Skip to comments.Jim Willie: Exposure of Allocated Gold Account Raids Will DEVASTATE the Major Banks
Posted on 08/10/2012 9:58:00 AM PDT by Renfield
-The recent rally in the USTBond 10-yield under 1.5% is a big danger signal
-Last week the jump came to the money laundering by a major global bank, next could be exposure of the artificial flight to USTBond safety, enabled by Interest Rate Swaps
-Another jump could be exposure of the big bank insolvency, covered up by accounting fraud
-A wild card jump could be exposure of the big banks diversifying away from the USTBond, dumping it, as they reveal their own collusion in lifting its value via derivative leverage
-A devastating jump will be the exposure of Allocated Gold account raids, which have left the major banks possibly over 40 thousand metric tons short of gold
-The result might not be successful prosecutions and legal entanglements for the banks so much as a mutual assured destruction of their systems that require faith and trust
-Gold is the true sanctuary, not the USTBond, and the Gold price is going toward $5,000 per oz
-The Gold price is at long-term monthly support, poised for a major move based upon more scandal...
(Excerpt) Read more at silverdoctors.com ...
Another buy gold add.
Yup. And I’m bullish on PM’s.
One thing I’ve always wondered -
If the people selling gold really believe what they say, then why are they so willing to take our “worthless” dollars in exchange for the gold that ~they own~?
If I really believed that gold was going to soar and the dollar collapse, I’d be in the business of buying gold, not selling it.
But that’s just me - what do I know?
Sellers buy from the mines or bar-wholesalers and sell to you for a slight uplift: say 2%.
But sellers don’t generally believe that PMs are going to soar. They get their 2% margin whatever the price, you see.
Whereas people who realize that the fiat system is going to crash are buying physical Gold and Silver. They aren’t selling it for paper currency.
Jim Willie is dead right about precious metals: unfortunately he is also a crazy conspiracy theorist.
According to his podcast on TF Metals: JFK is still alive and in a vegetative state in Greece, and that’s why his wife married Onassis. Oh boy.
The gold fiasco is real. A lot of gold paper being sold for gold that the seller doesn’t hold. That’s not tin foil hat stuff.
Unfortunately this guy gets into other areas that are pretty far out there. But that still doesn’t change the facts regarding gold (and silver).
Someone in this thread asked why these gold bugs would take our [soon to be worthless] dollars? One, if they are selling you paper, you probably won’t see the gold anyway. Two, most people in the upper reaches of the financial communities, private sector and government, simply can’t believe that there is next to nothing underpinning our currency and economy. They are literally incapable of conceiving business as usual not going on forever.
I *know* we are heading for a crash of biblical proportions. Yet, in the light of day, I want to shake my head and tell myself that I am letting my imagination get away from me. The scope of our mess is beyond the reasoning capabilities we all use in our everyday life. IOW, it just seems bloody unbelievable.
Because there is no business that calls itself a business that can just buy or otherwise come into ownership of an asset and just sit on it, hoping for appreciation. A gold reseller makes money by buying wholesale and selling retail, like any other retail business. Except the margins in precious metals are shockingly low. For example, if I go to APMEX right now (not the cheapest but a fine, reliable supplier with a good reputation and I am sure you have seen their ads all over the ‘net) with spot gold at 1620.50, I can buy a US gold Eagle for 1701.50 or sell one for 1659.50. IOW, they will pay $40 OVER spot for a gold eagle. Call it $1660. and $1701. a mere $41 spread between bid and ask, a mere 2.5%. How many resellers of anything could survive on that type of margin? (answer: very few. OK, maybe a giant like Wal-Mart with billions in gross revs)
Point being, PM resellers (just like NYSE floor traders) make MOST of their money just working the buy/sell spread. Now it is reasonable that they maintain an inventory that they wish to rise in price over time and it is also reasonable that they need to hedge that inventory in case of a market dump. The hedging (in the futures market) costs money, and, like all forms of insurance, very often expires worthless. So, reselling bullion is an incredibly thin business, razor thin. Yet...most bullion dealers post a buy price because it demonstrates their willingness to “make a market” in the item(s), which engenders confidence in their clients/customers. But for the most part, they are the bus driver at the front of the bus. They make money per transaction.
Incidentally, I sold 2 Eagles to APMEX about 4 months ago for $1760. each. So there you go. Gold hasn’t been to $1720 spot (what they paid me less an assumed $40 spread) since.
>>Another buy gold add.
What’s the price of Tungsten buggered up to now?
Did that Senator ever get his tour of Ft. Knox?
Is there really any gold left there?
Somebody asked me one time why I didn’t sell my gold. I said, “Why should I? If I sell it, the buyer will have my gold, and all I will have is a handful of worthless paper.” Simple.
The point of the article is not that people are buying/selling gold.
People buy/sell gold all the time. People buy/sell paper all the time.
The point is that some people have bought PAPER gold (which means that the banks PROMISE them the gold exists and the banks because they’re such swell buddies will HOLD THAT PHYSICAL GOLD IN TRUST FOR YOUR CONVENIENCE and charge you a measly token fee out of the goodness of their hearts).
Then the banks had some customers who weren’t satisfied with paper promises and who wanted REAL, HOLD-IN-YOUR-HAND gold.
The banks said “No Problemo” and took their cash and handed over gold bars THEY KNEW actually belonged to the suckers who bought “paper gold”.
Someday, somebody is going to buy real, physical gold and the bar number they get will be the same as a the bar number that the banks say they are holding in trust. (allocated gold).
Then the customer will know he’s being shafted because the banks basically sold him a gold bar he already owned.
This is a far worse scheme than the banks simply selling paper gold “contracts”. Although it is effectively a “short sale”, at least in terms of contract sales, there is visibility of the number of contracts, the terms, the expiration dates, etc.
In this scheme NO ONE knows how much of the “allocated” gold has been swindled, if any of it is covered by long contracts, none of that stuff.
Ditto. There is absolutely no way out of debt other than inflate our way out of it. We will not default, we will just make the value of currency worthless.