We Offer Client Education, Reliable Transactions And Fair Pricing.
Wednesday October 1st 2014

Insider

Archives

Physical Gold Supply Countdown

Print Friendly

It’s funny how little news is published when stock markets are rising – as if nothing could possibly be wrong.  Sure, the horrible headlines are still there; in my view, more plentiful, and widespread, than any time in our lifetimes.  However, as human nature tends to ignore bad news if at all possible, MSM “ratings” only weaken when they report it.  “All’s well” stories don’t garner ratings like death, misery, and calamity – but they sure beats those of “Cassandras” like the Miles Franklin Blog.

The perfect case in point is Europe, where 16 months ago the continent’s problems were supposedly “saved” because Mario Draghi said he’d do “whatever it takes” to rescue the Euro; i.e., PRINT as much money as possible.  Six months later, he was named Financial Times “Man of the Year”; sharing the same title bestowed on other world-killing money printers like Alan Greenspan and Ben Bernanke.  Imagine, being named the most important of the world’s seven billion denizens, simply for pressing the “print” key on your laptop – regardless of the massive inflation, debt, and societal breakdown it causes.  By the way, if you want to know just how “in bed” the MSM is with America’s “leadership”; consider that three of the most destructive Presidents in U.S. history – Bill Clinton, George W. Bush, and Barack Obama – have all won Time’s “Person of the Year” award – twice!

Twenty months ago, Greece’s stock and bond markets collapsed, en route to its second ECB bailout.  Queue “Goldman Mario,” and voila – four months later, Greek financial markets surged on his promise to PRINT unlimited money.  And how has Greek’s economy done since then?  Well let’s see; RECORD unemployment, plunging GDP, 157% debt/GDP, and calls for a third bailoutnext month.  In fact, Europe as a whole is experiencing record unemployment; while the supposedly “recovering” PIIGS are witnessing RECORD bond defaults, relentless worker strikes, and potentially – major political upheaval.

However, with global Central banks mimicking the “U.S. Model” of combining money printing – both overt and covert – with “PPT mechanisms” to support stock markets, bad news has been effectively “swept under the rug” for the time being.  No matter what the list of “since the 2009 lows” economic data continues to rise – such as corporate cash flow; or that the supposed economic “superpower” – i.e., America – is experiencing plunging infrastructure and retail spending, whilst its largest corporations continue to reduce orders and lay off workers.  So long as new money printing and “swap arrangements” hold up equities, all is well.  Heck, following last week’s reiteration of Fed and Bank of Japan QE programs, all the rage this week is Thursday’s ECB meeting – supposedly causing stocks to raise on expectations of an additional rate cut.  Even the MSM’s leading cheerleader, the New York Times, is begging Mario to take the already ridiculously low Euro funds rate – at 0.5% – lower; as clearly, real “recovery” is but a pipe dream.

Let’s be clear.  This is decidedly NOT 2000 or 2008; i.e., when equity market blow-offs were created by rampant, “irrational” speculation.  The public long ago left global equity markets – in large part, due to losses incurred in 2000 and 2008; leaving the vast majority of ownership in the hands of government and hedge fund algorithms.  However, the moral hazard created by relentlessly pushing stocks higher has created astonishing dislocations from economic reality.  Think about it – margin debt exploded in 2000 due to expectations of a “new economy” featuring endless wealth creation; whilst in 2008, the new paradigm of endless real estate appreciation created the same financial frenzy.  However, in 2013; with nothing surging except debt, real inflation, and interest rates – amidst abysmal GDP growth, following $10+ trillion of monetary stimulus, margin debt has reached RECORD levels…

SP and Margin Debt

Conversely, TPTB have undergone a relentless campaign – starting early this year – of at all costs, attacking the PAPER prices of gold and silver; i.e., the historical, global inflation barometers.  Ultimately, they will lose this game of financial chicken; but in the meantime, have created massive dislocations from traditional market relationships…

US Debt and Limit vs Gold

Fortunately, the ENTIRE WORLD is awakening to what is going on; most notably, those who intent on acquiring the world’s scarce supplies of PHYSICAL gold and silver.  In other words, the Cartel’s “footprints” have grown so large – and unconcealed – it’s become difficult for ANYONE to miss them.  To think that gold prices could have plummeted after the German’s were rebuffed in their attempt to repatriate gold; whilst Fed printing presses have moved “full speed ahead”; COMEX inventories plunged; Chinese gold imports doubled; and a slew of other nations admitting their gold, too, has been “invested”; is, frankly, incredible…

Gold Price vs Comex

Clearly, the above chart depicts a “physical supply countdown” that is getting dangerously close to ZERO.  Bill Holter wrote of this titled, “Going Out Of Business Sale!” of America’s remaining – if any – gold holdings; and frankly, there’s no other way to describe the insanity of PAPER prices falling whilst PHYSICAL demand surges to RECORD levels.  Similarly, Andrew Maguire wrote of the MASSIVE physical buying at the current, depressed levels; as well as the rapidly unraveling “leverage scheme” at the London Bullion Market Association, or LBMA.  In other words, the London equivalent of the fraudulent New York COMEX.

In fact, I spent much of last week describing Cartel fear of Thursday’s “first delivery day” for the COMEX October gold contract; which undoubtedly, is why PMs were attacked directly after the Fed reiterated its QE4 policy Wednesday afternoon.  As it turned out, it was disclosed late Friday afternoon that a whopping 7% of the ENTIRE COMEX REGISTERED GOLD INVENTORY was withdrawn, pushing it to a RECORD LOW of a measly 658,000 ounces – worth a measly billion dollars.  FYI, the COMEX registered silver inventories are also worth a measly billion dollars; and thus, I feel stronger than ever about what I wrote two months ago – i.e., such inventories could disappear at ANY TIME

Comex Warehouses 11-1-2013

With gold and silver prices trading well below their respective costs of production – as mining capex plunges into oblivion – the long-term outlook for physical supply has NEVER been weaker.  Meanwhile, whatever metal still remains in the Western Hemisphere is rapidly moving eastward; per the “New York/London to Switzerland to Hong Kong/Shanghai” trade corridor described in great detail over the past few months – such as this MUST READ article by fellow Denver-ite, Michael Kosares.

I’m not sure how much more clearly I can be that the “Achilles Heel” of the global financial system is TPTB’s inability to print PHYSICAL gold and silver.  The confidence game that is the Ponzi fiat currency regime is rapidly deteriorating; and all that naked shorting PAPER PMs accomplishes is a temporary “can kicking” – which will ultimately end catastrophically, and much sooner than most could imagine.  Once the rapidly awakening world realizes there’s no actual gold and silver behind the naked shorted empty promises, the rush for the scarce remaining supply will be as massive as it is quick.  We’ve already seen several PHYSICAL supply shortages since 2008 – including two this year alone (in January and April); and in my view, when the “Big One” hits, the opportunity to purchase real money at any price may be permanently ended.  And thus, I vehemently reiterate that the time is NOW to protect one’s assets.

Similar Posts: