Gold "Manipulation"

Wed, Jun 25, 2014 - 11:10pm

Ahh, it is good to be back.

I had a nice relaxing, electronic device-free, vacation over the last two weeks. I used the time to unwind, reflect, and attempt to pull back from the day to day grind. I used some of that time to read the book Gold Wars, by Ferdinand Lips, as well as the book Gold Cartel by Dimitri Speck, at least up to chapter 11. I hope to finish that book soon, but alas, work beckons . . . .

I have many questions, still, despite that effort and diligence.

First, let us all put things in perspective.

Jeffrey Christian is loathed as an anti-gold bug elitist shill mouthpiece for the banksters. And then there are those that simply hate him.

Let us also add to this discussion our former friend Trader Dan, who, formerly, penned useful articles, but has of late, taken on the mantra that gold is not manipulated.

In terms of perspective, I read another book that seemed to jump into my hands as I strolled past the book counter at LAX. Was it the bright orange cover? Perhaps. Anyhow, the latest book from the Freakonomics authors is called Think Like a Freak

I mention all three of these books, because each of them sets out in order, extremely useful facts, analysis, and a spectacularly useful mindset.

It is with this overlay that I offer up today’s post.

Let us all be clear on use of language. Specifically, I am referring to the word “manipulation.” There are pages of definitions, just type “manipulation defined” into any search engine, and voila, there you have it.

From Merriam Webster, here,, which I decided to use as the reference source because this was the dictionary I used in junior high school, I find the word “manipulate” is defined in use as a verb as follows:

ma·nip·u·late verb \m?-'ni-py?-?lat\
: to move or control (something) with your hands or by using a machine

medical : to move (muscles and bones) with your hands as a form of treatment

: to use or change (numbers, information, etc.) in a skillful way or for a particular purpose.

Full Definition of MANIPULATE

transitive verb
1 : to treat or operate with or as if with the hands or by mechanical means especially in a skillful manner

2 a : to manage or utilize skillfully
b: to control or play upon by artful, unfair, or insidious means especially to one's own advantage

3 : to change by artful or unfair means so as to serve one's purpose : doctor
— ma·nip·u·lat·able adjective
— ma·nip·u·la·tion noun
— ma·nip·u·la·tive adjective
— ma·nip·u·la·tive·ly adverb
— ma·nip·u·la·tive·ness noun
— ma·nip·u·la·tor noun
— ma·nip·u·la·to·ry adjective
See manipulate defined for English-language learners »
See manipulate defined for kids »
Examples of MANIPULATE

The baby is learning to manipulate blocks.
The mechanical arms are manipulated by a computer.
The doctor manipulated my back.
The program was designed to organize and manipulate large amounts of data.
He's always been good at manipulating numbers in his head.
As part of the experiment, students manipulated light and temperature to see how it affected the plants.
She knows how to manipulate her parents to get what she wants.
He felt that he had been manipulated by the people he trusted most.
The editorial was a blatant attempt to manipulate public opinion.
He's accused of trying to manipulate the price of the stock.

back-formation from manipulation, from French, from manipuler to handle an apparatus in chemistry, ultimately from Latin manipulus
First Known Use: 1834

exploit, play (upon)
Related Words
engineer, finagle, jockey, maneuver; beguile, bluff, cozen, deceive, delude, dupe, fool, gull, hoax, hoodwink, kid, shanghai, snow, take in, trick; intrigue, machinate, plot, scheme; arrange, contrive, devise, finesse, mastermind; cheat, chisel, con, defraud, fleece, gyp, hustle, swindle
Near Antonyms
botch, bungle, foozle, fumble, goof (up), louse up, mess (up), mishandle, muff, scamp

Understand what a transitive verb means:

A transitive verb has two characteristics. First, it is an action verb, expressing a doable activity like kick, want, paint, write, eat, clean, etc. Second, it must have a direct object, something or someone who receives the action of the verb.

Here are some examples of transitive verbs:

Sylvia kicked Juan under the table.

Kicked = transitive verb; Juan = direct object.

Joshua wants a smile from Leodine, his beautiful but serious lab partner.

Wants = transitive verb; smile = direct object.

Cornelius painted the canvas in Jackson Pollock fashion, dribbling bright colors from a heavily soaked brush.

Painted = transitive verb; canvas = direct object.

Alicia wrote a love poem on a restaurant napkin.

Wrote = transitive verb; poem = direct object.

Antonio eats lima beans drenched in brown gravy.

Eats = transitive verb; lima beans = direct object.

Pinky the poodle cleans the dirty supper dishes with his tongue before Grandma loads the "prewashed" items into dishwasher.

Cleans, loads = transitive verbs; dishes, items = direct objects.

So, “manipulate” as used in a sentence about Comex Gold, for example, as a transitive verb, would be something like this:

The banksters manipulate the price of gold on the Comex.

