Thursday, July 11, 2013

Hey Merkel, Where's Germany's Gold?

William Kay says he knows:

Kaye:  “Global hegemony (leadership or dominance) is changing in a way that most people don’t fully comprehend.  This area of the world, the Asia-Pacific, China in particular, is positioning itself to be the leading global power as we look out over the next five to ten years.

My sources tell me that contrary to the public numbers that are available, China has anywhere between 4,000 to possibly 8,000 tons of (physical) gold....
“They are not only the world’s largest producer of gold, but they are the largest importer of gold in the world.

This is an ongoing process for China.  This is a strategic initiative.  So China is massively accumulating the gold that is being extricated from the West at a very rapid pace.  The dynamics here are very geopolitical, and the Far-East is being elevated by this. 

In the ‘New World Order,’ which will ensue when this raid ends, China’s position, Russia’s position, Brazil’s position, will be greatly enhanced.  The position of the United States, as well as Europe and the UK, will be greatly reduced.  Those are the major consequences.”

Eric King:  “Bill, you say China has over 4,000 tons of gold already, possibly as high as 8,000 tons.  Where do you see them heading in terms of their overall ownership of gold?”

Kaye:  “Well, they’re not done yet.  Gold has been leased out, and we do know this (takes place) because it’s been admitted to by the major central banks.  The Fed has admitted it, the European Central Bank has admitted it, the Bank of England has admitted it.  They’ve all admitted that they engage in wholesale leasing of gold to the market.  

In practice how that (leasing) works is the Fed would contact their agent, typically JP Morgan, sometimes Goldman Sachs, and they would say, ‘OK, the gold price needs to be capped, so here is 20, 30, 40, 50 tons (of gold) that we’re going to lease out to you as our agent.  But in theory we can call it back.’ 

That’s a great theory, but in reality it’s nonsense because once JP Morgan and Goldman Sachs get the gold they sell it into the market.  So these bullion banks then become net-short gold.  And the Fed says, ‘Well, we still have a contract where in theory we can claim the gold.  So we’re going to report that we still own it in the official documents.’

But in reality the gold has been sold into the market.  That gold winds up in places like Beijing.  But before it gets to Beijing it frequently goes through Hong Kong.  And when it goes to Hong Kong, it goes to our refiner, the same people we use.  And by the way, Eric, we may own some of the gold that Germany thinks that they own.  But Germany will never see that gold because it’s safely stored in my account (and) for our investors at the Hong Kong International Airport.
Editor's note: This is why Zerohedge tracks China gold imports from Hong Kong, Below is the most recent numbers:

 Click to enlarge

And you may also recall my post from July 2012 on Hong Kong opening another vault that can hold 1,000 metric tons.

Kay continues:
Regarding that gold, which could have had the symbol of the Bundesbank on it when it arrived in Hong Kong, a leading refiner, one of the biggest in the world that deals with the People’s Bank of China (PBOC), certified that, ‘Yes, we’ve got gold available that we can deliver.  We’ve melted it down, we’ve tested it.  It may have had the Bundesbank symbol on it when it arrived, but now it’s melted down .9999 (fine) gold.’ 

That’s how it works in practice.  So the Fed gold, that Americans think is theirs, is gone.  The gold that the Germans have been told they will get back in 7 years, they’ll never get back because it doesn’t exist anymore (at the Fed).  I own it.  The People’s Bank of China owns it.  The Reserve Bank of India owns it.  The central bank of Russia owns it.  But the people of Germany (and America) don’t own it.”

Eric King:  “So they (the refiner) have admitted then that the Bundesbank gold, they get those bars in and they just melt them down?”

Kaye:  “What they’ve done is confirmed that everything I’ve told you is correct.  They get gold (bars) from all over the place, including major central banks, including the symbol of the central bank on them, and they melt them down.”

Eric King:  “But they’ve confirmed the Western central bank gold is where it comes from in many cases?”

Kaye:  “Reading between the lines, and you don’t have to read too much between the lines, it’s all a farce.  The gold is gone.  It’s been hypothecated and rehypothecated.  It’s gone.  Not only do the Fed and the U.S. Treasury not own 8,000+ tons, they probably own nothing.”

And as I have mentioned several times, gold is being drained from the GLD exchange traded fund and being sent to China.

But the narrative is that people are panicked, and because they are panicked they are selling into the market to whoever will buy.  And this is why the gold inventories, the Spyder Gold Trust and the other major exchange traded funds (gold holdings) have been so rapidly reduced.

The problem with that narrative is it’s not true ... Those exchange-traded funds are losing and are continuing to lose a lot of gold because it’s a manipulation.  The only people who can get access to the gold (at the exchanged traded funds) are the bullion banks themselves, and that’s exactly what they are doing.

And that gold is being transited from places like London and New York to places like Hong Kong and Shanghai.  This is what’s happening.  There is this major migration of gold from the West to the East.  And it’s an ongoing, but we’re getting late in the game.

The Spyder Gold Trust, which is by far the largest ETF in the world and has provided the majority of the gold that has been used to execute the scam that is ongoing by the bullion banks, these guys have lost 30% of their inventory.  They have lost roughly 13 million ounces year-to-date.

Now how much has your friend Eric Sprott lost?  Because he has a similar class of ownership.  As I just said, the Spyder Gold Trust has lost 30% of the gold that they had at the beginning of the year, and yet Eric Sprott has lost virtually nothing.  He has lost a total of one bar.  Now, enquiring minds would ask themselves, if we have a bear market in physical gold, why have they redeemed 30% of the gold that exists in the Spyder GLD, but they’ve redeemed nothing in Eric Sprott’s fund (see chart below)?

The answer is obvious:  The major bullion banks can control and do manipulate what goes on in terms of Spyder GLD and the other trusts that have the same structure which only they can access.  Whereas the closed-end funds that exist in Canada, Europe, and the Sprott fund which is run by a reputable guy who is regularly on your program, Eric Sprott, the people who can redeem (from those funds) are not the bullion banks, but the actual owners of the funds.  

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