Gold and silver are seeing a bifurcation between paper gold and silver being relentlessly slammed down - meanwhile physical gold is being bought by China , Russia , India , other Emerging Countries Central Banks ......... Note the major liquidation ongoing at the Gold ETF while silver Eagles and other silver coins have been so hard to buy they are being rationed ! Ironically , the further downward paper prices go , the more scarce the actual metals are becoming as the slow motion ( but moving more quickly and visibly ) run on Comex continues......

http://jessescrossroadscafe.blogspot.com/2013/04/gold-daily-and-silver-weekly-charts_12.html

  the smash down of gold and silver today  ( bitcoin also destroyed this week starting from Wednesday so that no one will think it could be a viable alternative to USD ) feels like the  counterintuitive wickedness surrounding the  Bear Stearns collapse - 3/16/08 ..... gold smashed down about 100 bucks from 3/17 - 3/19 - amazing as  Bear was the big short in silver before JP Morgan - if that short was forced to be unwound / liquidated - PMs would have exploded - history reflects that didn't happen as the US government facilitated JP Morgans hostile takeover of BSC .....despite all of the uncertainty , gold fell like a rock and the secondary goal attained ( apart from keeping the silver short in plce ) .... make gold seem like anything but a  safe haven....

Conversely when Lehman and AIG collapsed during the historical 9/15 - 9/18 turmoil , gold rose about 120 dollars from 9/15 through 9/23.....Was that the effect of the AIG rescue which of course rescued Goldman and the other banker from imminent collapse ?

http://www.silverbearcafe.com/private/11.08/realstory.html

( Recalling the real story of BSC.... - by Ted Butler )

The Real Story Ted Butler There is compelling new proof of a silver (and gold) price manipulation. The evidence connects the investment bank JP Morgan Chase, the dominant force in world commodity trading, the U.S. Commodity Futures Trading Commission (CFTC), the primary commodity regulator, and the U.S. Treasury Department, the arranger of every conceivable bailout. This week, I received a copy of a letter, dated October 8, sent from the CFTC to a California Congressman, Gary G. Miller. It discussed allegations of a silver market manipulation because of the data in the monthly Bank Participation Report. The data in that report for August showed that one or two U.S. banks held a massive short position in COMEX silver futures of 33,805 contracts, or more than 169 million ounces. This is equal to 25% of annual world mine production, and was up more than five-fold from the prior month's report. After this position was established, silver prices fell more than 50%, in spite of a widespread shortage in retail forms of investment silver. Never before had there been a such a large concentrated position in any market, including every manipulation case in the CFTC's history. Concentration and manipulation go hand in hand. You can't have one without the other. The letter was sent to me by a reader who had the foresight to write to his Congressman. Of course, the CFTC denied that a silver manipulation existed, as they always have. This proves that the Commission responds much quicker to a member of Congress than it does to hundreds of ordinary citizens and investors. In the future, should you decide to write to the CFTC, be sure to do so through your elected representatives. What was remarkable (and disturbing) about the letter was that it strongly confirms an analysis I presented in an article dated September 2, titled, "Fact Versus Speculation". In that article, I speculated that the shocking increase in the silver short position by one or two U.S. banks was related to the takeover of Bear Stearns by JP Morgan in March. Here's a quote from my article, dated September 2. "I am going to speculate based upon the known facts. Maybe I will be proven correct, maybe not. However, the nature of this speculation is so disturbing, that I hope I am wrong. But I need to state it because if I am close to the mark, the implications for the silver market are profound. I think the data in the COT and the Bank Participation Reports indicate that the U.S. Government may have bailed out the biggest COMEX silver short by arranging for a U.S. bank to take over their position. This coincides with JP Morgan's takeover of Bear Stearns. In fact, it would not surprise me if the bailout was JP Morgan taking over Bear Stearns' short silver position, at the government's request. While this silver bailout (if it happened) was no doubt undertaken with financial system stability in mind, it has disturbing implications of legality and equity" This is the relevant quote from the CFTC's Oct 8 letter. "In effect the increase [in the short position] reflected a one time acquisition of positions that were acquired through a merger in the industry, and not new trading by a bank. Thus, the assertion that there was new activity undertaken by the banks that led to a fall in silver prices is not correct since the "new" activity reflected in the CFTC's report was in essence positions that had already existed in the market prior to July 1st." The CFTC clearly confirms, in effect, that the big silver short position was related to JP Morgan's takeover of Bear Stearns, since no other merger provides a plausible explanation. However, the Commission is not speaking truthfully about an increase in the concentrated short position. The CFTC's own data, in weekly Commitment of Traders Reports (COT), show a sizable increase in concentrated short positions of some 12,000 contracts (60 million ounces) from levels before July 1st to the August Bank Participation Report. More importantly, the real issue is not about when the one or two U.S. banks increased their short position, but how large that short position grew in the August Bank Participation Report. The CFTC is deceiving a U.S. Congressman by attempting to reduce the argument to when the short position was increased, not the obscene and manipulative size of the position. This is deception through omission and misrepresentation. What difference does it make when the manipulative position was established? The issue is how can a short position of 25% of the world production of any commodity, held by one or two U.S. banks, not be manipulative? Bear Stearns held the largest concentrated short position in COMEX silver (and gold) futures at the time of its forced merger with JP Morgan in March. That position was not discovered until the publishing of the August Bank Participation Report followed by the October 8 letter from the CFTC to Congressman Miller. Furthermore, Bear Stearns had no legitimate backing to the short silver position, either in actual metal or cash. Otherwise it could have been delivered against or bought back, just as would have happened were it a long position. The price of silver at the time of Bear Stearns implosion was $20 to $21 an ounce. A free market covering of a concentrated short position of this size would have driven silver prices to the $50 or $100 level and would have exposed the long-term manipulation. Rather than let the free market deal with the required short covering of such an uneconomic and unbacked short position, government authorities arranged to have the short position transferred to JP Morgan. This was undertaken by the U.S. Treasury Department, along with taxpayer guarantees against loss to Morgan worth billions of dollars. This was done, no doubt, to save the financial system from imploding. This was also patently illegal, as it aided and abetted the silver manipulation. I'm sure the motive behind the illegal transfer of the silver short position was the mistaken assumption by Treasury that an explosion in the price of silver (and gold) would threaten overall financial stability. Well guess what - they succeeded in crushing the price of gold and silver, but to no avail, as financial stability has been shattered. JP Morgan was not just an accommodative good corporate citizen in the illegal transfer of the manipulative silver (and gold) COMEX short position. In addition to undisclosed government guarantees against loss, JP Morgan was given free reign to liquidate the COMEX short position at their discretion, knowing full-well the regulators would look the other way, no matter what dirty tricks were necessary to cause the price to collapse. Nor was JP Morgan a neutral agent in the silver price collapse. Data from the Office of the Comptroller of the Currency (OCC) http://www.occ.gov/deriv/deriv.htm indicates that JP Morgan held a much larger Over The Counter (OTC) derivatives position in silver and gold than was transferred to them from Bear Stearns. My analysis shows that Morgan has made many billions of dollars, perhaps tens of billions, from their downward engineering of silver and gold prices from their combined COMEX and OTC short positions. They have used that engineered price decline to buy back as many short positions as possible. If investors are wondering what caused the destruction of billions of dollars in gold and silver values, metal and share price alike, look no further than JP Morgan, and the government officials who enabled them. There can be no question that the CFTC is complicit in all these illegal activities. Same with the CME Group, owner of the NYMEX/COMEX. It is not possible that they are not privy and an active party to this successful downward manipulation. To think that officials at the CFTC, from the top of the agency, to staffers and even the Inspector General, have taken oaths of office to uphold commodity law and then have allowed that law to be repeatedly violated is beyond repugnant. That they have knowingly participated in an organized cover-up of this manipulation and have taken to lying to a Congressman calls for criminal prosecution. As bad as this is, it gets worse. The downward manipulation of the price of silver, initiated by the U.S. Treasury, undertaken by JP Morgan Chase and sanctioned and aided by the CFTC and the CME Group has proven so successful in destroying investment values that the low price of silver is now threatening to destroy tens of thousands of jobs of those who mine silver for a living, here in the US and throughout the world. Who do these people think they are that they can allow the artificial paper price to alter real supply/demand fundamentals? Those in charge of enforcing the law have enriched a few sleazy bankers who trade toxic paper derivatives at the expense of tens of thousands of innocent investors and now ordinary workers. This should make your blood boil. While investors in silver will soon see a strong snap-back in silver prices, it is too late for those workers who have already lost their jobs due to the artificially depressed price of silver. At risk remain those jobs that will be lost if silver doesn't rebound quickly. Silver mining is tough and dangerous for rank and file workers, much tougher than pushing paper derivatives. The fact that those who regulate our markets don't see that distinction needs to be rectified. One thing that I have never understood is why silver mine management has not taken a more active roll in pressing the regulators to more fully address the increasing evidence of a silver price manipulation. I suppose it has to do with fears of offending those Wall Street firms which may provide future financing and the false pride that goes with having denied in the past that a manipulation could exist. But surely those managers have now seen what a depressed price of silver has done to their stock prices and the fate of their companies. To still do and say nothing leaves their companies in grave danger. I think it is time for the employees themselves, and the unions that represent them, to take some initiative to help themselves. Losing jobs due to crooked behavior by big banks and their regulators should be a lightening-rod issue for employees, unions and Congressional leadership in the districts affected. I'm certain that legal action against the parties responsible for the price manipulation would result in substantial financial damages awarded to rank and file workers hurt by the manipulation. To that end, I offer, as much as is reasonably possible time-wise and free of charge, any consultative advice to any union or Congressional representative interested in bringing action against those responsible for the manipulation. For investors, conditions never looked better for the long-term merits of silver, precisely because of the recent crooked take down of the price. You should do two things. Buy as much silver as you can and write your elected officials to end the silver manipulation scam. www.investmentrarities.com

