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Are We On The Verge Of Witnessing The Death Of The Paper Gold Scam?

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog,

The legal claims on physical gold far exceed the amount of physical gold that the banks actually have by a very, very wide margin.  And right now the bankers are scared out of their wits because their warehouses are being drained of physical gold at a frightening rate.  So what happens when their physical gold is gone but they still have lots and lots of people with legal claims to gold?  When that moment arrives, it will represent the end of the paper gold scam. 

Many believe that the recent takedown of the price of paper gold was a desperate attempt by the bankers to put off that day of reckoning, but it appears to have greatly backfired on them.  Instead of cooling off demand for precious metals, it has unleashed a massive "gold rush" all over the globe.  Meanwhile, word has been spreading among wealthy families in both North America and Europe that they had better grab their physical gold out of the banks while they still can. 

This is creating havoc in the financial community, and at least one major international bank has already declared that it will only be settling those accounts in cash from now on.  The paper gold scam is starting to unravel, and by the time this is all over it is going to be a complete and total nightmare for global financial markets.

For years it has been widely known that the promises that banks have made regarding their gold far exceed their actual ability to deliver, but we have never reached a moment of such crisis before.

Posted below are quotes from people that know precious metals far better than I do.  What these experts are saying is more than a little bit disturbing...

-CME President Terry Duffy: What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold. That’s going to show you, people don’t want certificates, they don’t want anything else. They want the real product.

-Billionaire Eric Sprott: So we see all of these paper (trading) volumes going through that bear absolutely no relationship to what’s going on in the physical markets. As you know I have always been a proponent of the fact that supply in the gold market was way less than demand, and by a very large factor. I think demand exceeds supply by at least 60%. The central banks are surreptitiously supplying that gold, and ultimately they will be running on fumes.

When we hear about the LBMA not willing to deliver gold, and JP Morgan’s inventories at the COMEX have gone from 2.4 million (ounces) down to 160,000 ounces, it just makes you realize that all of this paper trading means nothing. It’s the real physical market that you have to rely on.

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

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

FACT #3: Silver fraud whistleblower and London trader Andrew Maguire stated that the LBMA was having trouble settling gold contracts in bullion as well and stated that institutions that asked for physical settlement “were told they would be cash settled instead by a bullion bank.” In plain English, this is a default. So Andrew Maguire reported that the LBMA had already gone into default. In light of Fact #1 and Fact #2, the dominoes were starting to tumble and the house of cards that the bankers had built in gold and silver paper derivatives to deceive and hide the true fundamentals of the physical gold and physical markets from the entire world was rapidly starting to crumble. A financial earthquake of magnitude 2.5 was quickly threatening to evolve into one of the biggest financial earthquakes of all time in which the world’s confidence in all global fiat currencies would effectively have a well-deserved funeral.

-Jim Sinclair: I think the reality is the supply situation is extremely volatile at this point, and even discussing it is like rubbing a raw nerve to the people who are in charge. The amount of discussion on the subject of warehouse supply, supply that is represented by the gold leases, indicated to the central planners that the demand for physical was going to continue to effect the exchanges.

Although they did not expect any grandstand delivery, the mere continued draining of physical inventories was threatening the very functioning of the paper exchange. That threatening of the paper exchange and its ability to continue functioning is really taking off the blinders and revealing the truth behind the critical question, ‘Where is the gold?’

The question now is, ‘Where has the gold gone?’ Who has all of this gold? Because of the nature of gold leasing, all of this gold has been purchased and it has gone somewhere. The reality of the empty vaults reveal that the gold has gone missing.

-Ronald Stoeferle: We’re seeing this rush to physical gold not only in the retail market, but also for the institutional players...[it's] just overwhelming…I [estimate] a 130-to-1 [ratio of paper to physical gold]…and I think in the last week we were really close to [triggering] a default of the paper market.

-Gerhard Schubert, head of Precious Metals at Emirates NBD: I have not seen in my 35 years in precious metals such a determined and strong global physical demand for gold. The UAE physical markets have been cleared out by buyers from all walks of life. The premiums, which have been asked for and which have been paid have been the cornerstone of the gold price recovery. It is very rare that physical markets can have a serious impact on market prices, which are normally driven solely by derivatives and futures contracts…

I did speak during the week with several refineries in the world, of course including the UAE refineries, and the waiting period for 995 kilo bars is easily 2-3 weeks and goes into June in some cases. A large portion of the 995 kilo bars in the UAE goes normally into the Indian market, but a lot of the available 995 kilo bars are destined for Turkey, at this time. We heard that premiums paid in Turkey have reached anything between US $ 20 and US $ 35 per ounce.

-James Turk: Another indication of the demand for large bars is the huge drawdown in the gold stock in COMEX warehouses. It is noteworthy that COMEX reports show the drawdown is largely the result of dealers removing their inventory, their working stock. When that happens, you know the availability of supply is constrained.

What all of this means, Eric, is one thing. If the central planners want to keep the precious metals at these low prices, to meet the demand for physical metal they will need to empty more metal from central bank vaults, or borrow metal from the ETFs as some have suggested is happening. Otherwise, the central planners will have to step back and stop their intervention, thereby letting the price of gold and silver rise so that demand tapers off, bringing demand and supply of physical metal back toward some kind of balance.

We've seen this same situation several times over the last twelve years. It is what I have been calling a “managed retreat.” Despite the current weakness, I firmly believe we have again entered a critical period where the central planners will need to retreat once again in order to let the gold and silver prices climb higher.

-The Golden Truth: And then I get a call from a close friend in NYC last Friday.   His career has been in private wealth management in the private bank department of the Too Big To Fail banks.  He's been looking for work and chats with old colleagues all the time.  He called my Friday and told me he just got off the phone with a very high level private banker from a big Euro-based TBTF bullion bank, but who was at JP Morgan until about six months ago.

This guy told my friend that there is a scramble by many very wealthy European families/entities to get their 400 oz bars out of the big bank vaults. He knows this personally, for a fact.  He said the private banker community is small over there and the big wealthy families all talk to each other and act on the same rumors/sentiment.  The Bundesbank/Fed and the ABN/Amro situations triggered this move.  He knows for a fact JPM tried to calm fears about 3 months ago by sending a letter to it's very wealthy clients assuring them their bars were safe, in allocated accounts.  He said right now those same families are walking into the big banks like JPM and demanding delivery of their bars or threatening to take their $100's of millions in investment portfolios to competitors.  His wording was "these people are putting a gun to the heads of private banks and demanding their gold."

I know this information is good because I know my friend's background and when he tells me his source is plugged in, the guy is plugged in. Not only that, my friend's source said that there's no doubt that someone like a John Paulson, not necessarily specifically him, but entities like him or it may include him, have held a gun to GLD and demanded delivery of physical in exchange for their shares.

Regarding the Bundesbank/Fed situation, recall that the Bundesbank asked to have some portion of its gold sitting - supposedly - in the NY Fed vault in NYC sent back Germany. The total amount is 1800 tonnes.  After behind the scenes negotiations, the Fed agreed to ship 300 tonnes back over seven years.  To this day, the time required for that shipment has never been explained.  Venezuela demanded the return of its 200 tonnes held in London, NYC and Switzerland and received it all within about four months.

