"The Chinese Don't Want Dollars Anymore, They Want Gold" - London's Gold Vaults Are Empty: This Is Why

Tyler Durden's picture

Today gold slid under $1200 per ounce, dropping to a level not seen in three years. Judging by the price action one would think that gold is not only overflowing from precious metal vaults everywhere, but can be found thrown away on the street, where nobody even bothers to pick it up. One would be wrong. In fact, as Bloomberg's Ken Goldman reports, "you could walk into a vault in London and they were packed to the rafter with gold, and the gold would trade from me to you to somebody else. You could walk into these vaults today and they are virtually empty. All that gold has been transferred out of London, 26 million ounces...." To find out where it has gone and why it is never coming back, watch the clip below (spoiler alert: listen for the line: "the Chinese don't want US dollars anymore, they want gold").

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honestann's picture

I need to express a few thoughts I've had recently about gold, and this seems like the only current message that is more-or-less on-topic.  So here goes...

A few days ago in a ZH message I said that it is likely JPM and the predators-that-be will [gradually or completely] stop manipulating gold downward just after the end of 2013.  They will have given gold, silver and precious metals a big fat black eye in the eyes of everyone not a firm advocate of precious metals by thoroughly smashing the 12 year price uptrend.  This is why they will make sure the price stays down until 2013 is behind us, because most people typically consider and quote price performance for calendar years.

But they have caused serious dislocations in the paper versus physical markets, and sent enormous quantities of physical gold and silver to China and emerging markets.  They have largely emptied a great many vaults in the process.  They might be able to keep this up for another year... or they might not have access to enough gold to pull that off.  In any case, on balance, seems reasonable to assume they will call it quits after 2013 ends, or at least reduce their efforts to times when the price starts to go exponential (like it was in 2011 when they ramped up their manipulation like crazy).

Recently there was an article about JPM loading up its vault with gold big time... and very, very quickly.

Now, the normal behavior of predators-that-be like JPM is to load up on something they know is about to be manipulated higher (or just certain to explode higher naturally because manipulation downward is [mostly] ended).  So we shouldn't be surprised JPM is loading up in order to make a killing.  Expect JPM to also suck up boatloads of highly leveraged futures contracts to buy gold and silver too.

But now we must do our mental due diligence.

While this scenario is perfectly logical, perfectly sensible, and entirely based on the real situation in physical markets... this scenario is also what we want to happen.  One must be very careful to buy into one's own hopes, no matter how sensible they may be.

So, in this spirit, consider the following.

JPM has been able to accumulate a lot of gold at super low prices (near $1200).  JPM also seems to have acquired quite a lot of gold futures contracts at similarly super low prices.  Now, if the price of gold takes off, they'll get rich.  However...

If you were one of the predators-that-be, and you wanted to really smack the holy crap out of gold and silver at this point in history, what would you do?

Well, if you are able to accumulate a huge pile of physical gold and long futures contracts on gold at super low prices...

what happens if you dump them all at once on low volume?

That's right.  You completely blow the price through the floor.  You take out several levels of support, and trigger all sorts of forced selling because a great many of us morons still buy with a lot of leverage (not me, but some still do).

Now... let's face a couple facts.

#1:  This is the normal modus-operandi.

#2:  These holidays include some of the lowest volume days.

Sooo... I hope everyone understands the FLIP side of this setup.  The predators-that-be could absolutely CRUSH their enemies (lovers of real, not fiat) by throwing gold over the cliff.  This is just the kind of xmas/newyear present the predators-that-be would love to jam up their enemies butts.

-----

Okay, I'm not convinced this will happen.  As I said, there are a lot of reasons to believe the JPM is just setting themselves up to make astronomical profits on the end of massive manipulation.  And there are a lot of reasons to believe the predators-that-be don't want to attempt another year of this manipulation, for fear they cause a run on physical, and get blown out of the water.

So... the truth of the matter is... we can't tell.

This could be JPM setting themselves up for astronomical profits like insiders always do before a huge trend change...

... or ...

This could be one final smash in the face before letting gold and silver rise...

... or ...

They could intend to attempt one more year of this manipulation.

Apply your own judgement.

-----

But if they do implement a super-smash-down this holiday... I'm loading up on highly leveraged gold and silver options.  I don't do this kind of thing... I love my reality real and physical.  But... that opportunity would be just too juicy to ignore, so this is one time I'd put maybe 10% of my savings into a wild "roll the dice" bet.

But that's just me.

fijisailor's picture

Interesting thoughts you have.  My one comment is:  Jamie wears presidential cufflinks.

lakecity55's picture

Excellent read.

