Tag Archives: gold manipulation

Is China Intentionally Making It Harder To Manipulate Gold?

A new gold futures contract is being introduced by the Hong Kong Futures Exchange (two contracts actually).  The two contracts will be physically settled $US and CNH (offshore renminbi) gold futures contracts.   The key to this contract is that it requires physical settlement of the underlying gold, which is a 1 kilo gold bar.

The difference between this contract and the Comex gold futures contract is that the Comex contract allows cash (dollar aka fiat currency) settlement. The Comex does not require physical settlement.  In fact, there are provisions in the Comex contract that enables the short-side of the trade to settle in cash or GLD shares even if the long-side demands physical gold as settlement.

With the new HKEX contract, any entity that is long or short a contract on the day before the last trading day has to unwind their position if they have not demonstrated physical settlement capability.

The new contract also carries position limits.  For the spot month, any one entity can not hold more than a 10,000 contract long/short position.   In all other months, the limit is 20,000 contracts.   A limit like this on the Comex would pre-empt the ability of the bullion banks to manipulate the price of gold using the fraudulent paper gold contracts printed by the Comex.  It would also force a closer alignment between the open interest in Comex gold/silver contracts and the amount of gold/silver reported as available for delivery on the Comex.

To be sure, the contract specifications of the new HKEX contracts leave the door open to a limited degree of manipulation.  But at the end of the day, the physical settlement requirement and position limits greatly reduce the ability to conduct price control via naked contract shorting such as that permitted on the Comex and tacitly endorsed by the Commodity Futures Trading Commission.

You can read about the new HKEX contract here – HKEX Physically Settled Contract – and there’s a link at the bottom of that article with the preliminary term sheet.

Will this new contract help moderate the blatant price manipulation in the gold market by the western banking cartel?  Maybe not on a stand-alone basis.  But several developments occurring in the eastern hemisphere and among the emerging bloc of eastern super-powers – as discussed in today’s episode of the Shadow of Truth – will begin to close the window on the ability of the west’s efforts to prevent the price of gold from transmitting the truth about the decline of the U.S. dollar’s reserve status and the rising geopolitical instability:

Empty Gold Vaults and Fresh Out of Bombs

Guest post from The Daily Coin:

Paul Volker was the last central bankster to actually do the right thing and push interest rates to 21%. Can you imagine that happening today? The entire global financial system would blow apart before lunch.

As U.S. politicians are in a constant state of bickering and arguing, not only with the world, but within our borders, how are we to compete with an economic machine the size of China and Russia? The citizens of this country need to understand these projects are happening and will change the course of history. The economic and power shift is happening right now. The now unavoidable economic collapse coming to the shores of America is happening. The Western economies began unraveling in earnest in 2008 and, as we are seeing today, will continue to accelerate until its bitter end.

You can read the rest of this here:   Out of Gold and Bombs

Trust In The United States Was Bombed Away

Trump employing a “wag the dog” strategy, in which he highlights his leadership on an international crisis to divert attention from domestic political problems, is reminiscent of President Bill Clinton’s threats to attack Serbia in early 1999 as his impeachment trial was underway over his sexual relationship with intern Monica Lewinsky. – Robert Parry, posted on Consortiumnews.com

Robert Parry has a blue chip track record as an investigative reporter.  He broke many news stories about the Iran-Contra affair for AP and Newsweek (back when mainstream news sources were a lot less fake) and he broke the story revealing the CIA was trafficking cocaine with the Contras in the United States in the 1980’s (we’re confident the CIA has upped its drug dealing game now that it has control of the poppy crops in Afghanistan).

Despite apparent internal dispute over the validity of the intelligence that Assad’s regime unleased a poison gas attack on ISIS, president Trump bombed Syrian air force assets.   According one of Parry’s CIA sources, the gas attack was a staged “false flag” event designed to provoke Trump into reversing his recent policy pronouncement that it would not seek regime change in Syria.   It’s also been questioned as to whether or not the gas released was even Sarin.