Manipulate = transitive verb; price of gold on the Comex = direct object.

As defined, then, the banksters are said to be “us[ing] or chang[ing] (numbers, information, etc.) in a skillful way or for a particular purpose,” by painting the charts.

Or, it could be that the banksters are, as Lips and Dimitri say in their books, “us[ing] or chang[ing] (numbers, information, etc.) [e.g., central bank gold] in a skillful way or for a particular purpose,” by participating in a rational business model whereby central bank gold is leased into the market to bullion banks [too big to fail banks like JPMorgan, etc.], which bullion banks act as intermediaries to gold miners, which gold miners then sell the leased gold generating revenue used to acquire equipment, test, and perform mining operations, following which the gold actually mined by the miner is returned to the bullion bank which bullion bank then returns the physical gold back to the central bank(s) from where it originated. Follow all that? It took awhile for me to get it, but that is the summation.

Let’s dig in deep to really understand this concept because it is CRITICAL. Remember, the central banks have huge stocks of gold. Basically, all gold ever mined is held somewhere, as opposed to having been consumed. Hence, to analyze gold and price, one must understand the concept that there are huge above-ground gold stocks, and this is important relative to the amount of gold mined in the aggregate in terms of annual mining output. Smart readers, like Spartacus Rex, would ask me now: Why?

Here is why: estimates vary, and no real precise numbers are available, but the central bank gold in total is measured in terms of DOZENS of years of annual gold mine output. This means that any central bank that leased out gold for purposes of affecting price can do so with abandon, because the amounts needed to be leased to affect price are but a small fraction of that which is held in storage. It totally makes sense now.

Even if paper gold represents leverage of 100:1, the central banks say “so what?! We can back that leverage with above ground stocks and there will never be a big enough run to catch us without enough supply!”

So, understanding this concept leads to the next: the scheme whereby bullion banks lease out their stored gold at a paltry rate, near zero, or as Mr. TF has found and discussed, below zero, in hopes of both earning a small profit from the leased gold, as well as the specific intent to influence gold pricing on the international markets for purposes of propping up the western fiat system.

Right there in the mix, naturally, are the too big to fail banks, the bullion banks. See, from my little understanding, the central banks do not have relationships with mining companies, nor do they trade futures directly. That business is done by the bullion banks acting as intermediaries between the central banks and the miners and markets. So, it goes like this: the central banks offer to lease some portion of gold to the bullion banks. It is but a small fraction of the central bank hoard. (As a side note, even if, as I believe, there is no gold in Ft. Knox, the scheme still works because it is all based on trust and paper gold inside a closed loop system. To the extent any actual physical gold needs to physically find itself leaving that closed loop, well, it seems there are snags in the banksters ability to gather a sufficient quantity. Witness Venezuela, Germany, etc. Also witness Libya who had their gold stolen. But for now, understand that the whole insider system is based on some actual hoard of gold, that does exist, is spread around the western banking system, in a form of a massive shell game, and will not collapse until every single bank vault is emptied and audited at the same time. Will that ever happen? Probably not, so this gives the banksters cover to move gold around, both on paper and physically, to perpetuate the scheme.)

The bullion banks agree to pay a paltry rate to the central banks in order to acquire a huge supply of gold, or alternatively get paid with a negative leasing rate, and take the gold (or paper gold, it matters not for this analysis) from the central banks. In exchange, the bullion banks give the central banks a promise to return the gold (or paper gold) to the central banks after a set period of time. So for now, let us just use one central bank, and one bullion bank to make this point clear. Imagine that the FED leases two million ounces of gold to JPM.

Now, we have an important lesson to learn here, and it comes from the teachings of the Freakonomics authors: INCENTIVES. One must understand the INCENTIVES of the participants, or one’s analysis is not likely to be accurate.

So, let us also begin to layer into our analysis our understanding of the incentive structure on the gold leasing scheme. The FED (our example of a central bank) has have two incentives to lease gold: (1) generate a paper profit on the balance sheet, and (2) flood the markets with supply of gold in order to depress prices of gold in order to prop up confidence in the western fiat banking scheme. The FED has ZERO incentive to NOT lease some of their gold. It makes perfect sense. So we know that with these incentives, there is NO doubt at all that The FED in our example leases gold and that as a result, market supply dynamics are assuredly affected by this gold leasing on a regular basis, if not constant, unremitting basis.

Now we come to the definition of the word “manipulation.” Is The FED (or other central banks) manipulating the price of gold? YES, a resounding YES!

The FED is using its gold to affect supply on the worlds markets. The FED uses their stored gold “in a skillful way or for a particular purpose,” namely, by leasing their gold, to increase supply and depress the price of gold. THAT is why the insiders are shorting!! Why would they NOT? But, to make this point, we must keep going and understand the INCENTIVES.

