SLV and GLD concerns

Here is another article raising questions regarding the GLD and SLV ETF's.

http://www.theundergroundinvestor.com/2010/10/now-that-the-cftc-has-declared-silver-manipulation-occurs-can-we-get-the-sec%E2%80%99s-mary-shapiro-to-investigate-the-likely-fraudulent-slv-and-gld-etfs/

Gold market manipulation unraveling

https://marketforceanalysis.com/articles/latest_article_310710%20.html

But unallocated gold is not gold at all. It is not gold that has been deposited that is loaned to someone else. It is gold that has been deposited that is loaned simultaneously to many other people. I have estimated that for each ounce in the vault the bullion banks have loaned or sold 45 ounces. So this appears to confirm my thesis that the BIS has been credited 346 tonnes of ledger entry gold in the BIS unallocated gold accounts held with the bullion banks. This makes the BIS an “unsecured creditor” of the bullion banks as defined by the London Bullion Market Association (LBMA) in their description of “unallocated account” holders.

The FT story suggests at least 10 bullion banks needed physical gold bullion desperately. This looks like a rerun of the 1960’s London Gold Pool fiasco where central banks dishoarded gold to meet massive investor demand in a futile attempt to maintain a gold price of $35/oz.

I have spelled out in recent articles that there is a run on the bullion banks that has commenced and is gaining momentum. Investors and institutions are waking up to the fact that “unallocated gold” is not gold at all but just an unsecured promise for gold. They are now starting to demand delivery and as there is only one ounce backing each 45 ounces that are claimed the situation is turning into what will be a short squeeze of epic proportions.

So investors have bought a record amount of “physical gold” which is actually paper gold which they have never seen and only about 2.3% of what has been sold actually exists. The bullion banks are “awash” with liabilities for the record amount of gold they are supposed to be holding. Investors are now distrusting the bullion banks and are asking for delivery so is it too surprising that the record amount of “physical gold” sales has led to a record gold swap being transacted to give the bullion banks liquidity?

The IMF has been surreptitiously selling gold at a clip of around 15 tonnes per month every month since February without any official announcements and without disclosing the recipients. This is another sign that the bullion banks are in serious trouble.

When 45 ounces of gold are sold but only one real ounce is sourced the result is a massive suppression of the gold price. But the converse is also true; when 45 ounces of gold are demanded for only one that is in the vault the price explosion is beyond imagination.

What is becoming unraveled is not the mystery of the BIS gold swaps as claimed by the FT but the gold price manipulation scheme itself.

LBMA shuts down bullion bank trading data

http://www.zerohedge.com/article/lbma-closes-public-access-key-bullion-bank-trading-data

GATA's Adrian Douglas (recently famous for facilitating the emergence of whistleblower Andrew Maguire) seems to think so, after his observation that the LBMA has decided to block "access to statistics relating to the trading activities of its member bullion banks. This information has been available to the public since 1997 but as of this week it is available only to LBMA members." His conclusion: "There is a cover-up of back-door injections of liquidity of physical gold, and the LBMA now is trying to conceal trading information. I interpret the LBMA's move to secrecy as a sign that the opportunity to get real metal is closing fast."

Investors could have been blindsided by the events of 2008, but anyone who misses the writing on the wall about what's going on in the bullion markets is just foolish. The bullion banks have sold far more metal than they can deliver, and more and more customers are asking them to deliver. This has led to back-door bailouts and cover-ups.

Anyone who has "unallocated" bullion should be very concerned. The LBMA itself describes owners of "unallocated bullion" accounts as "unsecured creditors." That means that the account holder has no collateral or title to any bullion.

Bullion bank unallocated account agreements require the bank only to settle in cash for non-performance. That means when the physical squeeze that is evolving takes gold and silver prices to multiples of the current price, holders of unallocated metal accounts will not get any bullion, nor will they be compensated at the prevailing market price.

Proof of gold price suppression

http://www.zerohedge.com/sites/default/files/Proof%20of%20Gold%20Price%20Suppresion.pdf

That suppression comes from trading on a net basis 45 ounces of gold for every ounce of real gold. In other words 44 ounces of paper gold are traded for each ounce of physical gold. This bogus increase in gold supply distorts the price such that it does not move in lock step with M3 but instead it moves in lock step with the amount of paper gold that is created out of thin air.

Each 44 ozs of paper gold are only backed by 1 oz of real gold but if holders of paper gold demand real gold then each 44 ozs of paper gold will need to be met with 44 ozs of physical gold and not just with one ounce; this will cause a run on the bullion banks. The price will increase and its final limit will be the price related to only real physical gold.

Conclusions

The inescapable conclusions are:

1) The gold price is suppressed through fractional reserve bullion banking

2) The gold market is selling on average 45 ounces of gold for every one ounce of real physical gold via “unallocated gold” (fractional reserve bullion banking). In other words the gold market is backed by only 2.3% gold

3) The true price of physical gold is currently around $54,000/oz if fractional reserve bullion banking did not exist. In the presence of fractional reserve banking with 2.3% gold backing the market price of “gold” is reduced to $1200/oz

4) The US dollar has a purchasing power that is 45 times over valued

5) The way to end gold price suppression is for investors to ensure they have allocated physical bullion preferably held outside of the bullion banking system

The Trade of the Century

The sick joke of the Gold cartel is that whether you hold dollars or unallocated gold you only have 2.3% of gold backing! However, the trade of the century is to buy actual physical metal with your dollars, or if you have unallocated gold to demand physical delivery. In this way you can trade something with 2.3% gold backing for an investment that is 100% gold.