Special Guest Post: The Great Comex Paper Gold Dump, by "Gordon Gekko"

Longtime readers of ZeroHedge will recognize the name of  "Gordon Gekko". His presence on that site predates even that of Turd Ferguson and he's been long recognized as a valuable contributor there.

"Gordon" also has his own, personal site which can be found here: http://www.gekkosblog.com/ You should check it out. He doesn't post very often but, when he does, it's usually pretty good stuff.

An example is posted below. After reading it yesterday, I immediately fired off an email to Gordon and asked for his permission to use it as a guest post here at TFMR. He happily obliged. Please take the time to read and consider this important and well-written column. You might also consider forwarding it to all those losing faith or otherwise questioning the value of their physical holdings.

"The Great Comex Paper Gold Dump"

by Gordon Gekko

So, Gold is apparently “falling” again? But is it? Really?

 
Before we can answer that question, first we must ask - What is “Gold Price”? Even more significantly, why the hell is Gold and its price so important anyway?
 
So lets’ begin.
 
An Empire of Fraud and Deception
 
 
The US Government – operating today under the control of an international banking cartel/mafia – is running a global empire whose sole aim is to exploit the many for the benefit of the few. But because the people won’t be exploited willingly, you have to control them. Now, sure, you can use chains and whips like the good ol’ days, but then the slaves won’t be as productive and may even revolt if exploited too much. Indeed:

"None are more hopelessly enslaved than those who falsely believe they are free"  

--Johann Wolfgang von Goethe
 

 
So massive lies and deception such as – it’s a “free society” governed by rule of law, it’s a democracy, the government is there to serve and protect you, you have a right to privacy, you can be a Bill Gates or a Warren Buffet too if you just.work.hard.enough., etc. – are used to first sedate the people and then they are raped and pillaged using the biggest deception of them all – the currency. Whether it is secret surveillance on a global scale, wars based on false pretenses, luxurious summits, Bilderberg conferences, massive transfer of wealth from poor to the rich – all of that is enabled by paper money – the US Dollar. Ever since its Gold backing was removed (first internally, then externally) the dollar is nothing but a worthless piece of paper which can be printed (or created digitally) in unlimited amounts by the Central Bank, therefore enabling the government and people who control the banks to appropriate unlimited resources from the global economy (since the dollar is the world reserve currency) for their benefit. Due to mass ignorance on monetary matters (deliberately fostered since the education system and media is also under the government’s - and by implication the cartel’s - control), people normally don’t pay any attention to it and continue to work and provide valuable output in exchange for worthless pieces of paper (for a detailed treatise on the paper money/debt fraud and the role of Gold, please refer to other articles my blog).
 
So for an empire based on lies and deception, the biggest threat is if the lies start falling apart. If you’re wondering why a “superpower” like the United States is so threatened and infuriated by the disclosures of an allegedly low level employee, wonder no more for more than the technical details, it is the fact that they expose the LIES, and thus threaten their control over the slaves.
 
Imagine how they would feel if the biggest of their lies underpinning EVERYTHING was exposed?  Gold is the only standard against which the dollar’s value can be truly measured since all other currencies are unbacked pieces of paper as well (well, they are “backed” by the dollar, if that makes any sense). If the Gold price rises too much too fast, it would expose the worthlessness of their fiat franchise, the slaves will no longer work in exchange for it and which is why they need to keep it under control NO MATTER WHAT. This is why they have designed elaborate mechanisms in order to help hide the true Gold price. But, in the words of a true American Hero and Patriot, Edward Snowden:
 

Truth is coming, and it cannot be stopped.

 
What is “Gold Price”?
 
What you – and the world at large – refers to as the “Gold Price” today is actually the price of "futures" contracts traded on electronic "futures exchanges" operating in various countries, primary among them being the COMEX in the US operated by the CME Group and "regulated" by the CFTC.
 
So what are "futures" and what is "spot price"? As per goldprice.org:
 

Futures contracts, or just Futures, are standardized contracts for delivery (the seller delivers) or receipt (the buyer receives) some fixed quantity and quality of a commodity. Futures contracts are available for each month of the year. For example, a contract for delivery of December wheat can be purchased in May the year before.

The "Spot Price" (price of Gold for immediate settlement/delivery) - the price used as reference Gold price throughout the world today - is simply the price of the futures contract of the "most active month" (most number of transactions) trading on the exchange, with the month referred to as "spot month".

 
 
(For those of you familiar with the futures market fraud, you can skip the next 2 sections).
 
