They’re Burning The Furniture Now

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper.   Francisco’s Money Speech – When Atlas Shrugged

Last night around 12:30 a.m. EST, $1.5 billion of paper gold was dumped into the Comex Globex computer trading system during one of the least liquid periods of trading in any 24 hour period.  It was done when there was almost no resistance from the physical market.  The two largest physical buying markets in the world were dormant when this hit occurred:  India was closed for holiday observance and Shanghai was on its mid-day trading hiatus.

Dumping this enormous load of paper gold onto the market like this can only be done by an entity that has an agenda other than profit motive. Even if a big player wanted to establish or add to a short position to express a bearish view on gold, a position of this size would be carefully set up in order to maximize the price level received for selling-short the gold futures. Instead, a powerful entity who can easily absorb the likely losses dumped this paper gold on the market with the goal of manipulating the price lower.

To be sure, hoards of “little guys” in the U.S. seem to understand the real truth.  The record buying of U.S. minted silver eagles – aka “poor man’s gold – during September and October bears witness to this assertion.  As the western Governments force the price lower with phony paper gold and continue to loot all visible sources of physical gold in order to meet delivery requirements, it seems that the “hoi polloi” is fighting back by  buying even more physical metal.  It’s not just in the U.S.  The  Royal Canadian Mint reports its silver maple leaf sales on a lagged basis but unofficial reports suggest that buyers there have been wiping clean the cupboard.  And a report surfaced out of Germany about a run on silver coins there by the public (LINK).

One can only wonder what the ultimate end-game agenda is here, because if these prices stick for awhile the majority of gold/silver mines globally will be forced to shut down. Many people believe this move in the metals is directed at the Swiss Gold Initiative vote at the end November.  But I believe  it’s fait accompli predetermined to fail.  I think what’s happening now is a desperate attempt to defer much bigger problems.

If signifying nothing else, yesterday’s election results in the U.S. were a de facto abdication of the Obama Government.  You can be certain that the shift in political control will do nothing other than take the country further down the road of ruin, but at least the little guy was able to express his disgust with a President who turned on those who elected him and reneged on every promise upon which he was originally elected.

The political and economic interests who are in control of the west are now exhibiting complete desperation to hold on to their power. And they are employing shock and awe methodologies that can only be described as financial terrorism – the financial markets equivalent of 9/11. This is what we saw when Japan surprised the world last Friday by announcing an even bigger QE money printing program. Not only is the Bank of Japan now monetizing 100% of all Japanese Government debt, it is buying up a not insignificant portion of Japan’s stock market. Shock and awe are what we are seeing with the degree of open fraud being committed by banks and corporations and by the unmitigated falsification of almost every economic report released by the Government.   But the country is starting to catch on this and yesterday’s middle class political voice, though helpless in initiating real change – was expressed.

I’ve always said that eventually China – or some consortium of countries led by China – would require that the U.S. open up its NY Fed vaults and Fort Knox and demonstrate to the world that it possessed – and held legal title to – the gold that it reports owning.  But I also have always expressed belief that the U.S. would start WW3 before being forced to reveal to the world what it has done with the 8,100 tonnes it supposedly owns.  The U.S. is burning furniture now in an attempt to defer its day of reckoning.  Unfortunately the last gasp will be war.

While I’ve been wrong about the ability of the U.S. to take the price of gold down this far, I have been largely correct for over 10 years now about how events would unfold.  With gold I’m not wrong on its eventual price – I’m just wrong on the path it takes and the timing of reaching its eventual price destination.  Let’s hope I’m dead wrong about the possibility of WW3.


12 thoughts on “They’re Burning The Furniture Now

    1. They’re not “selling” gold. They are suggesting they may TRADE gold for goods. I would love to see that because it would take the world one step closer to the full re-monetization of gold and further away from the dollar.

  1. some historical trivia about another example of “perpetual bonds”, like the argies were put into years ago.
    WW I is exactly 1 century ago, but the debt lives on.

    Ten years later, the bonds were refinanced by Winston Churchill into 4% Consolidated Loans. Facing the huge financial strains of the Great Depression, chancellor Neville Chamberlain used patriotism again to convert some of the “4% Consuls” into perpetual bonds, which give the debtor the right to never pay the principal as long as the interest is paid—which he cut to 3.5%. The government has been paying about £136 million a year to holders of the perpetuals and war loans

  2. The “Canadian Royal Mint”? How about the ‘Royal Canadian Mint’? And “it’s silver eagle sales”? The RCM does not mint “eagles” it mints the Canadian Maple Leafs, both gold and silver. Come on Dave. Get it together! lol

    1. Yep. My bad. That’s what happened when I write when I ‘m still in bed. I was thinking “Mapes” but wrote “eagles”

  3. Dave,

    where in the hell does that leave GDX, GDXJ and the mining stocks….if “the majority of gold/silver mines globally will be forced to shut down. “….worthless paper….please give us your insight.



    1. If mines shutter, the price of gold will be forced much higher by sheer demand/no supply. Juniors with real deposits
      will become invaluable.

  4. Dave, I think we may be seeing the actual start of the disconnect between the paper and physical price for gold and silver. German precious metal dealers report a huge run on silver and gold coins, with the ratio of buyers to sellers at 50 to 1.

    One of the US’s biggest primary dealers just issued the following; “Premiums for any previously placed purchases for silver eagles are NO LONGER VALID!”

    Get ready to pay much, much more over the “paper spot price” for both gold and silver.

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