Gold EFPs / Fraud cont’d

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When the Republican establishment realized that the initial Trump phenomenon was not a fluke that would soon flame out, Ryan, McConnell and their respective chamber mates did everything in their power to destroy Trump’s campaign, including recruiting Mitt Romney to excoriate Trump personally and professionally. But the smears and attacks did not work, because Trump had tuned into the gathering despair of millions of flyover America voters, and his insight into their pain enabled him to speak to them in a language they hungered for and understood. His words galvanized their anger and their anguish into action. Against all odds and by nothing short of a miracle from God, Trump won.

Now, more than a year later, we are beginning to learn the mountainous heights of corruption scaled by the Deep State elite to rig the 2016 election. Among many other sordid details revealed, we have learned that at the highest levels, the Justice Department and FBI have been corrupted, and turned into crude, partisan, Mafia-style enforcers of the Deep State looting agenda. With rarely seen arrogance and false righteousness, traitors within these organizations decided to subvert the will of the American people, and to swing the election to suit their personal tastes, and bank accounts.

In November, 2016, the American people came within a few thousand votes of being plunged into the crony communist dictatorship the Deep State elitists have planned for us. If Trump had not won, the people would never have found out what is now being revealed to them on an hourly basis about the depths of the Deep State corruption, because all of it would have been shredded and erased, like something out of Orwell’s 1984. The truth about the election, and the numerous related political scandals, such as the real Russian collusion, the Clintons’ treasonous $145 million Uranium One sting against the citizens of the United States, would have been assassinated and buried deep in the D.C. swamp.

The evidence is now incontrovertible that, on an inflation-adjusted basis, the United States has become the most corrupt empire in history. We see this corruption everywhere, not just in presidential politics. We see it in the cooked and crooked government books that totally ignore $21 trillion in accounting fraud, and likely, outright theft; in deliberate government misreporting of inflation, retail sales, employment, and GDP, perpetrated to tell false economic narratives and front-run markets that will react in predictable ways to them; throughout the banking and financial system, where scandals and massive fines are now so routine that no one even notices or pays attention to them anymore; in central bank interest rate rigging, which ripples into every other market, distorting all of them; and in cronyism that has bred the most pervasive wealth inequality in our history, and that is starting to resemble what was seen in ancient monarchies and feudal societies; to mention just a few examples of our corruptive disintegration. This endemic and systemic corruption is suffocating the American economy, not to mention the American dream, or what is left of it.

It is precisely this advanced, systemic corruption that enables the gold price manipulation fraud to continue unabated. If the High Priests of corruption could overtake the United States Justice Department and FBI, which they did, they can also easily control the gold market, which they do. And they do so because the corruption of the gold market is the necessary prerequisite to and enabler of every other form of official American corruption, as we shall later explain.

Which brings us back to the gold EFPs. The important question is: Are the EFPs solely designed to prevent Comex delivery failure? We don’t think so. We think the EFP story is bigger than that.

As we have outlined in recent articles, it is critically important to the Deep State financial elite that the price of gold not “go Bitcoin.” If it does, it would create a buying stampede that would feed on itself, sucking funds out of individual bank deposit accounts. Banks make money by controlling depositors’ money, and precisely nothing from a box of Gold Eagles buried in someone’s back yard. More important to the banks is that individual deposits will be required for future bank bail-ins and capital controls, and cannot be allowed to leave the banks, soon to be monetary prisons, in which they currently reside. As has often been said by those who have experienced them in the past, “there is no fever like gold fever.” This fact is well known to the financial elite, and they are doing everything in their power to prevent gold fever from breaking out.

The way to keep a gold buying stampede from happening is to sharply depress gold’s price, making gold look like a terrible place to put money. Human beings are momentum chasers by nature, which is broadly evident in the current Bitcoin and stock market phenomena. In 2011, gold was in the process of going vertical, just as Bitcoin subsequently has gone, and this represented an emergency for the ruling financial elite. Since then, they have pounded down the price from $1,900 to $1,250 today, during a dreary, relentless campaign now well into its seventh year. In the process, the ruling financial elite has made an unprecedented $1 trillion profit from the manipulation of the gold market, but the full story is more nuanced and complex than the elite’s looting and corruption.

The control of the gold price is a technical and complex process. Some people wonder why, if the manipulators could crush the price from $1,900 to $1,250, they haven’t they kept pushing it down in order to profit even more? Why haven’t they taken it down to, say, $1,000 or $750?

