Gold And Silver Shortages Become Acute; GLD Is Being Looted Again – Kranzler

A client of mine, a jeweler just called.  His refiner called him – looking to buy gold or silver. The refiner has very tight stock. My client buys “shots” to melt and builds into rings etc. His refiner volunteered info on the selling this am – says the system is manipulated, which shocked the client only in that it was openly admitted. When my client’s refiner needs product you know there is a shortage. This is the first time in 10 years this refiner said there were shortages.  – A colleague and friend of mine who manages high net worth accounts

TND Guest Contributor:  Dave Kranzler |

GATA was the first in this country to warn, based on a historically very reliable source from London, that there would be acute shortages of gold and silver this fall at refiners in Europe.  A few weeks later the mint announces that it is suspending sales of one ounce silver eagles until at least August.   And it now looks like GLD is being looted.

At the same time, both gold and silver eagle sales in June went vertical in June.  Last week the amount of gold withdrawn from the Shanghai Gold Exchange – 61.8 tonnes – was the 8th largest weekly withdrawal on record.

This is Gresham’s Law in motion.  Bad money chases good money out of the system. Above-ground stocks of physical gold and silver are disappearing because people “in the know” are converting their fiat Monopoly money into many different forms of gold and silver that is being safekept outside the corrupted and criminal banking custodial systems.

Gold has worked down from Alexander’s time. When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory.  – Bernard Baruch, as hypothecated from Jesse’s Cafe Americain

While anti-establishment analysts try to decipher and explain the ongoing asset bubbles that have reappeared since the Central Banks emarked on the mission of re-inflating the bubbles that led to the defacto financial collapse of the western banking system in 2008,perhaps the biggest bubble of them all is the one that has been blown in paper gold and silver.

As I have been documenting on this site, the amount of open interest in paper Comex gold contracts has gone parabolic in the last few weeks – here and here.  The open interest in gold went up again on Friday by 274 contracts to 474k.  This is 47.4 million ounces or 1,378 tonnes of paper gold – an amount of paper gold that exceeds the amount of physical gold held by most countries globally.

But more significantly, this amount of paper gold is 98x greater than the actual amount of physical gold held in Comex accounts that is classified as “available to be delivered.”  In other words, the amount of paper gold outstanding on the Comex is 99% fraudulent.  In relation to the underlying fundamentals and in relation to the actual amount of physical product available, the bubble in Comex paper gold is the largest in history. Then add to this the amount of paper vs. physical in London, estimated conservatively to at least 100:1 – right Jeff?  (Jeffrey Christian of CPM Group).

I find it quite amusing that bullion market professionals like John Hathaway – Tocqueville Gold Fund Manager – Bron Suchecki – Perth Mint – have finally come out of the woodwork and admitted what has been obvious for over 15 years:   Hathaway manipulation confessional;   Suchecki manipulation confessional.    GATA was much more gentle and diplomatic in its assessment of Hathaway’s “mea culpa”  than I am, to quote Big Bill:   “Cowards die many times before their deaths;  the valiant never taste of death but once,”  William Shakespeare.

Here’s what blatant manipulation of any market looks like when the paper version of the same is allowed to trade unchecked by those who are in charge of applying the laws already in place to prevent this:

I guess when the market intervention becomes this obvious, even people like John Hathaway and Bron are forced into admitting the obvious, but only out of fear of being branded idiots by the truth.   As John Brimelow of JB’s Gold Jottings puts it:  “The scale and brazenness of these raids is increasingly looking like April and June of 2013.”  

As for GLD, a startling 11.63 tonnes was removed on Friday, taking the total reported tonnage down to 696 tonnes.  It’s the lowest since September 19, 2008, when the price of gold closed on the Comex at $860.   I have written about this in the past and will do so more going forward, but it is likely that GLD does not even have 696 tonnes of gold sitting in its vaults that is unencumbered by hypothecation or lease agreements.  Or is just outright not there.

The prospectus of GLD – which I have gone over line by line several times over the years – makes it clear that GLD is nothing more than another derivative form of gold. Furthermore, I know of big players who have requested redemption of the gold from GLD in exchange for their shares – as prescribed by the prospectus – but who were denied – as is also prescribed in the prospectus.   In other words, GLD is nothing more than a device used by the bullion banks – acting on behalf of the western Central Banks – to source gold when needed due to extreme shortages in order to make deliveries to parties who they can not deny.  Like China, India and Russia. Or the OPEC States.

The global economy and financial system are collapsing, including and especially the United States.  While the powers that be can resort to outright criminal behavior to continue kicking the “collapse can” down the road for a while longer, it is imperative that they prevent the price of gold from signalling to the world that something is wrong.  What is happening now strikingly similar to what occurred starting in March 2008, right before Bear Stearns et al began to fall like a house of cards in a wind tunnel.

The amount of effort and degree of criminality involved in this latest effort to push down the price of gold with Ponzi paper is directly proportional to the severity of the economic and financial problem winding its way toward us still hidden behind fraudulent bookkeeping and propaganda.  But if 2008 was the equivalent of a small roadside bomb in Afghanistan,  what will soon hit our system will be like a nuclear bomb detonating in Times Square.

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About Dave Kranzler:

 I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics.  Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.

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