How Its Supposed to Work
 
Now, in theory, the futures price should accurately reflect the price at which one can obtain the actual physical metal since the futures contract is a legally binding contract to deliver the actual commodity. The exchanges have registered warehouses where the commodities with the requisite specs stated in the contract are stored to be delivered, should the buyer (remember this for later) choose to stand for delivery. A point to be noted here is that the futures exchanges allow trading on margin, i.e., you have to put up only a fraction of the actual contract value to trade, whether buying or selling (the amount of margin is decided by the exchange). If you're selling you can go "naked short" (sell a contract without possessing any Gold, only putting up a cash margin). So this type of contract trading on cash margin has a loophole in that a player with sufficiently deep pockets could overwhelm the market by introducing a large supply of contracts (buy or sell) causing panic selling or buying and unduly influencing the price to their benefit. Trading on margin facilitates this because for a big player putting up 5-20% cash margin is easy (even if it's in the billions), but procuring a large quantity of raw material, especially something like Gold, is rather difficult and subject to rules of nature. But the price manipulation can't last forever because at some point either you have to come up with the Gold (if you're selling) or front the full amount and take delivery (if you're buying) unless you choose to roll your position to another month. Now rolling over isn't without costs so if a player manipulates the price, it's usually for a short duration to profit from the price move and then they cover their position, at a profit of course. But the exchanges have safeguards against this in the form of position limits (no. of contracts bought/ sold at any given time) and also there are numerous regulations which obligate the exchange and its regulator to monitor trading activities and look for signs of fraud and manipulation. Hence normally such manipulation shouldn't be possible, and if it happens, is detectable and can be stopped.
 
So everything looks good, people are trading, real price discovery is happening, price manipulators are at bay, people are playing fair, Obama is bringing hope and change, there is freedom in the US of A, and everybody can live happily ever after.
 
How It Actually Works
 
Unfortunately, reality is a bitch.
 
Now, what if there was a sufficiently large entity - so powerful as to be able to control the exchange and its regulators - having access to unlimited money with vested interest in manipulating the price - not for a short term cash profit but for other motives and a longer duration. Would that be possible?
 
Think about it. But even if it's possible, why would somebody want to manipulate the Gold price? That too, for a long duration and not for a cash profit (because it already has unlimited cash). Who would want such a thing and what would they gain from it if not cash profits? Cui Bono? Does anyone/anything come to mind? Who has "unlimited cash"?
 
Yes, that's right - the Federal Reserve. Now the Fed is just a front - collectively it can be referred to as the banking cartel or banking mafia which includes entities such as JP Morgan, et. al.
 
These guys are sufficiently powerful and have a fairly strong motive in controlling the Gold price because Gold competes with the worthless paper currency issued by them. A rising Gold price signifies declining value and confidence in their paper money franchise. They have to protect it at any cost. If this sounds too conspiratorial, well, I only have one word for you: PRISM. For a detailed explanation of why this is the case, please refer to these articles herehere and here.
 
They exploit the following loopholes to achieve their objectives:
 
1. Most people trading futures end up NOT taking delivery. A majority are simply speculators interested only in profiting by betting on the price movements (and some hedgers who do not wish to go through the hassle of taking delivery) trading on margin. The bankers know this. Hence there are a lot more paper contracts floating around than there is real Gold. They are betting most won't bother and so far they seem to be right. Take a look at this extract below (via maxkeiser.com):
 

... COMEX continues to hold its place as the largest and most sophisticated meeting place for buyers and sellers to express their gold price opinions, in the form of bids and offers, on what the price should be. COMEX remains the beating heart of gold price discovery.

Gold futures contracts are referred to as "paper-gold" because the size of this market is said to be over 100 times larger than physical gold available...open interest on the COMEX, at the time of writing, accounted for over 85% of demand on the gold futures market, so COMEX receives the most examination here. In theory investors are able to take delivery of the futures contract on expiry, although few do, instead choosing to roll the contract...the fact remains that all the long positions on COMEX cannot be settled in gold.

 
2. As explained above (I suggest you read the whole article), Comex operated by theCME Group in the US is the primary futures exchange for Gold and is the trendsetter for Gold prices worldwide. They control the price on Comex and the rest of the world follows.
 
3. Since they (indirectly) control the exchange and its regulators (Crimex Comex and theCFTC), position limits don't apply to these guys. They're above the law. They can issue an unlimited supply of paper contracts whenever they wish to suppress the price and if required, can indefinitely roll over till the longs bleed dry. If you don't believe this, please explain how this happened.
 
Yes the longs can stand for delivery but most are heavily leveraged so few do. In a panic, even if it's manufactured, everyone bolts for the door.
 
 
4. If you have never taken delivery from the Comex, I suggest you give it a try. It's not easy. Even though the Comex is the primary price setting venue for Gold, the people in charge there have done their utmost to make it a huge hassle to take delivery. This is intentional. The promoters of Comex DO NOT want you to take delivery, but only gamble in their casino. If they win, great; if not, they can always pay you off in freshly printed casino chips (dollars) - just don't ask them for the Gold. If you did, the whole enchilada would come falling apart.
 
Disconnect Between Physical Gold and Gold Futures Price
 
But this manipulation is not without consequence and cannot go on forever, no matter how powerful they are. The bigger the manipulation, the greater the blowback. To explain things better, read the following (from one of my previous articles):
 

Anyone who has actually traded the Gold futures market for any length of time knows that this [manipulation] happens on a regular basis. So basically the government/Central Banks use the paper gold futures market as a price control mechanism for Gold (of course, they can't impose price controls on Gold overtly as it would reveal the lie - if Gold is a barbarous, meaningless relic why would you need to impose price controls on it?). But what happens when price controls are imposed on something? Shortages start to occur resulting in an even greater moonshot in price than would have otherwise occurred. A "black" market (which is actually the free market at play and depicts the true price of the commodity) eventually emerges where it sells at a premium to the official price. There are two reasons for this:

1. Buyers - aware that the commodity/good is available at a discounted price - beat a path to the door of whoever is foolish enough to sell it at the government mandated price. Availability at that price soon runs out.

