GATA....
Austrian central bank says gold audit is routine -- and secret
Submitted by cpowell on Wed, 2014-05-28 15:30. Section: Daily Dispatches
11:25a ET Wednesday, May 28, 2014
Dear Friend of GATA and Gold:
The audit of its gold reserves vaulted at the Bank of England that last week was reported being planned by the Austrian central bank --
-- has been conducted and was part of a routine series of audits by the bank and its results will not be made public, a bank spokesman said today.
The bank spokesman, Christian Gutlederer, commented in response to an inquiry by the German freelance financial journalist Lars Schall.
In addition to inquiring about the gold audit, Schall asked if the Austrian central bank would be publishing a list of the serial numbers of its gold bars, but the bank spokesman did not acknowledge the question.
Like most central banks, the Austrian central bank has a history of refusing to answer questions involving its gold reserves. Schall has tried with the bank before:
Today's reply to Schall from the Austrian central bank spokesman is appended.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
* * *
May 28, 2014
Dear Mr. Schall:
In response to your e-mail here my answer.
The Austrian Central Bank has conducted regular audits of its gold reserves in the past as well. Our latest audit is part of this routine. We do not intend to publish details of that audit.
As for the news media reports, I can just guess. Trend is a monthly magazine and was published ahead of the audit. The audit took place last week.
Kind regards.
Christian Gutlederer
Communications Division
Oesterreichische Nationalbank
Vienna, Austria
Communications Division
Oesterreichische Nationalbank
Vienna, Austria
Today's gold price suppression will end as London Gold Pool did, Turk tells KWN
Submitted by cpowell on Wed, 2014-05-28 00:40. Section: Daily Dispatches
8:39p ET Tuesday, May 27, 2014
Dear Friend of GATA and Gold:
Recent long periods of backwardation in gold show that central banks are losing their battle against gold as they did when the original London Gold Pool collapsed in 1968, GoldMoney founder and GATA consultant James Turk tells King World News tonight.
"That the gold market has been in backwardation on so many occasions, and in many cases remained in backwardation for extended periods, just shows how unhealthy the market has traded because of paper manipulation," Turk says. "The Western central planners and their agents at the bullion banks have had an ongoing war against gold for a long time now, and the tide may finally be turning against them, despite today's downdraft."
Turk's interview is excerpted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
Koos Jansen.....
Shanghai Gold Exchange International Board Another Blow To US Dollar
As we can see power shifting from West to East on a daily basis at the current time of writing, in the fourth quarter of this year the Shanghai Gold Exchange (SGE) will launch an international board in the Shanghai Free Trade Zone (FTZ) for investors worldwide to trade gold spot contracts denominated in renminbi. The purpose being is becoming not only the world’s primary physical gold market but also increase pricing powerand internationalize the renminbi.
Shortlist of recent developments regarding the rising powers in the East:
Russia’s central bank bought 28 metric tonnes of gold in April
Russia is setting up a joint currency with Belarus and Kazakhstan
Russia dumps record amounts of US treasuries
Russia closes an energy deal with China worth $400 billion (amongst 40 other business contracts)
Putin says Russia and China need to secure their gold and currency reserves
China openly calls for de-Americanization of the world
China, Russia, Iran and 21 other countries bolster cooperation to promote peace, security and stability in Asia
China is buying assets all over the globe and investing in infrastructure in Africa and West Asia
China is importing unprecedented amounts of physical gold
The SGE international board will be another blow to the US dollar hegemony, as more people around the world will hold renminbi, use the renminbi for trading gold and China wil have more power in pricing gold, though the international board’s pricing power can only be wholly exploited when the renminbi is fully convertible.
A Provisional Introduction To The Shanghai Gold Exchange International Board
Currently I don’t have any official documentation on the launch of the SGE international board, but by reading media (one, two, three, four) and from a source in the mainland, this is what I understand of it at this point: China’s central bank, the Peoples Bank Of China, has given approval to the SGE to set up a subsidiary company called the Shanghai International Gold Trading Center to operate the international board. The SGE is currently working on member recruiting, including commercial banks, gold producing companies and investment funds. Allegedly HSBC, ANZ, Standard Bank, Standard Chartered and Bank of Nova Scotia are to take part in the global trading platform.