Sometimes I think of it as they have run everyone over to equities, ("The Market will hit 20,000, Jim! Buy!!) while smashing PM. Next, they smash equities and run PMs back up. Who really knows, and I really don't care.

While spending a lot of my life studying these nazi bastards, I learned a German word Hitler was quite familiar with: Weltanschauung, or World View of Things. You can gain a great perspective by reading Otto Spengler's Decline of the West. He was quite popular with the NSDAP until he knocked Adolf, but I digress.

I place here a quote from a Wikipedia article:

"Spengler's book The Decline of the West (1918) written during the final months of World War I, addressed the claim of decadence of modern European civilisation, which he claimed was caused by atomising and irreligious individualisation and cosmopolitanism.[64] Spengler's major thesis was that a law of historical development of cultures existed involving a cycle of birth, maturity, ageing, and death when it reaches its final form of civilisation.[64] Upon reaching the point of civilisation, a culture will lose its creative capacity and succumb to decadence until the emergence of "barbarians" create a new epoch.[64] Spengler considered the Western world as having succumbed to decadence of intellect, money, cosmopolitan urban life, irreligious life, atomised individualization, and the end of biological fertility as well as "spiritual" fertility.[64] He believed that the "young" German nation as an imperial power would inherit the legacy of Ancient Rome, lead a restoration of value in "blood" and instinct, while the ideals of rationalism would be revealed as absurd.[64]"

My own Weltanschauung is that China/Asia is not some hotbed of plotters trying to scarf up gold and Rule The World, as the Orson Welles-voiced mouse on Pinky and the Brain is perennially questing after. It is simpler than that.

It is, rather, based on the rootless concept of Wealth and Power as maintained generationally by those we would call, in Lindsey Williams words, The Elites. Whether he is on the level or not, he tells a great story.

When the European powers first began their conquest of the New World by circumnavigating the globe and discovering there was, indeed, a finite end to the world, they next set out to explore and Categorize the Inventory. Think of the ships of the East India Trade Company sailing and stockpiling inventories of land and resources as just one example. If you want to get kinky, look at the EITC flag and Old Glory. See anything familiar?

Over the last few years I have been employed overseas on numerous tasks. I have observed two things: the vast resources of the world's lifeblood, petroleum and now NG, being discovered and extracted from Central Asia through East Asia. The current row between the PRC and Japan is a good sidebar to this, as both want the resources said to abound below the contested islands of the Senkaku zone. The fact that thousands of people will risk their lives and die in shoddy textile plants in Dhaka for 5$ US/day shows how desperate the world's people are to just make a decent living, and, trust me, the unknown guy in Bangladesh is a guy just like anyone in the US. He wants to live, support his family, practice his Faith, and try to have a few good times and maybe leave something a little better for his progeny.

Having reached a point where technology allows global connectivity, there is no need for Nationalism (there never was) for the "Elites." Here, Globalism, or world-wide authoritarian socialism comes into play. The rootless Elites see the next phase of Wealth and Power to the East of the City of London.

They are now in the process of moving their HQ, and when you relocate HQ, you take the Money with you.

"Gold is Money--" J P Morgan.

There is nothing wrong with a sense of Nationalism, Regionalism, or even Localism. Any decent man or woman wants to be proud of their place in the world, have a say in governing themselves, and (gasp) achieving, Life, Liberty and the Pursuit of Happiness.

I am still proud of America, or more precisely, its people. We have proven ourselves just as full of faults as every other nation in history, as human nature does not change. We have done some cool stuff, too, like the ideals of the Constitution and Bill of Rights. I once signed a blank check to include my own life in her defense, and that Oath only expires when The Good Lord calls me home.

To these Elites, however, it is all the Billions of US vs. Them. To Them, Nationalism must be Destroyed. If you have ever suffered from a drug addiction, you know you have to get that next drink (my former case) or Fix. These Elites have no intention of entertaining the thought of Rehab. They want it All, and they will do Anything to get It.

What began in small creaking boats on the trade winds of the world has grown into Singularity of Connectivity. How could these rotten nazis not resist their Unholy Grail, "All for US and None for you; well, OK, maybe you can squeak by, I do need me sum serfs."

Asia is the next Iteration, the next Weltanschauung.

As the good peoples of the world have fewer material desires, mainly to be left the hell alone in my case, you must each find a way to Resist. You do not do this with guns. You need guns to protect yourself, because the World is Ruled by the aggressive use of Force, but you protect yourselves by simply saying "No."

Find a way to your own Peace, Refuse to Play, and do not let the Bastards Grind You Down.

A good place to start is throwing out the TV set. It is Christmas Time. Whether you are religious or not, you can be kind to your family, friends and strangers. That is part of Who and What Christians are now celebrating, but everyone is welcome.