Amusingly, the staunch neoconservative propaganda rag known as the “Washing Post” published an editorial questioning the legitimacy of Trump’s missile attack.  Even some of the war-thirsty lunatics on Fox News were questioning the decision.

The U.S. has lost its economic and political edge in the global community.   The evidence of this mounts.  Russia and China (and other eastern bloc countries) are accumulating physical gold hand-over-fist as part of a strategy to bolster their currencies and remove the U.S. dollar as the world’s reserve currency.

China and Japan, the two largest financiers of the United States’ debt-fueled consumerism and Government deficit spending, have been quietly reducing the amount of Treasuries they hold and are willing to buy.

It’s become apparent to most outside of the United States, and to some inside, that the U.S. has become one big fraud.  The stock market is artificially propped up to prevent a crash that would wipe out America’s retirement funding assets and collapse the banking system;  via the Fed,  the U.S. has orchestrated a flow of funds system by which a few of its puppet Central Banks (Belgium, Swizterland and Ireland – the value of Ireland’s U.S. Treasury holdings now exceeds its GDP) fund Treasury debt auctions;  and a propaganda-based political system has been created that would make Joseph Goebbels blind with envy.

At the root of this fraud is a fraudulent monetary system that requires the Central Bank, together with the Treasury Department, to control the price of gold for as long as possible. This is accomplished via the issuance of an unending supply of paper “fake” gold to help keep the “market” price of gold in check on the Comex and the LBMA.

At some point the demand for physically delivered gold and silver from the east will sabotage the paper manipulation operation.  That’s point at which the United States will collapse.  In today’s episode, the Shadow of Truth discusses the latest events driving U.S. politics and markets:

Sometimes They Do Ring A Bell A The Top

Ding ding ding ding…It was reported yesterday that Trump has appointed the co-author of the book “Dow 36,000,” Kevin Hassett, as the Chief of the White House’s Council of Economic Advisors (LINK).  “Dow 36,000” was published a few months before the dot.com/tech bubble burst in March 2000.

Given the irrational semi-parabolic move in the Dow since election night, the appointment of Hassett in the context of his spot in the history of stock market manias is seeded in comedic, if not tragic, irony.  There’s numerous similarities between the current stock market and pre-crash moves in 1929, 1987, 1999 and 2007.   However, in terms of true valuation metrics, the current market bubble is most similar to the Dutch Tulip Mania.

Jason Burack invited me on his Wall St. For Mainstream podcast to discuss the Fed’s interest rate hike threats, the massive amount of gold flowing from west to east, gold market manipulation and why the current stock market is the most overvalued in history:

Gold Continues To Defy Fed’s Attempt To Control The Price

Bloomberg News admitted that it is aware of the Fed’s “hidden” mandate to control the price of gold when it published an article last Sunday titled, “Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – Bloomberg/Yellen/Gold.

That title, combined with the content of the article, implied that the journalists and editors at Bloomberg are aware that the Fed actively manipulates the price of gold.  It’s hard to know if this admission was put forth intentionally or unwittingly. But the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The Fed’s current tool for this purpose is the “good cop/bad cop” routine played out on a daily basis between the Fed Governors who purport the need for more interest rate hikes and the Fed Heads who advocate waiting until the economy improves.

Lost in the smoke of Orwellian propaganda is the absurd notion that the two “rate hikes” were a mere quarter of a percentage point in magnitude.  This can hardly be described as “raising interest rates.”  It certainly is not even remotely close to the concept of “interest rate normalization,” whatever that is supposed to mean.   In mid-2007, about a year before the financial system nearly collapsed, the Fed Funds rate was 5.25%.   A little more than a year later it had been dropped to near zero.

