The precious metals market has been under attack for the last two weeks by the Comex banks who have once again built-up an extreme net short position in their paper gold and silver positions. In fact the open interest in paper silver recently set a new record high, exceeding the previous high set in 2011, when the price of gold was approaching $50. That it took a record amount of paper silver creation to keep the price of silver below $20 a sense of desperation by the banking cartel in its effort to keep gold and silver “irrelevant” as an investment.
But the price action of the metals is behaving somewhat differently from past cycles when the banks decide to flex their muscles and trample on the precious metals market by bombarding the Comex with thousands of gold and silver contracts in order to disgorge the long positions held by hedge funds and create intermittent “waterfall” sell-offs.
Eric Dubin (The News Doctors) and the “Doc” (Silver Doctors) invited me back on to their “Metals and Markets” weekly show sponsored by SD Bullion to chat about the precious metals, junior mining stocks and geopolitical current events:
If you would like more information about Investment Research Dynamics’ Mining Stock Journal or Short Seller’s Journal, click on either banner below. The latest MSJ features a relatively unknown junior mining stock that could eventually be a 5-10 bagger from its current price (currently below 30 cents) and the new issue of SSJ (published this evening) explains why the housing market is about to follow the retail and auto sales into a recessionary spiral:
The paper silver open interest on the Comex is at all-time highs. The previous all-time high was 224k contracts when the price of silver was pushing $50 in 2011. The current paper silver open interest is 229k contracts with the price of silver at $18. At least the degree of fake silver open interest in silver was more appropriate to the price level at which silver was trading in 2011.
Having said that, the current paper silver open interest is entirely inappropriate relative to the amount of silver reported to be held in Comex silver vaults. 229 thousand silver contracts translates into 1.15 billion ozs of paper silver. That number represents about 37% more actual silver ounces produced by global by mining companies in one year. Compare that paper representation of silver to the actual 193 million ozs of silver reported to be held in Comex vaults, primarily “held” by JP Morgan which is reporting nearly 102 million ozs of silver in its vault.
Notwithstanding whether or not those 101 million ozs of silver are actually sitting physically in JP Morgan’s Comex-designated custodial vault (and much of it has likely been hypothecated), the amount of paper silver issued primarily by Comex bullion banks is nearly 6x the total amount of silver reported to be held in Comex vaults.
But it gets worse. The amount of silver that has been designated as available for delivery, or “registered silver,” is only 30 million ozs. In other words, the amount of paper silver issued by the Comex is 38x greater than the amount of silver made available to be delivered to the holders of those silver contracts.
The point here is that the Comex is likely the world’s most fraudulent market. In fact, It’s inappropriate to refer to the Comex as a “market.” The Comex is nothing but a mechanism by which the Fed, in conjunction with the Treasury’s Exchange Stabilization Fund and the Comex bullion banks, exerts control over the price of silver.
The degree to which the Fed et al has to exert fraud in order to contain the price of silver is reflected by the absurd imbalance between paper silver contracts issued in relation to the amount of the underlying silver available for delivery. In any other commodity sector this situation would be labeled “criminal.” With silver and gold it’s labeled, “nothing to see here, move along.”
As with silver, the trading patterns in gold reflect a high degree of desperation by the bullion banks to contain the price and demand of physical gold. Interestingly, right now most of the blatant manipulation appears to be connected to the London p.m. gold fix activity on the LBMA. We believe it’s evidence of a growing shortage of physical gold available to deliver into India, China and other gold-buying countries. We explain this view in detail in today’s Shadow of Truth episode:
The next issue of the Mining Stock Journal, released this evening to subscribers, will have new junior explorer idea with 5-10x upside potential. It will also have an alternative explanation to the JNUG suspension of new unit issuance and why this could be very bullish for the sector. You can find out more about subscribing to the MSJ here: Mining Stock Journal Subscription Info.
While no additional silver was put on deposit at the Comex during the [past] week, The Banks sold contracts for 120MM oz. This is fraud. -@TF MetalsReport
If you were to poll the public about comparing the investment returns between gold, silver and stocks during the first quarter of 2017, it’s highly probable that the majority of the populace would respond that the S&P 500 outperformed the precious metals. That’s a result of the mainstream media’s unwillingness to report on the precious metals market other than to disparage it as an investment.
In reality, among silver, gold, the Nasdaq 100 and the S&P 500, the S&P 500 had the lowest ROR in Q1. Silver led the pack at 14%, followed by tech-heavy Nasdaq 100 at 11.1%, gold at 8.6% and the S&P 500 at 4.8%. Put that in your pipe and smoke it, Cramer. Imagine the performance gold and silver would have turned in if the Comex was prevented from creating paper gold and silver in amounts that exceeded the quantity of gold and silver sitting in the Comex vaults.