Never, Ever give up your guns or your Soul, or your Individual Self-Value. Each person born is Unique. And that, my ZH Brothers, is a wonderful mystery of God's Creation!

Carry on.

 


 

 

 

 

therevolutionwas's picture

Talk like that at National Review, American Spectator, Blaze. Human Events, New Repuplic, etc, and you would be told to seek medical help.  Thank God for Zero Hedge.

falak pema's picture

For once you make sense. I agree, universal empires on history's time line, have always failed and Elites as you say should only serve the Knowledge tree; aka be truth seekers,  and NEVER be part of the POWER equation, aka those who practice "we the people" meme in our value systems.

The day the wise man wants to be Potus or Caesar all hell breaks lose. That is but a generalisation of Plato's dream of philosopher king : it led to the worst in western civilization. Aristotle was right; always use practicality and common sense to govern and let those "great scheme of things" be realm of vision or trouble shooting and never put into practice before trial and error has tested them in detail where the devil always resides.

When Popes or Shamans think they can be kings without trial and error and protoyping we get QE infinity and ZIRP and dystopian NSA "we know all, as we have the greatest algorithm fed by our best n brightest so we can prempt crime and societal anarchy"... and hey presto we are in USA of today, all boxed into the Bilderberger, now Davos, matrix of Elitist illuminati! Like Always.

lakecity55's picture

Always enjoy your ideas, Falak; I may not agree all the time, but you think outside the Box.

And that is what we need now.

I always entertained the idea (in Science Fiction literature) where the Braniac guys were restricted from unaccountable Power. Regular folks would build stuff, create stuff, make something somebody wanted, and trade.

H Beam Piper wrote a series called "Little Fuzzy" where there were glowing fossil-stones on another planet traded throughout the Federation. Prospectors gathered the stones and traded. Everyone was free to have a job they liked if they worked for it! Piper's Federation had its crooks, but the shenanigans we see today were punishable by Execution or a brain wipe. Corzine would be a Red Cross worker now in Piper's books.

Now, there is nothing wrong with working your buttocks off and enjoying what YOU BUILT, not the back-asswards quote from a guy who takes it up the ass (which just proves he's ass-backwards).

"You din't build that..." is perhaps one of the most disgusting, vile comments I have ever heard from a human being (assuming Backdoor Barry is not an evil Jinn).

The utterly disgusting, vile vomit that spews from these "progressives" who count human life as Nothing is a blight on Humanity.  Don't ask me what I would do to them. Their path ends in only one way: Nihilism and Death, Murder and Brigandage.

 

Live Long and Prosper.

***

If you are in Greece, we may be able to touch base sometime when I am on the road.

tip e. canoe's picture

my vote for comment of the year.

just don't forget the Sisters, especially considering to whom you are replying.

lakecity55's picture

"Good Read."

The article is good, but I was realy referring to H.A.

I love her perspective. She may have a tech background as I do.

 

honestann's picture

Thanks.  And yes, I'm a scientist, engineer, inventor, techie and [realist/objective] philospher to the core of my being.

honestann's picture

...you must each find a way to Resist. You do not do this with guns. You need guns to protect yourself, because the World is Ruled by the aggressive use of Force, but you protect yourselves by simply saying "No."

That is one of the best short and concise bits of advice ever.

Kina's picture

Wish people would stop answering response to response to response ...is fucking stupid...fucking comes up like shit on my screen...stop being so totally moronic people.... especially when most of those response are just one sentence childish shit.  I want to see people's responses to comments...but not a great big long series that reduces it a two mile long stream of single letters on my screen.

 

I dont want to turn that feature off...yet

Kina's picture

SO we now know Via KWN....that the ...

 

Head of the LBMA is trying to get producers to dump gold down by $400 next year.

 

These dirty little corrupt turds..... blatant corrpution that in a prior generation would see them executed by the State. But now because corruption owns the State they are safe from prosecution and execution for corrupting money.

 

The head of the LBMA should be dragged out onto the street and publicly flogged till blood streams from his back, then thrown in jail for a decade...the filthy little pig.

NOW if producers did that they should be sued for corruption by their shareholders for collusion to defraud shareholders...likewise the head of the LBMA ... collusion to defraud.

 

The only way you would think this could happen if TPTB owned these gold miners and had their own directors on the  board.

 

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/20_L...$400_In_2014.html

 

NOW do the authorities have enough evidence, as with LIBOR corruption, that Gold fixing prices is totally corrupt...when you have the Chairman of the LBMA out their blatantly trying to corrupt the price...it is obvious that their fixing like LIBOR is totally corrupt.

 

So...will their be prosecutions?

