The largest physical movement of gold in recent history is under way.
Hugo Chavez, Venezuela’s President wants to move his country’s 211 tonnes of gold (over $12B at Friday’s close) currently stored in American & European banks back to Caracas.
Major upward moves in gold prices over the past couple of years have been tied to central banks’ activities in the gold market, like the big purchases by India, China & Russia.
However, this recent move by Venezuela is rather unique. Instead than buying more gold, Venezuala merely wants to repatriate what is already hers. Unlike central bank purchases, which could involve just a ledger entry, this is the real thing. Physical gold is being moved around. What’s more significant is the discovery that after accounting for the 99 tonnes and 11.2 tonnes being held at the Bank of England (BoE) and Bank of International Settlements (BIS) respectively, about half of this huge stash are held in bullion banks like JP Morgan Chase et al - all major gold shorts. The move has left them scrambling for the real stuff.
This has led many to believe that the “Golden Retrieval” may have been a contributing factor to the most recent spike in gold price. It hits at the core of what GATA has been highlighting for over a decade - that bullion banks have been working hand in glove with central banks to suppress the price of gold, and that much of the physical gold at bullion banks and central banks are encumbered, leased or sold many times over, resulting in multiple claims for each bar of physical gold.
Bullion Bank Run - Pressure from all sides
When a major “client” like Venezuala suddenly decides to take physical possession of her gold, it may cause a run on the bullion banks, not unlike the much feared bank run for cash. Bank runs start when depositors begin to lose confidence in the banks holding their cash. All it takes is a a few large depositors withdrawing at the same time, thereby creating the initial stress in the fractional reserve banking system. Soon, the panic hits the masses and long lines form outside the banks.
We have to depend on what the west often refers to as rouge nations - and there are good reasons to believe that there are several out there in a position to take the cue from Venezuala. That’s because it is common practise among central banks to hold their gold outside their countries at ”trading centers” where the bank conducts “its gold activities” - according to a report by GATA citing a comment from Bundesbank. Take a look at this list and see how many potential rouge nation triggers you can spot among the larger holders of gold. As highlighted by Adrian Salbuchi in the video above, there is a political element to Chavez’s radical decision. I can see several rouge nations in that list having similar political motives.
With increasing awareness that the perils of wars, global poverty and social injustice can be attributed in part to our present fraudulent monetary system, there have been many calls to help speed up the inevitable demise of the failed experiment to run a global economy on a debt-based monetary system. All adopt the common strategy of advocating the purchase of physical gold & silver (especially the latter) to protect oneself financially while helping to create stress in the supply of physical bullion to bring down the banking cartel. They include:
Silver Liberation Army - Buy physical silver coins, bring down JP Morgan & the banksters
Underground Investor - Smack down the criminal global banking cartel with gold & silver
The set up before us is interesting. While the masses apply pressure from the bottom, we have the deep pocketed boys, institutional investors and money managers primed to move big time money into gold & silver following the recently concluded GATA’s Gold Rush 2011 London conference. That’s pressure from the middle. Now, with the likes of Venezuala starting to apply pressure from the very top, we may see the tipping point for a bullion bank run soon.
Here’s an excerpt from an update sent to subscribers on August 10, 2011. For subscription information please go to www.butlerresearch.com
It is important to try to understand, as much as possible, what are the dynamics behind the large price moves recently. It is human nature to accept any plausible-sounding reason offered if it is in conformance with the price direction. In a big price move, we demand an immediate explanation and then we accept any explanation offered, even if it doesn’t stand the scrutiny of further analysis. For instance, big price declines in copper and crude oil are immediately explained and accepted as being due to weakness in the world economy. Yet we know that the world economy and copper and oil fundamentals can’t possibly change quickly enough to be the real explanation. Please allow me to offer what I think is the real cause behind all the crazy price volatility and then to suggest something constructive you might want to do about it.
What’s behind the volatility is unbridled speculation and computer-type HFT trading gone wild. Oil didn’t drop $20 a barrel or copper 25 cents a pound because there was a sudden fall-off in demand or increase in supplies. This was all about speculative trading gone haywire. Let me be more specific. The whole premise of the economic justification behind commodity futures trading has been bastardized. US law has sanctioned the trading of commodity futures for the express purpose of allowing legitimate producers and consumers to hedge or transfer their price risks to speculators. But the wild price swings we are witnessing are not related to legitimate hedging. The volatility is as a result of speculators battling speculators, with real hedgers largely on the sideline. This is relatively easy to demonstrate.