2. The good becomes even scarcer as the costs of producing and selling it are no longer covered by the government mandated price. Aware of this, sellers withdraw from the market and demand ever higher prices for the good.

And remember: for marketable goods, the "out" is money, but the only "out" for money is a superior form of money. When the paper currencies become unstable, the only "out" is Gold so you can be sure there will be no lack of buyers, only sellers - and there is no upper limit to high it can go. Theoretically, the price will be infinity when no seller is willing to sell Gold in exchange for paper. You want to be "out" of paper before we reach that event horizon.

If the rigging in the futures market keeps continuing, the futures price at some point will decouple from the physical and become meaningless. This is exactly why you should use this opportunity to buy as much physical as possible at discounted prices while there are foolish sellers still willing to sell at the stated official (futures) price.

 
What’s happening in Gold futures market right now (and has been forecasted before) appears to be the beginning of “the disconnect” between “Paper Gold” a.k.a. futures and “Real Physical Gold”. Entities who:
 
a. Were/are solely in the game for cash profits and don’t understand the fundamental basis for buying Gold but ride the price trends in the futures casino
 
b. Have realized that the paper gold is nearing its end game and want be solely be holding the physical
 
c. Have been holding futures but are unable obtain physical Gold from the Comex
 
d. Need to liquidate futures positions to obtain dollars (for whatever reasons, e.g. funds which need to return money to their investors in dollars, morons going to dollar as a “safe-haven”, etc.)
 
are in the process of dumping paper Gold (including the fraudulent GLD ETF) en masse along with the bullion banks (ala JP Morgan) who have a vested interest in keeping the price low. This is what Andrew Maguire had to say recently regarding the physical market:
 

Just off wholesaler calls.  Most are too busy to talk at this time, but today (Thursday) will be the largest volume day this year and possibly 2 years.  Central bank purchases are almost certainly far in excess of paper sales.  We are so close to the marginal cost of production that my contacts are saying the gates are wide open here to purchase all physical that is available....

Continued paper market supply saw another + 45 tons sold into the rise ahead of Thursday’s fix and then in size directly post the fix.  These were immense amounts of paper gold hitting the market, yet there is absolutely zero physical gold for sale and nothing but buy orders in the wholesale market. 

We are below the true costs of production for both gold and silver and it makes a good deal of sense for the central banks to be taking all that is offered.  Fundamentally this will have a significant catch-up impact.

Needless to say we are getting reports of extremely large allocations of gold, but also far larger direct producer deals being struck outside the paper markets.  The one question is, just how long this paper market selling can continue to drive price when such a massive transfer of physical is underway?

(All emphasis mine)

 
 
There are strong hands and intelligent minds out there who know the truth and do not sell at every hint of a falling price. They care only about accumulating the physical metal – as insurance in case of system failure - not about short term paper profits. In fact, many of them will NEVER sell; only buy whatever the price as long as this fiat money regime lasts. That is why the price has been rising for the past decade even with heavy manipulation happening on the Comex. Moreover, the Comex doesn't operate in a vacuum. If the price is suppressed there, the buyers - aware that it is available at a discount - will flock there and demand delivery. If it can’t deliver, a break will occur in the prices being quoted on the Comex and the prices being quoted in the real world for the real metal as people dump the future contracts and try to find the physical elsewhere. This will render the futures prices worthless. By some accounts, the Comex is already under increasing pressure for delivery of the metal. So much so, that if you look at the Gold stocks inventory report published by Comex, they have recently put this disclaimer ON THEIR OWN warehouse stock report:
 

The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.

For questions regarding this report please email Registrar@cmegroup.com or call (312) 341-3370.

 
I suggest you call that number right away because if they don't know what's in their own inventory, then who does?
 
Of course they do realize the seriousness of the Gold situation. If they keep printing to infinity, the currency will eventually collapse against Gold. They are scared and desperate enough that they are thinking of using Volcker’s playbook of letting the interest rates rise figuring maybe that will keep the Gold price in check and the scam may continue. They just floated a trial balloon in the form of fed taper talk just to see how it might work. And boy, it doesn’t look good. Either way the economy is fried (which tells you why they are so interested in having laws and tools at their disposal which will help them control the populace – so they can perpetuate their power through an economic collapse which is sure to occur). And no, rising interest rates won’t save them because the amount of rise needed to stave off Gold is so high that it will probably kill everyone on the planet – either that or people dump the worthless dollars and move to a Gold based system. Basically, the world is going to have a debt jubilee with all the fiat currencies rendered worthless. He who has the Gold will make the rules.
 
The tail is wagging the dog right now. Nobody – NOBODY – in their right minds is selling the physical. This is all futures movement, which as pointed out above, maybe 100 times larger than the physical market. We have to go through this phase to get to the other side. Think of this as a cleansing process. The fake futures market needs to die before true price discovery can begin. But this process offers a great opportunity to those who recognize it (for a limited time only though). We don’t know how low the futures will go,but there will be a futures price below which the physical won’t be available. Even though gold is already below its average cash cost, we don’t know that level since paper speculators outnumber physical holders by a large margin, so the accumulators of the physical can keep getting the stuff for cheap as long as there is metal available. There is no single one defined moment of the beginning or the end of the disconnect. It’s already started happening on some scale in most countries. With so-called "premiums" hovering around 20-25% for a long time now, silver futures are already worthless for physical buyers in many countries such as India. Premiums on Gold have also soared in India, one of largest physical buyers, while imports and gold coin sales to the public have been practically halted:
 

India's biggest jewelers' association has asked members to stop selling gold bars and coins, about 35 per cent of their business, adding its weight to government efforts to cut gold imports and stem a swelling current account deficit.