Imported gold into the FTZ can be deposited in a brand new 1000 tonnes vault, after contracts are settled the gold can be delivered in this vault and withdrawn to be re-exported. Shanghai to become an international warehouse center. At first only spot contracts will be traded on the SGE international board, down the line derivatives will be launched.
The Shanghai FTZ can be considered as a Customs Specially Supervised Area, which I have written about extensively on these pages. Gold imported into the FTZ is not allowed to enter the Chinese marketplace without a PBOC permit. A Chinese trader in the mainland can not sell its physical gold to an international trader, for which it would be exported out of the mainland. To export gold out of the mainland there is a PBOC permit required. From what I’ve read, The structure of the Chinese domestic physical gold market will remain in tact after the launch of the SGE international board. Source:
A free trade zone (FTZ), also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties.
A free trade zone (FTZ), also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties.
SGE Chairman to Lead The Way
The chairman of the SGE is Xu Luode, who is former President of China Unionpay, a bankcard association established under the approval of the State Council and the People’s Bank of China. Xu already gained experience at Unionpay to lead a financial institution overseas. In 2010 Xu delivered a speech on how Chinese financial institutions can go global at the Lujiazui Forum, an important Chinese forum for policy makers on the rapid expansion of China’s financial market and China’s growing influence on the global economy. Now Xu will use his experience to open up the SGE to the world. From China Unionpay in 2010:
On June 26, Xu Luode, President of China Unionpay, was invited to attend the “Lujiazui Forum 2010,” …President Xu Luode delivered a speech on How Chinese Financial Institutions Can Go Global during the Post-crisis Era. New changes in the international economic pattern, especially the financial pattern, provided significant opportunities for Chinese financial institutions to go global, while the challenges were also formidable. Chinese institutions need strategy and holistic knowledge to promote globalization strategy prudently and steadily and successfully grow to be international corporations, expressed President Xu Luode in his speech.
President Xu Luode emphasized in his speech that the internationalization of an enterprise was not only the business behaviour of the enterprise itself, but should be also closely linked with national strategy and strategies of relevant enterprises. Since 2004, CUP’s internationalization has closely coordinated with the “reaching out” strategy of the country, and at the same time cooperates and interacts with the expanding of Chinese financial institutions and the internationalization of the Chinese Renminbi, thus achieving relatively rapid development.
Was Xu appointed as SGE chairman in October 2013 to launch the SGE international board? Who knows…
One of the largest gold refineries Heraeus Precious Metals’ sales director Kevin Crisp visits SGE Chairman Xu Luode, February 18, 2014
On may 15, 2014, Xu attended the fourth Commercial Bank Gold Investment Forum in Hangzhou. Based on three sources mentioned above (translated by Soh Tiong Hum) he made the following statements:
The Chinese gold market is an important force, a positive energy in the international gold market but its influence does not correspond to its mass and scale. Last year China’s domestic gold mines produced 428 tonnes; at the same time China imported 1540 tonnes of gold, adding up to nearly 2000 tonnes. China’s import volume is significant but China’s influence on the price of gold is very small. Real influence still lies in the West. Data such as Non-farm payroll, or even a speech could impact the gold market in a big way. In this sense, the mass and scale of China’s gold market and its influence in the international gold market does not match. Through the SGE international board Chinese pricing power will increase.
Foreign investors can directly use offshore yuan to trade gold on the SGE international board, which is promoting the internationalization of the renminbi. The international board will form a yuan-denominated gold price index system named “Shanghai Gold”. Shanghai Gold will change the current gold market “consumption in the East priced in the West” situation. When China will have a right to speak in the international gold market, pricing will get revealed. New York prices gold through bidding whereas the gold price is fixed by five banks in London. However the London gold fixing price is now being questioned since these five banks are price-fixers while at the same time they are also the market’s most important participants.
The development of China’s gold market is not limited to an increase in scale but a series of moves including market development, product improvement, system development and risk prevention. Marketing, pricing mechanisms and international standards are all very important building blocks so every aspect of China’s gold market should join forces to speed up development.
The Shanghai Gold Exchange has nearly 8,000 institutional investors and nearly 5 million individual investors.