And regarding the ABN/Amro situation.  ABN/Amro offered a gold investment account product that offered physical delivery of the gold in the investment account when the investor cashes out.  About a week before the gold price smash, ABN sent a letter to its clients informing that the physical delivery of the bullion was no longer available and that all accounts would be settled with cash at redemption.

I believe it was these two events that triggered the big scramble for physical gold by wealthy families/entities who were suspicious of the integrity of their bank vault custodial arrangement anyway.

*****

So what does all of this mean?

It means that we are entering a period when there will be unprecedented volatility for precious metals.  There will be tremendous ups and downs as this crisis plays out and the bankers try to keep the paper gold scam from completely unraveling.

Meanwhile, nations such as China continue to stockpile gold as if the end of the world was coming.

According to Zero Hedge, Chinese gold imports set a brand new all-time record high in March...

Quite the contrary: as export data released by the Hong Kong Census and Statistics Department overnight showed, Chinese gold imports in March exploded to an all time record high of 223.5 tons.

And the number for April is expected to be even higher.

Does China know something that the rest of us do not?

We are also seeing a rapid decoupling between spot prices and physical prices.  In fact, it is quickly getting to the point where the spot price of gold and the spot price of silver are becoming irrelevant.

For example, demand for silver coins has become so intense that some dealers are charging premiums of up to 30 percent over spot price for silver eagles.

That would have been regarded as insane a few years ago, but people are now willing to pay these kinds of premiums.  People are recognizing the importance of actually having physical gold and silver in their possession and they are willing to pay a significant premium in order to get it.

We are moving into uncharted territory.  The paper gold scam is rapidly coming to an end.  In the long-term, this will greatly benefit those that are holding significant amounts of physical gold and silver.

 

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Thu, 05/09/2013 - 23:12 | 3547096 Jam Akin
Jam Akin's picture

That's genuine optimism.

Thu, 05/09/2013 - 19:38 | 3546191 Shell Game
Shell Game's picture

I am ready for some uncharted territory, by God!

 

 

Thu, 05/09/2013 - 17:38 | 3546193 JPMorgan
JPMorgan's picture

They will lie and deceive until the last ounce is gone and they can't deny the fraud that is paper gold (and silver) anymore.

Rumor has it wealthy families and individuals are transferring out of paper gold into physical while they still can (they know what is coming).

No one wants to be cash settled just before the shit hits the fan.

Thu, 05/09/2013 - 17:40 | 3546218 SilverIsKing
SilverIsKing's picture

Quickest and cheapest way to acquire gold now is to open your own "We Buy Gold" shop.

Thu, 05/09/2013 - 17:44 | 3546229 DoChenRollingBearing
DoChenRollingBearing's picture

Cheapest for now.  But, rumor has it that scrap supplies are in the process of drying up...

Thu, 05/09/2013 - 17:53 | 3546256 SilverIsKing
SilverIsKing's picture

If the stock market drops, there may be another influx of jewelry sellers desperate for cash hitting those stores.  I brought some jewelry into a "We Buy Gold" store near me several months ago to test the waters with no intention of selling anything.  They offered 85% of spot.

Thu, 05/09/2013 - 19:17 | 3546427 Supernova Born
Supernova Born's picture

If the paper gold market actually failed it would be a very big deal.

Even if you consider the paper gold market "small" the following applies:

“Anyone who doesn't take truth seriously in small matters cannot be trusted in large ones either.”
-Albert Einstein

Thu, 05/09/2013 - 19:50 | 3546576 DoChenRollingBearing
DoChenRollingBearing's picture

SilverIsKing

You wrote: "I brought some jewelry into a "We Buy Gold" store near me several months ago..."

"several months ago" may soon be a long time ago...  You may be right if stocks plummet, but at some point a lot of scrap may be gone forever, put into hoards...

Interesting that they offered you 85% of spot, I would have guessed, guessed!, a lot lower.

Thu, 05/09/2013 - 18:39 | 3546408 Divine Wind
Divine Wind's picture

 

 

"Cheapest for now.  But, rumor has it that scrap supplies are in the process of drying up..."

The scrap gold market in many areas of the U.S. have already dried up. I have close friends operating one of the larger scrap refineries in the Midwest. They would buy from all of the "Cash for Gold" joints all over the place. While there is a little trickling in now, it is way down from when hundreds of lbs per day were coming through the doors. The peak was when the metal was around the $1800-1900 level. Many people sold their stash off to make ends meet, make payments on their ARMs or to get the latest flat screen TV.

For most of the average Joes, their gold is loooooong gone. 

 


Thu, 05/09/2013 - 18:55 | 3546466 Supernova Born
Supernova Born's picture

Who was behind the "cash for gold" explosion?

Seems to aid the cause of manipulation, confiscation and centralization of gold ownership.

So let me guess.

Thu, 05/09/2013 - 19:53 | 3546580 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 

Divine Wind

I am dying of curiosity: which refinery?  OPM?

Thu, 05/09/2013 - 20:35 | 3546673 YHC-FTSE
YHC-FTSE's picture

@JPM (Really? Did you have to choose that as your a/c name?) :)

Anyway. I was going to post something similar,  but you nailed it. They will keep on the deception until there's no one left buying their bullshit. Any divergence between paper and physical pm is going to be brought back sharpish. The big permanent divergence will only happen when the majority of investors acknowledge that paper silver and gold are frauds and leave the system altogether. In the meantime,  when prices take off again, paper will follow to draw back the punters, and then the Fed will use its infinite selling power to push prices down again. Investors who have worked that cycle out will play within the system despite a whole mountain of articles and pundits warning of the inherent fraud. 

It is no different to anything else in the markets these days. The smartest know it is manipulated and fraudulent but work out the big intentions of the Fed to place their punts. The algos crowd flashing on keywords are just a sideshow to the bigger frauds in fx, interest rate fixing, and favoured big cap multinationals being propped up by the tentacles of the pomo banks.

 

Thu, 05/09/2013 - 17:35 | 3546200 fonzannoon
fonzannoon's picture

This article is like throwing a piece of meat to a bunch of angry and beaten to shit lions. We just needed some king world news in there.

It's all well and good but until something really breaks I still feel like a mule who just recognized that the carrot in front of me is on a string and I can't fuckin get it.

Thu, 05/09/2013 - 17:57 | 3546266 FoeHammer
FoeHammer's picture

haha. +1

Eeeeeeeeegon Von Greeeyyyyyyyyyerrrzzz.

 

I really do enjoy the guests and commentary KWN though.

Thu, 05/09/2013 - 18:16 | 3546331 XitSam
XitSam's picture

Dave in Denver says some stuff.

Thu, 05/09/2013 - 18:58 | 3546474 freewolf7
freewolf7's picture

"angry and beaten to shit" =

pitch perfect and ready to play

Thu, 05/09/2013 - 19:13 | 3546509 ronaldawg
ronaldawg's picture

JUST LIKE THE RON PAUL ANAL TONGUING POST A COUPLE OF DAYS BACK....

Thu, 05/09/2013 - 20:29 | 3546558 Shell Game
Shell Game's picture

Bolded and All Caps, the first sign of pure genius..

