This is the most blatant market intervention that I’ve seen in 15 years of involvement in the precious metals market – IRD on SD Metals & Markets
Before we recorded this week’s SD Metals & Markets, Doc related a conversation to Eric Dubin and I about a conversations he had with two Authorized Purchasers of the US Mint which leads him to believe that the mint may be intentionally under-reporting silver eagle sales.
Doc and Eric invited me back on their weekly show to discuss the manipulated sell-off in the precious metals market this past week. Every day the Comex was intermittently bombed with huge quantities of paper gold. The only possible explanation for this is that the Fed/PPT wants to take the precious metals sector down in price ahead of uncontrollable financial event:
Below is a highly engaging interview with James Turk in which he discusses the key indicators to watch in order to anticipate the next big leg of the precious metals bull market. “To me the real bull market in gold began in 1913 with the creation of the Federal Reserve.”
By law the U.S. Mint is supposed to produce enough silver eagles to meet demand. Originally the law stated that the silver used in U.S. minted coins had come from U.S. mines. The U.S. produces roughly 40 million ounces of silver per year. About five years ago the demand for silver eagles began to outstrip the amount of silver sourced from U.S. mines that could be made available for silver eagle production. The law was amended to enable the mint to use silver imported from Mexico.
From time to time since the summer of 2008, the U.S. mint has had to halt its silver eagle sales because of a shortage of silver. This occurred once again in the middle of 2015 and the production halt lasted about 3-4 weeks. Since that time, the mint has limited the amount of silver eagles to one million coins per week. In 2015 the mint sold 47 million silver eagles, an amount which was stunted by the production halt. It is likely that the mint would be able to sell in excess of 60 million silver eagles in 2016 in the absence of production limits.
Make no mistake, curtailing production like this is nothing more than a form of price control. If the demand for silver eagles outstrips the supply, then the price should rise. “Price” is the ultimate mechanism by which supply and demand is equalized. That is a law of economics. If the demand for silver eagles is greater than supply because the mint can’t secure enough silver to meet demand for its product, then let the price of silver rise to the point at which supply and demand equalize. That’s how free markets are supposed to function.
They can force a market into a certain price level but that has to be met with metal if people are asking for metal to be delivered at those low prices and metal is getting scarce. – James Turk
The fact that the U.S. Government has had to impose production controls on the production of silver eagles is one of the many indicators which reflect the fact that the Government is losing control over the financial and economic system.
The relative price of gold and silver is a thermometer that measures the degree of systemic health at any given point in time. Since gold and silver hit interim bull market highs in 2011, the western Governments and Central Banks have colluded to suppress the price of gold and silver. This was imperative to their ability to continue the massive transfer of wealth from the middle class to the ruling elite through the use of Wall Street’s financial Ponzi schemes and the Fed’s ongoing debasement of fiat currency.
The Shadow of Truth hosted Bitgold’s and Goldmoney’s James Turk for a highly engaging discussion about the current move in the precious metals market. Mr. Turk sees it as yet another signal to the markets that Governments are losing control:
Both gold and silver are so cheap relative to historical norms and historical valuations that it doesn’t matter if it’s overbought, it can stay overbought on a short term basis for a long time – longer than we can possibly expect. What’s important is not short term overbought or oversold indicators but what the trend is. And to me the trend is higher in both gold and silver. I’m measuring this by saying that gold is above all of its short term moving averages. – James Turk
I think London has been pretty much emptied out – I don’t think there’s a lot gold left in London that’s available for shipment elsewhere. – James Turk, Shadow of Truth podcast – LINK
The rate of the flow of gold from western bank and investment vaults into Asia accelerated in the first quarter of 2015. India just announced that it imported 125 tonnes of gold in March, more than double the amount imported in March 2014. And 625 tonnes of gold was withdrawn from the Shanghai Gold Exchange during Q1, up 10.8% from Q1 2014. In that all gold purchased in China – other than the gold purchased by the PBOC – must pass through the SGE, withdrawals from the SGE represent the China’s gold demand (not including the PBOC). China only produces 400 tonnes per year, or 100 tonnes per quarter. This means recycled gold plus imports must account for balance of demand.
Just from combined demand from India and China, there is a supply deficit of gold. In fact, the global gold market has been functioning with a supply deficit since at least the mid-1990’s. Frank Veneroso was the first analyst/consultant to figure this out based on conversations in his meetings as a consultant with the world’s Central Banks. Veneroso predicted that eventually the price of gold would have to explode higher once the demand completely overwhelmed the supply.
GATA picked up on Veneroso’s work and began a campaign to educate the world about the western Central Bank schemes being used to keep the price of gold suppressed in order to prop up the legitimacy of paper fiat currencies.
James Turk has been a long time consultant to GATA and, in my opinion, knows as much about the global gold market as anyone. Turk was the first analyst to look at the original GLD prospectus in 2004 and conclude that it was little more than paper gold:
The GLD prospectus is quite clear that the shares are not backed by gold. It says the structure was designed to track the price of gold.
Rory Hall (The Daily Coin) and I hosted James Turk on our Shadow of Truth project. We cover the latest developments in the Greece/EU saga, the condition of “backwardation” in the London gold market and the catastrophic level of debt globally. We also discuss in-depth why GLD likely has very little physical gold sitting in its vault that is legally owned by the Trust and the reasons why the supply/demand deficit will lead, eventually, to much higher prices for gold.
I try to read/listen anytime Turk is willing to share his knowledge with the public. This is an incredible interview with someone who I consider to be as knowledgeable about the gold market as anyone in the world (other than maybe BIS insiders). We think you’ll find it time well-spent to listen to the entire podcast: