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Golden Economizer has been brokering residential mortgage loans and real estate in Los Gatos, California since 1993. He has a B.A. in Economics from the University of Virginia. He is an advocate of free markets, sustainable lifestyle, limited federal government and an asset backed currency. He... More
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  • The Day The Silver Suppression Stopped – Tuesday November 9, 2010
    Tuesday was a landmark day in Silver Metal Trading in the United States. Trading action this day clearly indicates to those attuned to the Silver Market that the long term price manipulators have finally lost control over the price of Silver Futures Contracts on the COMEX, and thus over Physical Silver Metal as well. Who are these manipulators? The largest are undoubtedly JP Morgan Chase and HSBC who have recently been indicted in an alleged conspiracy to manipulate silver futures and options on the COMEX. Unfortunately, this will probably only result in a slap on the wrist for these powerful banks, if that.
    Fed Rescues Bear Stearns From Chapter 11 to Obscure Its Huge Silver Short Position From The Public Eye
    It is common knowledge by those more well informed on the recent history of Silver Trading on the COMEX that JP Morgan has been sitting on a Huge Short Position In Silver for years, about equal to a full years’ production from US mining, part of which was inherited from the “takeover” of Bear Stearns for mere pennies on the dollar in 2008. The more well informed of us recognize that the Last Minute Deal To Save Bear Stearns when no legitimate buyers could be found was more of a White Elephant, Gifted From The Treasury and Fed to JP Morgan rather than an actual corporate acquisition (Bear Stearns had a negative fair market value because of the reckless, losing silver short position, but was allowed to go under because they were threatening to start covering it), with the unstated obligation implicit that JP Morgan would safeguard and perpetuate the huge Bear Stearns Silver Short Position. This is certainly the reason why Bear Stearns was not allowed to fail and go through Chapter 11 bankruptcy, in which case their short position would have been made public and forcibly unwound by the courts causing silver to explode upward in price, thereby exposing the worthlessness of federal reserve notes.
    Since JP Morgan is also the custodian for SLV, the largest of the Silver Bullion ETF’s, any sane person would view this as an obvious conflict of interest. Shorting a vital commodity such as Silver should by all rights be limited to those with a valid need to hedge production, and a short this size is obviously being held by JP Morgan’s Own Proprietary Trading Desk, since the mathematical odds of them having enough legitimate hedging clients to justify a position of this magnitude would be astronomical. NAKED SHORTING SHOULD BE ILLEGAL by every player and market maker in Every Commodity and Every Security in Every Market as it amounts to NOTHING MORE THAN COUNTERFEITING.
    For those of you interested in why such a large position as this is prima facie evidence of manipulation of the silver market, I refer you to a recent article by Ted Butler , THE most respected authority in the field. He suggests that you file a complaint with the CFTC, and has a sample letter you might want to use or customize.
    So let’s have a look at the wild fluctuations in Silver Futures Prices on Tuesday at the COMEX. The short term contract for December delivery closed Monday, November 8th at $27.76, a thirty year record high.   On Tuesday Nov 9th, it opened at $28.00, and powered steadily higher throughout the day until it reached a new 30 yr intraday record high of $29.45 shortly after 1pm eastern time. And then a curious thing happened: After climbing 6% intraday to a new 30 year intraday record high, and completing a 65% runup since the close on August 23, just 2 ½ months earlier, it plummeted 10% from its peak, recovering slightly to close at $26.95, down 2.9% on the day. A ten percent swing in one day is unheard of in any precious metals market. Something was clearly up. So what happened shortly after 1:00 o’clock on Tuesday to cause Massive Panic Dumping Of Silver Futures Contracts on the COMEX? 
    Coin dealers and other Sellers of Actual Physical Silver Metal all closed up shop for the day at that point and refused to part with any of the physical metal at any price, until they could learn what had happened to justify this wild gyration in the futures price. A few large wholesale distributors started charging oppressively large premiums over spot instead, to discourage any physical buying from taking place. There was a great disturbance in the force. These reactions were perfectly understandable, since no dealer wanted to part with such a scarce resource that had been on such a steep, continuous, upward price trajectory for several months without having a clue how much it would cost them to replace their inventory over the next few days. So instead, they just closed up shop for the day, and sat on their assets while trying to figure out the market direction and the cause of the instability.
    Then the news that Margin Requirements Had Been Increased on the COMEX filtered slowly down to the interested silver traders and suppliers from the Commodities Exchange Members. No public announcement had been made, but CME group, owner of the COMEX commodities exchange had sent a memo to its members, suddenly Raising The Margin Requirements By 30% For Silver Metal Alone, and for no other commodity, IN MID TRADING DAY.   Not only was this unprecedented, but was a Major Milestone In The Silver Market, and its significance should not be underestimated. Gold margin requirements were left unchanged, but the Spillover Effect From The Stunning Silver Margin Requirement Increase also Caused Gold To Reverse Course From All Time Record High Levels of $1,425.50 at 1 pm that day to close at just $1400.60.