The answer is that the supply does not exist to handle the increased demand that lower prices would create, particularly from sovereign buyers such as Russia and China. These buyers have certain amounts to invest on a regular basis. In September, 2017, for example, Russia purchased 1.1 million troy ounces, or 34.2 metric tons of gold. The average price of gold that month was $1315.39. This means that Russia spent approximately $1.447 billion on gold that month. If gold had been pushed down to, say, $1,000 per ounce, Russia would have been able to purchase 1.447 million ounces of gold for the same amount of money, or 347,000 ounces (31.6%) more gold. China, a huge gold accumulator that is far less transparent about the scale and timing of its sovereign purchases, and whose citizens are buying gold on a massive scale, would also have been able to buy 31.6% more ounces with whatever amount it invested in gold in September, 2017. And so would every other gold buyer that month, including sovereign, industrial and retail purchasers worldwide.

But with supply and demand already in a tenuous balance, where would the extra gold have come from?

The gold price manipulators are therefore required to cap the price not just on the upside, but also on the downside. If the paper price were to go lower than the supply / demand equilibrium price, this would trigger delivery failures that would spread like wildfire as everyone raced to buy disappearing, increasingly non-available gold. Buying stampedes are created by the non-availability of merchandise desired by consumers, because it is human nature that when people are told they cannot have something, their desire for that thing goes exponential.

When the gold price moves too low, the manipulators must go long (buy) paper gold in order to support and stabilize the price. The manipulators are therefore in the predicament of needing to vacillate between going long and going short, as circumstances demand, to keep the price in the allowable range. They must maintain dual long and short positions all, or at least most of the time. And all of the contracts they buy must ultimately settle, one way or another.

The manipulation of the gold price is strategically engineered at the highest levels of the deep state financial elite, and is managed for the elite by the Bank for International Settlements (BIS). Instructions from the BIS are then communicated to the western central banks (WCBs), who in turn inform the bullion banks of the specific price ranges they must keep gold within. These price targets change according to financial and economic conditions, and Deep State market manipulation profit (theft) objectives.

The Commitment of Traders (COT) gold report, which is issued by the CFTC based on data provided to them by the Comex, categorizes positions held by “commercials” (the bullion banks), “non-commercials” (generally assumed to be big dollar hedge funds), and “non-reportables” (smaller investors such as gold fabricators, jewelers and coin dealers, who must hedge their positions so as not to be financially hurt by price swings).

People assume that these market participant categorizations are honest and accurate, but we do not. The gold market has been corrupt for decades, and this includes in its reporting. We believe there are many bullion banks (commercials) that also manage shadow “non-commercial” (e.g., hedge fund-like) accounts. Therefore, at any given time, the bullion banks can be both long and short the gold market, via both known commercial accounts, and also unknown, shadow, non-commercial accounts.

If the COT report were honest, there would be a fourth category of market participants: Official Price Manipulators (OPMs), and all official price manipulation activities, long and short, would be reported. We will call such positions OPM Contracts. Of course, official price manipulation cannot be admitted or detailed, because it would expose the gold price for the rigged fraud that it is. Therefore, OPM Contracts currently hide within the shadows of the commercial and non-commercial investor categories.

The role of the bullion banks is to control the price of gold per the instructions of the BIS and WCBs. The bullion banks make enormous profits as a side benefit of being officially authorized gold price controllers, as they have been granted a Bondian License to Steal. But their primary duty is to ensure that the price remains within the ranges set by deep state financial elite and central bank agents. With respect to price manipulation, per se, it is not the intent of the bullion banks to take delivery of gold when their long contracts expire, or to deliver gold when their shorts expire. For them, gold price manipulation is a cash settlement operation.

There are numerous times when the price manipulators must act in a non-profit manner to keep the gold price in line. This occurs when the price comes close to breaching either the minimum or maximum price set by the BIS. It is at these times that the bullion banks must act in behalf of the BIS, not themselves. In other words, when the price is intra-range, the bullion banks can manipulate it for their own profit; but when the price threatens to break out of the range, then their job is to control it, no matter what the cost.

In performing their BIS and WCB gold price control duties, the bullion banks receive a guarantee that any losses they might incur will be fully subsidized. Because their actions come with great exogenous risk. News of such things as war, a major terrorist attack, a bank failure and even election outcomes can result in immediate, substantial moves in the price of gold. For instance, on election night, 2016 and the following day, the price soared and then plunged, as the controllers worked overtime to keep it within the set boundaries, producing massive paper gains and losses during the process. The deal between the BIS and WCBs, and their price manipulation agents, the bullion banks, is that Job One is to keep the price of gold within the set range at any given time.

Imagine a situation where the gold price is going too low, and the manipulators must step in to support it by going long. Imagine, too, that there are no market participants willing to go short at that necessary market intervention moment. Therefore, there is an order imbalance. To fix this problem, the bullion bank manipulators simultaneously go both long and short, to set the price where it needs to be. Keep in mind, these are price manipulation, not money trades. There is no intention on the part of the manipulators to settle them either via cash or physical delivery; these trades are solely made to maintain a particular and phony gold price. Therefore, as these contracts expire, the manipulators need to vaporize them, and make them disappear.