As an example, as of Friday the Comex is reporting 949k ozs of gold in the registered accounts of the Comex vaults and 9 million ozs of total gold. Yet, the open interest in paper gold contracts as of Friday totaled 41.7 million ozs. This is 44x more paper gold than the amount of physical that has been designated – “registered” – as available for delivery. It’s 4.6x more than the total amount of gold sitting on Comex vaults.
With silver the situation is even more extreme. The Comex is reporting 29.5 million ozs of silver as registered and 190.2 million total ozs. Yet, the open interest in paper silver is a staggering 1.08 billion ozs. 1.08 billion ozs of silver is more silver than the world mines in a year. The paper silver open interest is 5x greater than the total amount of silver held in Comex vaults; it’s an astonishing 37x more than the amount of silver that is available to be delivered.
This degree of imbalance between the open interest in CME futures contracts in relation to the amount of the underlying physical commodity represented by those contracts never occurs in any other CME commodity – ever. Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation. But never with gold and silver.
The Comex is perhaps the most corrupted securities market in history. It is emblematic of the fraud and corruption that has engulfed the entire U.S. financial and political system. The U.S. Government has now issued $20 trillion in Treasury debt for which it has no intention of every redeeming. It’s issued over $100 trillion in unfunded liabilities (entitlements, pensions, etc) for which default is not a matter of “if” but of “when.”
In today’s episode of the Shadow of Truth, we discuss “The Big Lie,” which is also known as the “Comex,” and explain why those looking to protect their savings should be buying physical gold and silver now:
Mehul Choksi, chairman of jewellery store chain Gitanjali Gems Ltd., is quoted as saying: “We expect some heavy buying in April as a large number of weddings are expected to take place. – LINK
Legal Indian gold imports jumped up to 96.4 tonnes in February vs. February 2016. These numbers come from the finance ministry and not the World Gold Council or bullion banks. This reinforces the observations by many that the BIS-directed attempt to curtail Indian gold demand by removing cash from the financial system has failed. Gresham’s Law in action. This number also does not include smuggled gold which, based on the increase in airport arrests so far in 2017, has ramped up considerably.
Amusingly, Cititgroup is forecasting total 2017 demand in India to be 725 tonnes. This number is laughable. Smuggling alone is thought to account for about 300 tonnes per year of gold going in to India. As a bullion bank with an untenable paper gold short position, Citigroup can only dream that India’s gold importation will be that low in 2017.
There will be a big “snap-back” effect on India’s gold demand after the brief intervention by the Government in late 2016. Based on yesterday’s response in the paper gold market in NYC after the Fed’s rate hike announcement, it seems that the western Central Banks/bullion banks are losing control of the bullion market.
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Investment Research Dynamics is pleased to present another truth-seeking missile launched by Stewart Dougherty:
This crime is already 285 times bigger than the LIBOR scandal, and 500 times bigger than Madoff’s swindle. It is, in fact, the largest, most destructive financial crime in history.
According to the mainstream financial media (MFM), the biggest financial frauds in history are the Bernie Madoff Ponzi scheme, with roughly $20 billion in net investor losses, and the Bank State rigging of LIBOR, which resulted in 16 guilty banks paying $35 billion in fines, which supposedly equated to their theft.
The MFM have conveniently ignored a far larger financial crime that has been perpetrated for 37 years and counting, and that has netted its orchestrators more than $1,000,000,000,000.00 ($1 trillion) in stolen profits. This crime is so powerful that it can produce fraudulent proceeds of $1+ billion on demand and in minutes, making it unique in the annals of theft. It is a crime that has been committed literally thousands of times since 1980, and is now being committed in the most blatant and brazen manner ever. This crime is already 285 times bigger than the LIBOR scandal, and 500 times bigger than Madoff’s swindle. It is, in fact, the largest, most destructive financial crime in history.
To read the rest of this, please click here: Gold & Silver Manipulation
If one can only see value in paper currency terms, one cannot see value at all
Hugo Salinas Price – website link – posted a couple of comments on Stewart Dougherty’s guest post earlier this week. I concluded that his insights needed to be shared on the front of this blog and he gave me permission to edit them together to make them easier to read for everyone. “I know my comment was complex but I wanted to condense the thoughts I have developed over three decades:”
I would like to take this chance to share a few of my thoughts on this. To me it is pretty clear that the American gold is encumbered. Not because of the usual reasons found on the web but because America defaulted on its gold under the Nixon administration. There are still, many foreign claims on that gold. If America starts to use that gold officially, the gold vultures, like the bond vulture funds, will be out en masse and with force. So it is in America’s best interest to ignore that gold – and gold in general.
