which is the great secret that Lucifer wants us to forget.  We individuals are One.

-China, Russia, and a reborn America must ultimately reject SDRs as a new currency, setting back the Beast's plans for a world financial dictatorship.  Europeans will probably be stupid enough to take the bait- nothing stopping this.

-The Illuminati will take a Ninja star to the balls on Dec 21, 2012.  History will show the prophetic date to be a critical turning point where the puppetmasters lose their ability to define our reality.  After the cusp, the global awakening will be as inevitable as gravity.  This is really what the prophecy is about.  (There will be other universes where Earth is doomed to eternal slavery and ignorance, but they will not be MY universes!)

 

BONUS CONDITIONS, NEXT FEW YEARS:

-No nukes.

-The next president is a liberty candidate like Ron Paul or Judge Napolitano.

-The next president throws Israel under the bus.  Once Israel loses its giant robot (America), it faces a stark choice:  Give up the crimminals or face another Holocaust at the hands of the Muslim hordes.  Would be nice if they try to hold everyone off with nukes but aliens shoot them down.  "Where is your God now, bitches?"

-Back to the Articles of Confederation.

-Senator Alex Jones heads up a new 9/11 Commission. Dick Cheney’s mechanical heart keeps him alive during his enhanced interrogation.

-Bush escapes to his bunker in Paraguay and attempts to drink away the last scrap of his soul.  He goes on the mother of all benders and triggers epigenetic changes in his diseased, shriveled-up brain.  Half of his remaining neurons go on permanent strike. He suffers an eternal case of The Horrors. Though he effectively dies and goes to hell, his body lives on- a zombie without the stench.  In the pit of despair, he desperately grasps at his last chance of redemption and revenge, and tells where the bodies are buried.  He destroys the Sith, and brings balance to the Force.

-Patriots kidnap some other members of the neocon cabal and give them to Iraq, where they are more likely to get the justice they deserve.

-Hippies have teach-ins about how socialism leads to great wealth for the oligarchs and poverty for everyone else.  Baptist ministers give sermons about how the desire for a police state plays right into Satan's claws.  Activists of all persuasions will be united in a simple belief:  Control is Satanic.  Monetary theory and techniques of mass mind control will be required courses in the high school curriculum.  There will be public television-smashing festivals. 

 

VICTORY CONDITIONS, THIS CENTURY:  A NEW RENAISSANCE OF FREEDOM, LOVE AND SCIENCE

-Radical life extension.

-Consciousness transferral to machines.

-Cheap space travel.

-A space race between China and a reborn America results in America building a self-sufficient offworld colony.

-A revolution of abundant, decentralized energy (solar?  fusor?)

-Digital gold or something like bitcoin becomes a major currency.

-Love and decentralization in many aspects of life lead to a rediscovery of community power.

-Rediscovery that we are One.

-Living worlds everywhere, incl. Titan (2 separate geneses), Venus, Neptune, Mars, watery moons and KBOs.

If you think reality is surreal now, wait until you see what is coming.  The rabbit hole goes very deep.  The long, strange trip is just getting started.

Do NOT follow this link or you will be banned from the site!