The big price moves are the result of moving averages and other technical signals being violated. Technical funds and other momentum type traders rush into and out of the markets, often on an intra-day basis, as a result of these price changes. Against those technical type traders are aligned the “commercials” that take the opposite side of these transactions. But these commercials are also speculators and are not the legitimate hedgers they purport to be. Real producers and consumers don’t hedge based upon changes in moving averages on a daily basis. Real hedgers don’t day trade. Real hedgers don’t engage in HFT. The fact is that the commercial traders are just trading against the tech fund speculators and this makes the commercial traders speculators as well. This is an important distinction. It is why the big commercials in COMEX gold may be in trouble, namely, they weren’t hedging in the first place and their short speculation may have been a serious miscalculation because it wasn’t a legitimate hedge originally.
If my analysis is correct, then most of the volatility is due to one giant sick game of unbridled speculation. The speculators include not just the obvious and visible speculators, but also the commercials pretending to be hedgers. These commercial speculators in drag include the largest banks, like JPMorgan. How has it gotten to the point where our insured deposit taking institutions are among the biggest speculators? This speculative trading activity on the part of banks has greatly increased the current price volatility and increased the dangers of systemic risk. How is that good?
We’ve gotten to this point because our financial system structure has encouraged more and more speculation on the part of our important financial institutions. Leading us on the way to ruin is the criminal enterprise, also known as the CME Group, which has become dependent of encouraging more of the mindless daily speculative trading to fatten its bottom line. So harmful is the CME’s role in all of this that in order for the CME to be blessed, the public must be damned.
What can we do about this sorry state of affairs? Quite simply, what we have been doing, namely, to petition the regulators to enforce the laws governing manipulation and disruptive trading practices. I know that many are tired of petitioning the CFTC because there has been little visible response from them regarding the silver manipulation. Yet I am still convinced that this is the best and perhaps only constructive route. I’m not going to beg you to contact them if you feel it’s a waste of time. Likewise, I’m not going to promise you that the agency will do the right thing, as that’s up to them. All I do know is that silver is manipulated by virtue of a concentrated short position on the COMEX and that is against the law. You must always do what you feel is right, regardless of how it may turn out or how many times you tried in the past or whether someone else will also do the right thing.
I know I’m going to send this article to the CFTC (as well as to the CME and JPMorgan). I invite you to do likewise if you are so inclined or write in your own words and ask them to break up the concentrated short position in silver. I would ask that you remain respectful if you do write so as not to distort the intent of your message. I know most of us are sick and tired of the silver crime in progress and the regulators failure to deal with it, but you must rise above your emotions to be effective.
Theodore Butler
Butlerresearch.com
For subscription information to Ted Butler’s private newsletter, please go to www.butlerresearch.com
Theodore Butler is an independent Silver Analyst who has been publishing unique precious metals commentaries on the internet since 1996. He offers a subscription service with once or twice weekly commentaries including detailed analysis of the Commitment of Traders Report, regulatory developments, supply/demand considerations, and topics of interest to investors in precious metals, with an emphasis on silver. Always outside the box. You can subscribe to his service by clicking here.
When I first looked into the HKMEx I was mainly looking to see if silver manipulators JP Morgan, Goldman or HSBC were involved. The good news, I did not see that they had any controlling or operational influence in the HKMEx. The worst thing I guess I found out of the list of board members was President Albert Helmig was a former VP of the NYMEX. The amount of information on the rest of the board is limited most likely because they are Chinese and English Google is limited. I then looked a little further to see who was paying the board.
I have been watching the emergence of the Hong Kong Mercantile Exchange with great interest. I recognize the importance of China establishing this new market that now not only trades Gold and Silver, but eventually Food and Oil. The ability to trade these commodities in both Dollars and Renminbi is a huge step in creating a regional, if not global, reserve currency. The historical significance of this new exchange in the sea change in wealth and power from the Anglo American empire to Asia, is completely missing in today’s media.