The International board will be a platform with global investors. This will raise the standard of product assortment, ability to prevent risk, information technology and support, market promotion and regulation. China is fully qualified and may become the world gold market’s very important first class player.
Regional commercial banks should seize the trends and opportunities in the development of China’s gold market, and become actively involved in the market.
As you may remember Malca-Amit opened a 2000 tonnes gold vault, their biggest vault on the planet, in the Shanghai Free Trade Zone in November 2013. Of course they knew Shanghai was to become to center of the global gold market (why else build such a big vault?). I think Malca-Amit has a lot of market intelligence as many bullion banks and other market participants are their clients. If a part of the Malca-Amit vault in Shanghai is designated to the SGE I don’t know at this moment.
Though we’ll have to wait for the details on how the SGE international board will exactly operate in a few months, it’s influence on the global gold market will be significant and this will further deteriorate the status of the US dollar hegemony.
In Gold we Trust
http://www.zerohedge.com/news/2014-05-28/putin-says-russia-china-need-ensure-security-their-gold-reserves
On June 26, Xu Luode, President of China Unionpay, was invited to attend the “Lujiazui Forum 2010,” …President Xu Luode delivered a speech on How Chinese Financial Institutions Can Go Global during the Post-crisis Era. New changes in the international economic pattern, especially the financial pattern, provided significant opportunities for Chinese financial institutions to go global, while the challenges were also formidable. Chinese institutions need strategy and holistic knowledge to promote globalization strategy prudently and steadily and successfully grow to be international corporations, expressed President Xu Luode in his speech.
President Xu Luode emphasized in his speech that the internationalization of an enterprise was not only the business behaviour of the enterprise itself, but should be also closely linked with national strategy and strategies of relevant enterprises. Since 2004, CUP’s internationalization has closely coordinated with the “reaching out” strategy of the country, and at the same time cooperates and interacts with the expanding of Chinese financial institutions and the internationalization of the Chinese Renminbi, thus achieving relatively rapid development.
One of the largest gold refineries Heraeus Precious Metals’ sales director Kevin Crisp visits SGE Chairman Xu Luode, February 18, 2014
The Chinese gold market is an important force, a positive energy in the international gold market but its influence does not correspond to its mass and scale. Last year China’s domestic gold mines produced 428 tonnes; at the same time China imported 1540 tonnes of gold, adding up to nearly 2000 tonnes. China’s import volume is significant but China’s influence on the price of gold is very small. Real influence still lies in the West. Data such as Non-farm payroll, or even a speech could impact the gold market in a big way. In this sense, the mass and scale of China’s gold market and its influence in the international gold market does not match. Through the SGE international board Chinese pricing power will increase.
Foreign investors can directly use offshore yuan to trade gold on the SGE international board, which is promoting the internationalization of the renminbi. The international board will form a yuan-denominated gold price index system named “Shanghai Gold”. Shanghai Gold will change the current gold market “consumption in the East priced in the West” situation. When China will have a right to speak in the international gold market, pricing will get revealed. New York prices gold through bidding whereas the gold price is fixed by five banks in London. However the London gold fixing price is now being questioned since these five banks are price-fixers while at the same time they are also the market’s most important participants.
The development of China’s gold market is not limited to an increase in scale but a series of moves including market development, product improvement, system development and risk prevention. Marketing, pricing mechanisms and international standards are all very important building blocks so every aspect of China’s gold market should join forces to speed up development.
The Shanghai Gold Exchange has nearly 8,000 institutional investors and nearly 5 million individual investors.
The International board will be a platform with global investors. This will raise the standard of product assortment, ability to prevent risk, information technology and support, market promotion and regulation. China is fully qualified and may become the world gold market’s very important first class player.
Regional commercial banks should seize the trends and opportunities in the development of China’s gold market, and become actively involved in the market.
Putin Says Russia, China Need To Ensure Security Of Their Gold Reserves
Submitted by Tyler Durden on 05/28/2014 11:44 -0400
"For us (Russia and China) it is important to deposit those (gold and currency reserves) in a rational and secure way," he said. "And we together need to think of how to do that keeping in mind the uneasy situation in the global economy."