The bullion banks, like JPM, etc., have incentives, obviously. Profiting from the spread on the gold leasing scheme, risk free, is one, as is keeping alive the western fiat currency scheme is another. Said differently, what incentives do JPM and the other bullion banks have to NOT accept the risk free gold carry scheme profits? None, that’s what!

Let us explore the mining company incentives. Miners have huge incentives to accept central bank gold, offered to the miners through use of the intermediary bullion banksters. Miners need financing to exist, in the form of equipment acquisition and operations at a bare minimum. The bullion banks take the leased central bank gold and sell it on the open market. Here is what happens, and explains the HUGE sales volumes.

Dimitri says it like this: “The [bullion] banks sell on behalf of the mines the borrowed gold in the market. Then the mines use the sales proceeds for investments . . . in new mining equipment. These investments in turn enable the mining companies to mine gold. This they use later to extinguish their gold debt with the central bank. The mines thus receive financing that is denominated in gold instead of in currency. They [the miners] must pay back gold, not dollars . . . On the one hand, this hedges them against a falling gold price, but, on the other, they don’t benefit from a rising gold price. Since there is no dependency on the gold price, the risk of default is more predictable, and it is therefore easier for mines to get gold loans.”

What a revelation! Using our example, The FED loans gold to JPM, who sells it en masse all at once, both generating money for the miner and depressing the price of gold on the futures market. JPM earns fees from the transaction, thus creating the spread between the fee income earned, and the leased gold rate payment back to The FED. Later, the miner produces gold, gives it to JPM, who gives it to The FED, and the cycle is completed. When the gold is mined and returned to JPM, then from JPM to The FED, note how NONE of this supply reaches the market, but is instead backdoored from the miner directly to the central banksters. See the incentive structure now?

In this scheme, WHO BENEFITS FROM A RISING PRICE OF GOLD? Spartacus Rex would correctly say: No one! But why? Easy. The FED wants to suppress price, thus instilling confidence in the colored bankster paper. The bullion banks like the risk free spread, and want to keep that game paying in perpetuity. The miners, who, on the surface to a novice, like me, seemingly have a strong incentive to want a higher price for gold, but the miners actually have zero incentive for either a higher or lower price. They care not at all! Ignorant of the gold carry scheme, I formerly thought that a miner wanted a higher price, so that it could sell it on the market for more than the costs to mine it, but no, it is not like that at all because all of the gold that ends up getting mined has already been sold at low prices by the bullion banks, and the miner only cares about returning the physical gold quantity back to the bullion bank to extinguish the loan!

What a concept!

Dimitri and Lips both talk of the effect of gold leasing and its effect upon miners in their books; for a historical perspective, start with Lips’ book, as he comes at it from the perspective of an old school Swiss banker, while Dimitri fills in the recent history and uses a clearer, modern style. Dimitri’s book came out in 2013, while Lips’s book came out in 2001 or so. Both are required reading for anyone who really wants to be informed, as opposed to just spouting off about parroted main stream media lies or equally meritless conspiracy theories. It is really not a conspiracy at all; rather, it is just a natural, intended effect of the fiat currency system, as it is rational in all respects and explains everything we see here all the time.

Incentives say it all. Us poor little retail consumers have no effect at all. We collectively do not amount to enough to upset the supply / demand balance in the aggregate, and our efforts to stack are long term hedges against the insidious theft by inflation. I hope to have a complete picture by finishing the Gold Cartel book soon enough, then I can finish this little incentive lesson.

So, looking at this scheme, is gold manipulated or not?

I do have some remaining questions, though, and I want to lay them out for consideration by all of the wise readers:

Nowhere in Lips’ book does he mention the petrodollar. Why not? His analysis is incomplete at best, or misleading at worst. Did he not know? No way. He was an insider who HAD to know. So, did he intentionally leave it out? Why? What incentive does he have to do so? Why would he NOT talk about it?

Remember, let’s contrast what Lips spent hundreds of pages talking about, from the perspective of a Swiss banker, with what Rickards says today, even as recently as a few weeks ago in a guest post right here on tfmr. Rickards IS an insider. Clearly, by his own admission. He knows. Or is he lying? Why would Rickards lie about that? If he is lying about that, what else is he lying about?

I know some here loathe Rickards, as a duplicitous bankster. I am in that camp, sometimes, then other times I am not. My gut feeling is that anyone that was invited to war game a currency war with the CIA and pentagon is definitely an insider, and is almost certainly spouting a narrative fed to him by the elites for purposes known only to the elites and designed to manage our perceptions, such as confidence in the fiat currency scheme, or perhaps a transition to a new currency scheme or otherwise. Who knows for sure?

What is sure is that Lips and Rickards say different things.