    Not only was such a move by the COMEX historically significant, but the exact timing of the announcement was highly noteworthy. Contracts for December Silver Delivery were trading at $29.45 at 1:05 PM when the announcement came down, and seemed likely they were on their way to breaking $30 by end of trading that day, a highly significant psychological level. Silver with a 3 handle would have been an entirely new psychological level of support, and would be instantly embedded in the minds of the dollar investing public, ESPECIALLY since the price had just broken $20 two months earlier on September 7th for the first time this year. Even the clueless talking heads on TV would have been forced to acknowledge it publicly. It is truly amazing how mainstream financial broadcasters have somehow managed to Ignore Silver’s Precipitous Climb of late, despite the fact that it’s clearly been the Best Performing Asset class for some time.
    This news was obviously the cause of the Precipitous Price Plunge, which obviously had been caused by speculators and investors dumping Silver Futures Contracts. The initial dumping was probably done by Frontrunning Speculators who quickly realized that Overextended Weak Hands would be shaken out by margin calls over the next day or two, followed by more dumping by the Actual Weak Hands who were either scared out of the market by this paradigm shift in policy, or didn’t have the cash to pony up to maintain their positions.
    So what caused this highly unusual move by the owners of the commodity exchange? And why couldn’t they at least have waited until the end of the trading day? My take is that the Big Bullion Banks, HSBC and JP Morgan, went whining to the fed to support their Huge, Losing Short Positions In Silver, and the fed twisted the arms of their good buddies who owned the commodities exchange to do their bidding. All these banksters CLAIM to want free markets, but certainly not when their own year end bonuses are at stake. The Few Surviving Big Banks KNOW that they are insolvent and their days are numbered. Of course it is also in the fed’s own interest to camouflage the runaway commodity price inflation their Out Of Control Money Printing is already causing, and to hide the ever more rapid deterioration of the federal reserve note’s purchasing power from the public.
    What no one has mentioned is that suppressing the silver price over the long term takes a supply of physical metal to sell into the market. This recent price explosion tells me that the Secret Stockpiles of Silver that the manipulators have been using to Suppress the Silver Price over the years have now been exhausted, overwhelmed by Worldwide Investor Demand and a multitude of new industrial uses. Years of price suppression has caused many mines to become uneconomic to the point that most of the world’s silver production is now the by product of base metal mining.
    The Crybaby Bullion Banks are Such Sore Losers, they whined until they got the commodities exchange to change the rules for them, not just in mid game, but in mid trading day. This was obviously devised to cause panic selling. How effective will this move be? Who will benefit? Who will lose?
    Well, Maxed Out, Overextended Speculators on Margin forced to liquidate during Silver’s Spectacular Climb will certainly be penalized. And the Big Silver Shorts, Naked Silver Shorts, All Silver Shorts will certainly benefit – at least temporarily. Those shorts who managed to cover during the brief period of speculative and margin call dumping will get a short term windfall. But then what? I’m expecting Silver To Resume Its Climb. Nothing has changed fundamentally. The can has been kicked a little further down the road, that’s all.
    Demand for Silver Metal is now global and India and China are the largest consumers. India’s consumption is up 500% this year, and China’s is up 400%.  The Chinese government legalized the private ownership of gold and silver bullion two years ago, and ever since have been running aggressive television advertising, urging their citizens to get their savings into bullion investment coins and bars. This is an easy sell in China, where the cultural affinity for precious metals is already strong, and the pent up demand after years of private ownership being illegal is considerable. Bullion investment coins as small as three grams are available at every post office in China. And if/when the Chinese government/central bank finally decides to establish a bullion backed currency, it will give them a built in domestic supply to confiscate and add to the government coffers.
     The uses of metallic silver are expanding every year. It’s in everything around you, computers, cell phones, flat panel TV’s, switches, Prius batteries, polyester cloth and most of it can never be recovered as scrap.
    Déjà vu – Commodities Exchange Tighten Silver Margin Requirements, Sinking the Hunt Brothers
