First let me apologize. In my last post I did not differentiate between the significance of both last Thursday and Friday. Explaining will make sense of the price action. Options and Futures on gold expired last Thursday which is why we saw the paper gold price being "attacked". Bullion banks desperately wanted to push down the price to 1) discourage physical delivery of the contracts and 2) push more people out of the GLD exchange traded fund which results in the fund having "excess physical" gold thy can make available to metals exchanges or bullion banks. Friday was the last day of trading for the second quarter marking the price that all anti gold news would use to mark the down quarter for gold as I predicted. But by Thursday the damage was done and the "paper gold attack" was over and gold price rose. As a result we predictably got this headline from CNBC:
Luster Gone: Gold Posts Worst Quarter on Record
Were you scared out of your gold? They certainly hope so, because the music seems to be stopping as I posted June 11th.
Courtesy of bullionbullscanada, we now know that London has, in effect, defaulted on their gold contracts and are now confirming a 100 day delay to take physical delivery!
As the rampant criminality in bullion markets becomes more and more apparent (even to outside observers); we get another anecdote from the Corporate Media illustrating the level of fraud/manipulation in unequivocal terms. We’re told that bullion-buyers in London must now wait more than 100 days to take delivery of the bullion for which they have already paid.
The comedic drones at Bloomberg, and officials of the London Metal Exchange itself would have us believe this is due to “warehouse queues.” While precious metals bulls undoubtedly appreciate the imagery implied of a 100-day line-up of armored cars waiting to load their bullion – in the middle of this “bear market” – the implication is fallacious.
In an era of just-in-time inventories; the notion that there can be a 100-day backlog to load bullion into armored cars with the metal already sitting in the warehouse is ludicrous. Clearly what the LME is really reporting here is a greater-than-three-month delay to refine the gold (or silver) being purchased here – and then ship it to their warehouse.
In other words, the “bullion” which traders believe they are purchasing today is in fact merely ore which hasn’t even been dug out of the ground yet. While gold and silver miners have nearly eliminated the suicidal “hedging” which the banking cabal used to suppress the sector even further in previous years; the banksters are now effectively “forward-selling” the gold and silver of these mining companies – by selling “gold” and “silver” which doesn’t even exist yet.
Essentially, the purchasers of futures contracts at the LME who request to “take delivery” of the metal they have purchased are simply given a new futures contract instead of the metal they now legally own. This second, unofficial, illegal futures contract is simply a 3+ month wait for buyers to receive what they have paid for – where the buyers aren’t compensated in any way for this effective default (on the first contract), and the banksters have free use of the buyers’ money for that period.Meanwhile, behind the scenes we know what is taking place, since it’s been widely reported since 2008. LME shills quietly contact buyers individually and inform them that if they don’t want to wait more than 3 months to take delivery of what they already own that there is another option: cash settlement.
As with these failures to deliver by the LME; cash settlement represents another category of bullion default. The LME can’t supply the metal, and so it buys off buyers with large bribes to ward-off the official bullion-default which becomes more inevitable by the day.
How large are the bribes? Even as far back as 2009 it was rumored that the normal size of the “premium” paid to buy-off traders was approximately 25%. Naturally such bribes will be accompanied by non-disclosure clauses – conveniently prohibiting buyers from confirming these serial inventory defaults at the LME (and New York as well?).
With current delays to take delivery having now reached such absurd extremes, there is no longer any doubt that the LME bullion warehouses are empty. This means that any cash settlements taking place can no longer be characterized as mere attempts to “conserve inventories.”
Rather, what we are dealing with here is now open fraud. Selling futures contracts to purchase bullion at specific dates, knowing that (in fact) that “bullion” does not exist. The cash settlement becomes the legal “consideration” confirming the fraudulent transaction: bait-and-switch.
Buyers think they are purchasing “bullion”, when all the LME banksters are really offering buyers is interest on their paper. It’s a generous rate of interest, to be sure, but it in no way alters the nature of the bait-and-switch being perpetrated at the LME – and thus the size of the bribe itself can in no way negate the serial acts of fraud being committed by the LME.