As for the gold carry scheme, it works because of the large stocks of central bank gold. But what about silver? There is no central bank horde of silver. There used to be, but it got sold off gradually, at least that is what I recall reading from some sources. Secondly, miners do not exclusively mine for silver; rather, their mining is for many commodities, which are all consumed, and which by products include silver. So, does there exist a silver carry trade? Not that I know of. So if there is no silver carry trade, then why do gold and silver reflect similar price moves? If gold is being sold in masse, depressing prices, what is the driver for silver falling in masse as well in lock step with gold? Should there not be a divergence?

Additionally, since silver is consumed, the stock to annual mine production ratio and analysis are also not the same as for gold. Silver, by all accounts, is consumed in great quantities far beyond annual production rates. That means silver stocks, to the extent they exist, are being depleted, thus leaving bullion banks (assuming they engage in the silver carry trade, borrowing silver from some source, selling it for the miners, who repay the silver from their production, extinguishing the loan) at risk should there be a massive run on silver. Again, the only way to know that would be a simultaneous raid and audit on every single existing silver vault in the world.

Finally, what effect on world precious metals prices, and the gold and silver carry trades, will this recent China warehousing scandal have? It is clear that Chinese metal warehouse issued more receipts for metal than existed. They issued fake paper, and the holders of those fake paper warehouse receipts are going to have to take losses. When and where will this arise in the markets as concerns price? If the Chinese merchants did this fake paper scheme for copper and aluminum, how could they not also have done it for other metals like gold and silver, especially in light of the Chinese buyout of the London Metals Exchange?

Too many questions, not enough answers.

Anyhow, prepare accordingly.

About the Author


boomer sooner
Jun 25, 2014 - 11:15pm

Sitting in a tent at Wolf

Sitting in a tent at Wolf Creek Pass, Colorado and 1st!

Jun 25, 2014 - 11:26pm

Now how about those gold rehypothecators?

China State Copper Firm Chief Jumps to his Death Following Corruption Allegations: Report

Chairman of Tongling Nonferrous Metals Group, Wei Jianghong, died after falling off building in suspected suicide

The head of a US$2 billion Chinese copper producer fell to his death from a building, the firm announced on Wednesday, with a state-run newspaper claiming he committed suicide following corruption allegations.

The chairman of state-owned Tongling Nonferrous Metals Group, Wei Jianghong, died on Tuesday after falling off a building, the company said in a statement.

A string of officials have killed themselves in recent months, with speculation linking some to a crackdown on graft launched by President Xi Jinping after he took office last year.

State-run media said Wei jumped from a hotel owned by the company in Tongling, the city in the eastern province of Anhui where it has its headquarters.

The China Business News quoted a source as saying the incident might involve corruption since disciplinary authorities had initiated an investigation involving Tongling.

Tongling’s profits have declined in recent years due to the sluggish world economy and slower domestic demand, reports said.

Its net profit for last year slumped 38 per cent year-on-year to 573 million yuan (HK$721 million), according to an exchange filing.

Shares of Tongling, listed on the Shenzhen stock exchange, were down more than four per cent on Wednesday afternoon after the announcement, but its market capitalisation was still 12.7 billion yuan.

Tongling said authorities were investigating the incident and the board had appointed vice-chairman Yang Jun as acting chairman. It added company operations were normal.

In April the deputy chief of the government agency that fields grievances from citizens, Xu Ye’an, killed himself in his Beijing office although the details surrounding his death remain unclear.

State media also reported that Li Wufeng, deputy director of the government information department, “fell to death”, also in April.

Jun 25, 2014 - 11:28pm


III th

Spartacus Rex
Jun 25, 2014 - 11:48pm

Productive Vacation Cal...

However, some issues you need to consider:

1) Miners who must pay back "quantity" In Kind, are not concerned with "price" but COSTS to Mine / Produce. Costs indeed go up whenever the Fiat Currency is further DEBASED causing their costs of operation to rise.

2)If Central Banks or a Country's Stockpile of Gold do not actually Matter, then explain the collapse of the London Gold Pool, and Nixon being forced to shut the Gold Window in order to preserve America's little remaining stockpile of Gold against the onslaught of Fiat Paper Claims for such at the ridiculous price of 35 when de Gaulle sent his ships to redeem his claims?

3)Ask yourself, what do you imagine would happen to the fiat measured "price" if every American simply acquired a single 1 Ounce Gold Eagle this year, for wealth preservation/Defecation Hits The Oscillation Insurance?