 
Any guesses why that current account deficit is exploding out of control? That's right - in their greed, the Indian government printed too much local currency, and now they want to the people to be obedient little slaves and stop buying Gold! Bending over must be easier. Of course the "jewelers association" doesn't have a clue.
 
So, we have tumbling prices (yes, the Indian currency has fallen, but Gold has fallen more, so its gotten “cheaper”), yet no physical available, at least in India. Go figure. Soon this phenomenon will be seen in every country around the world.
 
Online Physical Gold Price Datasource – Real Gold Price
 
I’d like to first define what is “Real Gold Price”:
 

Real Gold Price is the price at which the Real PHYSICAL Metal is available for delivery to the buyer's own PERSONAL possession and is the ONLY ONE that matters. It is NOT the Comex Futures price.

 
Currently the difference between the two prices (futures vs. physical) is referred to as "premium" that you have to pay over "spot" (Gold futures price). But whatever the nomenclature, the fact remains that the paper Gold price no longer accurately reflects what you have to pay in the market to buy the metal. It’s becoming meaningless for people who want the real stuff. Hence, yours truly has created a reference database/datasource that will accurately track and record in real time the price of real physical Gold. The data is sourced from what the major Precious Metal dealers are charging buyers to deliver real physical Gold to their own possession. It is important to note here that this does not include dealers/suppliers who are running some kind of allocated/unallocated scheme because until and unless the buyers have the metal in their hands, there is no guarantee that the metal has not been sold multiple times over or if indeed it even exists. The supplier may be able to provide a lower price for "the physical" if they are running such a scheme (and given today's rampant fraud in ALL markets, it is more likely than not that most are).
 
Now anytime the price falls, there is available in real time what price the real metal is going for (I try to get the cheapest price for a given denomination, with the only condition that the dealer is currently shipping the item. Readers will have to help in this endeavor i.e. finding the lowest real price for different denominations). People will be fooled no more by prices of worthless paper contracts.  
 
For now, the prices are in USD and dealers are also mostly US based, but any dealer can be included as long as they are delivering on time and have price updates online. You can check out the website here:
 

Real Price of Gold  - http://www.realpriceofgold.com/

More details such as how the data is collected and displayed etc. are available on the site, but just to give a preview, this is how the charts look like:
 
gold_price_graph.jpg

 

 

premium_chart.jpg
 
 
The site tracks prices for a variety of gold product denominations. Here are what the current real world prices for those denominations look like:
 
gold_price_table.png
 
 
*Comex price for denominations other than 1 Oz were obtained by multiplying by the appropriate factor (pls see website for more details).
 
As you can see, everything is on a “premium”!
 
If you look at the charts data, you will see that the real price right now closely tracks the comex price with almost a fixed difference (represented by the rolling average). It is my opinion that as the futures market breaks apart, two things will happen:
 
1. The fixed difference will increase
2.  The patterns might diverge as well
 
Indeed, if you look at the screenshot below for the 5 oz product, the premium jumped from the day before even as the Comex price remained almost the same:
 
5oz_jump.jpg
 
 
Of course, the data collection has only started since 13-Jun-2013, so I will be learning alongwith you. I'm sure there will be many things to see for the raw data doesn’t lie.
 
The site is a version 1.0, so I’m sure there are many improvements/features that may be needed. Please feel free to email me whatever feedback or questions you have about the site and I will respond as fast as I can. If I get many questions, I will put up a FAQ. Contact info is there on the site.
 
I remember some technical analysts looking at the Gold price chart and declaring that Gold is now in a bear market. I fully agree. Because the chart they are looking at is, in fact, the Gold futures price chart, which will continue to be decimated. There is no chart out there for the REAL physical Gold price which will continue to be bought as insurance against the stupidity of man and as protection from the depredations of paper money producing Central “Banks”.
 
This empire of tyranny and violence can only be defeated by elimination of ignorance and deception and bringing out the truth – in EVERY aspect - whether it is mass state-sponsored surveillance or fake futures exchange prices. Hopefully this website will help in exposing the biggest fraud of our times.
 
_________________________________________________________________________
 
Some parts of this article have been included from “What is Real Gold Price?” section of the website, also authored by yours truly.  

Note: I realize some of the "premium" part is due to fabricating costs for the item, but how much  fabricating cost can there be for a simple bar or coin? And what is Comex selling? An unadulterated sea of Gold?

Also, some people are suggesting that these premiums are merely dealer profit margins. Sure, the profit margin is part of the premium, but is not the whole premium IMHO. Otherwise how do you explain a 20-25% premium in case of Silver (in many countries)? Surely it is not entirely the dealer's margin. Anyways, as I said, we only care about what price we can GET the real stuff, not some idealistic notion of a price.
 