 

 

..and a sure second sign: http://www.zerohedge.com/news/2013-05-05/ron-paul-house-cards#comment-3533157 

or http://www.zerohedge.com/news/2013-05-05/ron-paul-house-cards#comment-3533185

 

I love how these trolls never put out there what they believe is the true path to economic and civil liberty and how they believe we can actualy get there. Instead they always turn to irrational, illogical attacks that are the signature of libtards/neotards.

Thu, 05/09/2013 - 21:40 | 3546821 Christophe2
Christophe2's picture

What does Ron Paul say about 911 Truth?  He derides it, obvious 'controlled opposition' figure that he is.

Thu, 05/09/2013 - 23:31 | 3547137 Herd Redirectio...
Herd Redirection Committee's picture

He knows what kind of thing would get him killed.  Some people are controlled through bribes.  Some through extortion/blackmail.  Others through threats.  I have a lot of respect for the guy (Ron Paul), but wish he would just take that next step.

Fri, 05/10/2013 - 10:29 | 3548159 Shell Game
Shell Game's picture

You two are kinda slow when it comes to Grand Shi strategy, eh?  The real reason for 911 is blowback from the evil of Imperialism.  What that evil created either 1) enticed terrorists to get on those planes, or 2) enticed Mossad to 'buy insurance', or 3) enticed a very evil government to consolidate even more power by intentionally creating 911.

 

Choose whatever explanation you want - THE ROOT CAUSE is this Rogue Government's interventionism and lust for Empire.  RP is on our side, try to act like it.

Thu, 05/09/2013 - 17:36 | 3546202 SILVERGEDDON
SILVERGEDDON's picture

Are Klingons from Uranus ? 

Is the Pope Catholic ?

Does a bear shit in the woods ?

Is Jamie Dimon a thief ?

Is Ben Bernanke someone's organ grinder monkey ?

Are most U.S. rewsidents so poor they are jerking off the dog to feed the cat ?

Stay tuned for more theatre of the absurd.

 

Thu, 05/09/2013 - 18:37 | 3546403 Spastica Rex
Spastica Rex's picture

Klingons aren't even from our own solar system. Duh.

Thu, 05/09/2013 - 18:48 | 3546442 donsluck
donsluck's picture

I think you have to read that as "cling on". Get it?

Thu, 05/09/2013 - 18:55 | 3546467 Spastica Rex
Spastica Rex's picture

Heghlu'meH QaQ jajvam!

Thu, 05/09/2013 - 19:11 | 3546504 Cheesy Bastard
Cheesy Bastard's picture

Ok, now I get the first part, but can you explain the part about uranus?

Thu, 05/09/2013 - 20:00 | 3546597 Hulk
Hulk's picture

Does a Klingon shit in Outer Space ???

Does Captain Kirk over act ???

Is Banacek Polish ???

Thu, 05/09/2013 - 17:36 | 3546204 lunaticfringe
lunaticfringe's picture

In a secret memo i got from JPM, they said that they only need one ounce of gold with which they can re-hypothecate any amount they need, including tons. This is the same, "just in time" delivery method that the US is using. 

Thu, 05/09/2013 - 18:35 | 3546394 Al Huxley
Al Huxley's picture

As long as all 22 million people don't want their oz of gold at the same time, everything will be fine.

Thu, 05/09/2013 - 18:36 | 3546401 Bastiat
Bastiat's picture

Kind of a loaves and fishes thing.

Thu, 05/09/2013 - 17:38 | 3546210 sitenine
sitenine's picture

It was a fucking stupid ass idea in the first place. I haven't been investing long enough to understand how it ever happened that paper was traded AS gold, and I certainly don't understand how even the dumbest muppet ever fell for it. Maybe it has something to do with that child's game of rock paper scissors, where paper beats rock? Like I said, I don't know. What I do know is that it is time to grow up.

Thu, 05/09/2013 - 18:43 | 3546426 jbvtme
jbvtme's picture

what a nasty pile of shit this economy has become

Thu, 05/09/2013 - 20:09 | 3546607 RaceToTheBottom
RaceToTheBottom's picture

You should read up on the prospectives of the ETFs.  It is not altogether clear where they actually get themselves the freedom to rely on a contract vs physical (if that is what they are doing).    Or put another way, read the ones that are proported to have gold (Sprots and CEF) and then something like GLD or SLV where they are proported to not have or have leased it out.

 

I bet you will have difficulty finding where they hide the words...

Thu, 05/09/2013 - 17:41 | 3546211 machineh
machineh's picture

'Instead of cooling off demand for precious metals, it has unleashed a massive "gold rush" all over the globe.'

Right ... a 'gold rush' by odd-lotter dip buyers.

The sheep are lining up to be shorn by the gold charlatans.

Thu, 05/09/2013 - 18:13 | 3546318 akak
akak's picture

Like every other clueless and/or disingenuous anti-gold shill, you have nothing to offer by way of argument or logic, only specious ad hominen attacks and the same tired pro-paper, pro-establishment propaganda that we have all heard 1000 times before.

Thu, 05/09/2013 - 19:15 | 3546514 ronaldawg
ronaldawg's picture

As long as we get the physical gold - sheer away BITCHEZZZZ

Thu, 05/09/2013 - 22:42 | 3546974 chindit13
chindit13's picture

akak, you might not like this, but I did some checking in the last few weeks in gold souks in a number of countries.  The "panic buying" stopped about two weeks ago.  Either everyone shot his load, or buyers are price sensitive and didn't like the $150 rebound.  Everything from small shops to large dealers looked back to normal.

I saw plenty on offer, with spreads that tell me all the LCSs and on-line guys are hosing their customers (and trying to cover the loss on their own inventory accumulation).  In one market, on Wednesday of this week, I was given a spread (a very large dealer who makes a two sided market) that was about the same nominal size (but a much lower percentage) that I used to pay back in 1999.  On offer was everything from Rands to large bars.  Price was "paper" plus a razor thin premium.  There are enough assay shops around so as to provide buyer security, too, and a law that doesn't take kindly to fraud.  (If you've never visited any of these souks, you should do it.  The amount of wealth---PMs and paper money---just sitting on desks in plain view is massive.)

The most surprising thing I was told came when I asked if there were any size sellers.  I was told "yes", and they were Chinese.  Go figure.

Everyone else' experience might be different, but it seems the supply shortages are not ubiquitous.  Anyone who is buying size should consider a little international travel, as the cost is more than covered by the slashed premium.

I'm probably considered an anti-gold shill because I view it as just another asset, just another trade.  I think its time is coming, but not yet.  For those intending to hold for the very long term, it probably doesn't make a lick of difference.  I am of the view, perhaps wrong, that people should step back and reassess what all the promoters are saying,  Take the same skepticism that everyone takes to official Chinese economic data or MSM reporting, because an awful lot of what the promoters are spouting is simply wrong.  I saw Jim Willie claim that the price for large scale buying is $2000.  That is either a fantasy or an outright lie.  It is just odd that so many distrust everything any authority figure says...unless they are gold promoters, who are believed to be incapable of deceit, hyperbole or naked self-interest.