32,150 Troy Oz. = 1 Metric Ton; 321,500,000 Troy Oz = 10,000 Metric Tons

Cheers & Semper Fi, S. Rex

Dr. P. Metals
Jun 25, 2014 - 11:51pm

My oh. My

All this fuss over a barbaric worthless yellow relic?

countries fall over it

heads fall off over it

entire industries are told to ignore it

Etc etc. makes no sense at all to even be discussing it really

Verus nemo
Jun 25, 2014 - 11:51pm

"Paul," on his YouTube channel, "belangp" has a nice video

in which he convincingly shows the mechanism that you describe, California Lawyer, and how/why it ties into the petrodollar arrangement. "Paul" is a freegold/FOFOA advocate but is quite independent-minded and doesn't completely agree with the freegold folks on silver (he saves in both gold and silver).

At any rate, here's one of his most recent videos in which he once again describes this complex mechanism and then weaves in an interesting analysis of the significance of declining GOFO rates towards the end.

The Gold Must Flow Update
Jun 26, 2014 - 12:10am

Welcome Back


Germany’s Missing Gold

The greater question — too complicated to get into here — involves increasingly clear evidence that, via paper contracts and ETFs, the international banking system is lending and re-lending physical gold reserves to keep gold’s price under $1300 per ounce.

by Terry Ponick, Communities Digital News:

One of the major problems in so-called Western democracies is the complicated machinery of duplicity that ruling oligarchs employ to keep the rigged monetary roulette wheels spinning. John Q. Public barely understands how he’s being played, and the Maven is often lost in the funhouse himself.

Take Germany and the small matter of just where its gold reserves are hiding. Many moons ago, the bulk of Germany’s gold reserves were parked, allegedly, in the Manhattan vaults of the U.S. Federal Reserve. Recently, however, the German government, apparently nervous about the existence of that gold, has been moving to repatriate much of it back to their own vaults. But by and large, that hasn’t been happening.

Read More @

Spartacus Rex
Jun 26, 2014 - 12:13am

@Spartacus Rex

Let me respond.

(1) if the duration of the loan is short enough, the fiat debasement risk relative to costs is minimized,

(2) I'm not sure what point you are making. The closing of the gold window etc., is extensively dealt with in Lips' book. The simple explanation is that closing the gold window effectively created a pure fiat dollar currency scheme, where before this closing of the window the dollar was partially redeemable for gold. Basically, the US defaulted and breached its promise to exchange dollars for gold. But, because the US was the biggest economy, and the dollar was used to balance world trade, economic reality dictated that the rest of the world just took it on the chin. The petrodollar concept seems accurate here, but Lips did not discuss it.

(3) while that sounds fun, the reality is that there is virtually no chance at all that any mass awareness of gold by the sheeple will ever take place, let alone lead to any great purchase of gold. I can count on one hand the number of people I have met in the last seven years that have EVER seen or held a gold coin, let alone owned one. Even when I show and tell them about my one ounce eagle that I carry on me at all times, they just kind of glaze over and always ask how much it costs. Fools. They just do not get the concept of something being valuable strictly because of its inherent qualities instead of being a paper promise of future delivery of value, that utterly depends upon a confidence scheme to perpetuate the lie of value so as to make it a tragedy.

Thanks for the questions. By the way, did you see I used your handle in the post? It pays to be persistent, no?

El Gordo
Jun 26, 2014 - 1:34am

I always feel more secure

when California Lawyer is in the house.

Spartacus Rex
Jun 26, 2014 - 1:47am

@ Cal

Re: “Thanks for the questions. By the way, did you see I used your handle in the post? It pays to be persistent, no?”

Your welcome, and yes let's hope so. Maybe with all the world wide fame you graciously just bestowed, I can parlay it into a free cup of Peet's somewhere, someday.


(1) the short duration of loan would depend upon the amount of gold leased, remember all of the easy low lying fruit has already been picked and it currently requires processing tons of earth to produce a single troy ounce of gold, which takes an enormous amount of energy, labor, as well as toll on the equipment being used.

2) Again, it would have been swell if on your vacation you had picked up a copy of G. Edward Griffin's book “The Creature from Jekyll Island” as such points out the flaws, fraud and trap of the System and thus provides the accurate “simple explanation/s”. When one grasps that currency is simply a Claim for Money/ Claim against the Money Stock, and America was hoodwinked by the Bankster Counterfeiters and Congress, with the Hocus Pocus Word Art “Fractional Reserve Banking” allowing them to fraudulently issue more currency/ Claims upon the Money Stock than actually existed (ergo Counterfeiting) it is an obvious foregone conclusion that the Money Stock would simply vanish into the Counterfeiters' pockets, and America/ns would be left holding the bag, and worthless pieces of Paper.

Thus one can grasp the total inevitable collapse of the Bretton Woods Agreement where each Country's currency was pegged to the fiat leveraged Phed Reserve Currency, and when Congress passed, and LBJ signed into Law, the Coinage Act of 1965, stripping even the Silver out of minor Coins, (due to the B.S.excuse about “Vending Machines” as if such were bottomless pits sucking the Silver Coins into a black hole and into a parallel universe) the Banksters could print “fractionally reserved” / leveraged currency domestically without worries of being caught short of Silver to redeem their fiat coupons in the U.S., and LBJ could launch the Guns & Butter Campaign whereby Rex got the “Gun” half, and shipped out on an all-expense paid cruise to the other side of the Planet, and the Free Sh*t Army got the “Butter”, in LBJ's “War on Poverty”.