179 Comments

Turd Ferguson's picture

CoT ratios

MODERATOR

The Gold Cartel net short position is now down to just 35,208 contracts as of last Tuesday. This represents approximately 109 metric tonnes of paper gold and a liability reduction of 85% from the pre-QE∞ level of 737 mts. Also the new Gold Cartel net short ratio is an astonishingly low 1.21:1. This means that for every 6 contracts that The Cartel is short, they are long 5. Read more here on the Spec side here: http://www.zerohedge.com/news/2013-06-28/golden-sentiment-rule-if-it-isn’t-chart-now-it-will-be-soon For the week, the Large Specs dumped another 1,870 longs and added another 7,670 new shorts.

The silver Commercial position continued to "improve" as well. The the commercials dumped 1,767 longs into the pending July expiration, they also covered 3,626 shorts. This leaves them with a net short position of just 4,093 contracts or 20,465,000 ounces of paper silver. Basically nothing and down over 95% from its pre-QE∞ peak. The silver commercial net short ratio is also at unbelievably low levels, coming in at 1.06:1. The Large Specs in silver continued to pile into the short side and are now nearly net short, for the first time that I can recall. (And keep in mind that this report is basis Tuesday.) This week, the silver Large Specs dumped another 969 longs while adding another 2,098 new shorts. This leaves them net long just 837 contracts!

Look...I know you're sick of hearing it...but this CoT positioning is simply incredible. WHEN prices are rebounding and flying higher, nearly every "analyst" will look back and say "well, we should have known this was coming based upon the way the CoT reports looked last summer".

Turd Ferguson's picture

And if you haven't yet, please read these

MODERATOR

Our pal, Andy, posted some very important stuff with Eric King yesterday. Please take the time to click both of these links.

This one is interesting as it covers the physical market: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/28_Maguire_-_Massive_580_Tons_Of_Gold_Purchased_In_Just_7_Days.html

But this one is the real doozy. This is the type of information that Andy covers every week for "Army" members in his weekly Commentary. As I've stated before, even if you're not a trader, you should consider joining the service simply for this weekly column. The insights Andy provides are simply invaluable. Join by clicking this link: http://www.coghlancapital.com/daytrades-application?ak=turd_army

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/28_Maguire_-_LBMA_Gold_Flight_Now_Threatens_Financial_System.html

RaRaRasputin's picture

Oh go on then :)

First (or third after the great Turd)

The childish glee never gets old ....

My daughter started her education young ;)

Spartacus Rex's picture

OMG, What The Hell Kind Of Vacation R U Taking TURD?

Sheesh! Pretty Soon You Will Be "Camping Out" Right Here. Hmm, wait a minute, did you bring marshmallows?

Spartacus Rex's picture

WAIT A MINUTE! This Is A ReRun! I Already Posted This!

Dagburn Typical Summer Re-Runs!

achmachat's picture

Spartacus

Dude! You have posted the entire Internet here. Entire articles!

You even post things that Turd links in his posts, do you even read his posts?

You actually posted this article on main street after Turd mentioned it and told us that he'd give it a guest post this weekend.

Gramp's picture

Good Stuff

Enjoying the Guest Posts! Thanks Guys!

Howard Roark's picture

Turd

Sure You want to go on vacation?

This will be an interesting summer. For sure. And with an winter that promises a lot.

Excellent guest posts and commentary from the Community.

Salut,

HR

Howard Roark's picture

I find

Some discrepancies between the Gekko post and Maguire interview to KWN regarding the origins of the manipulation on the gold price. Gekko says it´s the Comex, but Maguire says that´s wrong.

Am I reading right? 

Salut,

HR

Mr. Fix's picture

8?

What the heck, I couldn't resist.wink

zman's picture

Maguire

I really enjoy Andrew Maguire interviews, the only question I have after listening to his interview is, if physical metal is leaving London at double the rate of gold production coming in (and this has been happening for many months), and he says no one is selling gold into the market, where is the excess gold coming from to meet demand?

The math does not add up, so is all of that gold really leaving to Asia, or does some of it stay and get "stored" in London?

Also, the Gekko piece is excellent!!      

DeaconBenjamin's picture

French debt pile hits new record

 

Francois Hollande would be forgiven for having his mind on domestic issues today, with the latest economic news underlining the challenge he faces back home.

France's national debt has hit a new record high of €1.87 trillion euros, or 91.7% of GDP, the INSEE statistics office reported - up from 90.2% three months earlier. Paris is budgeting for the debt stock to peak at 94.3% in 2014, but with the country in recession there are growing fears that targets could be missed.

INSEE's report (details here) showed how French national debt has swelled, as a percentage of national output, since the crisis began:

French government debt, under Maastrict Treaty, to Q1 2013

French government debt, under Maastrict Treaty, to Q1 2013 Photograph: /INSEE

http://www.guardian.co.uk/global/2013/jun/28/eurozone-crisis-summit-youth-unemployment-deal

Turd Ferguson's picture

Keep going zman

MODERATOR

Where is it coming from?

Can someone help zman with this question....

Response to: Maguire
Mr. Fix's picture

More things that don't add up.

