GOLD: why rationing and price destruction foretell Crash2


Twenty days is a long time once the looters get to work

The page capture above is from the Slogpost of July 2nd last. It ends as always with the words ‘I intend to wait a little longer before buying some bullion, but I will be in big time at some point this year. As always, I must stress that what you do is your business, and this piece does not represent a professional recommendation’. 

The piece was completely wrong. Not because I got the real free-market outlook wrong, but because two very worrying signs have come to light since I wrote it. And of course – as with everything from Greenspan via Bernanke onwards – it’s all to do with rigging things in favour of central banks and sovereign debtors.

My plan was in fact very simple: to buy some gold bullion with the bars recorded by number, and then put it in a Swiss account to watch it grow as Crash2 unfolds… then be withdrawn over time for Swiss francs as a safe currency haven.

Smart, eh? Don’t you believe it.

Refusal to release gold

This is the first “development” that has, to say the least of it, put me off – which is almost certainly what it is intended to do.

Some European banks – primarily Swiss, but also some in Germany and Austria – are refusing to deliver gold they allegedly hold for clients above a certain weight. Above that level, they are insisting that the clients withdraw cash or various bonds instead of the gold. Specific requests by bar serial number are simply being ignored.

To be blunt, it is a straightforward refusal to deliver the client’s property. What one might term a pre-bailin kop-out. Or something.

The reasons could be that the bank doesn’t have the gold, or that the bank is hoarding the gold based on Central Bank instructions. Or both.

Why do I suggest CB involvement? Read on….

Deliberate gold price destruction

The “paper” gold market has been rigged for years. After Crash1 – as the CBs and Treasuries feared a flight from stocks and gilts to gold – despite the obviously gathering global crisis, gold ‘trackers’ bore no relation whatsoever to the physical price of the shiny stuff. Eventually, when the brakes came off after QE, I made a lot of money very quickly on trackers. Today there would be two risks…..first, massive intervention without warning by sovereigns to sell paper and cap the price; and massive failure by the paper suppliers themselves to cough up if the price rose sharply….as indeed it would if the market was a level playing field.

Sentiment since 2013(ish) has moved hugely towards bullion, and nation States across the globe have been stocking up. Three weeks ago, The Swiss government Pension authority decided to sell 700 million Swissies worth of paper gold into bullion and store it in Switzerland.

The Chinese have vastly increased their stores of real gold in recent years (not a little of it from South Africa), and the Russians now have even more physical gold than Peking. After adding 6.7M ounces (208 tonnes) of gold to her reserves in 2015, the Russian Central Bank added 6.4M ounces (199 tonnes) in 2016 and another 224 tons (7.2M ounces) in 2017. In that last year, Russia accounted for 60% of ALL gold purchased by central banks. 

The US Alt State has been gaily welching on its responsibility to deliver gold stored “on behalf of other States” for some years: Berlin in particular has had some less than pleasant experiences on that front. Remember that the last US President allowed to enter Fort Knox was Harry Truman in 1951. All requests since then have been politely rebuffed by the Alter Egos….and no President has seen fit to press the point.

All kinds of stuff could be going on here, but one game being played at the highest levels is Reserve Currency Ducks in a Row. It is now becoming ever clearer that Dollar hegemony is living on borrowed time: sooner rather than later, some form of Yuan/Ruble competitor to the petrodollar will emerge. Hence the central banks on both sides not only stocking up on gold, but also ensuring that they don’t have to pay too much for it, and we are going to get as little of it as they can manage. 

The ECB, meanwhile, hasn’t joined in: gold reserves in the euro Area remained unchanged at 504.77 tonnes in the second quarter of 2018 from 504.77 tonnes in the first quarter of 2018. This year, in fact, Draghi has reduced the eurogold hoard: gold reserves in the eurozone averaged 603.13 Tonnes from 2000 until 2018. This means that, since the end of last year, the euro as a currency has had 17% less gold with which to defend itself. Does this inspire your confidence still further, o Remaining persons? Anyway, being a Goldman Sachs alumnus, Draghi will be on the American side when it comes to the Reserve Currency shootout.

The bottom line is that, all things considered, I have moved from thinking there would be a window in which to buy gold to sensing that no window will be opened to let the rest of us in. Another escape route has been effectively closed off. Quelle surprise.

But equally, a lot of this activity is a symptom of the various élites preparing for Crash2. If there’s got to be a post-crash reset, then gold will have to play a central role in “revised” valuations of just about everything… their favour not ours, naturally. When almost every State in the world is a debtor, something has to give sooner or later. That something will be us.

Although over the weekend President Trump lashed out at money tightening by the Fed via two more rate hikes this year, this merely reflects that The Donald wants as big a boom as possible as we head towards his 2020 reelection vision. The fact is that money rates simply cannot return to normal without bourse panics, third world chaos and widespread sovereign failures. Argentina, Italy, Mexico et al already are (or soon will be) targets for the IMF to continue its long-followed strategy of control by debt….just another limb on the creeping centipede of power-bloc control.

The situation is not clarified by the obvious truth that statistics on everything from inflation and unemployment to oil prices and consumer debt levels are either bent or ignored as the goforits continue to posit infinite growth. Tighter money and long term structural unemployment mean that the so-called “recovery” in global GDP is a chimera – and this is reflected in the still tentative words used by the Fed: growth is solid but patchy progress is steady but gradual.

It’s all BS and it always was. One of the best indicators of economic slowdown is the inversion of the American Treasury interest rate yield curves – where the yield on short term rates are abnormally higher than long term rates. With Fed Chair Jerome Powell now openly committed to another two rate hikes this year, it is highly probable that by year end the 2 versus 10 year yield curve will invert. The can-kickers remain in the same prison they’ve inhabited since 2003.

Having now hit 70, I’m getting thoroughly bored with the continually changing need to keep an eye on my savings standing still, my pension being ring-fenced with candy floss, and the strategies of banker-controlled Treasury staff to steal any deposits I have via everything from universally electronic transactions to market rigging.

The forces behind all of it are as tediously obvious as those undermining the Brexit process. That probably has something to do with them being the same people. Either way, gold is on hold for me as an escape route. Watch this space.

Yesterday at The Slog: Mobster EU….have you woken up to it yet?