Two years ago in the Sons of Liberty Academy, I speculated about the rise of the anti-Hegemon challenging the power of the Anglo American Empire that has dominated the world for the past few centuries. The anti-Hegemon is a union of nations that has fallen victim to, or not benefited from, the Anglo American paradigm. The core of this group includes China, Russia, Iran and Venezuela, but many other nations are learning that there is much to gain from the power vacuum left in the collapse of the dollar. Nations like Brazil, India, Pakistan and South Africa have become closer to the core anti-Hegemon. Even nations that are supposed allies of the Anglo American empire, like France, occupied Germany and occupied Japan have much to gain from getting out of the shadow of the Anglo American empire.
“The supreme art of war is to subdue the enemy without fighting.” -Sun Tzu
The anti-Hegemon has been most wise not to go head-to-head with the mortally wounded beast of the American Empire. They see the mathematical inevitability of the dollar collapsing. Without a functioning currency, America cannot control its global empire. With each trade agreement and exchange that is opened outside the Anglo American empire, the beast is wounded further. China has amassed trillions of dollars and is now spending this money on real tangible assets. The most important part of this investment is that China is investing and creating allies, while we drop bombs.
I have studied the Anglo American Elite very closely and I know they would not go down this road without having a plan. The first part, was the creation of the Petro Dollar standard. Both oil shocks in the 70′s were completely planned by the Anglo American Elite. The Bilderbergers instructed Henry Kissinger to create an oil crisis to increase the price of oil 400% following the closing of the gold window in 1971. The new dollars would be recycled back into America’s markets providing a very powerful petro dollar trade. Admit it, you have always thought it was very odd that the Arabs would be so willing to reinvest their dollars into the great Satan. Now you know it was all a game of power.
What is not as well known, that at the same time the Anglo American Empire started the Petro Dollar standard, they stopped all development of oil in America. After all, why use our precious and limited resources when we can print little green pieces of paper and get someone else’s oil? I guarantee you, that as soon as the dollar dies and we are no longer able to import oil for dollars, America will announce the most amazing oil “finds.” We still have half of the Gulf, both the East and West Coasts, Colorado, the Bakken Field, and most importantly Alaska. These projects will be up and running in record time to help re-establish the Anglo American dominance.
The end of the Petro Dollar will end our world and the Anglo American Elite will not go down without a fight. I theorized in the 3 Coming False Flags that Elite will pick a fight with China way before we accept a 3rd world status. Throughout the most of the last century the Anglo American Elite built up and created enemies. They do this to have wars, that create more debt and control natural resources in order to maintain their dominance. There is ample evidence that Wall St funded the Bolshevik Revolution and even financed and supported the Soviet Empire up until its final days. Without their support, Stalin would have lost the war, never been given half of Europe, and starved millions of times over with the utter failure of Communism. The British funded and created Hitler. While America was going through the Great Depression, Germany was booming with the creation of Hitler’s dream. Even Benito Mussolini was on the British payroll. Even more recentlySaddam Hussien received billions of dollars of support and was practically begged not to give up the dollar for oil trade. When he crossed that line, he had to go. (Just like Gaddafi and his gold Dinar dream.)
The Anglo American elite, more specifically the Rothschilds, have supported both sides of almost every war in the past two centuries. The Rothschilds power is derived off of their ability to lend out more debt. Nothing creates debt faster than war. Without war, debts would eventually be paid off and control of assets would slip from their fingers. In order to create massive debts, massive threats have to be created. I believe that China will become the next major enemy of the Anglo American Elite. A little over a decade ago, China was nothing. They were a backwards country that had been closed to the outside world for decades. With the most favored nation trade status, their exports rose astronomically and trillions went into building up an economic, political and military threat. Without the Elite building up China, they would have been nothing.
When I first looked into the HKMEx I was mainly looking to see if silver manipulators JP Morgan, Goldman or HSBC were involved. The good news, I did not see that they had any controlling or operational influence in the HKMEx. The worst thing I guess I found out of the list of board members was President Albert Helmig was a former VP of the NYMEX. The amount of information on the rest of the board is limited most likely because they are Chinese and English Google is limited. I then looked a little further to see who was paying the board.
I have discovered that Nathan Rothschild along with the People’s Bank of China created the privately owned Hong Kong Mercantile Exchange. According to MarketsWiki the HKMEx was founded by En+ Group. On the face of it, it looks like a Russian company is partnering with China as they strengthen ties inside of the anti-Hegemon. When you look at the board of En+ Group you see Nathan Rothschild is at the genesis of this new market that looks poised to take down the dollar.
