Having 24 hours to consider yesterday's price smash, I feel compelled to share with you some of the conclusions I've drawn.
Remember there are two axioms in this "market witch" business:
- Only rarely do you use date and price in the same sentence. "$1600 by June" or "$44 by Labor Day" come to mind.
- Don't go around predicting the end of the world because you'll only be right once.
That said...and I say this with all sincerity...the desperation of The Bullion Bank Cartel seems palpable. I think the clue lies in that Bloomberg video I re-posted the other. In case you missed it, here it is again. All of the important information comes in the first 45 seconds or so and, remember, this guy Hoffman is a serious dude with serious, mainstream connections. Again, listen to what he says here: http://www.bloomberg.com/video/what-s-happening-to-all-the-gold-d33u1c23...
"If there ever is interest in gold again...and I'm not saying there is or isn't...that gold is just not there anymore."
And therein lies the crux of the matter.
The Bullion Banks and, by extension, their Central Bank Masters, are in a serious, irreversible jam. The gold is gone and the vaults are nearly empty. As the London vaults were depleted, it must have become evident that another source of gold was needed. Thus, the price raid of one year ago was ordered for two reasons:
- First and foremost, to squash Western investment demand
- Provide cover to drain the GLD to the tune of over 550 metric tonnes of gold.
IF THIS IS, IN FACT, THE CASE...and I believe it is...then we must expect The Bullion Bank Cartel to continue to apply as much pressure to price as they can for, as Ken Hoffman stated above, "If there ever is interest in gold again...and I'm not saying there is or isn't...that gold is just not there anymore."
Look at the price action of just the past few months. As price rallied from The Double Bottom of 12/31/13, The Banks stood ready to cover each bid but, without readily-leasable gold to leverage into paper, they could not hold price down. Price rallied into mid-March however and, just when it seemed ready to break out and re-start "investment demand", it was crushed back lower by over $100. It rallied again this month and, just after Comex open interest finally jumped higher Monday, it was beaten lower again.
Not surprisingly, the GLD, which began the year with an "inventory" of just 798.22 mts, saw it's "investment demand" increase, too. The Banks were able to come up with a little over 20 metric tonnes to add in early 2014 and "inventory" peaked at 821.47 mts on 3/24/14. In the days since, with the assistance of falling price, "investment demand" has waned again and "inventory" has plummeted back to 806.82 mts, now up just 8.60 metric tonnes YTD even though price is up over $100 or 8.5%.
So here's what I'm driving at...
IF I'M CORRECT about all of this...and everything from the anecdotal stories of "empty vaults" to the persistently negative GOFO rates tell me that I am...then we must expect The Bullion Bank Cartel to continue to wage war upon price for, as Ken Hoffman explained in December: "If there ever is interest in gold again...and I'm not saying there is or isn't...that gold is just not there anymore."
The Banks simply MUST keep price in check for fear of renewed investment demand.
Renewed Western investment demand will finally kill the LBMA/Comex, fractional reserve system. It will:
- Break The Banks as unallocated accounts are shown to be empty shells. Failure to deliver will destroy confidence.
- Perhaps more importantly, shine the light of truth upon the central bankers and politicians who have shamefully participated in and stood watch over the depletion of Western gold reserves.
Therefore, we must expect more and more days like yesterday as the increasingly desperate Banks fight to preserve their system. So long as you continue to stack and prepare, it will make for great theater. If you attempt to profit from this through the use of leverage, I'll try to help you along the way but you must be prepared for extreme and unexpected volatility, like we saw yesterday.
We are witnesses to the end of an era and a global financial paradigm shift. Be grateful that you have been blessed with eyes that see and ears that hear. Understand what is happening and trust your instincts. There is still time left to prepare accordingly. Use it wisely.