Large scale price is spot for all intents and purposes.  As size increases, paper approaches "phyzz".  "Duke of Doubt", down further in this thread, seems to be saying the same thing.

Maybe ZH should form a buyers' collective and send somebody out to fill orders.

Thu, 05/09/2013 - 23:06 | 3547075 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

chindit13, I always find your posts of interest.

I have not checked my LCS re gold in well over a week, it might be worth my while to do so tomorrow.

***

Re Jim Willie saying gold (in size) was trading for over $2000 / oz.  That is simply not true, I confirm what you write.  Bron Suchecki (Perth Mint bigwig) wrote that their mint sells LOTS of kilo bars there in Asia, and Perth is not getting $2000.

Fri, 05/10/2013 - 02:26 | 3547377 fonzannoon
fonzannoon's picture

I never saw a supply shortage in gold this whole time. Everytime I checked, my dealer had supply, and reasonable premiums as well. Which makes what chindit says very plausable and takes away credibility from articles like this.

The supply shortage was, and still is, in silver. I am still waiting to see if that resolves itself in me being able to buy silver at $24 or the paper price heading back to $30.

Thu, 05/09/2013 - 17:39 | 3546213 PSEUDOLOGOI
PSEUDOLOGOI's picture

YES!!!

NO!!!

Thu, 05/09/2013 - 17:38 | 3546214 docmac324
docmac324's picture

Time for a bears movie.

Thu, 05/09/2013 - 17:41 | 3546223 W T F II
W T F II's picture

"The Collaborators" will 'take down' GLD twice more, until $700ish is achieved...i m H o...all in prep for the "new" Currency Regime...!!

Thu, 05/09/2013 - 17:48 | 3546242 Bay of Pigs
Bay of Pigs's picture

So premiums will be $500, 600 or 700 an oz?

Now that would be something to see.

Thu, 05/09/2013 - 18:28 | 3546372 Citxmech
Citxmech's picture

If GLD started settling delivery defaults at $700/oz while there was a $700 premium on phys - contract holders would go completely apeshit.  They can pull some shit - but that would be completely over-the-top.

Thu, 05/09/2013 - 19:04 | 3546487 AmCockerSpaniel
AmCockerSpaniel's picture

If spot goes to $700, then look for a premium of $1700.

Thu, 05/09/2013 - 17:45 | 3546230 Duke of Doubt
Duke of Doubt's picture

Not sure what to make of this compilation of warmed over snippets.  Breathless comes to mind.  Hmmmm.

My only recent first hand experience comes from visiting the Grand Bazaar in Istanbul a few days ago.  I stopped into several dozen gold and precious metals shops there.  Many had customers - some of whom were buying.  Many others did not.  The bid/ask spreads varied, but most were thin and there were no excessive premiums.  The largest items that I saw were 100 gram bars.  Maybe the kilo bars were kept out of sight.  Maybe not.

Please understand that a substantial portion of my net worth is now parked in gold.  I do not believe that the Bernank can keep printing 85+ billion each month without consequene.  However, that doesn't mean that I believe that this kind of article is helpful.  I do believe there has been manipulation.  Not sure about suppression.

Facts are facts.  Inflamatory rhetoric is something else.

Duke of Doubt

Thu, 05/09/2013 - 17:49 | 3546245 W T F II
W T F II's picture

D o D,

Nice kid...!! Cute..Thank you for your report. It did all seem too contrived to me, especially the BUGS whippin' up the frenzy...!!

Thu, 05/09/2013 - 23:40 | 3547155 Herd Redirectio...
Herd Redirection Committee's picture

Timing.  You can never guess the timing of these things.  For one, if there was a large call option position in gold futures they wouldn't want someone (outside the Old Boys Billionaires Club) to make all that money.  Plus they want to suck as much out of the little guy and mining equity investors as possible.

And believe me, they have sucked A LOT out of the little guy and mining equity investors already.

Thu, 05/09/2013 - 18:21 | 3546347 americanspirit
americanspirit's picture

Hi DOD - while you and many others here at ZH are already way ahead of the game and therefore articles like this are old news, I'm sure you know that only maybe 1% of the people are awake, but among the other 99% at least some are stirring and when they do open their eyes one hopes that one of the first places they look is here on ZH. That's why articles like this one are important - to give others a hand up even though they may be a bit later than some of the rest of us to realize that the ship is sinking and it's time to move, now.

Thu, 05/09/2013 - 18:26 | 3546365 gratefultraveller
gratefultraveller's picture

If you hang around until the bazaar closes, you will see plenty of sturdy men walking in pairs with little greenish bags between them. Those hold one or more gold "bricks", approx. 2x1x5 inches in size.

They are from gold that has come in and has been molten down. These bricks go to a smelter, are refined, and are then worked into those little gold coins that you can find all over the in PM part of the bazaar.

In Turkey gold is pretty much a part of daily life - for example, you go to meet a friend's family, and you bring along one of those little 1 gram gold medals on a cute little red string.

When a baby is [the moslem equivalent of baptized], everyone of the invited gifts the baby with some gold, the more you give, the higher your prestige.

Last time I was there at closing time, in autumn, I have seen tens of these couples of sturdy men heading somehwere outside the bazaar, and some of them looked like they had 25 kg in their little bags. No armed security around - the reputation of turkish prisons is probably enough to keep people from getting stupid ideas.

Thu, 05/09/2013 - 22:36 | 3546983 Vooter
Vooter's picture

"Facts are facts.  Inflamatory rhetoric is something else."

Whatever works...

Thu, 05/09/2013 - 17:45 | 3546232 Cacete de Ouro
Cacete de Ouro's picture

Whats the point of this article? It juat regurgitates other speculations, so a 3rd derivative at best. You said yourself "if only there was a trade ticket".

Anecdotal 'evidence' is worth maybe 5% of hard evidence...

Crack the LBMA, that is key.

Stewart Murray blabbing on about Timothy Green donating his book collection to the LBMA boardroom...its like those Cleveland rapists attending a girl scout convention...

Those LBMA pricks have the gold in the basement...and are letting the Saudis molest it...

Thu, 05/09/2013 - 17:49 | 3546247 fonzannoon
fonzannoon's picture

The only good thing I see about this article is it gets exposure on a site that many many people read. So maybe it gets forwarded around to a few people that did not know about this stuff and opens a few more eyes.

Thu, 05/09/2013 - 17:46 | 3546233 The Swedish Chef
The Swedish Chef's picture

Oh, another shortage...whoppeee, haven´t had one of those in quite some time.

Thu, 05/09/2013 - 17:47 | 3546234 W T F II
W T F II's picture

How about dem "A"-rhabs bein' set up as the 'fall-guys' for the "cyber-terror" campaign that upsets ALL applecarts...?? Could be comin'...??

"I'm sorry, Mr. Jones, our screens are STILL down..."

Thu, 05/09/2013 - 17:47 | 3546239 Cult of Criminality
Cult of Criminality's picture

Tic Tock Wankers might not be Gold,might not be Silver but......

One fine day you will fuck up good .It may just be Brass and Lead that will be your undoing .....Saw it in a dream or hollywood movie.