Putin also said China and Russia will consider further steps to shift to use of national currencies in bilateral transactions.
And while we are confident the entire world is enjoying the now 5 year long foreplay, the time may have come for the PBOC to finally reveal what its updated gold reserves are. Maybe it can use Putin for that too.
One week ago we reported that while Russia was dumping a record amount of Treasurys it was buying gold, or some 900,000 ounces to be precise. Today we learn that as Russia continues to purchase gold, and is likely taking advantage of the recent rout in gold prices, it certainly won't be storing its physical metal with any of the western Central Banks. According to Reuters, shortly after Russia and China announced their historic gas deal, Vladimit Putin said at the recent International Economic Forum, that Russia need to ensure its gold and currency reserves are secure. And not just Russia: China too. Because apparently when it comes to speaking for "hard" monetary policy, Putin is now authorized to speak for both nations.
From Reuters:
"For us (Russia and China) it is important to deposit those (gold and currency reserves) in a rational and secure way," he said. "And we together need to think of how to do that keeping in mind the uneasy situation in the global economy."Putin also said China and Russia will consider further steps to shift to use of national currencies in bilateral transactions.
And while we are confident the entire world is enjoying the now 5 year long foreplay, the time may have come for the PBOC to finally reveal what its updated gold reserves are. Maybe it can use Putin for that too.
Bill takes on the FCA with respect to the Barclay's conviction of gold manipulation:
(courtesy Bill Holter/Miles Franklin)
It takes two for it to be a conspiracy
We found out last Friday who "A" (not "the") culprit was that has been selling concentrated blocks of gold futures to depress the price. The Financial Times wrote that a mid level trader from Barclays was nabbed and censured by FCA (British equivalent of the SEC), Zero Hedge wrote about this last Friday herehttp://www.zerohedge.com/news/
First off, this "lone perpetrator" only worked for Barclays for the last 8 years while FCA says that the scheme was ongoing for 10 years. Did someone "teach" him how to sell big and very naked blocks and then just retire and pass the baton on to him? Also, are we to believe that this "rogue" trader got away with selling $10's of billions worth of gold (and in a bull market) while the compliance department at Barclays never saw or said anything? No, not possible. Remember, this particular instance has a 10 year track record behind it, FCA never saw anything at all until just recently? Or...the CFTC? How could they have not seen this? What about before 2004, does anyone still remember the old "$6 rule"? (Yes I know, that was the "2% rule" at the time just as it is now. )
We are also supposed to be led to believe that all of the waterfall and concentrated smashes were done by just one trader, again, not possible. If it was just this one guy, how is last April's 36 hour waterfall period explained? 50% of total global gold production was sold in concentrated bursts in less than 2 trading days. Are we to believe that this $50 billion or so that was sold came from just one company and by just one trader within this company? $50 billion ?
I usually don't like to rant but I really can't help myself on this one. For more than 15 years I have said that the gold and silver markets were manipulated or rigged to keep the price down, I have said on umpteen occasions that all that is needed is to pull a "time and sales" to see how much was sold and who sold it. Period, end of story. Time and sales is not a big undertaking like a "DNA" test, it's even easier than "fingerprints". Time and sales is a PAPER TRAIL that tells you who bought, who sold, how much and exactly at what time. It is not rocket science, it is not in any fashion a judgment call and doesn't even need any reasoning whatsoever. Time and sales are black and white hard data that tell you who did what and when.
We have been led to believe by the numerous CFTC investigations that all is copacetic. Please remember the "wording" that they've used to cover their sorry butts, they "found nothing actionable". They did not say they found "nothing illegal" although they probably could have because a lower gold price (which I will explain shortly) is in the "interest of national security". So, anyone acting in this interest would not be doing anything illegal OR where the CFTC could take action.
No matter what, us "conspiracy nuts" at least have a smidgeon of vindication because we now have hard evidence that effort has been made to lower the price of gold... by at least one trader. Technically, it cannot be called a "conspiracy" yet because there is only one perpetrator, but... we also know that there is no way that this one single trader could have possibly sold $50 billion (40 million ounces) in just two trading days. If this were the case and the market was "honest", any single trader that went that short would have been sniffed (squeezed) out in an epic "come to Jesus" moment by market participants. Any single trader that sold or shorted 1/2 of global gold production would have the task of eventually covering that position while a bunch of sharks circled to make this an impossibility without losing an equal amount of flesh. It also stands to reason that if these bursts of selling were not "officially" sanctioned, they would have been uncovered by the week's end. Can you imagine if this were done in the Treasury or S+P pits? No, this would never fly, the perp would end up in solitary confinement between water boardings !