Saif Gaddafi with Rothschild Minion Oleg Deripaska
Nathan Rothschild has had other deals with “enemies”of the Anglo American Empire. Recently, it has become apparent that Nathan Rothschild had deep financial ties with Muammar Gaddafi in Libya. The relationship was interesting since most of the world’s central banks are Rothschild controlled and Libya was one of the few nations not under the Rothschild control. Nat developed a relationship with Gaddafi’s son Saif, then when the time was right, Gaddafi would have to go.
Mikhail Khordorkovsky
This is small potatoes compared to the Rothschild Rape of Russia. You may vaguely remember the rise of the Oligarchs in Russia after the collapse of the Soviet Union. It was said that these few young men became the richest men in the world when then bought and controlled huge portions of the natural resources and industries in the former Soviet Union for pennies on the dollar. We were told that they were lucky, smart or cunning. The reality was that they were merely front men for a much larger power. Young men like Mikhail Khordorkovsky went from obscurity to owning the Russian equivalent of Exxon Mobil in a few years. For years these Oligarchs controlled Russia with their wealth and mob like tactics. Finally, when Vladimir Putin wrestled control of Russia from the Oligarchs it became apparent that the power was never with the Oligarchs, but the Rothschilds. When Vladimir Putin imprisoned Mikhail Khordorkovsky it was reveled that Jacob Rothschild was the real owner of Yukos.
Oleg Deripaska
Now Jacob’s son Nathan, is partnering with another Rothschild Russian Oligarch Oleg Deripaska in En+ Group with China, what could possibly go wrong? Oleg Deripaska was a manager of a smelter at 25. Four years later he owned the Sibirsky Aluminium Investment Industrial Group. That grew into Basic Element conglomerate that controlled…
United Company RUSAL Largest Aluminum Producer
Ingosstrakh oldest insurance company
GAZ automotive
Avaikor Aviation
EuroSibEnergo Power Company
Glavmosstroy Construction
In 2008, Oleg was the eight richest man in the world with an estimated worth of $28 Billion dollars.(All of these “richest”lists never show you the real wealth of trillionaire families like the Rothschilds who ownCentral Banks.) All of Oleg’s wealth came of course through the power of the Rothschilds. Oleg thrived in the chaotic era of crime that was rampant in Russia after the collapse. The Aluminum Wars were probably one of the more violent episodes in the battle for control. Lawlessness in Siberia was rampant as, “politicians, managers or reporters –were run over, shot, had their throats cut or were killed in air crashes.” In the midst of all of this violence, Oleg emerged the king of Aluminum.
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It is also important to note that the Rothschilds exited the LBMA in 2004.The Rothschilds have been involved and owned gold for centuries. They know more than any other family in the world, the power of gold. At the LBMA they and a few other families owned so much gold that they literally met twice a day to literally fix the global price of gold. So why did they leave the LBMA after 200 years in London and why are they going back in to the game in China? My speculation is that the LBMA does not have all of the gold they are trading as Andrew Maguire’s testimony proved. These Anglo American banks are trading and suppressing the real price of gold and silver with multiple paper schemes. My guess is that the Rothschilds simply left the scene of the crime before it comes crashing down.
So why China? Given the history of the Rothschilds and the fact that their wealth has been tied to buying assets when there is “blood on the streets,” I think China will be the next to bleed. The heart of the Anglo American empire is the Rothschilds and Rockefellers. They have been actively courting China to join forces with them. These Elitists actually admire the Chinese in their ability to control their citizens and its free reign they give to industrialists.
“Whatever the price of the Chinese Revolution, it has obviously succeeded not only in producing more efficient and dedicated administration, but also in fostering high morale and community of purpose. The social experiment in China under Chairman Mao’s leadership is one of the most important and successful in human history.” -David Rockefeller, statement about Mao Tse-tung in The New York Times, August 10, 1973 (65 million died under Mao.)
“Some even believe we (the Rockefeller family) are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’and of conspiring with others around the world to build a more integrated global political and economic structure—one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” -David Rockefeller, Memoirs, page 405
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The Rothschild minion George Soros has been trying the hardest to get the Chinese to play ball with the Anglo American Elite. Their creation of a New World Order must have China or it will collapse.The Chinese have been wise to take from the Anglo American empire and not give them any control. They play along while they continue to strengthen their position. Ultimately if the Chinese do not take the offer, they will be handled with the gun. (Read the 3 Coming False Flags.)