If the financial analyst “Einsteins” define “rate normalization” as the 5.25% level in 2007, it will take about about 20 years using the speed of rate hikes by the Fed over the last two years.   On the other hand, going back to 1954, which is as far back as the Fed’s database takes us for the Fed funds rate, the median level for the Fed Funds rate is somewhere around 7%.   Is THAT level how one would define “normalized rates?”  You can do the math on how long it would take thereby to achieve “normalized interest rates” if 7% is the goal.

Since mid-December 2016, when gold appears to have bottomed out from the manipulated price “correction” that began in August, gold has been trading in defiance of the Fed’s attempts at price control.  Yesterday’s (Wednesday, Feb 22nd) trading action is point in case.  Gold was slammed for about $9 right after the paper trading market on the Comex floored commenced.  This is standard operating procedure.  But about 5 1/2 hours later, when the Fed released the minutes from its last meeting, gold spiked up and reclaimed the full $9 price take-down.    Today gold has soared another $16.

At the Shadow of Truth, we suspect both Yellen and the editorial staff at Bloomberg News are mumbling to themselves.  In today’s episode, we discuss the trading action in gold and the potential more interest rate hikes this year:

Bloomberg News Admits The Fed Manipulates Gold

“Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – That was the headline in a Bloomberg news report that was released on Sunday afternoon. There’s a lot going on in that headline – none of it accurate except for the fact that gold is moving higher despite the efforts of western Central Banks to cap the price.

The basic premise of the report is that gold is moving higher in defiance of the Fed’s apparent move to raise interest rates. Reading through the report reveals even more misleading and completely false information than is conveyed by the headline. Here’s a link if you want to read the article:  Bloomberg/Yellen/Gold.

The headline itself and the article content are both highly problematic, riddled with disinformation and completely inaccurate assertions.  Anyone actually who might have read the article and trusted the content has been taken down to “ground zero” intellectually.  Propaganda for the ignorant.  I will be reviewing several ways in which the article content is inaccurate, if not intentionally fraudulent, in the upcoming issue of the Mining Stock Journal.

That said, the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The idea that Yellen “can’t halt” the rising price of gold implies that such intervention is part of the Fed’s mandate.  It’s the first time I can recall in 16 years of researching, trading and investing in the precious metals market that the mainstream financial media, unwittingly or not,  has acknowledged that the Federal Reserve attempts to intervene in the gold market.

If the implied message of the headline was inadvertent, it means that conversations with respect to the Fed and its role in preventing the price of gold from rising are actively occurring in meeting rooms and reporter “bullpens” at several financial media organizations, with orders from “above” to never publish the truth.   Imagine if the Washington Post had withheld the news about Watergate…

Today’s action in gold exemplifies the tenor of the Bloomberg report.  Almost as if “on cue,” in deference to Yellen’s attempt to “halt” the gold rally from yesterday, gold was slammed for $9 this morning.  The reason generally attributed is “March rate hike hopes” LINK.   I guess that’s all it takes.  Yellen or some Fed clown exhales “rate hike on the table in March” and gold gets slammed by the trading computers.

Allegedly Germany has repatriated a large portion of its gold ahead of schedule (why it was supposed to take 7 years no one can explain).  Notwithstanding whether or not the gold is actually sitting physically in a Bundesbank vault, the announcement of the early repatriation conveys a sense of urgency to do so.  Furthermore, the eastern hemisphere countries are hoovering gold like there’s no tomorrow for fiat currency.

The Feds and the western Central Banks are exuding fear with respect to gold. The escalation in anti-gold propaganda reflects this sense of desperation, as do the shallow sell-offs followed by a move higher in paper gold that are initiated by LBMA and Comex paper traders after the Asian markets close for the day.  The conclusion remains that all sell-offs in the gold market, like today’s, should be capitalized upon by adding to positions in physical gold and silver and in mining stocks.

An Open Letter to Elizabeth Warren on Gold Fraud

The letter posted below is from Stewart Dougherty.   Elizabeth Warren on the surface purports to represent middle class interests by associating herself with the erection of the Consumer Financial Protection Bureau.  But she has turned out to be another faux populist who panders to the public in order to generate voter support and, in reality, sides with the rest of her cronies and looks other way while Corporate America steals our wealth.