Apparently the Free Sh*t Army suddenly developed a taste for french champagne, and the wives of Military Industrial Complex Bigwigs went apesh*t for french fashion designers, and de Gaulle called Bull Sh*t!

Got the Picture Now? Understand why the U.S. Debt was previously limited and thus stable at approx. 300 Billion for over a decade, Kennedy is assassinated, LBJ steps in, and the Debt Engine is ignited and cleared for Take Off?

de Gaulle calls the bluff and London Gold Pool collapses.

And the worst came when Jimmy “the Rat” Carter signed into law, the Monetary Act of 1980 allowing the Banksters to monetize even Commercial A**wipe, and leverage up to 100 to 1

Of course the BIS is now trying to enforce a 5% Capital Reserve (20 to 1 leveraged Ponzi) while the TBTF /J Banksters are pushing for merely a 3% Capitol Reserve ratio (33 to 1 leveraged Ponzi)

(3) Even though Americans and the Free Sh*t Army cannot see their own demise, the rest of the World, particularly China, India, Russia and the ME are not STUPID, and couldn't give a rat's a** about Charts, or B.S. Predictions by Edelson or Bo, and are acquiring /stacking PMs regularly month in and month out.

Again, read G. Edward Griffin's Book. It is literally a “page turner”

Cheers & Semper Fi, S. Rex

Jun 26, 2014 - 1:54am

Howzit Cal Lawyer?

That was a great explanation of the gold carry scheme which I am going to read again a couple of times. I would've never guessed that the miners aren't chomping at the bit for higher sell prices, to increase their bottom line but that explanation makes sense (as much as any other financial shenanigans do). However, wouldn't they want higher prices so their share values increase through demand? I realize that is a bit off topic from the carry trade but I think they would have incentive there.

Spartacus Rex made a good point with the costs which you rebutted, it seems few miners have had to close their operations in this recent downward trend.

Thanks for dropping the knowledge on me! Much appreciated! I hope that you were able to pull yourself away from the books long enough to go surf, snorkel, or suit up to blow bubbles in Hawaii Nei! Also hope it was magical Maui! Maui No Ka Oi!

Jun 26, 2014 - 3:08am


You sum up why I find so much satisfaction having become really serious about my garden this year. Along with the Rabbits and Quail. My first hatch of quail eggs was about 7 weeks ago and tomorrow (actually today) 10 eggs will be included in my breakfast.

I've been enjoing a Cantaloupe half or something from my garden with each meal for weeks. It takes time to learn this, but at no time EVER has so much information been available. Given by people that will show their successes and failures on youtube and elsewhere

Everyone that cares about humanity has a part to play and I'm encouraged by the wake up.

As always, thank you for a great post.

Spartacus Rex
Jun 26, 2014 - 4:25am

2 Funny & U Can't Make This Sh*t Up...

Texas Sheriffs Form Warrantless Checkpoints...

(R U Ready 4 This?)

in Guadalupe River, Searching Witless Inner Tube Riders!

"You ever heard of the 4th Amendment?" I asked, very loudly.

This seemed to take them by surprise and one of the sheriff's sheepishly replied "Yes, that's why we ask!"

"Good. No, you can't search nothin'," I replied."

Green Lantern
Jun 26, 2014 - 4:25am

Re: China Warehousing

Re: China Warehousing Fraud

It's been my contention for sometime that China has been rehypoethecating it's gold into it's own shadow banking system and some of it has been funneled into medical research.

This is what I'm talking about. China is not only leading the space race but advancing technology to battle declining fertility rates to ensure sufficient population for recruitment into the People's LIberation Army

Who wants to give it a try? Don't be shy.

Video unavailable

​I submit this as evidence that China will be the next world power.

Anybody listen to John Batchelor last night on China? Scary place.

El Gordo
Jun 26, 2014 - 5:17am

I often wondered

why gold miners did not just pay salaries and expenses "in kind" rather than in fiat, passing the price risk off to the recipient of their product. Apparently they do, they just have a middle man to handle the weighing and stacking, etc.

Jun 26, 2014 - 6:08am
Jun 26, 2014 - 6:24am
Jun 26, 2014 - 7:03am

Debbie does dishes

* Q: Why are Jewish men circumcised?

A: Because Jewish women don't like anything that isn't 20% off.

* Q: Why don't Jewish mothers drink?

A: Alcohol interferes with their suffering.

* Q: Have you seen the newest Jewish-American-Princess horror movie?