 

Will the Chairman of the LBMA get 20 years in an arse raping prison he thus deserves?

lakecity55's picture

Man, I luv me some KWN, but they are over-excited about PMs.

Their basic idea that PMs is good is on target, though. There are some pretty smart guys on that blog.

Jim Willie is my favorite all-time PM Rebel, however.

"Interpol today has a world-wide alert for Jim Willie, the revolutionary guerilla economist/investor. Do not attempt to apprehend him yourself, he will be too heavy to carry with hidden stores of PMs. PMs must remain in the custody of High Party Officials."

Runs-With_Toast's picture

BTW,

FBI is global stakeholder in cryptocurrency, currently owns largest bitcoin wallet
hooligan2009's picture

"he who sells what isn't his'n, buys it back or goes to prison"...well ok..modern version "he who sells what is'nt his'n, makes a shit load of fiat and snorts marching powder til his nose drops off and...tweets" 

still i still reckon selling central bank gold to china under the guise of leasing it, is theft.."they took my goldddd" it never belonged to the central banks...they were supposed to be just looking after it...now its gawnnnnn (echoes of south park...they took his job etc)

GetZeeGold's picture

 

 

If someone had just said that to start with.....we could have just done away with the other 500 comments.

PR Guy's picture

 

 

While you are waiting for the gold price to recover, here's a short (and funny) animatiion to watch!

 

http://www.youtube.com/watch?v=39X4sXc0Ubc

 

RabbitOne's picture

While installing an IT product at a San Francisco savings and loan in 1972 I became good friends with the S&L’s IT Manager. He had migrated from Hong Kong to seek his fortune in America.

 

Every payday the IT manager and I went out to lunch and along the way he would cash his pay check getting half of it in cash. When I finally summoned the courage to ask him why he carried so much cash he said “No I am not going to spend this cash. I am buying gold and silver with the money...”

 

I was somewhat perplexed by his answer about buying gold and silver. So finally one day I ask him “…why do you need so much gold and silver...” He chuckled and replied “ …you know nothing of Asian customs. We all buy and keep what we can carry on our backs. Thousands of years of wars have taught us to buy what is small enough to carry if we are forced to move but has value where ever we must live at the moment. I will never own your paper money you carry in your wallet for very long for those reasons…”

 

I later took his words to heart and bought my stash of gold when it was in the $300 range. I often think about what he taught me…  

RabbitOne's picture

While installing an IT product at a San Francisco savings and loan in 1972 I became good friends with the S&L’s IT Manager. He had migrated from Hong Kong to seek his fortune in America.

 

Every payday the IT manager and I went out to lunch and along the way he would cash his pay check getting half of it in cash. When I finally summoned the courage to ask him why he carried so much cash he said “No I am not going to spend this cash. I am buying gold and silver with the money...”

 

I was somewhat perplexed by his answer about buying gold and silver. So finally one day I ask him “…why do you need so much gold and silver...” He chuckled and replied “ …you know nothing of Asian customs. We all buy and keep what we can carry on our backs. Thousands of years of wars have taught us to buy what is small enough to carry if we are forced to move but has value where ever we must live at the moment. I will never own your paper money you carry in your wallet for very long for those reasons…”

 

I later took his words to heart and bought my stash of gold when it was in the $300 range. I often think about what he taught me…  

manich's picture

I hope that guy Sprott has a lot in his vault. I bought some of his paper when it fell to $1200.

muleskinner's picture

A good friend is Chinese and an outstanding Chinese fry cook.  Best venison I have ever eaten.

I had to cut the breast out of another pheasant.  It was just the other day and the pheasant in Chinese stir fry was excellent.  Non-pareil, as it were.

I use a fillet knife for fish.  I pierce the skin of the pheasant with the tip of the fillet knife and then proceed to cut some more skin until I can peel the skin away from the meat of the pheasant.  I use the fish fillet knife to remove the breast pieces from the carcass; way too much work to plucking a pheasant and trying to cook the entire bird.

I have cut off enough chicken heads and plucked enough feathers to feel like the fox guarding the hen house.  I wait to eat the chicken until the next day after butchering chickens all day long.  Throw the newly guillotined chicken onto the grass and let the poor critter bleed out.  Into boiling water for about 30 seconds and the feathers are ready for plucking after the dead chicken cools some.

Maybe an irrelevant digression, but it is about the Chinese buying gold and pheasants are from China.  It cogs together somehow.

What would you rather have, 2000 tons of gold in your vault after a year of purchasing the barbarous relic or 1.2 trillion dollars worth of US Treasuries?

highwaytoserfdom's picture

The eyes of Dr. T.J. Eckleburg........  buying physical....