The world has (finally) realized that a country with the reserve currency is not something a country should want and that the dollar can fail. The danger is that it will fail to soon. That is why the euro was created for example. The currencies from the individual countries were all issued from the US treasury. Meaning that if the dollar went the way of the dodo, the European currencies would die with it. Enter the euro, issued from gold [the euro was originally partially backed by gold]. The gold held by the ECB is priced on a mark to market basis. You can check the website of the ECB, its number one asset is listed as gold and, sadly, gold receivables [meaning that gold is leased out]. Most of the Eurasian landmass followed this initiative [pricing Central Bank gold on a mark to market basis] – for instance, the BRICS countries. All that is needed a rebalancing of the gold holdings of major countries. Enter China. They had way too little gold and way too many dollars. But last year they also started to mark their gold holdings to market.
Seems to me the world is ready to hyperinflate into gold. After all, all currencies have already hyperinflated in the financial world. When the run on real things happens, as a system operator, you don’t want that since a functioning printing press is worth way more than gold. So you want to guide the hyperinflation into a useless metal and use this gold to help equalize the tradeflows. They cannot implement a global political & economic system when things are unstable because it will fail again and soon. Just as all reserve currencies did since late 1400. If I were in the position of the globalists, I would aim for the Roman model. Split the money concept. Currency for spending and settling debts but use gold and silver as a final debt extinguisher. This would function to prevent the kind of mess the EU countries are now in. The debts of the south are the assets of the North. This is a recipe for disaster.
Let me elaborate on why I think that the world is ready to hyperinflate in gold terms. The Western public will not hold an asset that goes nowhere, at least in currency terms. The public in the East were never fooled that way. Some – I think rightly – joke “if one can only see value in paper currency terms, one cannot see value at all”. I also think gold is wealth and not money. Gold has always been funny in that way. So many people worldwide think of it as money even though its supply tends to dry up as the price rises.
First the Comex will be thrown under the bus to destroy the paper leverage (price suppression) game. Maybe the LBMA as well though I would not be surprised as well if it’s allowed to stay alive. Then the prices can rise and the message will sent: “gold is the new wealth reserve to balance trade imbalances and then the Western hyperinflation will be killed.” Central banks lose most of their gold reserves (and that is good) and gold can do what it did for millennia again, settle trade imbalances.
As usual, in historical terms, most of the average people wont have it besides a few grams. But it will be people, not institutions that control it and will help to create a decentralised counterforce to the centralized system we live in that is hopelessly out of touch with reality.
A last thing, courtesy of JS mineset, of the countries that value their gold on a mark to market basis (a few others may have followed since this graph was created:
These premiums [the ex-duty import prices being paid for legal kilo bar imports in India] are actually quite remarkable as the need to import kilo bars only arises if Indian demand is not satisfied by Dore imports (which had a duty advantage of $15.52/oz this afternoon) and smuggled gold. Reports of apprehensions at Indian airports are continuing to appear, indicating that smuggling has in fact revived. – excerpt from John Brimelow’s Gold Jottings Report (contact John at firstname.lastname@example.org to learn more about his service)
The price of gold & silver have had a big move since mid-December, despite the flood of “fake news” connected to the temporary disruption of gold imports into India precipitated by Modi’s now-failed attempt to limit the ability of Indians to buy physical gold and despite the plethora of fake news about the quantity of gold flowing into China both before and after after the week-long Chinese New Year observance.
Brimelow goes on to assert in one of his Monday updates that, “Viewed from a US-centric and technical perspective, gold’s friends have something to worry about. However the Asian buying is about as strong as it ever usually gets and for that reason the Bears’ prospects are probably limited.” Note, the “technical perspective” indirectly references that use of paper gold by the western bullion banks in their attempt to control the global price of gold.
As an example of the price-control mechanism implemented in the western paper market, you’ll note that after a surprise bounce in gold on Friday, likely stimulated by paper short-covering on the Comex, was met with an attack after the Monday a.m. LBMA gold price “fix” and again right after the Comex floor paper gold trading commences:
These are typical times during the day, when the physical gold buying markets in the east are closed for the day and the western paper market manipulators take control of global gold trading via LMBA forwards and Comex futures and OTC derivatives.