OK, I mentioned above that a lower gold price is "desired" and in the interest of national security. Why is this and how can I say it? Think about it, what would a $5,000 or $10,000 price of gold mean? Did you notice the little "dollar sign" in front of the numbers? It would mean that "dollars" would be worth far far less than they are currently at $1,300. It would mean that their purchasing power is far less. It would mean that the "power" to print these pieces of paper (or electronic digital chits) is less "powerful". The power would be less because logically they would have to print many more just to equate to current purchasing power.
From another angle, a higher gold price means a lesser level of "confidence" that would require more dollars for the same ounce of gold. Please understand that "confidence" is the only thing left that is holding up your standard of living. Confidence is the only thing left that lends "value" to your dollar bills. It is the only thing left that lends value to Treasury bonds which by the way are what your bank uses as "reserves" to claim that they are solvent in any fashion. Confidence is THE only thing that is keeping the global (U.S. sponsored) Ponzi scheme from collapsing. What I have just described is "motive", motive for a lower gold price.
In reality, I cannot believe that a British (Western) regulator would dare expose even one trader for price manipulation of gold. This is a "thread" that is now exposed and can be pulled on. Do these regulators really believe that one sacrificial lamb will be enough? Do they really believe that the public will be satisfied... or gullible enough to accept just one mid level head to roll? This is a very dangerous precedent or gambit if you will. In my opinion, they should have just kept lying 100% because this is the way that lies come unraveled. This is like the little kid explaining to his mother that all the cookies are gone because he saw his brother eating one when he got home from school. He's not admitting his own guilt but he is pointing a finger. "Someone" did it, he is admitting that the cookies are gone ...and the lie unravels from there because he still has cookie crumbs on his face (how to explain the continuing 8AM massacres etc. after this bad bad lone trader has been shut down ?)
None of this really matters because it is becoming more obvious that "all is not right" in the gold market. Austria now wants to audit their gold in London. First it was Germany who asked for an audit (and were denied) at the New York Fed and then asked to repatriate gold, now it is Austria. Will London give them the same excuses that "logistically" it will take 7 or 8 years? Remember, Germany only received 5 tons total of gold last year out of 300 (out of 1,500 "held") that was promised. The FCA truly boo booed on this one because they are admitting that one trader sold non existent gold, do they expect people to believe that this guy was the smartest (and only) person in the world to have figured out how to sell gold...that isn't really gold? And without his firm knowing about it? Really ?
I do want to make mention of a piece written on the Barclays topic by Trader Dan Norcini recently http://traderdannorcini.
Dan says that the dollar index no longer dropping is why gold stopped going up and that gold will not go higher until the index resumes its downtrend. He may be correct but the dollar index is "versus" other fiat currencies, primarily the euro. If all currencies debase at the same rate, there will be little movement in the index yet all of the currencies have debased. If the price of gold can be "managed" to lower levels then the façade of paper currency purchasing power can be maintained. There has been enough anecdotal and hard evidence dug up over the years that points to manipulation to depress the price of gold. There is certainly motive and without a doubt the "ability" through futures markets where huge leverage can be employed. There is also the "cover" of agencies like the CFTC's monkeys who see, hear and speak no evil. I am of the opinion that TPTB cannot afford to let gold trade freely for even a single day for fear that it could ignite the derivatives time bomb but that's just my opinion.