Okun's Brokun... Or Why Someone Is Lying

Something is way off: either the unemployment data is very much wrong and the real unemployment rate is far higher especially when normalized for the collapsing labor participation rate and the surge in part-time and temp workers, or the GDP calculation is incorrect and the economy is growing at a 4%+ rate. (It isn't). The scarier implication is that in addition to all other seasonally adjusted economic data points which have become painfully unreliable, daily Treasury tax receipts must also now be added to the docket of meaningless and corrupt data points. The question of just how the Treasury could explain a massive (and deficit boosting) cash discrepancy could only be answered if somehow the Fed is found to be parking cash directly into the Treasury's secret basement.

 

ctob's picture

@zman

Both Sprott and Maguire have been non this. Sprott has two white papers with multiple citations and quite simple math showing quite amazing deficits.

I'll give you a hint stockpiles are much larger than production ... its the only thing that can account for it.

Mr. Fix's picture

Where is all the gold coming from?

On his daily forum,  DayStar has hypothesized that the gold is being sold into the market from what he calls “ancient   hoards” that the  elites have stashed over a millennia. They are off the books, and may have been the results of stolen  stashes taken by military conquest. Jim Willie hypothesizes that they are cleaning out the “Roman catacombs”, which is his euphemism for Vatican gold.

Either way, it is being used to buy time so that the next system can be put into place.

The  elite will not squander real money for long, they know that an economic collapse is imminent, because they have been planning for it for decades, if not centuries.

The end goal is to steal as much wealth  as possible, not for the money, but for the power.

Something incredibly wicked is coming our way, and it is coming soon.

Strongsidejedi's picture

what if...

So, does everyone remember that CNBC story from a few months ago with Jane Wells at California Numismatic Investments in El Segundo?

The CNBC guys showed a drop off of some gold bars and coins to sell hundreds of ounces to the store.

Now, think about this scenario (lots of if's, but this is all just conjecture and is more hypothetical).

If the guy selling owned the gold personally, but wants to dump that gold.  Now, gold is down 15% from that time. 

If he buys back the gold now (just a few months later), he ends up significantly improved in his position at the cost of the wholesaler.

The Wholesalers and LCS guys must be getting squeezed hard right now.

At a $1240 price per ounce, the miners, refiners, and the mint must all be getting pinched.

So, I put to the board, how in the world does this price in anyway reflect true world action?

We're saying that the energy required to mint a 99.99% gold 1 ounce coin is less than the energy in 10 barrels of crude?

Seriously?

1 barrel of crude oil makes about 20 gallons of gasoline.  That's only 1 or 2 tanks of gas for one SUV?

WTF?

We're saying that for each ounce of refined US mint gold coinage, that it takes no more than 10 tanks of gasoline to do the following:

1.  get to the gold under ground.
2.  Get dirt out of the earth to the mill,
3.  Isolate the gold containing particles/ore from the dirt.
4.  Send gold particles to the refiner (how many miles from the mine to Johnson Matthey?)
5.  Refiner then burns down and melts the ore
6.  Refiner then creates bar
7.  Refiner sells to the bar and ships to Sunshine Mint (how many miles from JM to Sunshine Mint?)
8.  Sunshine Mint then burns the refiner's bar
9.  Sunshine makes the 99.99 % planchett for US Mint
10.  US Mint orders planchett from Sunshine
11.  Sunshine Ships the planchett batches (how many miles is it from Sunshine to the New York Mint?  Is this planchett batch sent by Brinks ground or air?  If air, how many gallons of jet fuel are needed to get to JFK and then drive it to West Point or whereever they stamp the thing?)
12.  US Mint gets the planchett (receiving)
13.  US Mint does the die
14.   US Mint then makes the proof or circ coin.
15.  Wholesaler places order
16.  Wholesaler ships from West Point to their store (LCS in LA is CNI? another 3000 miles?)
17.  Brinks picks up the coin at LAX and drives to CNI.
18.  CNI receives the coin, inspects, stores
19.  LCS orders from Wholesaler and then the coin is driven to the LCS.
20.  LCS opens for business.
21.  I drive to LCS.
22.  I drove to the vault.

Seriously people, are we REALLY saying that its only a few gallons of gas per step?

With all the flying and deliveries involved, do we really think that's only 20 tanks of gas to get through all those steps?

That has to be one efficient supply chain to get those 22 steps done in 10-20 tanks of gasoline.

Spartacus Rex's picture

@ achmach-ant

Aren’t you that little ignoranus who was running his mouth off yesterday?  See @ “and.. who reports in number of coins sold???”                     “entire Internet” Apparently quite small at your end of the web, Right AssHat? “Entire articles!” So sorry to tax your reading comprehension skills & attention span!  Gee, must have missed that on the SPROTT “main street”, but I sure didn’t miss your B.S. yesterday, so Go Pound  te-paki-sand-dunes-87.jpg
 
Mad5Hatter's picture

Attack Plan

will be ready 7/1 am, come heck or high water.

Erewenguy did a great job editing two sections.

Other sections in process.

Waiting to hear from occanltrvlr of other sections.

160 pages single line paced, lays it all out in readable English. Sweet!!!!

The attack plan is butt hurt the gold cartel, slam the mob boss, and liberate bullion for true price discovery, time to get that 100% plaintiff success rate back into serious play.

That_1_Guy's picture

Santa JS on Sprott money.

I posted this on the other thread.

