Tag Archives: World Gold Council

Early Monsoon Season Will Boost Indian Gold Buying

Financial Markets, Gold, Market Manipulation, , , , ,

After the concerted western Central Bank  effort, led by the BIS, to squelch Indian gold imports by eliminating the most commonly used currency bills failed, the fake news about Indian gold imports coming from the World Gold Council amplified.  The WGC missed its Q1 2017 forecast for Indian gold imports by a country mile, as Indian gold imports doubled in Q1 to 253 tonnes.   Please note that these numbers do not include the amount of gold smuggled into India, which has been estimated to be 200-300 tonnes annually.

Now the World Gold Council is promoting the narrative that Indian gold imports will average only 90 tonnes per quarter the rest of the year because of a new General Sales Tax scheduled to be implemented on July 1st plus restrictions to be implemented on gold dore bar imports.  However, this is again an ill-fated prediction, likely for the purpose of spreading anti-gold propaganda, which seems to be one of the World Gold Council’s general directives.

First, in April and May, the premiums to world gold paid in India suggest that April/May imports already are well into triple-digits.  And the WGC’s arguments are absurd, as expressed by John Brimelow in his Gold Jottings report:

In JBGJ’s opinion the only way this prediction can be right is if the $US price of gold jumps a couple of hundred dollars. Since Q2 is half gone and premiums have if anything been even more constructive during April and May, imports for the quarter are very likely be deep in triple digits also. The dore point is just ridiculous.  To the extent dore is not available India will just revert to buying kilo bars which are only a few dollars more expensive. How the Authorities will treat the gold trade in introducing General Sales Tax is still uncertain. But using it to increase the rate of tax will just increase smuggling. In any case, fear of a tax increase should be stimulation anticipatory buying, a point the WGC avoids mentioning.

In addition to the current elevated level of gold demand in India, the early arrival of monsoon season to India will further boost demand for gold “by setting up India for higher farm output and robust economic growth” (Economic Times).   Farmers use cash from their harvest sales to buy gold, which is one of the major sources of demand fueling India’s biggest seasonal gold-buying period in the fall through year-end.  The bigger the harvest, the more gold bought by Indian farmers.

For the WGC to forecast 90 tonnes per quarter for the rest of 2017, especially given that Q2 is nearly in the bag and is likely already well over 100 tonnes, is nothing short of motivated anti-gold propaganda.  An increase in the General Sales Tax will likely cause a temporary dip in gold imports.  But, as with sudden moves higher in the price of gold, Indians will “get used” to paying a slightly higher price and normal import patterns will resume. Furthermore, a higher rate of taxation on gold sales in India will likely stimulate increased smuggling, over which the Indian authorities seem to limited control.

I appears currently that the western Central Banks are having a difficult time keep a lid on the price of gold.  The elevated level of Privately Negotiated Transactions and Exchange for Physical transactions – both of which facilitate settlement of Comex gold contracts off-exchange, privately and out of sight – is an indicator the banks are struggling to settle gold contracts with deliveries from the amount of gold available on the  Comex.   For now the price of gold has been successfully contained below $1300.  But it would not surprise me if gold makes a strong run over $1300 heading into, in not before, Labor Day weekend.

Alan Greenspan Endorses The Gold Standard

Financial Markets, Gold, Market Manipulation, Precious Metals, U.S. Economy, , ,

In his remarkable essay, “Gold and Economic Freedom,” written in 1966, Alan Greenspan stated:

Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

Greenspan of course went to become the front-man for the interminably corrupted Central Bank system, which is utilized as a wealth-confiscation and control mechanism for the elitists who control western Governments (Mayer Rotschild: “let me issue and control a nation’s currency and I care not who writes the laws”).