A: It's called 'Debbie Does Dishes.'

* Q: Why do Jewish mothers make great parole officers?

A: They never let anyone finish a sentence.

* Q: What's a Jewish American Princess's favorite position?

A: Facing Bloomingdale's.

* Q : What's the difference between a Rottweiler and a Jewish mother?

A: Eventually, the Rottweiler lets go.

Jun 26, 2014 - 7:27am

The P.M. investor's glossary

CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.

BROKER -- What my broker has made me.
STANDARD & POOR -- Your life in a nutshell.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW-- The movement your money makes as it disappears down the toilet.

INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.
PROFIT -- An archaic word no longer in use. [h/t RichL]

Jun 26, 2014 - 7:33am

Then and now

Johnny and Mark get into a fistfight after school.
Crowd gathers. Mark wins. Johnny and Mark shake hands and end up buddies.
2007 - Police called, SWAT team arrives, arrests Johnny and Mark. Charge them with assault, both expelled even though Johnny started it.

Jeffrey won't be still in class, disrupts other students.
Jeffrey sent to office and given a good paddling by the Principal. Returns to class, sits still and does not disrupt class again.
2007 - Jeffrey given huge doses of Ritalin. Becomes a zombie. Tested for ADD. School gets extra money from state because Jeffrey has a disability.

Billy breaks a window in
hisneighbour’s car and his Dad gives him a whipping with his belt.
1957 -
Billy is more careful next time, grows up normal, goes to college, and becomes a successful businessman.
2007 - Billy's dad is arrested for child abuse. Billy removed to foster care and joins a gang. Billy's sister tells State psychologist that she remembers being abused herself and their dad goes to prison. Billy's mom has affair with psychologist.

Mark gets a headache and takes some aspirin to school.
1957 -
Mark shares aspirin with Principal out on the smoking dock.
2007 - Police called, Mark expelled from school for drug violations. Car searched for drugs and weapons.

Pedro fails high school English.
1957 -
Pedro goes to summer school, passes English, goes to college.
2007 - Pedro's cause is taken up by state. Newspaper articles appear nationally explaining that teaching English as a requirement for graduation is racist. ACLU files class action lawsuit against state school system and Pedro's English teacher. English banned from core curriculum. Pedro given diploma anyway but ends up mowing lawns for a living because he cannot speak English.

Johnny takes apart leftover firecrackers from 4th of July, puts them in a model airplane paint bottle, blows up a red ant bed.
1957 -
Ants die.
2007- BATF, Homeland Security, FBI called. Johnny charged with domestic terrorism, FBI investigates parents, siblings removed from home, computers confiscated, Johnny's Dad goes on a terror watch list and is never allowed to fly again.

Jack goes quail hunting before school, pulls into school parking lot with shotgun in gun rack.
Vice Principal comes over, looks at Jack's shotgun, goes to his car and gets his shotgun to show Jack.
School goes into lock down, FBI called, Jack hauled off to jail and never sees his truck or gun again. Counsellors called in for traumatized students and teachers.

Johnny falls while running during recess and scrapes his knee. He is found crying by his teacher, Mary. Mary hugs him to comfort him.
1957 -
In a short time, Johnny feels better and goes on playing.
2007 - Mary is accused of being a sexual predator and loses her job. She faces 3 years in State Prison. Johnny undergoes 5 years of therapy.

Jun 26, 2014 - 7:55am

Pronunciation of aluminium

To the citizens of the United States of America from Her Sovereign Majesty Queen Elizabeth II

In light of your failure in recent years to nominate competent candidates for President of the USA and thus to govern yourselves, we hereby give notice of the revocation of your independence, effective immediately.

Her Sovereign Majesty Queen Elizabeth II will resume monarchical duties over all states, commonwealths, and territories (except Kansas, which she does not fancy).

Your new Prime Minister, David Camoron, will appoint a Governor for America without the need for further elections.

Congress and the Senate will be disbanded.

A questionnaire may be circulated next year to determine whether any of you noticed.

To aid in the transition to a British Crown Dependency, the following rules are introduced with immediate effect:

(You should look up "revocation" in the Oxford English Dictionary.)

1. Then look up aluminium, and check the pronunciation guide. You will be amazed at just how wrongly you have been pronouncing it.


2. The letter 'U' will be reinstated in words such as 'colour', 'favour' and 'neighbour.' Likewise, you will learn to spell 'doughnut' with out skipping half the letters, and the suffix '-ize' will be replaced by the suffix '-ise'. Generally, you will be expected to raise your vocabulary to acceptable levels. (look up 'vocabulary').


3. Using the same twenty-seven words interspersed with filler noises such as "like" and "you know" is an unacceptable and inefficient form of communication. There is no such thing as US English. We will let M*crosoft know on your behalf. The M*crosoft spell- checker will be adjusted to take account of the reinstated letter 'u' and the elimination of -ize.