Today's item of interest.....

12 APRIL 2013

Gold Daily and Silver Weekly Charts - Shock and Awe in the Currency Wars - Silver Shenanigans

“This is an orchestration (the smash in gold). It’s been going on now from the beginning of April. Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance.

Then, a couple of days ago, Goldman Sachs announced there would be further departures from gold. So what they are trying to do is scare the individual investor out of bullion. Clearly there is something desperate going on....

I have assumed from the beginning that it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.

The exchange value of the dollar is (being) threatened, and if that collapses the Fed loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail.

So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.

And to help protect this policy they have convinced or pressured the Japanese to inflate their own currency. The Japanese are now going to print money like the Fed. They are lobbying the ECB to print more. So I see this as a dollar protection policy.

...I know where the gold is coming from in the market, it’s just paper. It’s naked shorts, there is no gold there. If somebody wanted to take delivery on those contracts nobody would be able to provide it. I don’t know what the source of the (physical) gold is. Some people are saying that the actual stocks available for possession are rapidly declining...”

Paul Craig Roberts, Fed Orchestrated Smash in Gold

I am not so sure that Paul Craig Roberts is right in manner of degree.  But it does make some sense, certainly more sense than the theories being put forward by the mouthpieces of the status quo.

I am sure this metals action was a lively point of discussion at Jim Sinclair's talk in Toronto today.

I do not see anything related to option expiration.  The next stock option expiration is next week on the 19th, and the next Comex expiration is the Thursday after that on 25 April.

Personally I think the wheels are falling off the economies of the West, and the financial engineers are hitting the panic button in advance. The BRICs are going to be in open rebellion if the rest of the G7 joins Japan in massive printing.

The Anglo-American banking cartel is doing what they do best: engaging in opaque market operations to shift the pain to the broad mass of innocent people when their schemes start to fall apart.   They have used their usual resources to spread the word in advance.

The kind of mass selling we saw today was not designed to be profit maximizing.  It was designed to flatten price to affect market sentiment and provoke additional selling.   I would imagine we will see some more activity along those lines before this is done.