    When the forerunners of the COMEX raised the margin requirements for silver futures on January 7th, 1980, it was the beginning of the end for the Hunt Brothers’ fortune. It was said that the Hunt Brothers, in cooperation with the Saudis, had already managed to corner about 35% of the above ground silver market, causing the futures price to peak at $48.70 an ounce, the All Time Record High Closing Price. After the sudden, unexpected change in margin requirements, the price dropped in half in only four trading days. The Hunt brothers were already over leveraged, and when the Saudis pulled out of the deal, they were ruined. This was following a period of excessive over printing of the US dollar in the 70’s, quite similar to the one we are experiencing today, and I suspect the fed and treasury were culpable in the sudden change in margin requirements that ruined the Hunts. Gold and silver going parabolic made the monetary policies of the fed at that time look bad. The Recently Fiat Federal Reserve Notes were being exposed to the light of day for what they really were – Unbacked Pieces of Paper that had Completely Failed as a Store of Value – arguably the most important function of a currency. Without this capability, federal reserve notes would only be useful as a Medium of Exchange Substantially Superior to Barter, but had been Exposed as Useless for Long Term Savings, or as a Conduit for Long Term Contracts, crucial to any economy. Legal Tender Laws prevented anything else from being used, and it was illegal to demand payment of any contract in bullion.
    Navigating Today’s Silver Market in the Aftermath of Margin Requirement Changes
    Today, the Overextended Long Speculators in Silver hold smaller positions than the Hunts. They will be forced by the exchange to liquidate positions to meet the new margin requirements, and in a few days normal trading patterns will resume. Silver Will Resume Its March, upward and onward, unobstructed by the manipulators who are now out of ammo, and trampling on the Bullion Bank Short Conspiracy along the way. Tuesday, November 9, 2010 was The Day They Fired Their Last Silver Bullet.
    The Biggest Silver Consumers in the world, China and India, will be largely unaffected, and will see this as a buying opportunity, as will Smart Investors Worldwide. Long Term Silver Investors can smell blood in the water, and they want to eat the Big Bullion Banks for lunch. They will be holding and adding to positions for the most part. Most industrial demand for silver is highly inelastic as well, so the steady rise in price will have little effect on industrial consumption.  As the silver price continues to rise, silver jewelry will become trendy, and will no longer be looked down on as junk jewelry. The Coming Price Increase of Silver Will Cause an Increase In Demand For Silver Jewelry. This may be counterintuitive, but I believe it will come to pass.
    So have we truly seen an end to Thirty Years of Silver Price Suppression? If the Suppressors of Silver are really out of Silver Bullets, are there any more hidden bombshells left in their arsenal? Well, margin requirements could still be raised on the COMEX, again and again until they reach 100%. Then they would be completely out of those howitzer shells, but I believe future raises in Silver Margin Requirements will be less and less effective as Silver Speculators are now expecting them, and thus will be less vulnerable and overextended. It would be a slap in the face to the Whiny Silver Suppressors if they managed to finagle another increase in margin requirements, and it resulted in little or no panic selling. 
    What about more Naked Shorting? Well, this would be a Desperate Last Ditch Measure By the Bullion Banks, with the risk of getting caught with unlimited losses on an increased short position as Silver Prices Continue Steadily Upward, paralleling the increases in the money supply as more and more unbacked dollars are continually printed. But the bullion banksters don’t really care because they know that their Uncle Sammy and Daddy Bernanke will keep funneling them more worthless paper federal reserve notes to cover these positions in a pinch. After all, it costs them nothing to print, and these spoiled stepchildren of the fed are officially too big to fail now that the global economy is in such a precarious position, right? So, the next time that the manipulators do a planned take down the equities markets as they did in 2008, you can expect to see a bunch more Naked Shorting By the Bullion Banks in tandem with it, just like in 2008. So just be careful not to get caught out on margin, or you could be shaken out of your speculative long position for a loss, instead of being able to hold on for a year or so until Silver Continues Its Inexorable Climb To The Stars. Holding Physical Silver and Gold is the way to protect your hard earned savings from the Vicious, Unprincipled Manipulators of Markets and Dastardly Dilutors of Currency, and Silver Is Far More Undervalued Than Gold at this point in time.