The Consumer Financial Protection Bureau is a Trojan horse device which superficially appears to protect the public from Wall Street but in reality does  nothing more than provide a false sense of security. It’s another useless bureaucratic mechanism which serves no purpose other than to create another Government department that vacuums up taxpayer money and employs people who are otherwise unemployable in the private sector.

I ask you this, dear Elizabeth, if your Consumer Financial Protection Financial Bureau serves any purpose, how on earth did Wells Fargo’s billions in checking account fraud go undetected.  I suspect another person with “Warren” in their name had a hand in encouraging you to leave Wells Fargo alone.

And speaking of Wells Fargo, the show you put on the other day verbally “pistol-whipping” Wells Fargo CEO, John Stumpf, was highly entertaining.  But unfortunately, your words are tougher than your actions.  Based on the financial regulations (see FINRA, please) that are in place to punish those caught committing financial market illegalities, Stumpf can be held legally responsible for the actions of those below him – his “agents” is the technical term in case you’ve never studied financial regulations.

The size of what occurred at Wells Fargo qualifies Stumpf and his henchman to be indicted with felony charges.  I recall in 1988 that the Justice Department threatened Drexel Burnham Lambert with RICO charges for its felonious actions.  Of course, that was an era when Congress was not completely captured by Corporate America.

I’m sure your theatrics helped increase your support base in Massachusetts.  It’s too bad no one will hold you accountable.  I also see that your 2nd and 6th largest sources of campaign funds come from laws firms who represent Wall Street banks and from Wall Street itself:  Elizabeth Warren campaign donors.

And speaking of being held accountable, maybe you can explain why you oppose any legislation that would force an open, independent audit  of the Federal Reserve.  I understand why you won’t go after Stumf and Wells Fargo beyond verbal castigation, but your position on an Fed audit ceaselessly baffles me and all of my colleagues…

Dear Senator Warren:

On September 20, 2016, you appropriately excoriated CEO John Stumpf about the consumer fraud that took place at Wells Fargo Bank. Again and again, you used the word “scam” to characterize Wells Fargo’s actions, and this was the proper word for you to use. It was a scam, plain and simple.

Over a period of several years, Wells Fargo created more than 2 million accounts to flatter its numbers and increase its stock value, thereby increasing the value of senior executives’ stock options.

Many of the phony accounts were dormant and incurred no fees, but certain other accounts, such as credit cards, did incur fees.

Erring on the side of excess, let’s assume that the actual cost to Wells Fargo customers was $1,000.00 per phony account. This would mean a $2 billion fraud, in total. If we assume that these accounts were created over a 5 year period (it was probably longer), the scam would have amounted to roughly $400 million per year.

This $2 billion consumer fraud has correctly inflamed members of Congress, making you and your Capitol Hill colleagues irate, as we witnessed during the fiery House and Senate hearings.

Yesterday, October 4, 2016, a different kind of consumer fraud occurred. But this one was more than 100 times greater in amount, in ONE DAY, than Well Fargo’s entire multi-year fraud.

This fraud resulted in the theft of $246,758,400,000.00 ($246.8 BILLION) from people all over the world.

This SCAM affected rural farmers in India; common villagers throughout Africa; elderly retirees in Japan; young newlyweds in China; small shop owners in Tibet; flower merchants in Peru; nurses in Argentina; school teachers in Canada; and people of every type of vocation and station in the United States.

This SCAM hurt people of every single socio-economic class; every race, religion and creed; every age; every ideology, political and otherwise; and every other imaginable human description. And it hurt them in every single nation throughout the entire world. The common strand connecting hundreds of millions of people fleeced by this SCAM is that they are simple, ordinary, everyday human beings trying to enjoy a decent life and future.

From facts documented for more than a decade by formal researchers such as those at an organization known as GATA, we know without a shadow of doubt that this SCAM emanates from the United States, even though it affects people throughout the world.