“If my sons did not want war, there would be no war.” -Baron Rothschild
Having the Rothschilds involved at the HKMEx really raises my alarm as they create deeper ties inside the Chinese elite. If you know anything about the Rothschilds they are very generous and gracious friends when they want something from you, and when they have what they want, they turn the tide and leave you hanging. They mastered the cycle of lending generously money that they don’t have through fractional reserve banking and then contracting credit markets so that they take ownership of the assets that they loaned against. The big play they mastered is loaning to both sides of wars and then making sure that the victors are responsible for the defeated debts to be paid. Don’t dance with the devil.
“I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls Britain’s money supply controls the British Empire, and I control the British money supply.”The current Nathan Rothschild namesake Lord Nathan Rothschild.
China would be wise not to associate with the Rothschilds and the Anglo American Empire, just look at the Opium Wars. When the British Empire continued to run trade deficits with China, they tried diplomacy with Lord McCartney and economic inducements, all of which failed. The more tea, silk and porcelain the British imported, the lower the money stock of silver the British Empire had. This was because China was on the silver standard and they would not buy any English goods to off set the trade imbalance. (Sound familiar?)
So what did the British do? They smuggled Opium into port cities and started a drug trade to create problems for the Chinese Elite, weaken the Chinese populace and get the silver back from the Chinese. When the Chinese asserted their sovereignty and fought against these drug dealing criminals, it started the two Opium Wars that ravaged China for years. The British defeated the Chinese and they the signed the Treaty of Nanjing in 1842. The Chinese signed over all of their ports and international trade to the British. (If you ever wondered how Britain owned Hong Kong, now you know.) The Rothschilds controlled Britain at the time and I am sure that they were influential in getting the eight nation army to crush the Boxer Rebellion in 1898. The Anglo American Empire subjugated the Chinese until Mao kicked out all of the Westerners.
What does this all mean for silver? I believe that the HKMEx is still a very positive development for the price of physical silver, despite the Rothschild involvement. The Rothschilds are some of the most brilliant men on earth. There is no denying this, given the amount of power that they have accumulated over many generations. Nat Rothschild is clearly the future of the dynasty. (Especially since enviro Jesus David de Rothschild has blown his mission for the Global Warming Carbon Credit Scheme.) The Rothschilds throughout history have not so much created history, but flowed along with history. They used to study the effect of sunspots on the prices of grain. They have carefully watched political and economic cycles to be in the right place at the right time. All of which I am teaching in the Sons of Liberty Academy. The Rothschilds know that the debt cycle is coming to an end and that it is a mathematical certainty. Even they, cannot prevent this from happening. So they are preparing for the turn in history.
The fact that the Rothschilds are back in the metals market and they are behind smaller silver contracts being sold in China, is a good thing for the price of silver. Any more physical demand in a huge market like China can only accelerate the inevitable physical silver default. The price of silver over the long term cannot be stopped. At some point the 3 Demands of Silver will force the physical prices of silver to over ride the paper price of silver once and for all.
“You can ignore reality but not the consequences of reality.”-Ayn Rand
What I am very concerned is the coming crisis between the Anglo American Empire and the anti-Hegemon. It is fun to think about the price of silver when the physical reality sets in, but the economic, political and military reality of what will happen is very disconcerting. I hope I am wrong about my prediction of the 3 Coming False Flags, but the more time goes by, the more I see that this will not end well. The Anglo American Empire still has the largest military, the strongest propaganda machine and deepest capital markets. They will not just throw their hands up and let the Chinese dictate the future without a fight.
Finally, I would like to touch on another subject that I am sure will play into this, racism. I believe when this time comes to make China into the next Nazi regime, all of the power used to make Arabs into “animals,” will be turned against the Chinese to make middle America blame those “slant eyed, commie bastards.”Donald Trump has already called China our “enemy.” Video games and movies are trying to make China our new enemy. This will all be done to fuel the fire of ignorant Americans to blame China for all of our problems. The fact is that our Elite is responsible for all of our problems. They are the ones running up deficits fighting never ending, senseless wars. They are the ones that invested and built up China while gutting America. They are the ones that control both parties. And sadly they will be the ones to profit off of the next war of the Military Industrial Complex to create a new paradigm. The Elite will blame China while they go back into the shadows retaining power and making more profits.