 

Thu, 05/09/2013 - 17:48 | 3546240 mattdubz86
mattdubz86's picture

so the miners need to stop selling their gold based on spot prices and hoard that shit and sell it to the highest bidder

Thu, 05/09/2013 - 18:55 | 3546463 donsluck
donsluck's picture

Um, that IS their business.

Thu, 05/09/2013 - 21:48 | 3546838 Long_Xau
Long_Xau's picture

Not exactly, not when hedging is involved. They usually sell short today and deliver when they produce it, at least that is my understanding. They are thus transferring any gain or loss from market price moves to someone else. Their hedging is done through the bullion banks, their operations are often financed also by banks and the price signals they receive (they don't send any, they forfeit that important function when they hedge) are controlled by bullion bank cartels (LBMA), so it looks to me like these miners act as mere servants to banks. I would guess many of the miners are waking up to this.

Thu, 05/09/2013 - 23:46 | 3547169 Herd Redirectio...
Herd Redirection Committee's picture

Its clear as day that if WS says the silver price is $24, and Nucleo Direct Bullion Exchange has bids for silver bullion well over $24 that the miners should be telling the refinery, "Spot price??? No no no no.  I have a bid for $25.55"

 

Thu, 05/09/2013 - 17:49 | 3546243 goldenboy
goldenboy's picture

preciousmetalspete.blogspot.com/    It's ALL there!

Thu, 05/09/2013 - 18:07 | 3546295 dick cheneys ghost
dick cheneys ghost's picture

Great Blog..........

 

Thu, 05/09/2013 - 21:57 | 3546860 Nostradumbass
Nostradumbass's picture

THAT is a very informative blog...Thanks!

Gold to $150 Wooo!

Thu, 05/09/2013 - 17:50 | 3546249 RaceToTheBottom
RaceToTheBottom's picture

I wonder whether we will see a price differentiation between the real held gold/silver places like SPROT and Central Fund of Canada and the ones reputed to not hold the PM like GLD and SLV?

Thu, 05/09/2013 - 22:47 | 3547017 Room 101
Room 101's picture

It would not appear that CEF or Sprott are being valued all that highly.  Current discount to NAV at CEF is 3.6%, Sprott gold is. 27%, Sprott silver is .34% premium. 

Thu, 05/09/2013 - 17:51 | 3546251 Bam_Man
Bam_Man's picture

The whole PM futures/ETF complex is truly a "Farce Majeure".

Thu, 05/09/2013 - 17:55 | 3546260 SilverIsKing
SilverIsKing's picture

Or a Force Manure.

Thu, 05/09/2013 - 17:55 | 3546262 vulcanraven
vulcanraven's picture

"Farce Manure"

Thu, 05/09/2013 - 17:56 | 3546264 vulcanraven
vulcanraven's picture

Hivemind

Thu, 05/09/2013 - 17:53 | 3546258 Fuku Ben
Fuku Ben's picture

FACT 4: Even people that probably think they are part of the 1% have been refused delivery

http://silverdoctors.com/former-cme-ceo-refused-physical-delivery-for-2-gold-contracts/

When the rats panic the bottom feeders in the pyramid will find out real fast who is in the 1% and who isn't

Sorry Leo. Looks like you're on notice you're part the 99%

But we don't want you. So WTF do you do now?

We'll consider taking you if you repent. Whistleblow every detail about everyone and everything you know publically and someone will be in touch. 

Thu, 05/09/2013 - 18:17 | 3546336 Al Huxley
Al Huxley's picture

Indeed.  I bet Jamie Demon's operating on the assumption that he's 'in the club'.  He might be surprised when he finds out how small the club really is.

Thu, 05/09/2013 - 18:41 | 3546418 JoeSoMD
JoeSoMD's picture

Read the linked article and the comments thereto.  He apparently was not refused delivery.  The linked article is intended to incite and has no factual basis in reality.  It's a pump piece.

Thu, 05/09/2013 - 19:26 | 3546533 Urban Redneck
Urban Redneck's picture

His name is  Leo Melamed   

You would think the author of the piece or at least one of the posters could have pointed that out.

<CTRL-C> + <CTRL-P> = |stupidity|

Thu, 05/09/2013 - 17:55 | 3546263 Political_Savage
Political_Savage's picture

What's the transfer mechanism here to utter chaos - I kinda get it.

So Countries and people are hoarding Gold - what are they going to do with it?

I get the "threat" to fiat currencies and the breakdown of another derivative product, but how does this threaten the entire system?

Thu, 05/09/2013 - 23:51 | 3547178 Herd Redirectio...
Herd Redirection Committee's picture

Governments financed by money printed out of thin air.

Financial system propped up by money printed out of thin air.

Real estate and stock markets propped up.

The response to the crash will be worse than the crash. 

Thu, 05/09/2013 - 17:58 | 3546270 Composter
Composter's picture

i would say this is (approximately) LTCM x 10.

 

LTCM had a 400 ton naked short gold position.  back in 1998.

 

theoretically, Jim Rickards was one of the guys that helped patch up that situation.

 

just wish i had more cash to stack higher.

Thu, 05/09/2013 - 17:59 | 3546277 WelfareFTW
WelfareFTW's picture

so when does the bloodletting of the paper sheep and their octupii masters begin..? grabs *popcorn* and fondling my gold

Thu, 05/09/2013 - 17:59 | 3546278 TDoS
TDoS's picture

They will never relinquesh control. If somehow it all slips out of their grasp, they'll just confiscate your gold.

Acres, livestock, bullets.  Wheeee, over the cliff we go!

Thu, 05/09/2013 - 18:15 | 3546329 SilverIsKing
SilverIsKing's picture

You mean sneak into my house in the middle of the night and remove my teeth while I am sleeping?

Thu, 05/09/2013 - 18:24 | 3546360 XitSam
XitSam's picture

Yes. Except the sneak part. And it won't be at night. And you won't be asleep.

Thu, 05/09/2013 - 22:28 | 3546950 Vooter
Vooter's picture

Zyklon-B. Make it a double...

Thu, 05/09/2013 - 18:00 | 3546279 apberusdisvet
apberusdisvet's picture

scrap supplies have been long gone now for at least a year.  Just ask your LCD and he''ll tell you that up to 2010 he was sending at least 10 lbs/mo to the local refinery; now it's a few ounces, at best.

Thu, 05/09/2013 - 19:08 | 3546493 SamuelMaverick
SamuelMaverick's picture

I buy scrap gold as a sideline. The supply has dried right up. The sheep have sold their gold over the last five years, and we have hit the bottom of the well.

Thu, 05/09/2013 - 18:02 | 3546281 koan
koan's picture

I spent my money on guns and bullets, silly me.

Thu, 05/09/2013 - 18:03 | 3546282 Quinvarius
Quinvarius's picture

You have to be willing to accept your physical gold may never get an official price that you can add to your score card--Only that dealers and some dude on Ebay will pay you 10k an ounce for it.

Thu, 05/09/2013 - 21:56 | 3546858 Crisismode
Crisismode's picture

 

 

10K of what? Worthless paper??

 

Thu, 05/09/2013 - 18:09 | 3546289 Kirk2NCC1701
Kirk2NCC1701's picture

It means, you twits in the boardroom of the Fed and TPTB (GS, JPM), that you need to keep the price of PM in the right range, to minimize the bullion rush.