Enjoy.

Guy

Off to the beach....

lamare's picture

Wall Street in for a "cyber attack"??

Just read the following article:

https://jhaines6.wordpress.com/2013/06/29/sas-offers-us-insight-as-we-try-to-connect-the-dots-concerning-the-snowden-story-and-the-debacle-this-present-for-the-nsa-thanks-sas-j

In light of the recent plethora of official news stories claiming to report “inside information” on Ed Snowden and the debacle his revelations caused the NSA, we have this quiet, diplomatically stated event:

https://www.cia.gov/news-information/featured-story-archive/2013-featured-story-archive/cia-launches-redesigned-website.html

I would expect a gradual but ever-accelerating campaign of news stories associating the CIA with activities building up to a constructive, straightforward, and detailed examination of the nation’s intelligence gathering capacity and capability in the not-too-distant-future. I’ve detected a pattern in all of this MSM reporting that suggests someone is trying to “take down” someone else.

Who that might be is anybody’s guess but I still have a tendency to value Jon Rappaport’s reporting as a view from the rim of this cauldron.

[...]

As implied in the article above, the U.S. Government is preparing for an attack upon the nation’s Critical National Infrastructure (i.e., “The Grid”).

http://www.technologyreview.com/news/429621/preparing-for-cyber-war-without-a-map/

Gee Whiz! Little family, who do you think might want to “take down” the U.S. Critical National Infrastructure?

http://www.dailytech.com/Chinese+Grad+Student+Details+How
+to+Attack+Americas+Power+Grid/article17951.htm

Oh yeah, here’s a look at his infamous thesis: http://www.sciencedirect.com/science/article/pii/S0925753509000174

Okay, people! Do I hear a drum roll? Come on, everyone! I know you guys can add it all up.

My comment (awaiting moderation):

Very interesting, indeed.

When you look at the current state of the gold and silver markets, they are at a point where a massive reversal appears to be about to happen the coming weeks. A very interesting detail is the gold position of JP Morgan:

http://harveyorgan.blogspot.nl/2013/06/andrew-maguire-physical-gold-leaving.html

[...]

So, JP Morgan apparently has a physical shortage of 92,722.51 oz of gold, which is quite a problem indeed. And that is not the only problem.

[...]

Physical gold inventory is leaving for Eastern shores at a massive rate. And if that weren’t enough, they now also got a problem with silver leaving for India

[...]

Adding one and one together, I would guess that it might be very convenient for JP Morgan and friends if the Wall Street area would suffer a massive power outage for some period, along with “coincidental” problems with local power back-up systems at the exchanges, such that the whole trading and book-keeping systems would crash because of a “cyber attack”, in such an imaginable way that even most records would have been “erased”.

This may be a far-fetched idea, but it *would* solve a lot of problems for our bankers….

I know it's just wild speculation, but then again, it *would* solve a lot of problems for the EE. So, I'm not saying this will happen, but it *could*. I guess we will just have to wait and see....

foggyroad's picture

Truth

"There is no chart out there for the REAL physical Gold price which will continue to be bought as insurance against the stupidity of man and as protection from the depredations of paper money producing Central “Banks”.
 
"This empire of tyranny and violence can only be defeated by elimination of ignorance and deception and bringing out the truth – in EVERY aspect - whether it is mass state-sponsored surveillance or fake futures exchange prices. Hopefully this website will help in exposing the biggest fraud of our times."
 
Thank You.
 
Ps. Please go back and H/T the Author of this fine Guest Post, not only is it polite, but so well deserved.
 
559 reads, 6 hat tips?
 
553 lurkers? 
russwinter's picture

FLAWED GOLD PRICE DROP ‘REASONING’

Gunfight at the Ok Corral, and Gold Price Drop "Reasoning."
 

http://winteractionables.com/?p=3959

DayStar's picture

RE: From Whence Cometh the Gold?

Mr. Fix, the catacombs and the ancient hoards may be only part of the solution.  My question is, how do they keep restocking on 90% monster boxes if they got cleaned out as they obviously did?  The stackers are not selling, and if even the distributors were cleaned out during that run in May, where did they come up with massive amounts of this antique 90% US currency when it was all sold out?  I can see where they can manufacture new silver eagles, but from whence cometh the 90%?  The only thing I can figure is that these guys knew they would need it back in '63 and bought when silver was $4 an oz and 90% was selling below spot.  They bought up maybe a few thousand tonnes of the stuff when it was dirt cheap and warehoused it and are bleeding it onto the market to make it look like there is supply when it's really about all gone.  That is the only thing I can think of that makes sense.  The massive importation of silver into India while they can't get gold and now into China, and yet silver continues to be dirt cheap does not bode well for continued supply.

The Sibyls say the grey haired prince [the NWO ruler?] will canvas the world looking for gold, but especially silver.  By that time it will be obvious that there is maybe an order of magnitude more gold above ground than there is silver.

FWIW,

DayStar

zman's picture

Where is the gold coming from?

ctob- "stockpiles"   Mr.Fix- "ancient hoards".

I have read Sprott's study on this subject, and his final conclusion is that gold must be coming from Western central banks,  and they must be running very low at this point.