Just as notable about Friday’s move higher in gold during NY trading hours is that fact that the price was moving in correlation with a move higher in both the dollar index and the U.S. stock market. Often, there is an inverse correlation between gold and the USDX/Dow/SPX.
There’s is an “invisible hand” in the market pushing the prices of gold and silver higher in defiance of the attempted price control schemes being exerted in London and New York. This silent operator is without the pressure being exerted in the physical market.
This week I’m sure will prove to be a bit of a price roller-coaster, as the semi-annual “Humphrey-Hawkins” (as it used to be called) Fed Chairman testimony on monetary policy and the economy is a time used by the western CB’s and bullion banks to control the price of gold using paper. After all, they can’t have the price of gold moving higher when the Fed’s El Hefe is extolling the virtues of the fiat currency and fractional banking system in front of Congress and the world, which begins today.
The point here is that it’s my view that the next longer term trend move in gold is higher, which means that price attacks should be used as buying opportunities, both for the metal and the mining shares. In fact, the mining shares were quite stubborn about going lower when gold was being hit hard in New York after being hit hard in London. Typically this is a signal to the market that prices in the precious metals sector are going higher.
If history is any guide, global changes of this magnitude mean that the entrenched systems run by central banks and Deep State politics are set to be destabilized on a level we may have not witnessed in our lifetimes, which means assets like bitcoin, gold, and silver could become the safe havens of choice for investors. – Mac Slavo, SHTFplan.com
Mac’s comment above was in response to the news that First Majestic CEO, Keith Neumeyer, is prepared to join the legal battle being waged against the world’s largest banks for manipulating the gold and silver markets. Good luck with that.
But even if the plaintiffs make some headway against the banks, this fight will take years to wage and it will likely do little more than provide some temporary relief from the financial market’s equivalent of pancreas cancer.
While the precious metals community engaged in a celebratory end-zone dance when Deutsche Bank admitted to malfeasance in its paper silver trading business, the insolvent bank coughed up a fine that was mere pittance of the billions it made over the years rigging the LBMA.
To make matters worse, JP Morgan was mentioned nowhere in Deutsche’s testimony. JP Morgan has by far the largest silver vault on the Comex, with an alleged 82 million ozs in its custody. The next largest is Brinks with 25 million. I say “alleged” because it’s quite doubtful that a large portion of JPM’s reported holdings exists anywhere other than as an entry on its daily vault report. Ask Germany about that…
JPM also happens to be the largest market maker in Comex silver futures, it’s part of the bank cartel that fixes the price of silver on the LBMA everyday and it’s the vault custodian of the alleged silver that is supposed to belong to the SLV trust. Does it make sense that JP Morgan went unnamed in the Deutsche Bank confessional? If that happens to pass your smell test then we would suggest that you blow your nose thoroughly and take another sniff.
With regard to the manipulation of precious metals, if you want to kill a snake, you have to cut off its head. Similarly, if you want to end precious metals manipulation, you need to destroy the BIS. The directive and authority to manipulate the metals comes from the mother of all Central Banks. JP Morgan is the BIS’ chief agent in executing the directive. Deutsche Bank was given explicit instructions to omit all references to JP Morgan from its superficial mea culpa.
Mac is correct in his assertion that systems run by Central Banks are becoming destabilized. And he is correct in his implied assertion that this will lead to much higher precious metals prices. Bitcoin? Who knows? Bitcoin is a de facto digital currency and thus yet another fictitious form of money with a computer system as its counterparty.
The problem is that as the destabilization process unfolds, the Establishment will fight back hard in an effort to maintain control. This blow-back will be in the form of a further advancement toward Governmental totalitarianism. With the geopolitical and economic wheels beginning to fly off rails, at this point it’s fait accompli. In today’s episode of the Shadow of Truth, we discuss the general systemic decay of the U.S. and Trump’s role as the modern day Nero:
According to the plaintiffs, records surrendered by Deutsche Bank show traders and submitters coordinating trades in advance of a daily phone call, manipulating the spot market for silver, conspiring to fix the spread on silver offered to customers and using illegal strategies to rig prices.
“Plaintiffs are now able to plead with direct, ‘smoking gun’ evidence,’ including secret electronic chats involving silver traders and submitters across a number of financial institutions, a multi-year, well-coordinated and wide-ranging conspiracy to rig the prices,” the plaintiffs said in their filing. The new scheme “far surpasses the conspiracy alleged earlier.” – Bloomberg.com, December 7, 2016
Anyone who denies that gold and silver are manipulated either has not spent time examining the evidence or is financially incentivized to refute all allegations. In other words, they are either ignorant or willfully corrupt. This includes the entire universe of politically corrupt western Central Bankers and professionally criminal Wall Street bankers. But first and foremost it includes all three branches of Government.