    Disclosure: No positions
    Tags: SLV, SIVR, CEF
    Nov 11 8:18 PM | Link | Comment!
  • Which Is A Better Buy Today - SLV or GLD?

    Answer: they’re both great buys.  Both gold and silver have been on a tear for nearly two months now. But if you are choosing where to deploy capital today, how would one choose?

    Let’s look at the short term technicals, starting with the 20, 50 and 200 day EMA’s of GLD.

    GLD Closing Price 10-15-2010

    Since GLD closed at $119.78 on August 23rd, 2010, it is up by 11.6% as of its Friday, October 15th close of $133.68, a nice gain in less than two months.

    Its closing high on Friday is currently 3.0% above its 20 day EMA, 6.4% above its 50 day EMA, and 14.4% higher than its 200 day EMA.

    What is striking about this chart is seeing the green SLV price line soaring above GLD’s price and all its EMA’s.

    Next, a look at SLV and its short term technicals.


    SLV Closing Price 10-15-2010

    Since SLV closed at $17.61 on August 23rd, 2010, it has climbed a spectacular 34.9% as of its Friday, October 15 close, an annualized gain of 277%!

    Even SLV’s 20 day EMA soars above GLD’s price line.  Is SLV too toppy, we might ask?  Let’s check the technicals and see.

    It’s closing high of $23.75 on Friday, October 15th was 7.7% above its 20 day EMA, 15.5% above its 50 day EMA, and 29.6% above its 200 day EMA.

    I would have to say from looking at the moving averages alone that SLV is on a trajectory twice as steep as GLD, making it a far better buy in the short term.

    Fears that the fed will announce a massive QE2 in early November are probably already baked into the cake for both GLD and SLV, and if they suddenly are overcome with an urge to change to a more responsible monetary policy, both GLD and SLV could take a short term hit, with SLV likely to take a bigger hit, but my money is on more irresponsibility.  The good news is that the long term fundamentals for both GLD and SLV are extremely strong, so in the highly unlikely event that the market takes the next FOMC announcement as a shift toward more conservative monetary policy, you should be able to safely ride it out in either ETF.        


                                        Disclosure: No positions
    Oct 18 3:51 PM | Link | Comment!
  • America Should Open Its Vaults and Sell Gold - What gold? A response to the former Assistant US Treasury Secretary
    October 15, 2010

    This article was originally published in the London Financial Times by Edwin M Truman, former Federal Reserve economist and former assistant U.S. Treasury Secretary. I added a few thoughts of my own.

    Chris Powell of writes “For years Truman has been turning up at the center of the gold price suppression scheme, but GATA and its supporters might agree with him in principle on this one, insofar as getting central banks out of the gold business is the first step toward a free market in gold.”

    When I ran a google search on “No Gold Left in Fort Knox”, I got 275,000 results.

    America Should Open Its Vaults and Sell Gold

    By Edwin Truman
    Financial Times, London
    Tuesday, October 12, 2010

    The original article can be found here:

    or google search:  Edwin Truman gold

    Gold is back in the news. Its price is soaring in what some analysts say is a reflection of a weak economy and a lack of confidence in government policies. (Stating the obvious) Naturally, investors are looking at a new sure thing in the expectation that prices will continue upward. (Subtly criticizing gold investors by calling it a “sure thing,” and insinuating that gold is in a bubble, with no supporting facts) My advice to the US government, however, is that this may be the best time -- to sell. Doing so would help President Barack Obama and Congress reduce indebtedness, at little cost. (If the dollar price of gold WAS ACTUALLY at a multi year peak, it might be the best time to sell, but that is clearly not the case. Only a return to sound fiscal and monetary policy by the federal government would cause that to happen, and what are the chances that politicians will suddenly turn honest? Also, the entire REPORTED gold supply of the United States Treasury and federal reserve would only bring in less than $400 billion at current prices. The fed creates that much currency for free in two seconds to spend on needless foreign wars, bailouts for its cronies, stimulus that doesn’t create jobs, and Mrs. Obama’s 20 Whitehouse staffers (servants). Not to mention, the US ACTUALLY OWNS ZERO OUNCES OF GOLD BULLION as reported by the Reagan Gold Commission in 1982. It is all owned, however much is now left, by the federal reserve as collateral for the national debt.)

    It is an article of faith in bullion markets that the US will be the last country to dispose of its gold stock. (Idle speculation to cover the fact that it’s already been disposed of) For 30 years it has had a no-net-sales policy for reasons ranging from resistance by US gold-producing interests to concerns about the international monetary system. That assumption may remain plausible. Yet the administration has an obligation to re-examine its policy. (What policy? You can’t sell what you’ve already sold.)