This assault on property and savings is not all that different that what is occurring in Europe, except it is happening on a global scale.  Time for a grand bail-in, and the mechanism will be the yen, pound, euro and dollar.  The banks must be saved and all must pay.

All we can do is be on our watch, and remember who we are, what we know, and what we believe.  

“So it just amazes me how people concentrate on what’s happening in one paper market.”

12 Replies

• Maguire – Over 500 Tons Of Paper Gold Sold In Takedown

King World Maguire interview lined above  is a must read to understand the extent of the paper manipulation coinciding with physical going bye bye.......

China is buying gold like mad - where is this gold coming from , how long can this continue before the Western Central Banks run out , how much physical gold is present at the Gold ETF , how long before Comex gold into default ?????

What? This would have been over $6 billion:

Ashraf Laidi @alaidi

Merrill Lynch said of having sold 4 mn oz of gold at the open

5:00 PM - 12 Apr 13

http://silverdoctors.com/here-we-go-25-silver-1400-gold-as-metals-are-smashed-into-close/

HERE WE GO…$25 SILVER & $1400 GOLD AS METALS ARE SMASHED INTO CLOSE

APRIL 12, 2013 BY THE DOC 22 COMMENTS

Total capitulation in the gold and silver access markets as gold and silver are CRUSHED into the access market close…

Silver smashed to $25.72 prior to placing a weekly close in the access market at $25.85!

Gold smashed as low as $1475 prior to placing a weekly access market close at $1478!

We suspect more than a few LCS’s shelves will be laid bare this weekend.

http://silverdoctors.com/draghi-orders-cyprus-to-sell-all-gold-reserves/#more-24929

DRAGHI ORDERS CYPRUS TO SELL ALL GOLD RESERVES!

APRIL 12, 2013 BY THE DOC 26 COMMENTS

Goldmanite Mario Draghi has just issued Cyprus an ultimatum that the nation’s gold reserves must be liquidated to satiate the Vampire Squid…er…the ECB for Cyprus’ bailout.  In response, Cyprus’ Central Bank President Panicos Demetriades just stated: 

• PANICOS DEMETRIADES SAYS CYPRUS CENTRAL BANK INDEPENDENCE UNDER ATTACK.

As Bloomberg reports:

“The decision is going to be taken by the central bank,” Draghi said after a meeting of euro-area finance officials in Dublin. “What’s important, however, is that what is being transferred to the government budget out of the profits made out of the sales of gold should cover first and foremost any potential loss that the central bank might have from its ELA.”

ELA stands for Emergency Liquidity Assistance, a lifeline that can be offered by national central banks in the euro region to commercial banks that can’t get funding.

Asked about a letter he wrote to Cyprus President Nicos Anastasiades, Draghi said the letter is “very, very clear.” He said the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.

“The independence of central banks in the euro area is enshrined in the treaty,” Draghi said. “The ECB will look at developments in Cyprus from this angle.”

Speaking alongside Draghi, Dutch Finance Minister Jeroen Dijsselbloem said selling gold “has always been an option put forward by the Cypriot authorities.”

“But as mentioned in the program documentation, this is a decision to be made independently by the Cypriot central bank,” he said. “And it’s not any demand from the troika or the eurogroup.”

As Cyprus is the official template per DieselBOOM, next up for Draghi/Goldman and the ECB/IMF is the combined 5,550 tons of physical gold reserves via Italy, France, Portugal, and Spain alone:

1	United States	8,133.5	76%
2	Germany	3,391.3	73%
3	International Monetary Fund	2,814.0	N.A.
4	Italy	2,451.8	72%
5	France	2,435.4	71%
6	China	1,054.1	2%
7	Switzerland	1,040.1	11%
8	Russia	957.8	9%
9	Japan	765.2	3%
10	Netherlands	612.5	60%
11	India	557.7	10%
12	European Central Bank	502.1	33%
13	Taiwan	423.6	6%
14	Portugal	382.5	90%
15	Venezuela	365.8	75%
16	Turkey	359.6	16%
17	Saudi Arabia	322.9	3%
18	United Kingdom	310.3	16%
19	Lebanon	286.8	29%
20	Spain	281.6	30%

http://www.tfmetalsreport.com/blog/4633/enencumbered-gold

Unencumbered GoLD

Thursday, April 11, 2013 at 10:26 am

After yesterday's nearly 17 metric ton withdrawal, it is becoming increasingly clear that a global movement is afoot to hoard massive amounts physical gold. Today, let's try to put all of this into perspective.