If the price had kept climbing (before you intervened lasts Fall), there would have been a run on gold -- and accelerated a currency/dollar crisis.  We get it:  you had to prevent that.  But some moron (at JPM who's richer than us but not smarter than us, or at GS) went too far.  They over-corrected and hammered it down too low.

If the price of paper/ETF gold gets too low, such that it approaches the marginal production cost plus channel margin costs, you will have created a bullion supply problem -- that starts to feed on itself.

What you should have done, is to have steered it to the middle of the road.  Not too far to the right (into the ditch), and not too far to the left (oncoming traffic).  But I guess 'moderation' or 'subtlety' are lost on your blo, hormone and ego-laden boys.

You need to slowly raise the price of gold to the 1750-1850 range, and silver to the 35-40 range.  Over the next 6 months.

But it may be too late now, if the cat's out of the bag.  Last laugh is likely on you.  The Russians and Chinese are laughing their ass of.  And maybe so is the leadership at GS, who have surely made sweatheart deal with China (selling out the US for huge access to the Chinese market, where they can continue to "do God's work"). /s

Thu, 05/09/2013 - 18:20 | 3546346 Jackagain
Jackagain's picture

Or it could be that JPM just wanted to dump some of their short positions at a huge gain...

Thu, 05/09/2013 - 18:08 | 3546301 tokpela
tokpela's picture

So what are people's thoughts on:

 

http://cafr1.com/SoYouWant.html

SO YOU WANT A GOLD BACKED CURRENCY - THE 50-YEAR PLAN IS COMING TO A CLOSE..

 What you will see take place over the next two years is the promotion by the cartel to make the public believe “it is essential to have a gold backed currency”. The parrots will be saturated with sound-bites to Parrot away screaming and demanding a gold backed currency. **International Circumstances will be created to bring the fear level to the brink.**

Then in 2014 or possibly 2013, the Powers-That-be, will say: We have heard your cries and we must in good consciousness yield to your demands, so here is your gold backed currency… Bait; Hooked; landed; and fried. 

** Now the cartel will have the liquidity ** to unload what they have stockpiled for 50-years as the country obtains the physical gold to back the currency… 1000%+ profit locked in and the public now becomes the bag-holder. 

After the conversion is complete and the horde unloaded, then the collapse in gold prices begins (2015-16), with the true and real collapse of the dollar now taking place backed by the quickly diminishing value of gold. 

The 50-year plan is complete. The wealth transfer accomplished for the cartel, and the public will be screaming and looking at who to point the finger of blame upon. 

The only one to blame in reality will be themselves for so easily being masterfully entertained by Bait; Hooked; landed; and fried. 

Break the conditioning! Look at “who” owns all of the gold. That old adage: “He who owns all of the gold makes the rules” applies and believe me, you DO NOT WANT them making the rules.

Thu, 05/09/2013 - 18:27 | 3546370 Jackagain
Jackagain's picture

I don't want a gold backed currency...they would have to confiscate all our gold again in order to do that. Also, they wouldn't have enough liquidity to loan out or keep the markets going. 

 

Just about anything would be better than this fiat, central bankster program though....

Thu, 05/09/2013 - 18:37 | 3546406 Citxmech
Citxmech's picture

Money is gold.  Fiat is an IOU.  Fractional reserve, debt-issued fiat is a total and complete scam.

I really don't give a shit what they "back" any fiat currancy with or in what percentage if it's still fundimentally a debt instrument and subject to fractional reserve lending - it'll still be garbage.

Thu, 05/09/2013 - 18:53 | 3546457 Pareto
Pareto's picture

i disagree with the article.  gold and the dollar will not depreciate simultaneously.  what the article is effectively saying is that gold isn't worth anything, and thats bunk.  its worth at least what it costs to get it out of the ground and in a jewelry box.

 

article is a piece of crap.  if gold were really worthless/time, why would central banks, individuals and governments buying it?  price of gold moves inversely to the dollar.  a dollar crash raises the price of gold in dollar terms.

 

besides, even if the nominal price of gold did crash, its real lexchange value will remain relatively constant.  but, everybody already (at least everybody on this site) knows this.

Thu, 05/09/2013 - 20:15 | 3546632 RaceToTheBottom
RaceToTheBottom's picture

The last thing is the world they want is a Gold backed currency.  They don't want the discipline.

 

They would have to balance their budget and they would lose most of their ability to tax by inflation.  Why would they want that?

Thu, 05/09/2013 - 18:12 | 3546312 NoWayJose
NoWayJose's picture

Given supply difficulties and delays, along with the spread to buy Phyzz, I think we will see futures markets turned on their head soon when big savvy investors actually buy the paper contracts and then stand for delivery. If they can get delivery there is a nice profit in the price spread. That will truly end the paper markets and expose the manipulators.

Thu, 05/09/2013 - 18:13 | 3546313 optionsman
optionsman's picture

i like the suggestion in the article that the Fed and perhaps other CBs are supplying physical gold to market. i also like the suggestion that the Fed may be behind the gold price crash. the reason i like these suggestions is that I can see why the Fed would not want to have any real or percieved competition for the reserve currency status of USD. if i am right then the gold price decline and wild fluctuations since then are all part of a long term plan the Fed is executing.......

Thu, 05/09/2013 - 18:13 | 3546316 americanspirit
americanspirit's picture

I see a bad moon rising

I see trouble on the way

 

Thu, 05/09/2013 - 18:14 | 3546320 Peter Pan
Peter Pan's picture

NAME and SHAME any bank etc which settles their customers'demands for gold with cash.

Keep naming them until the message filters through to them, their remaining customers and the general investing public.

Thu, 05/09/2013 - 20:54 | 3546715 Vuke
Vuke's picture

Peter, SHAME them?  They've been stealing from hard working people for decades, defrauding widows and orphans, deluding savers and staving pensioners.

 

SHAME them?  In the old days they'd be led to a pillar and shot.

Thu, 05/09/2013 - 18:15 | 3546327 Paracelsus
Paracelsus's picture

   This reminds me of the last time I truly laughed my ass off. Porsche bought a bunch of VW options on the sly,then on a Friday they announce they have enough to assume control. The hedge funds are caught napping and have to buy VW stock at any price ($1000 a share!) on the weekend. Something like a $6Bill. slaughter. Amazing. And then they have the cheek to complain to the German DAX guys about how they were ill-used.How do these people keep a straight face I'll never know......

Thu, 05/09/2013 - 18:30 | 3546380 Al Huxley
Al Huxley's picture

At least there all they had to do was cover.  Very expensive, but probably not fatal.  The shorts holding the bag this time are going to be in for a worse ride, because they won't find gold in the quantities that they'll be expected to deliver available at any price.  Why do you think the bullion banks are moving so aggressively away from net short toward net long?  So when the Russian and Chinese mafia hit them for delivery, they'll be able to say 'hey, I'd love to help you, but I'm in the same boat - the guy you need to talk to is the manager of SuperFund XYZ, here's his address in Conneticut, or you might find him at his Hamptons Villa, in any case, I'm sure he'll be happy to settle up with you'.