What we witness is massive, condoned, formal, organized Wall Street theft. And since this type of theft has been happening for years with no Congressional or regulatory action of any kind against it, it also constitutes state sponsored financial terrorism, deliberately intended to inflict financial harm on innocent, honest, hard-working, everyday citizens worldwide.

From the dawn of human civilization, man has searched for honesty in all its glorious forms. Honesty is what makes civilization possible in the first place. When there is no honesty, civilization disintegrates. Where only dishonesty, corruption and deceit prevail, chaos and inhumanity rule.

One of the basic forms of honesty sought by humanity from the beginning was a reliable, truthful money. Honest money is a critical prerequisite to a functioning civilization. Early people discovered such a form of money, and their discovery was so powerful that it has reigned uninterrupted in the mind of man and in markets for more than 5,000 years.

It is called Gold, and perhaps you own some yourself. Perhaps you received it as a keepsake handed down to you by a parent or grandparent, with all its sentimental powers. Perhaps it is a beautiful piece of jewelry given to you by a loved one or yourself, or perhaps you saw a gold coin one day and purchased it for its value and its beauty. Those who own gold cherish it, and I would imagine you cherish yours, too, if you have some.

During this period of 5,000 years, by honest toil, deployment of capital and engineering brilliance, mankind has brought forth from the earth 183,600 metric tonnes of gold, or nearly 6 billion troy ounces. This amounts to not quite 1 troy ounce for every person on earth. In fact, if everyone wanted to own gold equally, they could only possess is 0.77 troy ounces of it. So we see how rare it truly is, despite 5,000 years of struggle to find, mine and distribute it.

Yesterday, October 4, 2016, a day that will live in infamy, the price of gold was crushed $42.00 per ounce by the financial elite (or, what I call, the “eleech”), with full state blessing, for the dual purposes of monetary enforcement and outright theft. The perpetrators of this SCAM walked away with hundreds of millions of dollars of direct, private profits, which they always do when they conduct these repeated attacks on the price of gold.

The citizens of the world were not nearly as fortunate as the fraudulent and thieving eleech. 5.875 billion ounces of gold lost $42.00 per ounce in price, for total global wealth destruction in the amount of $246,758,400,000.00, aka 246.7 BILLION dollars, on that date.

This constitutes one of the largest, outright, one-day THEFTS in human history. History’s other record-setting thefts also cluster around this exact form of fraud, which has been happening now for decades with no Congressional or regulatory action of any kind whatsoever taken to stop it.

Aside from providing a risk-free ability for the Wall Street eleech to steal hundreds of millions of dollars from people around the world, with zero risk of facing any type of criminal charge at all, the purpose of these price attacks on gold is to scare people away from owning it.

The for-profit Central Bankers have monopoly products called fiat currencies. These currencies are deliberately designed to diminish in value. We know this for a fact, because one of the mandates of the Federal Reserve Bank is to create inflation. They actually tell us this in plain English. They want us to believe that the gravest monetary problem we face today is that there is insufficient inflation, and that higher prices would be a great benefit to Us, the People. Naturally, this kind of brazen, self-serving lie is an insult to the People’s intelligence. The people are not stupid, and it is a grave error when politicians, officials and/or the eleech think we are.

People all over the world are waking up to the fact that fiat currencies are a serious danger to their financial well-being, and they are looking for alternatives in order to avert this danger. Historically, tangible things, including precious metals, are a way to achieve this. Given your focus upon matters financial, Ms. Warren, surely I’m not telling you anything you don’t already know.

Monopolists everywhere despise the idea of their monopolies being challenged. They are particularly fearful when the truth starts to leak out about a monopoly product that is drowning in fraud, corruption and lies, and that is defective. When it comes to human perception and understanding, a spark can become a firestorm in the collective consciousness in the proverbial wink of an eye. The absolute last thing corrupt monopolists can permit is a Great Awakening.