I know I could have made this article very small and simply said the Rothschilds are owners of the HKMEx, but that would not have put into perspective what is really going on in this world. I spent 6 years studying and putting together the Greatest Story NEVER Told, the enslavement of humanity by the Elite. Far to often what is missing from the even the best bloggers, is the historical, economic, political, military, emotional and even spiritual perspective of what is behind all of these stories. I believe that everyone should understand how the world works and the Sons of Liberty Academy is by far the best way to wake up to this reality. Take time to join today, it is free and it will change your life.
“When you are aware, you can prepare.” - Chris Duane
Much has happened in the Political Metals world during my 3-week family vacation to escape the cold of Dunedin winter. When we left, gold and silver was around $1,500 and $34 respectively. When we returned, gold was at its all time high in USD, GBP, EUR & MYR while silver answered the question “Silver: Will it be Up or Down?” decisively.
Now that silver has punched through its 50-DMA and $38 resistance level, it should be revisiting its April high pretty soon, or be back to the mid 40s “in a heartbeat” as James Turk puts it. This optimism is based on several developments and forecasts by some big names in the PMs space.
Key developments that are positive for gold & silver
1. Reinvestment in the Exchange Stabilization Fund is suspended.
The US treasuries department has announced that it will suspend reinvestment of the Exchange Stabilization Fund (ESF), the last of the measures available to keep the nation under the statutory debt limit.
The ESF was established at the Treasury Department by a provision in the Gold Reserve Act of January 31, 1934. The fund began operations in April 1934, financed by $2 billion of the $2.8 billion paper profit the government realized from raising the price of gold to $35 an ounce from $20.67. The act authorized the ESF to use its capital to deal in gold and foreign exchange to stabilize the exchange value of the dollar. The ESF as originally designed was part of the executive branch not subject to legislative oversight. Wikipedia
This is very significant because it is partly through this fund that the US government and the Federal Reserve intervene in the gold market. While we still have to contend with the likes of JP Morgan, one major player in the Gold Cartel is down, at least temporarily.
2. Threat of Euro Zone default
Ambrose Evans-Pritchard, International Business Editor of The Daily Telegraph puts it this way.
“As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability.”
According to Ben Davies, CEO of Hinde Capital, Euro Zone default is no longer a question of “if” or “when”. It’s a question of how. “What remains to be seen is, is it going to be disorderly? This is all highly conducive for gold.”
“People are really beginning to realize that (gold) is the currency of first resort…. Various liquidity is going to be coming from all corners of the world. At no time has gold pulled back throughout any of this credit tightening process, the market is going higher. We are in my opinion going to see a $2,000 handle this year.”
3. China’s launch of the Pan Asia Gold Exchange
Up until now, the COMEX gold & silver paper traders have dominated the market to the extent that price discovery for physical gold & silver is akin to the tail wagging the dog. All this is set to change with the launch of the Pan Asia Gold Exchange in China. Andrew Maguire, independent bullion trader and a whistle-blower told KWN
“By creating the first ever rolling spot contract, Chinese bank customers will for the first time have ease of access to 10 ounce gold contracts in Renminbi directly from their bank accounts and with the click of a mouse. To give a further idea of scale, if just 1% of their customers bought a single 10 ounce contract, that would equate to 1,000 tons of physical gold being drawn down…. I firmly believe we are marking a pivotal point that will in very short order affect current precious metals price discovery dynamics. We now have an additional factor to be vended into the supply demand equation. This factor will ultimately destroy the remaining short positions in both gold and silver.”
4. Saving the best for last - Ben Bernanke’s testimony
Gold prices catapulted to record highs after Ben Bernanke’s testimony to the House Financial Services Committee reaffirmed the possibility of more monetary easing. To give you an idea of the potential extent of the impact, here’s a quote from Peter Hambro, Chairman of Britain’s biggest pure gold listing Petropavlovsk.
“It is very scary - the flight to gold is accelerating at a faster and faster speed.. One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money.”
QE3 aside, what’s more interesting is Bernanke’s comment that “Gold is not money” (Watch the video). Indeed! How can gold be money when it cannot be created out of nothing, the manner he’s been creating Money out of thin air all along? At least he is consistent and honest on this point.