Dan also mentions that the central banks actually "want" higher gold prices because they are afraid of deflation, this is one part that I particularly disagree with. With the way "money" is thrown around today, a pittance $20 billion order for delivered gold in my opinion would be enough to tip the scales toward an upside panic if the Fed desired it. I cannot believe that higher gold prices could not be easily orchestrated overnight as mined supply does not meet the current demand and market prices are below the costs of mining, in other words the supply just isn't there. The danger to the central banks as I see it is not prices going down because all they'd have to do print up some fiat and buy gold, no, it is losing control of upside pricing. A loss of control to the upside would crack the confidence in and the credibility of the central banks themselves. Were (when, in my opinion) this to happen, they will lose their currencies and thus their ability to push and pull the levers of finance. I guess the flaw in logic that I see here is that the Fed can ALWAYS buy gold if they want to and pay for it with newly minted money. Can the Fed "always" sell gold to keep the price down? Well, yes they can as long as they have it to sell ...but they can only sell what they have because gold cannot be printed. Actually, upon thinking about this for just a short moment longer, what would stop the Fed from making the statement "we will buy any and all gold for $2,500 per ounce"? Would gold not immediately shoot up to $2,500? Sorry, I don't buy the argument that the Fed wants higher gold prices and are afraid of lower prices.
I do want to say that I respect Trader Dan's opinions but I do not agree with all of them. I know him as a top notch guy and he is obviously a top notch trader as evidenced by the fact that he is "still here" and trading. Trading is a hazardous occupation and one where just one big mistake could be enough to knock you out of the game if you are not disciplined. I would never dismiss what Dan has to say out of hand but after reading his piece, I do disagree with much of it so I guess we'll just have to agree to disagree.
That said, I have written many times that trying to time gold is a mugs game in my opinion. If you understand the end game then you also understand that you have to be there "when" it happens. If you purchase physical metal without margin and sit tight until the end game arrives, you will "win" so to speak. Buying dips is a great idea but if you own no metal at all currently, "you shouldn't wait to buy gold...you should buy gold and wait".
As I have said in my opinion for several years now, this entire scheme will come down on the day that China is told "sorry, we cannot deliver any more gold". This will happen on its own or the Chinese can force it with an outsized order. It doesn't matter which occurs first because the outcome will be the same. We will live with a much much higher price of gold and a financial system that implodes because confidence evaporated.
Regards, Bill Holter
http://www.silverdoctors.com/precious-metals-central-bank-manipulation-or-chinese-accomodation/#more-43018
Bill takes on the FCA with respect to the Barclay's conviction of gold manipulation:
(courtesy Bill Holter/Miles Franklin)
We found out last Friday who "A" (not "the") culprit was that has been selling concentrated blocks of gold futures to depress the price. The Financial Times wrote that a mid level trader from Barclays was nabbed and censured by FCA (British equivalent of the SEC), Zero Hedge wrote about this last Friday herehttp://www.zerohedge.com/news/
First off, this "lone perpetrator" only worked for Barclays for the last 8 years while FCA says that the scheme was ongoing for 10 years. Did someone "teach" him how to sell big and very naked blocks and then just retire and pass the baton on to him? Also, are we to believe that this "rogue" trader got away with selling $10's of billions worth of gold (and in a bull market) while the compliance department at Barclays never saw or said anything? No, not possible. Remember, this particular instance has a 10 year track record behind it, FCA never saw anything at all until just recently? Or...the CFTC? How could they have not seen this? What about before 2004, does anyone still remember the old "$6 rule"? (Yes I know, that was the "2% rule" at the time just as it is now. )
We are also supposed to be led to believe that all of the waterfall and concentrated smashes were done by just one trader, again, not possible. If it was just this one guy, how is last April's 36 hour waterfall period explained? 50% of total global gold production was sold in concentrated bursts in less than 2 trading days. Are we to believe that this $50 billion or so that was sold came from just one company and by just one trader within this company? $50 billion ?
I usually don't like to rant but I really can't help myself on this one. For more than 15 years I have said that the gold and silver markets were manipulated or rigged to keep the price down, I have said on umpteen occasions that all that is needed is to pull a "time and sales" to see how much was sold and who sold it. Period, end of story. Time and sales is not a big undertaking like a "DNA" test, it's even easier than "fingerprints". Time and sales is a PAPER TRAIL that tells you who bought, who sold, how much and exactly at what time. It is not rocket science, it is not in any fashion a judgment call and doesn't even need any reasoning whatsoever. Time and sales are black and white hard data that tell you who did what and when.