Interestingly, Greenspan is spending his final years coming clean about fiat currencies and the fractional banking system, as reviewed here in The Daily Coin:  LINK.   Most recently, in an interview with the World Gold Council’s “Gold Investor” publication, Greenspan fully endorses a return to the gold standard:

If the gold standard were in place today we would not have reached the situation in which we now find ourselves. We cannot afford to spend on infrastructure in the way that we should. The US sorely needs it, and it would pay for itself eventually in the form of a better economic environment (infrastructure)  LINK

We can only speculate the reasons why Greenspan has gone full circle back to his views expressed in his 1966 seminal essay about gold and is “coming clean” about economic systems based on fiat currencies rather than a gold standard.  But the fact that the former fiat money “Maestro” is now advocating the gold standard reinforces its validity.

In today’s episode of the Shadow of Truth,  we discuss the effort underway to discredit gold by the mainstream media using misinformation, disinformation and outright lies in the context of Greenspan’s stunning admissions:

Click on either image to learn more:

Think GLD Is Legit? Better Think Twice About That

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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.

Russia Buys 30 Tonnes Of Gold In March

Financial Markets, Gold, Market Manipulation, Precious Metals, ,

I guess Obama’s economic sanctions and the crash in the price of oil isn’t affecting Russia’s economy the way the western media propaganda would have us believe:

It’s interesting that Russia is still buying because it’s economy has taken a knock from Western sanctions and from lower oil prices,” David Jollie, an analyst at Mitsui & Co. Precious Metals Inc., said by phone from London. “This sends a very bullish signal to the gold market.”  (Bloomberg article link)

Everyone remember when the rumors were floated last fall that Russia was selling gold to raise money because it was getting squeezed from sanctions?   As it turned out, Russia added a significant amount of gold to its reserves at that time.

There is an egregious error in that Bloomberg report.  It cites the World Gold Council as reporting that the U.S. has 70% of it foreign reserves in gold.  I guess that’s accurate if you count lease receivables and gold “I.O.Us” from bullion banks as being the equivalent of possessing physical gold.

Recall that several years ago the BIS changed the standards by which Central Banks can account for gold by enabling CB’s to consolidate “lease receivables” into just “gold” in its asset account.  This is because most, if not all, of the Fed/ECB/BOE gold has been leased out.

It’s fascinating to watch Russia and China accumulate a massive amount of physical gold while western Central Banks continue to use paper gold in order to keep the price capped. I don’t know what event will trigger a failure in the west’s gold capping abilities, but I have a feeling that it will be an event that will make life very uncomfortable for everyone.

Central Banks Buy 75 Boeing Dreamliners Worth Of Gold In 2014

Financial Markets, Gold, Precious Metals,

Please note – And this is extremely important – the amount of gold purchased by Central Banks in 2014 DOES NOT include any amount of gold that was accumulated by China’s Central Bank, the Peoples Bank of China. This is a fact that mainstream media or the World Gold Council will not report.

The World Gold Council is reporting that Central Banks purchased 477.2 metric tonnes of gold in 2014.  Apparently this would be enough to purchase 75 Boeing 787 Dreamliners.  Governments added 477.2 metric tons to their reserves, the second-biggest increase in 50 years and 17 percent more than a year earlier, the World Gold Council said in a report Thursday. Based on the average price of gold in 2014, central banks probably paid about $19.4 billion. A Boeing 787-9 has a $257.1 million retail price, according to the company’s website.  – Bloomberg News

This amount represents roughly 25% of total amount of gold produced by mines globally during 2014.  That’s another fact that won’t be reported.

The report lists Russia as being the biggest buyer.  Of course, in what has become standard western media fraudulent and misleading journalism,  recall that American business news made an attempt at reporting that Russia was unloading gold toward the end of 2014.  Subsequent disclosure from Russia’s Central Bank revealed that Russia was in fact buying up large quantities (www.goldchartsrus.com, edit in white is mine – click to enlarge):

150123Russian_Reserves

Further, please note that the number from the WGC does not include any gold hoovered up by the PBOC.  The WGC notoriously is incredibly inaccurate with its estimates on gold imported into China.  It has absolutely no clue how much gold is being accumulated by the PBOC.  Of course, no one else outside of the highest circles of Chinese Government knows this either.

Thus, any estimate of Central Bank gold buying during ANY time period should be asterisked with a note that states explicitly that the number is an estimate that does not include PBOC purchases.