Thu, 05/09/2013 - 21:30 | 3546796 RaceToTheBottom
RaceToTheBottom's picture

I remember that one.  That was epic.

Thu, 05/09/2013 - 18:18 | 3546339 Jackagain
Jackagain's picture

The trouble is that the last time this happened they confiscated the gold....

Thu, 05/09/2013 - 19:00 | 3546478 Antifederalist
Antifederalist's picture

No that was two times ago. Last time Volcker put interest rates at 20%.

Thu, 05/09/2013 - 19:34 | 3546549 Urban Redneck
Urban Redneck's picture

Volker came at the end of a 20 year chain of events that had earlier included JFK banning US citizens from owning gold overseas.  In the interim Gerald Ford had decided that US debt serfs could buy gold again, and the Paper Gold was born the very next day. 

Thu, 05/09/2013 - 19:44 | 3546567 bardot63
bardot63's picture

Horsefuck. Get your facts straight, Jack.

Thu, 05/09/2013 - 18:22 | 3546351 solgundy
solgundy's picture

Welcome to Club Delusional.....home of the rabid gold bugs....."massive short squeeze coming"  1st put forward by Jim Sinclair in 2005 & repeated every year by the likes of Eric King..pumper 1st class

Thu, 05/09/2013 - 18:30 | 3546382 fonzannoon
fonzannoon's picture

Tough to argue wit the Sinclair/Sprott aspect. It really is.

Thu, 05/09/2013 - 18:42 | 3546419 Al Huxley
Al Huxley's picture

The problem is, you can see the inevitable end pretty clearly WAY in advance of it actually happening, but the disconnect can persist for a long time, and then if you try to tell people about it you look like a fucking moron for months or years, before you're finally vindicated, and then nobody wants to hear about it anyway because they prefer the more comfortable to go along with the 'nobody could have seen that coming' line, as it makes them feel less stupid, or at least part of a bigger club of stupid.  I remember seeing essentially the same thing for about 3 years going into the housing bubble crash - lots of people were writing about it, and about how it would end, in 2005 and 2006, and getting ridiculed or ignored, even though in retrospect they were typically more or less spot on in their assessment of the bubble and how the bust would pan out.  But nobody ever went back and said - 'wow, those guys had this thing nailed, we shouldn't have been such dickheads to them'.  Just 'nobody saw this coming'...   Will be the same with gold.

Thu, 05/09/2013 - 19:11 | 3546503 fonzannoon
fonzannoon's picture

That's true. I wonder if I am overstating it, but the difference to me between gold and housing is that if gold goes the way we all think it is, the blowback hit's the dollar. Or can you have a break between phyz, and paper, sending phyz parabolic while at the same time having the dollar still buying the same basket of goods it does today?

Thu, 05/09/2013 - 21:09 | 3546740 Conax
Conax's picture

I've run into that idea in the silver discussions.  It is thought that silver hitting a hundred would mean $10 bread.  As if the only factor in its price increase would be generic inflation.  Across the board, everything would have to go up equally, then.  

Silver has more uses that benefit humanity than any other single element, or any compound other than oil.  It will rise since demand is up while supply falters.  It's a law.  Better still, gold has the benefit of the love, faith and greed of the Old Money wealthiest families in the world.  They know money by their DNA.

If they begin to squabble over it, all hell could break loose. 

Silver could hit a hundred with $3 bread on the shelves.

Thu, 05/09/2013 - 22:24 | 3546940 Manipuflation
Manipuflation's picture

"but the disconnect can persist for a long time, and then if you try to tell people about it you look like a fucking moron for months or years, before you're finally vindicated, and then nobody wants to hear about it anyway because they prefer the more comfortable to go along with the 'nobody could have seen that coming' line, as it makes them feel less stupid, or at least part of a bigger club of stupid."

 

You forgot a decade.  What about a decade or MOAR of stacking and buying guns and ammo?  I have to agree with your post though about perceptions. 

Thu, 05/09/2013 - 18:31 | 3546384 balz
balz's picture

And what was the value of gold in 2005? And now?

Thu, 05/09/2013 - 18:45 | 3546432 Bay of Pigs
Bay of Pigs's picture

It was $400-500 an oz.

Just another clueless bullshitter taking shots while he can. Seems like 2008 all over again. Gold retards are everywhere on the net.

Thu, 05/09/2013 - 18:47 | 3546440 Manipuflation
Manipuflation's picture

Not quite a parabola yet but getting pretty damned close to being one.  So laugh it up now solgundy because it won't be funny later on for paperboys either.

 

http://www.marketwatch.com/investing/index/djia/charts

Thu, 05/09/2013 - 21:38 | 3546810 Swarmee
Swarmee's picture

As regards balz point above....
Gold range 2005: $411-$536, cum. Avg $444
2013: $1380-$1693, cum. Avg $1585

With many opportunities to sell all the way up to $1900 along the way.
So um, WTF was your point again?

Thu, 05/09/2013 - 18:27 | 3546371 RopeADope
RopeADope's picture

All paper financial products are a scam to some degree. After all equities don't really have a claim to corporate earnings now do they.

Thu, 05/09/2013 - 18:28 | 3546373 A82EBA
A82EBA's picture

Went long SLV in October, now I know better, but havent taken the loss yet hoping for a miracle it comes up a bit before selling at loss.

Thu, 05/09/2013 - 18:31 | 3546386 Al Huxley
Al Huxley's picture

You haven't been paying any attention at all to anything that's been said around here, have you?  You know, the whole 'paper vs real' dialog?

Thu, 05/09/2013 - 18:34 | 3546390 fonzannoon
fonzannoon's picture

I was going to beat on him but I just feel bad for these guys at this point.

Thu, 05/09/2013 - 18:37 | 3546405 A82EBA
A82EBA's picture

Oh I know I got it coming, but could you give odds on SLV getting near $32 please?

Thu, 05/09/2013 - 19:20 | 3546523 oddjob
oddjob's picture

All ETF's eventually go to zero.

Thu, 05/09/2013 - 18:34 | 3546393 A82EBA
A82EBA's picture

I have both, much more phyz than paper, but you're right, I did pay attention but did not heed the warnings.

Thu, 05/09/2013 - 18:29 | 3546376 Taint Boil
Taint Boil's picture

 

 

Read the fine print -----> redeemable is cash ROFL

Thu, 05/09/2013 - 18:32 | 3546387 A82EBA
A82EBA's picture

Why was Gold allowed to reach $1800+ ?

Thu, 05/09/2013 - 18:59 | 3546472 Supernova Born
Supernova Born's picture

Why does a fisherman not jerk the line on the first nibble?

Too bad the fisherman underestimated the size and determination of the "fish" and used an inadequate test line.

The fish is about to break the line.

Thu, 05/09/2013 - 18:32 | 3546388 besnook
besnook's picture

off topic but it is a brilliant story about entrepreneurship in the usa and how big business with the help of .gov stifles the expression of genius and choice in the free market.

 

http://www.youtube.com/watch?feature=player_embedded&v=gPbh6Ru7VVM

Thu, 05/09/2013 - 18:39 | 3546411 Smiley
Smiley's picture

I call your cash redemption and raise you a torch and pitchfork.