As you know, we've been actively chronicling the "investor liquidations" of the GLD. Of course, that's the popular SPIN. Supposedly, investors worldwide are reallocating assets out of precious metals and into equities.

On 1/2/13, the GLD allegedly held in "inventory" 1,349.92 metric tonnes of gold. By the end of January, that figure had fallen to 1328.09. By 2/28/13, the reported "inventory" was less than 1,270 metric tonnes and by late March it had fallen to 1,222 metric tonnes. And now, in April, we're rolling. Down over 35 metric tonnes month-to-date.

Yesterday alone, the GLD reported a total withdrawal of 16.84 metric tonnes of gold. This brings the total "gold" in "inventory" down to 1,183.53 metric tonnes. Year-to-date, the GLD "inventory" has been depleted by 12.33%. Stated another way, for every eight bars there used to be in "inventory", there are now seven.

Now, let's try to put this into perspective. Yesterday's withdrawal of 16.84 metric tonnes is 541,418 troy ounces. A London Good Delivery Bar is 400 troy ounces, so yesterday's withdrawal represented roughly 1,353 bars. The image below is of a pallet holding 192 gold bars.

The total withdrawal of 1,353 bars would look like this:

As Ruprecht would say: "That's a lot." But we're just getting started! As stated above, GLD has shed about 35 metric tonnes just this month. That's seven more pallets!

Now we're getting somewhere. According to the World Gold Council, 35 metric tonnes (those 14 pallets of gold) is about how much is owned by the Ukraine or Malaysia. And the GLD spits out that much in just eight business days due to "investor liquidation".

But let's not stop there. The cumulative withdrawal YTD is 166.39 metric tonnes. That's 5,349,562 troy ounces! On the pallets above, I've only shown you about 35 metric tonnes. For the total GLD withdrawals YTD, we have to add another 56 pallets or 10,686 bars or 4,274,362 ounces!

And again, we are told that this is all due to "investor liquidations". Let's stop there for a moment. Call me crazy but wouldn't you think that an "investor" who is "reducing his/her investment allocation in precious metals" would also be dumping silver? I mean, silver's a precious metal, too, isn't it? Hmmm.

Well, let's look at GLD's little brother, the SLV. On 1/2/13, the SLV reported an "inventory" of 10,084.96 metric tonnes of silver. As of last night, the SLV showed an "inventory" of 10,497.59 metric tonnes of silver, UP 412.63 metric tonnes YTD or almost 4%. WHAT?? Wait a second. That can't be right. My math must be wrong. GLD has shed 166 metric tonnes of gold YTD...more than the entire holdings of Thailand or Singapore...but, over the same time period, the "inventory" of the SLV has grown?? YEP!

Now, you're probably thinking: "I remember something earlier this year about a massive, one-day addition to the SLV". Yes, you do recall that. Here's a link: http://www.zerohedge.com/news/2013-01-17/slv-etf-adds-record-572-tons-silver-one-day-more-all-2012 Of course, 10,000,000 ounces or about 311 metric tonnes of silver were almost immediately withdrawn and shipped off to JPM's new vault: http://silverdoctors.com/18-3-m-oz-slv-deposit-jpms-new-silver-vault-jpm-discovers-way-to-bypass-comex-re-entry-process/ And we also saw a huge, 5,800,000 ounce (180 metric ton) withdrawal back on Friday. Even taking all of these shenanigans into account, the SLV "inventory" is still up YTD. So, again, I ask the question: If investors are liquidating the GLD due to asset reallocation, why aren't they liquidating the SLV, too?

