Re the Ed Steer link:
caseyresearch.com
I can not verify if Ed Steer is correct and that the bullion banks (JPM and HSBC) are short 22,000.000 ounces of gold (1/4 of current year production). Ed provides a link to tradingcharts.com, unfortunately I do not know enough to interpret this data, and the link does not seem to be working for me. But Ed is a member of GATA and he has been playing with this stuff a long time, so until corrected, I will take his word for it.
My thoughts on this, assuming Ed is correct (comments welcome) are:
1. 22 milion ounces is a big number. At 950/ounce = apprx 21 billion dollars. Serious money, and this is a serious business.
2. It is highly likely that these are naked shorts as --
22 million ounces = roughly 748 troy tons. There are only 10 entities that have that much gold (or more) on hand per
en.wikipedia.org
and all are central banks except 2, the GLD ETF and the IMF.
3. Shorting means: these banks have promised to deliver or settle in cash for gold they do not own at a future date at a price lower than the spot price on the day the contract was made.
4. This on its face would appear to be a dangerous bet, unless someone has their back, the Fed or other central banks.
5. This would appear a prima facie attempt to control the spot price by selling gold now, for delivery later at a sharply lower price.
6. We know from Barts work that the ECB sells gold and buys gold in an attempt to destabilize the market. Perhaps its sales are coordinated with the bullion bank gold shorts, enabling them to cash out at a profit on a market depressed by the ECB.
see:
nowandfutures.com
nowandfutures.com
7. It would seem to me that this manipulation can continue as long as:
a. Market price is determined on futures markets. -and-
b. The backers of the bullion banks remain in business (and continue to want to manipulate). Assuming the backer is the Fed or other CB's, change in this behavior would require anything from government or CB breakdown to a change of policy caused by an enraged citizenry or elimination of the offending institution (see Ron Paul). -or-
c. Competition arrives in the form of other governments who want to purchase gold for their own reserves, and do it on the futures markets and TAKE DELIVERY.
There is evidence that both Russia and China are buying reserves, but purchasing from their own internal sources. -or-
d. The counter parties to the shorts decide to unify in terms of strategy and a substantial number of them take physical delivery. This would end the game in massive short covering (unless some "exception" is found to enable the bullion banks to escape their contracts (declaring gold ownership illegal?)).
8. This is a possible answer to BK's question as to why gold is not yet at USD 2k per ounce.
9. It irks me that this manipulation appears to be successfully continuing, however, if it fails or ends, the POG should react strongly, as if propelled by a compressed spring that has been suddenly released.
10. I have personally done some light diversification into both platinum and palladium, as both appear to be less likely "managed" for their role as money, as their historical role in that function is almost nil compared to gold and silver. In fact, this year, both appear to have performed better after the dip than Gold.
I welcome any additional thoughts or views on this topic as to the present and future of this manipulation and how it can be ended. |