This is what the EFPs do. EFPs are where the OPM Contracts go to die and be buried. The EFP longs offset the corresponding Comex short OPM Contracts (which are also phantom), keeping the Comex accounts in balance.

We acknowledge that in times of delivery stress, the Comex might need to convince legitimate gold longs (in other words, non-Official Price Manipulators) to accept EFPs by offering them a cash bonus for doing so. But this would be in a minority of cases, given that the non-commercial hedge funds are typically momentum trade, cash settlement players, not investors in physical gold. They want cash profits to fund their salaries and bonuses, not gold. Therefore, it is uncommon for them to stand for delivery.

The Comex is owned by the CME, a publicly traded corporation subject to regulation, audits and taxation. If the CME were to actually pay cash bonuses to legitimate longs persuaded to accept EFPs, they would need to report them as a business expense. While they would try to bury these expenses deep in the footnotes of their financial reports, in the event of a lawsuit and legal discovery, the payments would be revealed. This is a legal risk the CME cannot take, because bribing customers to accept EFPs would indicate a de facto delivery failure on their part. If an EFP were no different from a Comex contract, why would the CME need to bribe a customer to accept it? Non-admitted and elaborately disguised delivery failure would be tantamount to fraud, and the payment of bribes to cover up such a delivery failure, in other words, to cover up the fraud would be a prosecutable criminal act.

Therefore, any EFP payments / bribes must be transferred to the LBMA, the over the counter gold market in London, which is opaque and loosely regulated, if regulated at all. Keep in mind, the vast majority of EFPs simply vanish, as they are the concocted method of making OPM Contracts disappear.

As has been pointed out by several gold market experts, it is inconceivable that the LBMA has the ability to deliver the quantity of physical gold represented by the massive number of EFPs created in recent months. But we believe this misses the point. It was never the bullion banks’ intention to demand delivery of the OPM contracts, which are nothing but shadow, price control mechanisms.

This is why, despite the fact that the enormous gold futures trading volume in New York and London would by now almost certainly have produced delivery failures, if they were all legitimate and real, there have not been any reported delivery failures. The only explanation for this is that a large number of these contracts are shadow OPM Contracts whose sole purpose is to control the price of gold, and which are then vaporized after they have served their price manipulation purpose.

Please keep in mind that the control of the gold price by the deep state financial elite is not some parlor game that they play for their enjoyment; it is an absolutely critical requirement in keeping the fraudulent fiat currency counterfeiting scheme from collapsing. There are literally trillions of dollars at stake, and the entire counterfeiting scam could and almost certainly would implode if gold “went Bitcoin.” If that were to happen, gold would tell the world the sobering monetary, financial and economic wisdom it has gleaned from 5,000 years of study, experience and reflection. The simple fact is that the financial system cannot handle the truth that gold knows, and that it would tell, if it were allowed to.

In our view, we are at the point where official corruption is so endemic and extreme that it has become a mistake to rely on official gold reporting of any kind, whether from the CFTC, the CME, the Comex, the LBMA, the World Gold Council, the mainstream media, the government or anyone in between, in conducting market or price analysis, or in forecasting coming gold market developments. When it comes to the one and only money, gold, we believe the most logical and profitable approach is to simply refer to history, and use common sense. The 5,000 year old antidote not only to financial fraud and corruption, but to the profoundly corrosive and dangerous effects of political fraud and corruption, has been gold. We believe this antidote is now more important than it has ever been in human history. The Washington, D.C. swamp is evolving from a living, breathing cesspool of out-of-control corruption, into a Silurian breeding ground for epic, highly-evolved evil. We hope the now ceaseless revelations of corruption can at least halt, if not reverse the further spread of this destructive scourge, but history says this never happens in declining empires. Therefore, we believe that those who honor their basic, common sense instincts to buy physical gold as protection against the consequences of official corruption and evil will be rewarded by Time for doing so.

Kindly note: Harvey Organ is the leading expert when it comes to EFPs. He publishes detailed EFP data on a daily basis, and if you do not already follow his work, we believe you will find it illuminating. No one is closer to the daily specifics of the EFP fraud than Harvey. S.D.

Stewart Dougherty is the creator of Inferential Analytics, a forecasting method that applies to events proprietary, time-tested principles of human instinct, desire and action. In his view, forecasting methods not fundamentally based upon principles of human action are unlikely to be reliable over time. He is a graduate of Tufts University (BA) and Harvard Business School (MBA). He developed expertise in strategic analysis and planning during a 35+ year business career, has traveled to and conducted research in over 25 countries and has refined Inferential Analytics into a reliable predictive instrument over a period of 16+ years

14 thoughts on “Gold EFPs / Fraud cont’d

  1. Excellent deductions, Mr. Dougherty. I had never considered the PTB pulling the price upwards until you brought up the supply issue. I should had remembered that they want the contracts to be far more valuable than the real thing; it’s how they syphon wealth. Any reversal of this plan threatens to detail their entire system of thievery, which is built on a double pramid scheme of digital and cash contracts.

