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The FT Goes There: "Demand Physical Gold" As One Day Paper Price Manipulation Will End "Catastrophically"
What have we done: after a series of reports in late 2012 in which we showed, with no ambiguity, that not only might the Bundesbank's offshore held gold be severely "diluted" (follow our 2012 exposes on German gold here, here, here, and here), but that on at least one occassion, the Fed and the Bank of England conspired against the Buba in returning subpar quality gold, the Bundesbank shocked everyone in early January 2013 when it announced it would repatriate 300 tons of gold helt in New York and all of its 374 tons of gold held in Paris. But convincing the Bundebsbank to demand delivery was peanuts compared to changing the tune of the Financial Times - that bastion of fiat "money", and where the word gold is mocked and ridiculed, and those who see the daily improprieties in the gold market as nothing but "conspiracy theorists" - to say the magic words: "Learn from Buba and demand delivery for true price of gold", adding that "one day the ties that bind this pixelated gold may break, with potentially catastrophic results."
In other words, precisely what we have been saying since the beginning.
Welcome to the 'conspiracy theorist' club, boys.
From the FT's Neil Collins: "Learn from Buba and demand delivery for true price of gold: One day the ties that bind the actual and the traded commodity will snap:
A year ago the Bundesbank announced that it intended to repatriate 700 tons of Germany’s gold from Paris and New York. Although a couple of jumbo jets could have managed the transatlantic removal, it made security sense to ship the load in smaller consignments. Just how small, and over how long, has only just become apparent.
Last month Jens Weidmann, Bundesbank president, admitted that just 37 tons had arrived in Frankfurt. The original timescale, to complete the transfer by 2020, was leisurely enough, but at this rate it would take 20 years for a simple operation. Well, perhaps not so simple. While he awaits delivery, Herr Weidmann is welcome to come and look through the bars in the Federal Reserve’s vaults, but the question is: whose bars are they?
In the “armchair farmer” fraud you are told: “Look, this is your pig, in the sty.” It works until everyone wants physical delivery of their pig, which is why Buba’s move last year caused such a stir. After all nobody knows whether there are really 260m ounces of gold in Fort Knox, because the US government won’t let auditors inside.
The delivery problem for the Fed is a different breed of pig. The gold market is far more than exchanging paper money for precious metal. Indeed the metal seems something of a sideshow. In June last year the average volume of gold cleared in London hit 29m ounces per day. The world’s mines are producing 90m ounces per year. The traded volume was many times the cleared volume.
The paper gold in the London Bullion Market takes the familiar forms that bankers have turned into profit machines: futures, options, leveraged trades, collateralised obligations, ETFs . . . a storm of exotic instruments, each of which is carefully logged, cross-checked and audited.
Or perhaps not. High-flying traders find such backroom work tedious, and prefer to let some drone do it, just as they did with those money-market instruments that fuelled the banking crisis. The drones will have full control of the paper trail, won’t they? There’s surely no chance that the Fed’s little delivery difficulty has anything to do with the cat’s-cradle of pledges based on the gold in its vaults?
John Hathaway suspects there is. He worries about all the paper (and pixels) linked to gold. He runs the Tocqueville gold fund (the clue is in the name) and doesn’t share the near-universal gloom of London’s gold analysts, who a year ago forecast an average $1700 for 2013. It is currently $1,260.
As has been remarked here before, forecasting the price is for mugs and bugs. But one day the ties that bind this pixelated gold may break, with potentially catastrophic results. So if you fancy gold at today’s depressed price, learn from Buba and demand delivery.
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Oi, you're havin' a right bubble mate.
This long rabbit's too much for a wide boy like me, init?. I am off to the boozer for a nice old Ruby Murray with the trouble n strife.
Wow. Real "English."
Hmmm.....maybe the FED and a few other bullion banks liquidated their gold stock at the top of the market and intend to buy it all back when the market crumbles back to $100.00 an ounce? A shrewd $1800.00 dollar an ounce gain? For an bankrupt entity like the the US government it would be a handsome sum of money indeed.
Nah......that would be illegal.
What absolute BS. If it was about profit they could just print some banknotes. What will one day determine profit AND wealth is oz of gold and or silver.
I down voted you. If (a big if) the govt could sell all their gold (claimed at 8,000 tons) at 1900 and buy back at 100 then the profit would be massive (to us little people) but still tiny (compared to the US debt. After the last debt ceiling makeover they added a few hundred billion in debt in a single day. That takes far more than a lousy 8,000 tons of gold profits to cover.
Sorry I am late posting but I just finished counting my ounces. Now I will read the comments.
Welcome to the end of the comments, It gets a bit lonely down here. Been up to much lately?
Nope. Just counting oz. LOL.
Gold is a great insurance policy for all sorts of scenarios.
But seriously no one should want to see a world where gold sells for $10,000 per ounce in the next five to ten years.
What small stacks most of us have will be dwarfed by all the other problems in such a world. The situation in Greece would not even come close to describing the scene.