We have been led to believe by the numerous CFTC investigations that all is copacetic. Please remember the "wording" that they've used to cover their sorry butts, they "found nothing actionable". They did not say they found "nothing illegal" although they probably could have because a lower gold price (which I will explain shortly) is in the "interest of national security". So, anyone acting in this interest would not be doing anything illegal OR where the CFTC could take action.
No matter what, us "conspiracy nuts" at least have a smidgeon of vindication because we now have hard evidence that effort has been made to lower the price of gold... by at least one trader. Technically, it cannot be called a "conspiracy" yet because there is only one perpetrator, but... we also know that there is no way that this one single trader could have possibly sold $50 billion (40 million ounces) in just two trading days. If this were the case and the market was "honest", any single trader that went that short would have been sniffed (squeezed) out in an epic "come to Jesus" moment by market participants. Any single trader that sold or shorted 1/2 of global gold production would have the task of eventually covering that position while a bunch of sharks circled to make this an impossibility without losing an equal amount of flesh. It also stands to reason that if these bursts of selling were not "officially" sanctioned, they would have been uncovered by the week's end. Can you imagine if this were done in the Treasury or S+P pits? No, this would never fly, the perp would end up in solitary confinement between water boardings !
OK, I mentioned above that a lower gold price is "desired" and in the interest of national security. Why is this and how can I say it? Think about it, what would a $5,000 or $10,000 price of gold mean? Did you notice the little "dollar sign" in front of the numbers? It would mean that "dollars" would be worth far far less than they are currently at $1,300. It would mean that their purchasing power is far less. It would mean that the "power" to print these pieces of paper (or electronic digital chits) is less "powerful". The power would be less because logically they would have to print many more just to equate to current purchasing power.
From another angle, a higher gold price means a lesser level of "confidence" that would require more dollars for the same ounce of gold. Please understand that "confidence" is the only thing left that is holding up your standard of living. Confidence is the only thing left that lends "value" to your dollar bills. It is the only thing left that lends value to Treasury bonds which by the way are what your bank uses as "reserves" to claim that they are solvent in any fashion. Confidence is THE only thing that is keeping the global (U.S. sponsored) Ponzi scheme from collapsing. What I have just described is "motive", motive for a lower gold price.
In reality, I cannot believe that a British (Western) regulator would dare expose even one trader for price manipulation of gold. This is a "thread" that is now exposed and can be pulled on. Do these regulators really believe that one sacrificial lamb will be enough? Do they really believe that the public will be satisfied... or gullible enough to accept just one mid level head to roll? This is a very dangerous precedent or gambit if you will. In my opinion, they should have just kept lying 100% because this is the way that lies come unraveled. This is like the little kid explaining to his mother that all the cookies are gone because he saw his brother eating one when he got home from school. He's not admitting his own guilt but he is pointing a finger. "Someone" did it, he is admitting that the cookies are gone ...and the lie unravels from there because he still has cookie crumbs on his face (how to explain the continuing 8AM massacres etc. after this bad bad lone trader has been shut down ?)
None of this really matters because it is becoming more obvious that "all is not right" in the gold market. Austria now wants to audit their gold in London. First it was Germany who asked for an audit (and were denied) at the New York Fed and then asked to repatriate gold, now it is Austria. Will London give them the same excuses that "logistically" it will take 7 or 8 years? Remember, Germany only received 5 tons total of gold last year out of 300 (out of 1,500 "held") that was promised. The FCA truly boo booed on this one because they are admitting that one trader sold non existent gold, do they expect people to believe that this guy was the smartest (and only) person in the world to have figured out how to sell gold...that isn't really gold? And without his firm knowing about it? Really ?
I do want to make mention of a piece written on the Barclays topic by Trader Dan Norcini recently http://traderdannorcini.
Dan says that the dollar index no longer dropping is why gold stopped going up and that gold will not go higher until the index resumes its downtrend. He may be correct but the dollar index is "versus" other fiat currencies, primarily the euro. If all currencies debase at the same rate, there will be little movement in the index yet all of the currencies have debased. If the price of gold can be "managed" to lower levels then the façade of paper currency purchasing power can be maintained. There has been enough anecdotal and hard evidence dug up over the years that points to manipulation to depress the price of gold. There is certainly motive and without a doubt the "ability" through futures markets where huge leverage can be employed. There is also the "cover" of agencies like the CFTC's monkeys who see, hear and speak no evil. I am of the opinion that TPTB cannot afford to let gold trade freely for even a single day for fear that it could ignite the derivatives time bomb but that's just my opinion.