4. July 4th will no longer be celebrated as a holiday.


5. You will learn to resolve personal issues without using guns, lawyers, or therapists. The fact that you need so many lawyers and therapists shows that you're not quite ready to be independent. Guns should only be used for shooting grouse. If you can't sort things out without suing someone or speaking to a therapist then you're not ready to shoot grouse.< /SPAN>


6. Therefore, you will no longer be allowed to own or carry anything more dangerous than a vegetable peeler. A permit will be required if you wish to carry a vegetable peeler in public.


7. All intersections will be replaced with roundabouts, and you will start driving on the left with immediate effect. At the same time, you will go metric with immediate effect and without the benefit of conversion tables.


8. The Former USA will adopt UK prices on petrol (which you have been calling gasoline)-roughly $10/US gallon. Get used to it.


9. You will learn to make real chips. Those things you call French fries are not real chips, and those things you insist on calling potato chips are properly called crisps. Real chips are thick cut, fried in animal fat, and dressed not with catsup but with vinegar.


10. The cold tasteless stuff you insist on calling beer is not actually beer at all. Henceforth, only proper British Bitter will be referred to as beer, and European brews of known and accepted provenance will be referred to as Lager. South African beer is also acceptable as they are pound for pound the greatest sporting Nation on earth and it can only be due to the beer. They are also part of British Commonwealth - see what it did for them. American brands will be referred to as Near-Frozen Gnat's Urine, so that all can be sold without risk of further confusion.


11. Hollywood will be required occasionally to cast English actors as good guys. Hollywood will also be required to cast English actors to play English characters. Watching Andie Macdowell attempt English dialogue in Four Weddings and a Funeral was an experience akin to having one's ears removed with a cheese grater.


12. You will cease playing American football. There is only one kind of proper football; you call it soccer. Those of you brave enough will, in time, be allowed to play rugby (which has some similarities to American football, but does not involve stopping for a rest every twenty seconds or wearing full kevlar body Armour like a bunch of nancies). Don't try Rugby - the South Africans and Ki wis will thrash you, like they regularly thrash us.


13. Further, you will stop playing baseball. It is not reasonable to host an event called the World Series for a game which is not played outside of America. Since only 2.1% of you are aware that there is a world beyond your borders, your error is understandable. You will learn cricket, and we will let you face the South Africans first to take the sting out of their deliveries.


14. You must tell us who killed JFK. It's been driving us mad.


15. An internal revenue agent (i.e. tax collector) from Her Majesty's Government will be with you shortly to ensure the acquisition of all monies due (backdated to 1776).


16. Daily Tea Time begins promptly at 4 pm with proper cups, with saucers, and never mugs, with high quality biscuits (cookies) and cakes; plus strawberries (with cream) when in season.

God Save the Queen.

Green Lantern
Jun 26, 2014 - 8:06am
Green Lantern
Jun 26, 2014 - 8:07am



Jun 26, 2014 - 8:44am

In spite of the pressure

In spite of the pressure on gold and silver, $21 seems to be a hard floor to break. Looks like lowly copper is leading the metals higher.

Jun 26, 2014 - 8:54am
Jun 26, 2014 - 10:03am

gold is money

Gold is money in this financing mechanism for the miners. As gold prices drop they get less bang for their ounces. Their profits can only come from above and beyond 'leased' gold which makes them debt serfs to these obligations. Hardly desirable to me.

Jun 26, 2014 - 10:07am

Fox News anchor Gregg Jarrett gets beat up by Police

Raw: Video Released of Fox Anchor Arrest

Jun 26, 2014 - 10:18am

charts off

Gold capped, but too strong to fall below 1306. Looks like a good day to work on the yard.

Jun 26, 2014 - 10:38am


I dont know Doc. There is some action today I can feel it here in the trenches (office).

Jun 26, 2014 - 11:23am

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 6/10

6/11 8:30 ET Producer Price Index
6/12 8:30 ET Consumer Price Index
6/13 8:30 ET Import Price Index
6/14 8:30 ET Retail Sales
6/14 9:15 ET Cap Ute and Ind Prod
6/14 10:00 ET Business Inventories

Key Economic Events Week of 6/3

6/4 All day Fed conference in Chicago
6/4 10:00 ET Factory Order
6/5 9:45 ET Markit Services PMI
6/5 10:00 ET ISM Services PMI
6/6 8:30 ET US Trace Deficit
6/7 8:30 ET BLSBS
6/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 5/28

5/28 10:00 ET Consumer Confidence
5/30 8:30 ET Q1 GDP 2nd guess
5/31 8:30 ET Personal Income and Consumer Spending
5/31 8:30 ET Core Inflation
5/31 9:45 ET Chicago PMI