    With that in mind, I’ve been pondering the steps that would happen before the inevitable fall of the dollar, and remembered the example of India’s government attempting to force its citizens into a cashless system by withdrawing the legal tender status of 100 rupee notes. Fact is, digital banking systems are not for poor people; it costs resources to maintain those networks, and the merchant fees can screw up a small businessman’s margin. Compare that to cash and, even better, true money; transaction costs are much lower, sometimes even non-existent. That’s why some sellers start to budge on the price when you offer cash. Imagine the discounts you’d get with bullion when things really pick up!

    But I’m getting ahead of myself. The American population isn’t as poor as India’s…yet, so most are not considering getting off digital. With the distortionary effects of inflation and accelerating adaptation of the Russia-China banking system…Americans will definitely be a lot poorer a year from now, therby setting off a major bank run as they scramble to not only pay off balances, but to also squeeze as much savings as they can by adopting cash-systems of commerce again. Their survival will depend on it initially, but it will only be jumping from one frying pan to another.

    1. Which, unfortunately, raises the question they WANT you to ask yourself: why invest in Gold? In its essence, this reverts to the old adage “Don’t fight the Fed”. The issue for Gold investors, now that we know much more, including this article, about the OPM manipulation of Gold, will they ever lose control of the process? The only reason for investing in Gold is a belief that yes indeed they will eventually lose control. Yet they have remained in control for decades and this latest EFP (Which, incidentally I believe stands for Exchange of FUTURES for physical, not Exchange for physical as commonly quoted recently) demonstrates the degree of Official flexibility available to them through the opacity of the metals “markets” using both old and new (EFP) tricks; and more to come should it be necessary.
      On balance, Gold investing doesn’t seem a logical investment based on all that we now know about the PM “markets”?

  2. Fascinating article, and I agree with its conclusions. I believe Bitcoin in particular, and the other cryptocurrencies in general are doing now what the precious metals have been prevented from accomplishing: exposing the hyperinflationary issuance of untold and unaccounted for fiat currencies. While the Central Banksters have had their fingers in the dykes holding back the PMs, the cryptocurrencies have flooded over the top. With the death of the Petrodollar at hand, it’s now “game on”. Got gold? Got Bitcoin? Still holding fiat?

    1. Bitcoin is a product of action-junkies chasing price momentum. Bitcoin is doing what Dutch tulip bulbs did in 1637. A large percentage of the Bitcoin trading is done by middle-aged Japanese “kamikazee” daytraders. Let’s get our facts straight before we make grandiose statements about this era’s darling.

      1. Bitcoin allows anyone to move unlimited amounts of money internationally. It doesn’t matter what the price is . If it’s at 20k, I can move $100,000 with 5 bitcoins. If it’s at 1000k I can move my hundred grand with .1 Bitcoin. What do I care what the price is? If it’s rising , I get the added benefit of a profit in the process. Get the picture now?

  3. Making fiat is good, but making the fiat (creating it out of thin air) is infinitely better (at least from the perspective of our monetary overlords). The money of kings (gold) is thus regarded as kryptonite, which is why it must be contained and kept in check, lest it weaken and destroy the elitists “superman”.

  4. “if the manipulators could crush the price from $1,900 to $1,250, they haven’t they kept pushing it down in order to profit even more? Why haven’t they taken it down to, say, $1,000 or $750?
    The answer is that the supply does not exist to handle the increased demand that lower prices would create….”
    Those prices are also below the average cost of production and refining to .999. That would further cramp supply.

  5. Maybe China and Russia are getting all these EFPs to capture almost all future gold production to back the Petro/Gold/Yuan and Petro/Gold/Ruble. All these EFPs would have to be honored first for delivery before the West could buy gold on the LBMA exchange. By the time the West could get any gold, it would be GAME OVER. Just a thought .

  6. This is one of the most interesting and important articles on the murky world of gold written in a long time. It is a must read so pass it on. It pulls together the weaves of deception and corruption in the gold market – the EFP contract being the lynch pin.
    My question is what ends this nightmare? When they can no longer come up with the physical or the implosion of the financial system? This could go on much longer than we think. I would be interested in Stewart’s view on how the ending plays out and timeline.
    Thanks for the article.

  7. Also, we should keep in mind the massive ongoing purchases of gold by China, Russia et al. Surely this has to fit in with the above discussions.

  8. Russia and China have another weapon and it is gold. All they have to do is bid their time accumulate more metal and let the west self destruct which it will in time. Want to pressure the system and manipulators ? then step up buying. Sanctions threatened ? buy harder. War threat ? pull the gold trigger once and for all with a price reset. Is all that to simplistic ?

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