    The market price of gold has risen for more than a decade (and the dollar now buys 65% as much goods and services as a decade ago, so what’s your point?) propelled by low interest rates, the hype of the bullion dealers (holding large inventories) (Hype, what hype? Inventories? What inventories? Those are the LAST reasons that people are buying bullion today at these prices), and no doubt the normal amount of fraud and misinformation accompanying asset price bubbles. (blah, blah, blah Can you provide a few facts, please?) The Financial Times has reported that the precious metals industry expects the price to increase by a further 11 per cent over the next year. (A blatant underestimate. Gold has been appreciating an average of 17% annually in dollar terms over the past decade, and is currently accelerating.)

    Meanwhile, the US Treasury holds 261.5 million fine troy ounces of gold. (I’ll believe THAT when I see the results of next year’s audit. And only if they assay the bars, not just count’em) The government has been sitting on it since the Great Depression, receiving no return. At the current market price of $1,300 per ounce, the US gold stock is worth $340 billion. The Treasury secretary, with the approval of the president, has the power to sell (and buy) gold on terms that the secretary considers most beneficial to the public interest. Revenues from sales must be used to reduce the national debt.

    If the US were to sell its entire gold stock at the current market price, it would reduce the gross government debt by 2 1/4 per cent of gross domestic product. ( A drop in the bucket. About 1/4th of our current annual deficit, 1/10th of our annual federal budget) (US net government debt would decline by essentially the same amount because the US gold stock, listed as an asset on the balance sheet, is valued at only $42.22 an ounce.) (Yes, this would reverse the effect of a falsified accounting entry) Based on the average interest cost from 2005 to 2008, this reduction in debt would trim the budget deficit by $15 billion annually. (How wonderful! This would lower our current $1.5 Trillion dollar annual budget deficit by a staggering 1%, on a one time basis, and our entire national cache of gold bullion would be gone forever. This amounts to less than a rounding error.) Thus, the Obama administration would be doing something about the US fiscal debt and deficit without reducing near-term support for the ailing economy. (Yes, they would be making a token gesture to camouflage the extent of government’s continual theft of the people’s savings through inflation of the money supply.)

    This proposal has other benefits too. First, the US would be obeying the maxim to buy low and sell high. (Oh, please! When did the US govt ever buy any gold bullion? They stole it from the people in exchange for worthless bits of paper. Not to mention all the gold that was deposited with the fed during the 1930’s by Europeans seeking shelter from the invading Germans, which the US govt has still never returned. And sell high? Compared to what? The govt paid $20.67 an ounce for the gold they confiscated under threat of imprisonment from the US citizens in 1933. Adjusted for inflation, they would be getting about the same amount of federal reserve notes back. This sale will obviously never take place.)

    Second, it would be performing a socially useful function. Demand for gold exceeds normal production, driving up the price. To the extent that the gold craze (another slight to gold investors) is being fed by concern (rational or irrational) about government policies, public welfare would be enhanced by giving citizens something tangible to hang around their necks or place in safe deposit boxes. (Well, that is true enough. Getting the gold back into the hands of the people would be a positive thing. But this is a meaningless threat for the purpose of continuing to suppress the true market price of gold in today’s dollars. The federal government has little or no physical gold to sell. Jawboning the price down is the only weapon left in the arsenal now to prop up the failing dollar) Third, if the price is a bubble, as seems likely, the sooner it is burst, the better for the average investor. (I can’t see how exactly, please explain. Wouldn’t this depend on when the investor purchased, and whether or not he was savvy enough to sell at the peak?)

    Some people point to possible costs. Aside from political pressures from those who want to protect the value of their holdings, above or below ground, two principal arguments are made against US gold sales. The first is that they would disrupt the market. But the US can be cautious in its sales, avoiding disruption of the sales programmes of other countries, as it has in the past. (Sure, if it had any actual bullion left to sell) There is little risk. In recent years, sales under the Central Bank Gold Agreement have dwindled, and some other central banks are buying gold. (A lot more central banks are buying now than the few central banks that are actually selling) (The US is not a party to the agreement.) Also the International Monetary Fund has completed more than three-quarters of its own planned sales of 403.3 metric tons.* (In 2009, the world’s central banks became net buyers of gold bullion after 19 consecutive years of net selling. The parties to the most recent Central Bank Gold Agreement failed to meet their sales quota for the first time. This year (2010) I would be extremely surprised if they managed to meet even 1/4th of their quota, that is, if the agreement doesn’t disintegrate completely. Central bankers are not stupid enough to continue selling a finite, appreciating asset such as gold in exchange for one that is constantly inflating and will eventually become worthless, just like every other fiat currency has throughout history. Today the world’s longest running fiat currency is the British Pound, one of the weakest currencies among all developed countries, and at greatest risk of failure.)