Thu, 05/09/2013 - 18:42 | 3546420 icanhasbailout
icanhasbailout's picture

math sez paper times gold equals paper

 

Thu, 05/09/2013 - 18:44 | 3546431 toadold
toadold's picture

Well I was reading a link at Drudge to the Daily Mail. In it was a report about a bicycle race at the Shanghai Zoo. There were two monkeys and a bear involved.  A monkey and the bear crashed, then the bear ran up and started to eat the trapped monkey. The trainer/keepers ran up an tried to beat the bear off with sticks.They were too late and the monkey died. The onlookers cheered the bear on. 

Looks like a prophetic metaphor for the paper gold market for me. If one of those bank monkeys trips the bear will eat him before the Fed can come up and save him by beating on the bear with bundles of paper money. Meanwhile  the audience is buying popcorn.

Thu, 05/09/2013 - 18:53 | 3546456 The Abstraction...
The Abstraction of Justice's picture

They were too late and the monkey died. 

 

WTF, call that a punch line?

Thu, 05/09/2013 - 19:03 | 3546480 Cheesy Bastard
Cheesy Bastard's picture

The punch line was where the trainers tried to beat the bear off after he swallowed the monkey.

Thu, 05/09/2013 - 19:25 | 3546531 ronaldawg
ronaldawg's picture

My four year old says you tell a good monkey story.

Thu, 05/09/2013 - 20:26 | 3546653 RaceToTheBottom
RaceToTheBottom's picture

I would cheer the bear on.  I might even toss him a knife...

Thu, 05/09/2013 - 18:45 | 3546434 observer007
observer007's picture

Central banks continue to buy gold

The central banks of emerging economies took advantage of the low gold prices and bought additional gold to diversify their currency reserves.

 

http://homment.com/centralbanks-gold-buy

Thu, 05/09/2013 - 18:48 | 3546443 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

No

Thu, 05/09/2013 - 18:48 | 3546444 ThorsteinVeblen
ThorsteinVeblen's picture

Last July as silver came back close to $40, we sold most all of the scrap (mostly beautiful) silver in the house. We sold some gold as well. After diligently shopping it around I found out first hand that in general, fine silver to be melted down would comand only about 80% of market price. This shopping for a buyer cost time and probably 10% as the market was generally declining. About that time, a similar story to this one ran about the physical silver shortage. From this experience, one could wager that if gold fans lent themselves out as buyers of gold at a higher price than the 80% the scrap buyers pay, they could buy all of the gold that they wanted at or below current market prices. Owning gold and silver was like owning the 1950 Chris Craft without a trailer that sat in the field when we bought our house; You have to "give" it away to someone to be rid of it.

Thu, 05/09/2013 - 19:05 | 3546468 akak
akak's picture

If you were willing to take only 80% of the value of your silver, you apparently were not very willing to do the proper research or shop around enough to find a legitimate PM dealer, who would certainly have paid you ~95% of their melt value.  I'll never understand why so many people are so unwilling to go the little extra step to obtain a fair price for items they are looking to sell.

Thu, 05/09/2013 - 19:16 | 3546518 SamuelMaverick
SamuelMaverick's picture

Akak, I deal with refiners.  For scrap silver the best you are going to get is 90% if you are a legite dealer in business. For the average joe off the street, if you can get 70% you are lucky. Scrap gold goes for 96% at a legite refiner.  The cash for gold shops, pawn shops, and jewelers usually pay the poor woking guy only 45 to 65%.  

Thu, 05/09/2013 - 19:26 | 3546536 ronaldawg
ronaldawg's picture

Last time I looked my silver wasn't some unwanted junk:  It is shiny, new and PRECIOUS.....

Thu, 05/09/2013 - 23:56 | 3547188 ThorsteinVeblen
ThorsteinVeblen's picture

Certainly, I thought the same thing and was proven wrong. I was diligent and found the world of gold diggers (and the refiners that the dealers sell to) far worse than the stock swindlers. Try offering some out sometime, it may surprise you as it did me! Having driven large trucks through huge spreads in the early days of MBS's, it makes Salomon Brothers. look like Boy Scouts.

Thu, 05/09/2013 - 20:09 | 3546616 besnook
besnook's picture

scrap silver most definitely gets the full price without melting it down. all you need for confirmation is a look at what sterling is selling for on ebay. it is stupid to melt it into bars. that cost money for negative return. i won't be sellin my silver cups bowls and utensils to dealers.i will be selling it for eggs and bacon and bootleg whiskey.

Thu, 05/09/2013 - 18:53 | 3546458 koperniuk666
koperniuk666's picture

"Many believe that the recent takedown of the price of paper gold was a desperate attempt by the bankers to put off that day of reckoning, but it appears to have greatly backfired on them. "

Are these the same people as the NWO bunch who have everything planned? I'm confused?  So it's NOT deliberate? Or am I supposed to only THINK that it's not? Would one of you conspiracy types please explain?

or is it just another fuck up?

Thu, 05/09/2013 - 18:54 | 3546461 The Abstraction...
The Abstraction of Justice's picture

First we get the silver, then we get the women. Say hello to the golden days of endless sex games!

Thu, 05/09/2013 - 18:58 | 3546473 yogibear
yogibear's picture

Banksters always leverage at least 10 to 1. So every ounce is levered 10 fold.  

The only way you solve this is to take those responsible and seize their assets and let the mobs handlw their justice.

Thu, 05/09/2013 - 18:58 | 3546475 Judge Crater
Judge Crater's picture

First, consider that everything the Obama/Wall Street administration tells you is lies.

The amount of physical gold the USA owns is not 8,100 tons (261 million ounces).  Extrapolation: The US Treasury

has enough working stock gold on hand to keep on minting gold coins for the next five years (about 2,800,000

ounces). The remainder of the gold reserve at the public depositories in Denver, West Point and Fort Knox is commingled

with the gold reserves of foreign countries.  The greater portion of the gold bullion stored at Fort Knox has been transferred out

of that depository over the past 30 years.  Ft. Knox has a policy of discharging most non-managerial employees who work there

after five years at the most, to prevent those employees from finding out about the theft of millions of ounces of gold each year

from Ft. Knox. Who has that stolen government gold now is a state secret.    

---

The Truthseeker: Boston Bombing - What You Aren't Told                                      (Episode 14)
http://www.youtube.com/watch?v=GcxmAunB4Ck
Thu, 05/09/2013 - 18:59 | 3546476 Downtoolong
Downtoolong's picture

I'll be happy if and when Jamie and Blythe come up short on deliveries and, for punishment, are forced to go dig the stuff out of the ground themselves. I'll be even happier if Corzine is their foreman when they get there.

Thu, 05/09/2013 - 19:01 | 3546481 Unpopular Truth
Unpopular Truth's picture

I would be happy, too, but they will never have to.

They will simply pay off in cash.

If they deem it too expensive, they will just ask the Govt to make it illegal to own gold.

Thu, 05/09/2013 - 19:07 | 3546492 Al Huxley
Al Huxley's picture

Uh, yeah - so I guess they only 'sell/resell/resell again' to Americans?

Thu, 05/09/2013 - 19:42 | 3546563 fonzannoon
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