The criminal manipulation of prices is now being accompanied by criminal “settlement” of contracts in London. We must suspect that New York is near or at the same level of criminality in the settlement of its own contracts. Indeed, with the Attorney General of the United States having publicly pledged to cover-up all the crimes committed by these bullion banks; they could commit the same crimes being committed by the LME banksters with complete impunity.
Meanwhile, the only thing more perverse than trading in these official, fraudulent paper-bullion markets is the reporting on this sector by the Corporate propaganda machine. It continues to refer to the fraudulent manipulation of bullion prices as a “bear market”.
We have India engaging in three, extreme, rapid-fire measures to attempt to suppress gold demand in its own market; because at current, fraudulent prices Indians were literally buying-up every available ounce of gold on the planet (with some competition from the Chinese). Meanwhile, we also see recent data indicating India is now importing silver at an annualized rate of 10,000 tonnes per year.This is more than double the rate of silver-importing which occurred in India during the Great Take-Down of bullion prices which occurred in the Crash of ’08. But after five more years of silver inventory depletion; the silver market is even less-capable of absorbing such rabid demand for real metal today than it could in 2008.
Now we see that the official bullion exchange in London is unable to fill legally contracted orders. Previously, the U.S. Mint suspended production (and sales) of some of its gold coins, despite a statutory requirement that it always produce sufficient supply to meet demand. We must presume that the reason why the U.S. Mint broke its own law was simply lack of supply.
To refer to the precious metals sector where supply-exhaustion and inventory defaults are now facts of life as a “bear market” is nothing less than despicable. It is a perverse lie with only one purpose: to attempt to legitimize the fraudulent take-down of precious metals markets.
“Why are prices falling so far/so fast? Because it’s a bear market.”(“Why is it a bear market? Because prices are falling so fast.”)
It is nothing but nonsensical, circular reasoning; but it’s the best that the Corporate Media can do. Having spent the last 3 years calling gold (and silver) “a risk asset” one day, and “a safe haven” the next; media shills have contradicted themselves so often that they no longer even attempt any pseudo-analysis of fundamentals.There is nothing but the “bear market” lie as a near-transparent façade to mask open crime in these markets. But it’s not merely the banksters who have openly exposed their own criminality. When we have prices plummeting lower while demand is so frenzied that we are now seeing inventory-defaults in the world’s largest official exchange(s); it is impossible for any regulator not to see (and comprehend) such a perverse imbalance in these markets.
There is no rational or legal explanation for a market where prices are falling despite such extreme demand that inventory-default is now taking place. “Price” (i.e. a rising price) is the mechanism – the only mechanism – which can relieve such demand in markets, and restore at least some sort of equilibrium.
The fact that our pseudo-regulators allow prices to continue to be suppressed while demand literally “demands” (much, much) higher prices is nothing less than an implicit confession that these Charlatans are the direct accomplices of the banksters. Let no one be fooled when the laughable Bart Chilton engages in another one of his “good cop/bad cop” farces with Gary Gensler at the CFTC.
The massive, unprecedented bullion demand (in the face of falling prices) is unequivocal, empirical proof of the criminality of the banksters in these markets. The failure of our regulators to intervene in this prima facie crime is unequivocal, empirical proof of their own complicity in this crime.
(Official) bullion default or (unofficial) market Decoupling is now an absolute near-term certainty, unless prices are allowed to reverse radically higher in the very near future. Indeed, the speed with which these markets are being driven to inventory default must lead one to suspect that such a default is the intent of the banking cabal.
While we cannot know what (evil) illegal schemes the banksters have in store for us next, we do know the inevitable result of their current crimes: (real) bullion markets drying-up completely. The tidal wave of bullion-buying from India and China alone must soak-up any/all available supply.
As the line goes from all of those corny, TV infomercials; “buy now, while supplies last.”
The huge advantage we have as individuals, is that we are small buyers, buying just a few Troy ounces at a time or less. For us, physical gold is still available at this beaten down price plus the typical premium for coins and bars that were always present. But for the bullion banks and metal exchanges, this means big trouble. There simply is not enough gold available by the ton to go around.