    Another counterargument is that the US should hold on to its stock in anticipation of a return -- by itself alone or with other nations -- to a monetary system based on gold. But returning to the gold standard would reinstate a system associated with unstable prices, wages, output, and employment.(On the contrary, the most stable period of wages and prices in history was during the classic gold standard from 1590 up until 1914, when the classic gold standard was finally abandoned to finance WWI. It was never fully reinstated, although gold coins continued in circulation as US legal tender until 1933) It has not existed for a century; and will not make a comeback. (On the contrary, China has already been laying the ground work for a gold backed currency by initiating currency swaps with Indonesia, Brazil, Australia, and other countries that have natural resources to sell, accumulating gold secretly until June 2009 when they announced that their central bank had increased their holdings by 400 tons, and legalizing gold ownership by their citizens for the first time since the Maoist revolution. Not only did they legalize it, they are encouraging it. You can now buy gold coins as small as 3 grams at any post office in China, and their govt has been running advertising campaigns on TV urging the citizens to put their retirement savings into gold and silver bullion (that much more to confiscate once the time comes). Once this gold backed currency is established, the US dollar will have no value at all other than the current exchange value into Chinese currency at that day’s exchange rate, and for payment of US taxes. On that day, both the Chinese Yuan and gold coins will become accepted as payment for purchases in the United States.) Official discussions of the reform of the international monetary system do not include any advocates of a return to gold (big surprise, the monetary bigwigs want to preserve the status quo), and the IMF articles of agreement prohibit it. The sooner thoughts of such a return are laid to rest, the better. (Better for whom? The money printers, of course.)

    A related argument is to keep the US gold stock as a "rainy day" precaution. But after the recent economic and financial crisis and with the prospect of misery for several more years, how much more rain must pour before the US acts?

    End of London Financial Times Article

    *On September 28, 2009, the IMF's Executive Board approved gold sales of nearly 13 million ounces, representing one eighth of the Fund's total holdings. During October and November 2009, the Fund sold half of this quantity to the Reserve Bank of India, the Bank of Mauritius, and the Central Bank of Sri Lanka. On September 7, 2010, the Fund sold 10 metric tons to the Bangladesh Bank. They have been selling the rest gradually into the market to suppress the gold price, but not very successfully. The recent surge in gold prices may indicate that this quantity has been exhausted.


    We must have owed those countries a big favor. Dozens of countries around the world would have been more than glad to exchange some of their country’s reserves, composed of depreciating assets such as US Treasuries and Agencies, and various foreign currencies, for any hard asset, especially precious metals. My guess is that Sri Lanka, Mauritius and Bangladesh have some sort of natural resource that the US govt needs, probably rare earths. And India is a valuable ally in a very strategic location. We probably need them as a place to spy on Pakistan and China, and as a place to refuel our ships.

    The IMF declined to reveal the price at which it sold 200 tons of gold bullion to the Central Bank of India on November 3, 2009, but the closing price that day at the NYBOT was $1084.50 The IMF claims on their website that their gold sales are conducted at market prices.

    Looking at last week’s price of $1379.50, it looks to me like India got a pretty good deal, a 27% profit in less than a year, with many more years of appreciation to come. How long can these sales continue? Certainly not indefinitely with the annual world production of gold falling short of demand now for over ten straight years, and considering that the quantity of physical gold ostensibly held and traded by the world's central banks, bullion banks, and futures exchanges is significantly overstated, according to

    Edwin Truman's entire article is just one big smokescreen to preserve the misconception that the US govt's gold supply is still intact and the same as they claimed to have forty years ago. If that was true, why would the federal reserve be so adamant about not allowing an audit of Fort Knox? This would be routine at any private corporation, is required by law, and would only serve to quiet concerns if the gold WAS STILL ACTUALLY THERE AND UNENCUMBERED.

    "Gold is a barometer of the common stock of a country, and right now gold is sniffing out weakness in the management of the United States as a business."

    James Sinclair, gold investor

    Mr. Sinclair became famous in the business community when he sold 900,000 ounces of gold at an average price of $810 in early 1980, just before the price peaked.


    Disclosure: No positions

    Disclosure: No Positions
    Tags: GLD
    Oct 16 1:56 PM | Link | Comment!
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