Traders discussing on recorded lines ways in which to rig the silver market? Imagine that. Lost in the smoke of the latest revelations about the big bank silver market manipulation is the fact that Andrew Maguire presented evidence of this at JP Morgan over six years ago. Perhaps the most shocking aspect about the latest revelations is that JP Morgan was not cited in the Deutsche Bank court filings.
Although summarily dismissed by the Commodity Futures Trading Commission and mainstream financial conspiracy, JP Morgan has been the “ring leader” in the silver market manipulation scheme for years.
The latest revelations will never be accepted as truth until CNN or CNBC reports on them to “verify” for the zombie masses that the big banks are indeed corrupt beyond the imagination of “conspiracy theorists.” It will be interesting to see if this will lead to RICO prosecution, which it should:
RICO law refers to the prosecution and defense of individuals who engage in organized crime. In 1970, Congress passed the Racketeer Influenced and Corrupt Organizations (RICO) Act in an effort to combat Mafia groups. Since that time, the law has been expanded and used to go after a variety of organizations, from corrupt police departments to motorcycle gangs. RICO law should not be thought of as a way to punish the commission of an isolated criminal act. Rather, the law establishes severe consequences for those who engage in a pattern of wrongdoing as a member of a criminal enterprise
The threat of RICO was used to pry open the truth at Drexel Burnham in order to bring down what was, at the time, one of the biggest – if not the biggest – financial market corruption schemes in U.S. history.
The latest revelations are hard evidence that GATA has been right since 1998, when it was founded by Bill “Midas” Murphy and Chris Powell in order to document and expose the gold and silver market manipulation for the world to see. GATA’s evidence has been written off for over a decade as “conspiracy theory.” Now it is confirmed conspiracy truth. In fact, Murphy was banned as a guest on CNBC after he discussed gold market manipulation.
“Fake news?” Hardly. Proof is now in court documents. In today’s episode of the Shadow of Truth, we discuss the latest court documented evidence which confirms that silver market manipulation is standard operating procedure at the big banks who are supported by the taxpayers:
Gold was pushing $1230/oz overnight, as the methodical take-down of gold and silver in the NYC and London paper markets has triggered an avalanche of demand for physical gold in the eastern hemisphere.
Last night ex-duty import premiums in India were $14 over spot gold. In Shanghai the premium to world gold was $9.76. Delivery volume into the Shanghai Gold Exchange rocketed to an extraordinary 86.55 tonnes (it was 35.9 tonnes on Wednesday). The open interest on the SGE was 807 tonnes. To one observer’s recollection, John Brimelow of John Brimelow’s Gold Jottings, this is the first time the open interest has been over 800 tonnes.
In Viet Nam the premium paid by the public was $90 over world gold. The spread has been wider over the last 15 years, but not much and only during times when there’s been high “backwardation” between the physical delivery bullion markets in the east vs. the fraudulent paper gold markets in London and NYC.
To reinforce this nebulous idea of gold flowing from west to east, and unusually high amount of gold was shipped out of the Comex kilo bar vaults yesterday. 320,434 ozs left the Comex. Over 12,000 kilobars have left JP Morgan’s kilobar vault account in the last two days. This is being attributed as evidence of Asia’s voracious demand right now, as NY and London – when those two conduits actually clear real metal – trade 400oz LBMA grade bars whereas Asia prefers kilobars.
The price of gold is being attacked right now in a manner that is quite reminiscent of the way it was attacked in the summer of 2008, right before the global financial markets collapsed, led by the fall of Lehman.
Something really ugly is coming toward the global economic and financial system. The dollar index soared from 72 to 86 between June 2008 and October 2008, while gold and silver were systematically taken a lot lower. We know how that played.
Similarly, the dollar has gone parabolic in the last week without any visible news or events that would have triggered this move. Too be sure, if Trump implements his borrow and spend program for infrastructure projects, the Fed will have to print a lot of money to monetize the avalanche of Treasury debt issuance, given that the rest of the world is now dumping their Treasuries.
Both of those factors should be dollar-bearish and gold-bullish. In good time that’s how this will play out.
In the latest episode of the Shadow of Truth, we discuss the extraordinary “backwardation” that has developed in the price of gold between the west and the east. We also discuss evidence of the ongoing collapse in the U.S. economy.