When asked why people own gold, he replied ”As protection against of what we call tail risks: really, really bad outcomes.”
Again, he’s spot on! Really, really bad outcomes. Would you consider hyperinflation, currency debasement, sovereign debt default, collapse of the fiat money system on a global scale as “really, really bad outcomes”? If you do, and if you have not already done so, consider starting your fight against every central bank in the world by owning gold (& silver).
And..
if you think that gold at it’s current all time high of $1590.10 is “expensive”, take a look at the inflation-adjusted price of gold using the Shadowstats model.
What Big Banks are doing in the commodities market
They buy up warehousing companies to gain a virtual monopoly
Goldman, through its Metro International Trade Services unit, owns the biggest warehouse complex in the LME system, a series of 19 buildings in Detroit that house about a quarter of the aluminum stored in LME facilities.
In recent years, major investment banks like Goldman and J.P. Morgan and commodities houses like Glencore have been snapping up warehouses around the world, turning the industry from a disperse grouping of independent operators into another arm of Wall Street. The LME has licensed about 600 warehouses around the world.
With the monopoly, they control the flow of the commodity
Coca-Cola, which has complained to the LME, says it can take months to get the metal the company needs, even though warehouses are allowing aluminum to come in much more quickly. Warehouses, meantime, collect rent and other fees.
“The situation has been organized artificially to drive premiums up,” said Dave Smith, Atlanta-based Coca-Cola’s strategic procurement manager. “It takes two weeks to put aluminum in, and six months to get it out.”
They use that control to manipulate the market
The transformation has raised questions about whether the investment banks, which also have big commodity-trading arms, are able to use their position as owners of warehouses to manipulate prices to their advantage.
Replace Coca-Cola, Goldman, Aluminium with Investors, JP Morgan and Silver respectively, and we have a very familiar story.
Source: Wall Street Gets Eyed in Metal Squeeze | Yahoo Finance
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Vietnam is world’s 2nd largest gold hoarder
VietNamNet Bridge - Vietnam is hoarding between 460 and 1,000 tons of gold worth around US$21 to $45 billion, second only to India, according to figures released last week. The figures take into account gold held by the people and stored at banks.
The data were released during the conference in Hanoi themed “The effect of the gold market on financial market in Vietnam” held by the National Financial Supervisory Commission, as reported by Sai Gon Tiep Thi.
The World Gold Council ranks Vietnam as among 5 countries with the largest gold hoarding in the world, second after India. Vietnam’s gold takes up 23-29.5% of the world’s total gold during the past 5 years.
Vietnam is among the top 20 countries that buy the most gold jewelries (20 tons per year). Such a high consumption rate has been maintained for the past many years, reported the GFMS gold company during the conference.
Six “Gold Bubble” myths you’d do well to ignore Adrian Ash | BullionVault
Anyone saying gold is a bubble is talking through their hat – or worse…
GROWTH IN global gold demand is indeed rapid. And another decade of quintupling prices isn’t a certainty. But neither of those facts mean gold is a “bubble” today, writes Adrian Ash at BullionVault.
In fact, anyone calling gold a bubble right now is talking through their hat – at best. Take these jokers, for instance, all holding forth in the last month…
Myth #1. “Gold is a crowded trade”
The finance pages are packed with gold headlines, but actual investment levels remain low. In the early 1980s, private-bank clients were expected to hold 3% of their wealth in gold, many times the 0.5% allocation seen across the finance industry today. Even in the bullion market itself, three-quarters of the 500-plus analysts and traders attending last autumn’s LBMA conference in Berlin said they held as little as nothing (“Between 0% and 10%”) of their savings in precious metals. Saturation is a long way off.
Myth #2. “Gold has madly rushed to $1500 without a correction”
Compared with undeniable bubbles, gold’s recent climb just isn’t steep enough. Gold prices rose 70% for Dollar investors in the last 3 years, but US stocks rose 160% in that length of time in the 1920s, and Germany’s Neuer Markt rose over 1600% starting in 1997. London’s South Sea Bubble of 1720 rose 9-fold in 5 months! What makes gold remarkable today is the longevity, not speed, of its bull market – now delivering positive, inflation-beating returns to US and UK savers every year since 2001.