Dan also mentions that the central banks actually "want" higher gold prices because they are afraid of deflation, this is one part that I particularly disagree with. With the way "money" is thrown around today, a pittance $20 billion order for delivered gold in my opinion would be enough to tip the scales toward an upside panic if the Fed desired it. I cannot believe that higher gold prices could not be easily orchestrated overnight as mined supply does not meet the current demand and market prices are below the costs of mining, in other words the supply just isn't there. The danger to the central banks as I see it is not prices going down because all they'd have to do print up some fiat and buy gold, no, it is losing control of upside pricing. A loss of control to the upside would crack the confidence in and the credibility of the central banks themselves. Were (when, in my opinion) this to happen, they will lose their currencies and thus their ability to push and pull the levers of finance. I guess the flaw in logic that I see here is that the Fed can ALWAYS buy gold if they want to and pay for it with newly minted money. Can the Fed "always" sell gold to keep the price down? Well, yes they can as long as they have it to sell ...but they can only sell what they have because gold cannot be printed. Actually, upon thinking about this for just a short moment longer, what would stop the Fed from making the statement "we will buy any and all gold for $2,500 per ounce"? Would gold not immediately shoot up to $2,500? Sorry, I don't buy the argument that the Fed wants higher gold prices and are afraid of lower prices.
I do want to say that I respect Trader Dan's opinions but I do not agree with all of them. I know him as a top notch guy and he is obviously a top notch trader as evidenced by the fact that he is "still here" and trading. Trading is a hazardous occupation and one where just one big mistake could be enough to knock you out of the game if you are not disciplined. I would never dismiss what Dan has to say out of hand but after reading his piece, I do disagree with much of it so I guess we'll just have to agree to disagree.
That said, I have written many times that trying to time gold is a mugs game in my opinion. If you understand the end game then you also understand that you have to be there "when" it happens. If you purchase physical metal without margin and sit tight until the end game arrives, you will "win" so to speak. Buying dips is a great idea but if you own no metal at all currently, "you shouldn't wait to buy gold...you should buy gold and wait".
As I have said in my opinion for several years now, this entire scheme will come down on the day that China is told "sorry, we cannot deliver any more gold". This will happen on its own or the Chinese can force it with an outsized order. It doesn't matter which occurs first because the outcome will be the same. We will live with a much much higher price of gold and a financial system that implodes because confidence evaporated.
Regards, Bill Holter
Regards, Bill Holter
Six days before the Syrian prez election and :
ReplyDeletehttp://www.debka.com/article/23949/Obama-about-turns-on-Syria-US-military-training-and-weapons-for-moderate-Syrian-rebels-
http://www.reuters.com/article/2014/05/29/us-usa-obama-foreign-idUSKBN0E70NB20140529
http://www.presstv.ir/detail/2014/05/28/364581/us-pledges-more-aid-to-syrian-militants/
Now .. is that supporting their democratic process ? Isn't that why the US is involved there ? To support democracy ?? How about try to help them have a fair election and stand by their CHOICE for president !!?!!?!!
I call BS.
NW
Yeah - check my war watch -- got information their on the US training on how to commit war crimes ( ironically having " trainees " discuss US instructors teaching about finishing off wounded Syrian soldiers.)
DeleteDon't you know fair elections occur when US thugs or tools win......
I knew that, and they are especially fair when using Diebold machines and US thugs win.
DeleteYup !
Deleteoil items :
ReplyDeletehttp://www.zerohedge.com/news/2014-05-28/shale-boom-goes-bust-costs-soar
http://www.zerohedge.com/news/2014-05-27/exxon-bp-defy-white-house-extend-partnership-russia
NW
Yup..... so both of those items........
DeleteI saw those too and have never been a fan a fracking even Nate tried to change my mind back in the day. Think it's too damaging to our water supplies and the fracked wells don't seem to produce for very long.
DeleteOil shale will place fracking in the dustbin of history sooner than expected....
Delete