For years, and particularly since 2011, when precious metals market forces impressively began to break free and exert themselves, there has been a systematic effort to smash their prices. The technique used to do this is to dump millions of ounces of nakedly shorted paper metals onto the markets in a matter of seconds or minutes, creating a price avalanche.

This is deliberate price manipulation, and therefore fraud. It delivers a handful of eleech insiders huge financial gains, at the expense of everyone else, while also advancing a diabolical and thoroughly dishonest monetary agenda.

This has happened literally hundreds of times over the past four decades, but the problem is getting worse. Apparently, the perpetrators are getting addicted to the huge sums of money they can steal in a mere few hours. It also tells us that the monopolists at the Central Banks are getting very worried about something. Therefore, they are deliberately creating phony metals prices in order to confuse, deceive and create false illusions among the public about their defective monopoly products.

Senator Warren, you have shown extreme interest in and moral repulsion over the $2 billion Wells Fargo SCAM, so I would imagine the $247 billion one-day, oft-repeated SCAM that I have outlined above will pique your interest, too. Yes? I certainly hope so.

On a broader, closing note, Ms. Warren, when one views the current landscape, it appears that our leading national export is Wall Street greed and fraud. This greed and fraud brings shame upon and disgrace to our nation. To any sentient person, it is repulsive. Having watched you grill Mr. Stumpf, I know this kind of avarice and corruption is particularly repulsive to you.

My belief is that the people of the world are waking up to how the Wall Street eleech are financially hurting them, and that the people are rightly getting angry about it. Our standing in the world appears to diminish every day, in large part due to the financial abuse that a tiny, arrogant, greedy, corrupt cabal of American moneysuckers inflict upon decent people throughout the world. The egregious manipulation of gold market is a glaring, nationally embarrassing, “poster child” example of this abuse.

You can help your country and its citizens right now by focusing your energy, intelligence and sense of ethics upon this disgraceful crime.

I will let this message sink in for a day or two, and will then contact you so we can discuss it in further detail, and speak about how this abuse can be stopped.

Respectfully, Stewart Dougherty
October 5, 2016

Gold & Silver Slammed At Comex Open: Something Bad Is Coming

This is starting to smell a lot like 2008.  By nearly all private sector reported economic data series, the economy is starting to tank hard.  Just today the employment component index of the NY ISM manufacturing report plunged at its fastest pace in history and hit a 7-yr low.  A bevy of private sector reports yesterday showed similar trends.  Most notably construction spending fell in August – vs. a .7% gain expected.  It was the second month in row construction spending declined after a big downward revision pushed July into a decline vs. June.  Construction spending is now contracting for the first time in 5 years.

But there’s an even bigger problem to throw in the mix.  It’s called “Deutshce Bank.” Despite inexorable pleas to the market by CEO, John Cryan, DB is exhibiting ALL of the characteristics displayed by Lehman in the months leading up to Lehman’s collapse.  If DB were forced to undergo an independent – and by independent I mean non-Central Bank, impartial outside third party – audit and a bona fide mark to market of its off-balance sheet “assets,” the bank would be catastrophically insolvent.  As it is now, the stock market values DB stock at just 26% of DB’s stated “book value.”  It’s true book value is likely negative by at least few $100 billion.

Just for the record, I did “back-of-the-envelope” mark to market analysis on the balance sheets of Lehman, JP Morgan, Washington Mutual and Wells Fargo at the beginning of 2008.  This was before I had a blog but I had shared my work with Bill “Midas” Murphy’s Le Metropole Cafe.  My work showed that each one of those banks were hopelessly insolvent if accurate mark-to-market accounting would have been enforced on those banks by the regulators.  Wash Mutual and Lehman collapsed that year.  JP Morgan and Wells Fargo also would have collapsed if the Government had not ripped over $800 billion away from taxpayers and gave it to the big Wall Street banks plus Warren Buffet’s bank.