Myth #3. “Gold will fall hard when interest rates rise”
Only if interest rates outpace inflation, and what are the chances of that? People turn to gold when cash – its major (and otherwise better) competitor as a store of wealth – loses value. Sub-zero real US rates have already cost cash savers over 3% of their spending power in the last 18 months. Rates currently lag inflation by the widest margin since the summer of 1980. Back then, however, the cost of living was rising at double-digits, and could not be talked away.
Myth #4. “Inflation is set to fall back”
How, exactly? The cost living is hurting earners, savers and seniors alike, but mostly because their incomes aren’t growing. On the official data, the Consumer Price Index has risen barely 11% from five years ago, its weakest long-term rise since 1967. Anything lower, and QE3 looks certain, thanks to the Fed’s anti-deflation fixation. If US inflation is headed anywhere from here, it’s not down.
Myth #5. “Gold’s not an investment, because it doesn’t pay interest”
A desperate claim which is at least true – true a decade ago at $260, and true evermore unless an investment bank sells you a structured derivative. Gold’s lack of income means it has no promises to break, setting it apart from all other asset classes, most notably debt. It’s hard to accuse gold buyers of “over-optimism ” (Charles Kindleberger’s definition of bubble), but this market would only move into “irrational exuberance” (Robert Shiller’s phrase) if it kept rising after monetary policy switched from weak to strong.
Myth #6. “Gold will burst when the world economy settles down”
You’ve got to love that “when”. But beyond its impact on policy rates, however, economic growth has little to do with gold prices. Gold fell vs. the Dollar during the US recessions of 1980 and 1990, only to triple during the go-go years of 2003-2007. Across the last four decades, in fact, gold shows a negative but statistically insignificant correlation with quarterly US GDP of minus 0.11 year-over-year. Quarterly GDP in China (the world’s second-biggest buyers) shows a negligible 0.08 correlation since 2005. Rupee gold prices since 1996 show only a 0.32 correlation with Indian GDP.
People started saying gold was a bubble in early 2008 at $1000, then at $1200 and $1300 in 2009 and 2010, and now at $1500 and above in 2011. Yet still nothing has changed to the core case for gold. If anything, in fact, the fundamental reasons for private savings going to buy gold have grown stronger.
Ultra-loose money is locked in by record peace-time debts and deficits. Central-bank and private-Asian gold buying continue to grow as economic power moves East.
Everything else is just noise – the one excess to which gold investing is prone right now.
Congressman Ron Paul was appointed to head the Domestic Monetary Policy Subcommittee of the House Financial Services Committee in December last year. This subcommittee overseas the Federal Reserve. Paul is well known as the author of comprehensive legislation to audit the Federal Reserve Bank, with the goal of providing both taxpayers and world financial markets with full transparency of U.S. central bank actions.
This is where one of the key battles over the role & fate of the Political Metals will be fought - the battle to end the Fed’s relentless effort to suppress the price of PMs in cohort with other central banks and Wall Street bankers.
I wonder: will this welcomed renewed interest in the Constitution lead to a healthy reassessment of all of our policies? Will there be no more wars without an actual congressional declaration? Will the Federal Reserve Act be repealed? Will only gold and silver be deemed legal tender?
I’ll will keep an eye on the progress of the 112th Congress currently in session and share with you any pertinent developments with the “Audit the Fed” initiative.
Now, on to an interesting (but little known) role played by one of the key members of the banking cartel involved in the manipulation of the PM markets. In the interview below, JP Morgan executive Christopher Paton amits that this is “a very important business to JP Morgan” and that it is doing very well. So what’s that “important business”?
As unemployment rises as a result of the crash of 2008 caused primarily by the banking cartel, JP Morgan’s role is to process the rising food stamp benefits. JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan make. Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan’s profits in this area have soared. More unemployment, more business, more profits!
While JP Morgan et al are pushing down the price of paper gold & silver, the Russian Central Bank, and many others, are piling up on the real stuff - physical gold in their reserves. Today, the WSJ reports that the Central Bank of Russia plans to buy from domestic banks 100 metric tons of gold a year in order to replenish the country’s gold reserves. In 2010 Russia’s gold reserve increased 23.9% to 790 tons, or 25.4 million Troy ounces.
One more reason to convert your fiat money into Political Metals.
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[Updated: 21 Apr 2011 - Central Bank of the Russian Federation reported they bought 600,000 ounces in March, which brings their 'official' holdings up to 26.1 million ounces] Click image to enlarge.
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