Could it be that maybe, just maybe, the drop in GLD "inventory" isn't related to "investor liquidations" after all? Maybe, just maybe, were are instead seeing a conversion of paper shares into physical metal for delivery? Of course maybe, just maybe, even these withdrawals are just book-entry, unallocated "credits". Read this from page 18 of the GLD prospectus:

"Prior to initiating any creation or redemption order, an Authorized Participant must have entered into an agreement with the Custodian to establish an Authorized Participant Unallocated Account in London, or a Participant Unallocated Bullion Account Agreement. Authorized Participant Unallocated Accounts may only be used for transactions with the Trust. An unallocated account is an account with a bullion dealer, which may also be a bank, to which a fine weight amount of gold is credited. Transfers to or from an unallocated account are made by crediting or debiting the number of ounces of gold being deposited or withdrawn. The account holder is entitled to direct the bullion dealer to deliver an amount of physical gold equal to the amount of gold standing to the credit of the account holder. Gold held in an unallocated account is not segregated from the Custodian’s assets. The account holder therefore has no ownership interest in any specific bars of gold that the bullion dealer holds or owns. The account holder is an unsecured creditor of the bullion dealer, and credits to an unallocated account are at risk of the bullion dealer’s insolvency, in which event it may not be possible for a liquidator to identify any gold held in an unallocated account as belonging to the account holder rather than to the bullion dealer."

If you ever want to read the entire thing, here's a link:http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus2012.pdf

Anyway, let's return to this "disappearing gold" idea. Did you see this story earlier this week?http://bullmarketthinking.com/comex-gold-inventories-collapse-by-largest-amount-on-record/Year-to-date, the amount gold held on deposit for Comex delivery has declined by nearly 2,000,000 ounces. This sounds about right as The Comex delivered over 1,000 contracts in January, about 14,000 contracts stood for delivery in February and another 1,400 or so in the non-delivery month of March. So, how about some more pallets? Two million ounces is 5,000 bars. Once again, our pallets hold 192 bars so we need another 26 of them to represent the total Comex withdrawals for the first quarter alone.

And let's not forget the gold that is flowing out of London and Shanghai each day. Our man on the ground in London is Andrew Maguire. He's been trading and acquiring gold for over 30 years so, through his network of contacts, he's able to accurately estimate/measure the daily amounts of physical gold being allocated and delivered. Of course, the daily movements vary based upon price, discount to futures and day of the week. However, I asked Andy for an "average". What does he see play out on an "average day"? The numbers he provided are: 10-12 metric tonnes per day in London and 12-15 metric tonnes per day in Shanghai. Uh-oh. That's another 26 pallets and that's only for "an average day". And we're not even including Dubai or any of the other global centers!

You know, I could probably keep going and continue to copy-and-paste that stack all day long. (I bought the picture through Dreamstime so I can print it as many times as I'd like.) I think you get the point of this exercise, though. MASSIVE AMOUNTS OF PHYSICAL GOLD ARE MOVING AROUND THE PLANET, MORE SO THAN EVER BEFORE, AND CURRENT GLOBAL STOCKPILES ARE BEING DRAINED.

You're being told that the GLD is shedding gold and returning it to the Authorized Participants because "investors are re-allocating their portfolios away from precious metals". I'm sure some folks are so that's at least partially-true. But how do you explain away the fact that the SLV "inventory" isnot down YTD? And where do you suppose all of that Comex gold went? And who/what is buying and taking delivery of, "on average", 20-25 metric tonnes per day through the world's physical delivery centers? And do you now think that gold at $1570 is expensive or inexpensive? Do you believe the "analysts" and "experts" who claim that gold is headed to $1300? Or $1100?? Or $800??? Are you going to side with The Sheep and The Paper Bugs and convert your metal back into fiat currency? Or are you going to side with whomever is accumulating all of this gold on a daily basis?

Additionally, do you trust yourself, your brain and your instincts? Do you wonder where all of is this gold is going? Are you curious as to why this is happening? Everyone from the financial media down to your friends and neighbors may not care. But you should. You most definitely should! And you should buy this dip. You should have bought the last dip. And you should buy the next dip. And every dip. And take delivery. While you still can and while there's still time.

TF