Deutsche Bank is at least as underwater as each of those banks – and probably more underwater than Lehman and Wash Mutual combined.   If the western Central Banks can’t find all of the hidden skeletons in DB’s derivatives closet and clandestinely monetize them, DB will collapse.

Gold is being taken down just like it was in 2008 ahead of some type of systemic disaster coming at us.  Gold hit $1020 in March 2008 just as Bear Stearns was collapsing.  It was taken down even more during the summer, ahead of Lehman’s collapse.  These events should have pushed gold over $2000 back then.  Gold eventually almost did hit $2000 by late 2011.  The same price management effort is being implemented now and the elitists will do their best to keep gold from broadcasting a loud warning signal to the markets that something is wrong.

Unfortunately, if the masses were allowed to see gold’s “canary” die in the “coal mine” behind the elitists’ “curtain,” it would enable the ones paying attention to get their money out of banks and other monetary custodians before their money is vaporized by whatever financial hurricane is brewing.

Today gold was smashed right when the Comex floor opened.  This is standard operating procedure:

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In the first 30 minutes of Comex floor trading, 3.2 million ounces of paper gold “bombs” were dropped on the Comex. Currently the Comex is showing that 2.5 million ozs of gold have been made available in Comex custodial vaults for delivery. Naked short-selling of futures contracts this extreme only occurs in the gold and silver markets. If selling of this magnitude relative the amount of underlying available for delivery occurred in any other commodity, the CFTC would immediately investigate. Not so in gold because the CFTC is part of the elitist team that is charged with price management of gold.

The common “muscle” reaction to a day when gold, silver and the mining stocks are down as much they are now is to sell and run.  But this is the wrong reaction.  If you want to do something to try and protect what’s your’s, days like today are when money should be removed from banks – especially Deutsche Bank – and moved into the precious metals sector.  This may not be the bottom – but it’s close enough for Government work.  If you liked mining stocks in early August when the HUI index hit 284 , you should love them now with the HUI at its 200 dma.   The HUI has nearly completed a 200 day moving average correction.  It might go lower from here but you’ll never pick the bottom.

I use Goldmoney (Bitgold) to accumulate gold on days like today – because I can buy fractionals of an ounce at price that’s close to spot.  I moved a fair amount of cash from my checking account into my Goldmoney account today:  GOLDMONEY/Bitgold.

Someone Dumped 70 Tons Of Paper Gold At 8:30 a.m.

At 8:30 a.m. this morning, 10 minutes after the Comex gold pit opens, over 70 tons of gold was dropped into the entire Comex trading system.  If this happened on the NYSE, one of the ECN’s (usually BATS) would have mysteriously “broke” and trading would have been halted – before the damaging effects of the systemic paper overload hit the market.

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From 8:30 to 9:30 a.m. EST, a total of 6,289,900 ozs of paper gold, or 196.5 tons was unloaded on the Comex.   To put this in perspective, the Comex is reporting 2.37 million ounces of gold in its registered account (the gold that can be delivered).  That amount of paper gold that would unloaded was 2.7x the amount of gold available to be delivered.   It represents 58% of the entire amount of gold reported to be in Comex vaults.

It’s hard to find any specific news trigger that would have motivated anyone to sell one ounce of gold, let alone nearly 3x the amount of physical gold available to be delivered.

Perhaps the worst economic news reported was retail sales, which dropped .3% in August vs. the expectation of no change.  This is the 4th month in a row retail sales have dropped on monthly sequential basis.  Retail sales have declined 6 out of 8 months this year.

There’s probably nothing to see in that chart above – just like the allegations of Hillary’s poor health…

 

Think GLD Is Legit? Better Think Twice About That

Readers who have followed my work for several years know that I have been quite vocal about the illegitimacy of the GLD gold ETF.   James Turk was the first analyst in 2004 to bring attention to flagrant legal loopholes which enable the GLD custodian (HSBC) to play the “shell game” with GLD’s gold bars.