I guess if we go with this theory, they are on borrowed time. The next question is, where is the silver coming from?   From production, but where else?

foggyroad's picture

The Prudent Bear

Uninsurable Risks

June 28, 2013 

http://www.prudentbear.com/2013/06/uninsurable-risks.html#.Uc8sMWbh_Zv

"Quantifying current Bubble risk is an impossible task. Global debt and securities markets easily surpass a hundred Trillion. Gross derivative exposures are in the many hundreds of Trillions. The now enormous Chinese and EM financials systems, in particular, lack transparency. The amount of global speculative leverage is unknown. The degree of global financial distortion and economic maladjustment will not become apparent until the next major period of market risk aversion and resulting tightened global financial conditions. For now, recent market gyrations support my view of precarious Latent Market Bubble Risks.

I’ll attempt to use some data to illustrate how Fed policymaking has greatly exacerbated already outsized market risks. As a crude proxy for “market risk,” I’ll combine outstanding Treasury debt, Agency debt/MBS, Corporate bonds, municipal debt and the value of U.S. equities – securities that fluctuate in the marketplace based upon perceptions of value, liquidity and risk. It is worth noting that “market risk” had inflated to $33 TN during the booming nineties, after beginning the decade at $10 TN. Importantly, the nineties saw a fundamental shift to market-based Credit instruments, with the proliferation of ABS, MBS, the GSEs and “Wall Street Finance” more generally. 

I have over the years argued that Credit is inherently unstable. The move to market-based debt instruments created an acutely unstable Credit system, instability that provoked a change at the Federal Reserve to a policy regime committed to backstopping the securities markets. For more than twenty years now, this new policy regime has led to an unending series of Bubbles, booms and busts, even more aggressive policy responses and only bigger, more precarious Bubbles. This is critical analysis that remains completely outside of mainstream economic thinking.

When Dr. Bernanke began his crusade against deflation risk back in 2002, “market risk” was at $29.7 TN. Extraordinary monetary stimulus (and resulting mortgage finance Bubble excess) was instrumental in market risk surging to $53 TN by the end of 2007, before dropping abruptly to $44.8 TN in 2008. During the past four years, “market risk” has inflated $16.7 TN, or 37%, to a record $61.5 TN. Perhaps more illuminating, as a percentage of GDP, “market risk” began the 1990’s at 182% and closed the decade at 323%. Post tech-Bubble asset prices had the ratio back to 284% by the end of 2002. By 2007, however, it had inflated all the way to 378%. In 2009 it fell back to 314%. It then ended 2012 at a record 392%. From another angle, over the past 10 years GDP increased $5.2 TN, or 50%, while “market risk” inflated $31.8 TN, or 107%. While conventional thinking subscribes to the post-2008 deleveraging viewpoint, I believe the data strongly support my re-leveraging and historic Bubble thesis.

Global insurance companies have come to believe that global climate change has made some locations “Uninsurable.” Extraordinary changes in the weather landscape have made areas so prone to potential catastrophe that risks cannot be effectively priced in the insurance market and reserved for by those writing policies. 

I will posit that years of central bank intrusion and market domination have made global risk markets “Uninsurable.” “Market risk” has ballooned precariously higher, with massive issuance of non-productive government debt and other late-cycle private-sector Credit excesses. Meanwhile, central bank liquidity injections have inflated global asset market prices, while inciting speculation along with a manic global search for yield. Distorted "Bubble" global economies are increasingly succumbing to the debt and maladjustment overhang, while Financial Euphoria has seen securities markets inflate into dangerous speculative Bubbles."-Doug Noland

read more..

click link above please.

Gramp's picture

The REAL News...

Mr. Fix's picture

Day Star & zman:

Careful planning!

The only scenario that makes sense, is that this has been planned for many decades. It is the only way to have the resources in place that so they can be used now, to facilitate the power grab that they are in the process of putting in place.

We know that we are in a “endgame scenario”, one that could have been envisioned at the creation of the Fed itself, 100 years ago.  We know that gold and silver have been manipulated  throughout the entire history of the United States monetary system, and I do not see any reason why they will change their agenda in that respect.

But they will have to change their modus operandi, and come up with a new, and possibly less covert means.

(Once the police state is firmly in place, they will have no need to perpetuate an illusion).

As the article states, they are obsessed with maintaining the value of their paper money franchise, because as long as they can create the illusion that still has value, they can buy hard assets with it, print money out of thin air, and convert it into real estate, such as farmland, buy foreclosures for pennies on the dollar,  buyout all of the gold and silver mines that are not under their control, and do it all with soon to be worthless paper.

This is why it would be worthwhile to sprinkle a little bit of gold and silver into the market right now, because they can still print trillions worth in paper, and buy more than they could with the gold or silver.

DayStar, I appreciate you pointing out the reoccurrence of “junk silver” being piled into the market.

This can only happen the way you say it could, meaning they are currently in the endgame, something that they have been  “saving up for” for many decades now.

We know that the economic apocalypse is a completely engineered event, and they have already pre-positioned the required elements to perpetuate the illusion that Fiat is valuable until the very end.

And as we say,

“this will not end well”.

foggyroad's picture

Listen to this uplifting peaceful compilation

It  will calm the Savage Beast, and will sooth the disquieted Soul.

It will take the Grump out of yer Rump.

Peace

:o)

csquared13's picture

GLD

GLD

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