Focus on developing an income that is reasonably stable in all situations. That would likely be a job or an asset that certainly won't make you rich, but involves the basics such as food, commodities, basic consumer goods with inelastic demand, and the development of practical job skills in a service that is necessary in all scenarios.
Or become a shrewd trader (in the broad sense of the word) That helped the Jews survive lots of difficult situations and migrations thru the centuries.
Gold's main altruistic role has been as a guardian of the people's store of labor, and desire to accumulate some genuine wealth, for their kith and kin. An insurance policy, yes. Yet also, a means to evade the money grubbing two faced lies of spendthrift governments and private banks who profit most when running up debts and promises off the backs of the people, their labor, their trust, their honest industry.
There will be a bonfire of the vanities, and a conflagration of the latest experiment with paper money, unrestrained by a link to the world's oldest monies: gold and silver. Every fiat system has failed, and this one will too.
I'm not arguing with you 'carlpopper'. I am merely extending your point.
"conflagration" means it will burn. I don't see any more than the moving of digital files to the recycle bin and then permanent deletetion. Doesn't sound so dramatic this way but lots of financial kooks will jump out of high rise windows.
" Focus on developing an income that is reasonably stable in all situations. "
When I grow up I want to be an undertaker. With money saved, I will open a factory manufacturing toilet paper.
Oh, I want to see gold at $10,000 per ounce.
Then $100,000 per ounce. Then $10,000,000.
Because that's the end of fiat, which is a lesson that human beings need to learn again. Understanding that lesson is worth however much pain it costs, because that pain will be insignificant compared to the pain people will suffer if they let this racket continue.
Unfortunately there will be a coordinated attempt to use the coming collapse scenario to accomplish numerous political ends, such as the dissolution of the sovereign nation state. $10,000+ gold -- or a loss of control of the markets by TPTB -- will likely result in massive war. War is the ultimate distraction and scapegoat for failed domestic and economic policies. While I too would like to see the 100 million Americans on Welfare weaned off this "free" money, and a few thousand bankers jailed for fraud, to do it properly requires the steady accumulation of moral and political force. Quick upheavals could be a worse thing than what we have already, and the 33rd degree masons are experts at manipulating the commoners during times of crisis. cf. masonic creed "ORDO AB CHAO" or "Order Out Of Chaos"
Why all the shennanigans with a barbarous metal that no central bank recognize as money. Even the Oracle of Omaha mocks gold openly and regularly. Yet here we are with stories of the most powerful institutions and people on Earth using stealth, subterfuge, lies, damned lies etc... on a worthless metal that never gets used up after being mined. Hmmm....
Critical thinking?...
How dare you!
lol
No worries.....Warren will send Chuck Munger to give him a stern scolding.
As Yoda might say "smart this one is".........great logic my friend.
"You can keep your bitcoins"
The con is unsustainable. There is insufficient gold to give Germany back its tons without defaulting on other holdings. Also. gold-plated tungsten substitutes are mixed with real bars, so caveat emptor!
The FT is getting its excuses in before the STHF, imo. The FT ceased being a newspaper for its readers and became a mouthpiece for the status quo some years ago. Now, the FT wants to retrieve some credibility at the llth hour, it seems to me.
I remember an email exchange with their Martin Wolf after 2008. Extraordinary, unorthodox monetary measures were being introduced. He was nigh on hysterical when I politely pointed out the flaws going forward in that plot. I was the heretic, it seems, and he was the employee bound to his master's boot.
Hi Martin.
I did say we could discuss this issue again on the other side. How about 2016? The world is a contest of ideas. Cheers, my dear.
throwing Kugerrands
at cats ...
That's wicked smaht , as the Boston saying goes. Some may ignore reality. Reality will not ignore them.
You can really tell that ZH readership numbers and stories have really gotten up the noses of the MSM by the number of their trolls coming into the site now and their tactics...
Quite as amusing...
If you can't walk to your safe and take it out it's not real. Paper anything is not a real anything, it's only a promise that if times remain civil and the lights stay on that you might or might not receive what you technically own when you ask for it.
if we like your gold we can keep your gold
I'm paraphrasing a bit here:
Ezekiel 7:19 (the bad guys) will throw their silver into the streets, and their gold will turn to (shit). Their (fake, counterfeit) silver and gold will not be able to save them in the day of the LORD's wrath.
Even cooler if you could get Samuel L. Jackson to say it.
God I swear, people will look back and say it was all so obvious.
"So you traded your labor for pieces of paper, or digital representations of debt certificates, backed by nothing?"
"Yes."
"Like grocery coupons?"
"Yes."
"And some people, the well connected ones, could print more of this shit at will, thus diluting your buying power?"
"Yes."
"And you staked your life on this?"
"Yes."
"You didn't see that this was an obvious fraud?"
"Well, uh..."
You didn't expect him to be an accountant too, did ya?
If you like your Gold you can keep it..... PERIOD!
There's almost no gold in COMEX, perhaps none in GLD.
There's no physical backing in bitcoin.
Therefore COMEX & GLD should be backed by bitcoin.
I mean really, if Friday humor just isn't doing it for you anymore this will be twice the laughs.