Why Gold Price Suppression Can NOT ContinueCommodities / Gold and Silver 2014 Jan 11, 2014 - 08:04 AM GMT
“Market data provider Nanex in Winnetka, Illinois, tonight produces proof that Monday’s smash down in the gold futures market was not a mistaken ‘fat finger’ trade but the product of a high-frequency algorithm trading program painstakingly designed to take the market down. Nanex’s report, with great charts, is here: http://www.nanex.net/FlashCrash/OngoingResearch.html ” www.gata.org 01/08/2014
“…I don’t see why they can’t just keep doing this. After all, with each smash it gets easier for them to cover their short positions.
“Exposing them by somebody standing for gold delivery which can’t be delivered, is the way, but seems less and less likely. After all, Germany asked for gold delivery and didn’t get it. Nothing much happened!” Private Communications to Deepcaster
The evidence that a Cartel (Note 1) of Central Bankers and Allies has been suppressing the Prices of Gold and Silver (so as not to have A Real Money Competitor, to their Fiat Currencies and Treasury Securities) has been building for years.
Indeed, the evidence is so overwhelming that it is increasingly making its way into certain Main Stream Media.
But the foregoing private communications to Deepcaster raise a Key Question. “Why can’t they just keep doing this?”
Many of us Gold Partisans have wondered the same thing, especially in light of the fact that Germany asked for its Gold back and did not get it.
But the Answer is Clear. Gold Price Suppression can not continue, which raises the questions “Why?” and “How much longer will it last?”
It can not continue indefinitely because available Physical Supplies are being drawn down much faster than Production plus “Scrap” can replace. We and others have noted the dramatic drawdown in Comex Supplies Registered (available) for Delivery. And depending on time and the Particular Market the spread between the Paper Price and the Higher Price for Deliverable Physical is often Quite Substantial.
Indeed, the “shortage” of Physical is already so substantial that Germany asked for its Physical to be repatriated from New York, and all they got was a Promise for seven years of Incremental Deliveries.
So given the foregoing evidence of Price Suppression, plus the Sovereign Nation of Germany’s Inability to repatriate its own Gold, what chance is there that the Price Suppression will end soon or ever?
Answer, a Good Chance of “soon.” Consider first The Challenge: every National (or Regional, as the Euro) Fiat Currency Printer in the World has an interest in attempting to delegitimize Gold and Silver as Real Money, by suppressing its Price. India’s Central Bank, after all, has (against popular sentiment) piled on Tariff after Tariff to slow the Importation of Gold.
But the Draw Down of Physical Continues, led by China, the World’s largest Importer and Producer. And China does not export Gold.
But One Key that the Price Suppression must end was Provided by another Communicant
“That’s a great question. Why can’t they just continue to do this? Perhaps they are loading up on physical at these reduced prices (most particularly Chinese interests are doing so) and then they’ll let the price go up?”
Private Communications to Deepcaster
China is clearly moving toward making a Gold-Backed Yuan the World’s Reserve Currency and is likely temporarily Complicit in facilitating the “low” current Prices so they can continue to Buy on the cheap.
But given the Physical Drawdown this can not last.
The German Repatriation Attempt Failure is a superb example of just how severe the Available Physical Supply Shortage is. (Germany was undoubtedly “leaned on” to accept Promises of a seven year Repatriation Scheme by its and the European Central Banks’ Central Bankers in the same way the US Taxpayer was leaned on to provide the Multi-hundred Billion Dollar Bank Bailout in 2008 – “The whole System will collapse unless you do it our way” is the likely [fallacious] “Argument”).
And the Regulators have proven themselves useless at best, and complicit at worst.
“MIDAS NOTE: So why and heck is it that someone doesn’t demand the identity of who pulled this trigger and call them out?
“What a lame dead regulatory/investigative world we have in the US.”
But the Reason the Price Suppression can not continue much longer despite Cartel Suppression attempts is found in the recent Headline
“One week into 2014 UK Royal Mint Runs out of Gold Coins”
“JBGJ understands that the main market for these coins is the Gulf and India (H/T GMS). Very likely the demand surge reflects Indian smuggling off take.”
China and “Retail” Investors in the Gulf, India and around the World are implementing an End Run around the Cartel’s Paper Price Suppression Scheme. Therefore, Expect more Delivery Failures, followed by Massive Launches up in Price.
The “when” can be answered by Monitoring the Markets and Physical Flows as Deepcaster’s Reports and Alerts to its Subscribers reflect.
No surprise then that even the “smart” Establishment Money and Opinion is shifting to a “Buy Gold” Perspective. Note The Gartman Letters’ Admonishment, and JBGJ’s correct observation:
“…we note the ‘reversal’ to the upside two weeks ago which still obtains even despite the ‘attack’ upon gold earlier this week when prices fell $30/oz. in a matter of moments. The fact that the weekly reversal in gold’s favour holds is impressive….as we watch gold buying continue at a heady pace in China and even too in India despite the latter’s government’s attempt to quell demand, we are impressed.
“…our propensity to act is rising.
The Gartman Letter
“While TGL is generally unpopular amongst gold friends, JBGJ’s observation is that the service has a pretty good buying record.”
And there is one more overriding Reason the Gold Price Suppression can not continue. Consider the Headlines and Introduction to Shadowstats.com 2014 Hyperinflation Report.
The Fed-led Destruction of the Purchasing Power of the World’s Reserve Currency, the U.S. Dollar, will leave one “Currency” left standing – Gold.
Extremely Difficult Circumstances in the Year Ahead:
Confluence of Economic and Systemic Crises Should Intensify
With Global Confidence in Dollar Rattled by Uncontrollable Fiscal and Monetary Excesses, U.S. Government and the Federal Reserve Have Limited Options to Address Panics
Heavy Selling of U.S. Dollar Remains Likely Proximal Trigger for Inflation Pick-Up
Developing Hyperinflation Would Push Ongoing Recession into Deep Depression
Physical Gold Remains Primary Hedge for Preserving Wealth and Assets
Nothing is normal: not the economy, not the financial markets, not the financial system and not the political system. The year ahead will be an extraordinarily difficult time, with a confluence of already-intensifying crises and likely panics pummeling the moribund economy, roiling the markets, and destabilizing the financial and political systems. With the federal government and Federal Reserve locked into their respective systemic-destructive fiscal and monetary policies, a related, continuing massive loss of global and domestic confidence in the U.S. dollar, should lead to an outright dumping of the U.S. currency in the global markets, setting the initial stages of a hyperinflationary great depression.
Hyperinflation 2014—The End Game Begins, No. 587: Special Commentary
Physical Gold and Silver in one’s Personal Possession (NOT in Bank Vaults) are the best Protection. Deepcaster echoes Jim Rickards observation, which we paraphrase, “Those who become aware late, will wake up one day and find there is no Gold available.”
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