Certainly highly illegal activities by HSBC are de rigueur, as evidenced by its conviction for laundering drug money – for which a $1.9 billion settlement with the Justice Department failed to deter HSBC’s money laundering activities – LINK. What the heck, $1.9 billion is merely the cost of conducting a high-margin business endeavor.  Just ask the big banks funding Hillary Clinton’s Presidential campaign.

In 2009 I published an extension of Turk’s 2004 GLD evisceration – one which Turk actually helped me edit – in which I concluded:

I have no problem with the concept of using GLD for daytrading to make directional bets, long or short, on the short term swings in the price of gold. But if you invest in GLD with the intent of making a long term investment in gold, please be aware that GLD is NOT an investment in actual physical gold. GLD is nothing more than a piece of paper which proclaims, but does not promise, to have gold on the other side of its highly structured legal barriers. Furthermore, for the reasons shown above, there is the possibility that you might wake up one day to find out that the price of GLD has suddenly dropped well below the spot price of gold and that GLD could even end up worthless.

At some point I will update this research piece because GLD has made some changes to the prospectus which widened the legal loopholes into  legal sewage holes.

The bottom line is that GLD (and SLV) was created to “trap” billions of institutional cash that might otherwise have been used to purchase actual physical bars.  It was a tool to enhance the price manipulation of gold using paper derivatives.  I have no doubt that at some point in time GLD held a lot gold bars in its vault.  But I think it’s also pretty clear to anyone who has been through the prospectus with fine-tooth comb that GLD was set up as a “holding pen” of sorts for gold bars that would eventually be used to put out physical demand fires once the Central Banks ran low on or out of gold bars used in Central Bank leasing activities.

I mentioned to a colleague yesterday that the information about the economy and the markets published by “official” sources is not interesting.  The Government and big banks report the information they want us to see.  It’s the information content “behind” the official reports that is of interest.

Unfortunately we end up having to connect a lot of “dotted lines” in order to draw reasonable inferences about the truth that lies beneath the surface.   With GLD, the prospectus itself is a treasure trove of “dotted lines.”  So too is the fact  that the Bank of England is now a vault “sub”- custodian for GLD.  Yes, the Bank of England that is one of the original participants in the development of the gold leasing market.  My GLD research piece explains why the “sub-custodian” mechanism in the GLD legal structure readily enables gold bar leasing.

Adding to the intrigue is the fact that GLD’s “Sponsor,” World Gold Trust Services – a subsidiary of the World Gold Council – has had four different CEO’s in less than three years from 2013-2016.  The CEO previous to these three CEOs had been in place for four years, from 2009-2013.  BullionStar’s Ronan Manly is the first to report this strange event – LINK.

While I laud Manly for his diligent research of the events, I find his rationale for the CEO revolving door at GLD to be circumspect.   For me the dotted lines connecting the CEO revolving door at GLD are threefold – all of which point to the accelerated use of GLD as a source for leasing and hypothecating gold bars since 2012 in order to manipulate the price of gold:  1) the 2012 alteration of the prospectus which further loosened the already tenuous degree of legal accountability of the custodial vaults;  2) the massive draw-down and subsequent “replenishment” of gold bars reported to be in held by the ETF;  3) the inclusion of the Bank of England as one of the highly unaccountable vault sub-custodians.

My “dotted line” view is that each CEO was in the position long enough to understand the true nature of GLD’s dealings and decided they were not getting paid enough to hang around long enough to go down with the ship.

The final  conclusion for me is that GLD (and SLV) is the precious metals market’s equivalent of Enron or MF Global.  The 3-yr CEO revolving door at GLD since 2012 likely reinforces this viewpoint.   When the real scramble for physical gold that can be possessed immediately takes place – an eventuality we all know is coming sooner or later – the truth about GLD will be revealed and the clueless, hope-strangled GLD shareholders will be helpless as they watch the value of GLD plummet while the market price of gold goes parabolic.