The Bankers’ New Gold
Written by Jeff Nielson
Wednesday, 14 December 2011 12:42
In a fresh sign of bankster desperation, we recently learned that they have pushed lease rates for gold to the lowest, negative level in history
– i.e. they are paying people more money to “borrow” their gold than at
any other time. We know this is a sign of desperation, because back in
the real world, buyers are paying premiums near record-highs to buy their (real) gold.
There are numerous
implications regarding this latest bankster tactic to suppress the gold
market, but before getting into those let’s explore all of the reasons
why bankers like “leasing gold” in the first place. The starting point
is to note that it is with gold-leasing that we see the beginnings of
the banksters’ 100:1 leverage in the gold market.
A banker is holding a quantity of gold in his vault. He “lends” the gold to a trader, and suddenly you have two parties
both pretending to be the “owners” of that gold. Naturally, the
banksters also like the fact that this is a totally opaque,
unregulated/unreported transaction. The banksters can secretly lend out
their gold, and since the transactions are never reported, we lack the
absolute proof that none of this “loaned gold” is ever repaid.
There is certainly plenty of circumstantial evidence
on which to base such a conclusion, however. In order to review this
evidence, we first need to know what is being done with the bankers’
leased gold. A detailed analysis by veteran precious metals commentator Frank Veneroso explains how and why “The ultimate borrowers in the gold lending operation are these shorts in the gold futures and forward market.”
We immediately see a
second reason the bankers love gold-leasing: all of the “leased” gold
ends up being shorted onto the market. What this directly implies then
is that in order for these gold leases to ever be repaid the short
positions must be closed out so that the gold (supposedly) backing the
trade can be repatriated to the bank. However, what we see in the gold
market is a huge, permanent short position in the gold market – which
has swelled enormously since Veneroso wrote the article above nearly a
We now know that at
least some of these gold leases have never been repaid, since the gold
that was loaned out remains on the market. However, as a matter of
simple arithmetic we can deduce that few if any of these leases are ever
repaid. As I noted above, each gold lease creates “paper gold” (i.e. a
“fractional reserve” gold market) and increases the bankers’ leverage in
the gold market.
We know from Jeffrey “I can’t keep a secret” Christian of the CPM Group that the gold market is leveraged by approximately 100:1.
Yet just as every new lease increases leverage in the gold market,
closing out any lease would reduce leverage by a corresponding amount.
The combination of the permanently rising leverage, and the permanently
rising short position provide irrefutable empirical evidence that little
if any of this “leased gold” is ever repaid.
We can reinforce this
conclusion further through common sense, and a basic observation of
bankster behavior. Specifically, bankers never reduce their
leverage voluntarily – the exception being short-term panic reactions
each time their reckless gambling (again) pushes them to the verge of
their own bankruptcy. However, as noted above there is zero empirical
evidence that the banksters ever reduce their leverage in the gold
market on even a semi-permanent basis.
several powerful reasons as to why the bullion banks love to “lease”
their gold (i.e. sell it to multiple buyers) begs the question: why
aren’t the bankers always “leasing” vast amounts of gold to suppress the
price? Hopefully that answer is obvious to regular readers. If you
want to loan ton after ton of gold onto the market, you must have some original bullion to lend into the market in the first place.
Here is where we come
upon a seeming paradox with respect to the recent explosion of gold
leasing. We know that the banksters have virtually run out of their own
bullion, as the evidence is absolutely conclusive. The same Western
central banks which were openly selling 500 tons of gold per year onto
the market every year have now all totally ceased their gold sales. They have no more gold…or at least they had no more gold.
Yet here we have the same bankers directly implying that suddenly they have lots of gold.
It makes no sense to announce “the greatest sale on gold in history” –
only to run out of inventory after the few first customers have bought
their fill. Clearly the bankers have some new gold. This begs an even
more obvious question: where did they get it?
we must descend into speculation. However it is speculation which we can
back up with yet more circumstantial evidence. As I noted in a previous
commentary, as part of the “economic rape” of European economies, the bankers announced that they would be “willing to accept gold as collateral” for some of their (fraudulent) paper debts. How magnanimous of them!
As we all know, when
Greece (finally) forced the bond parasites to absorb 50% “haircuts” on
their holdings that was a default event. What happens when a debtor
defaults on a debt? Collateral is seized. The latest statistics
from the World Gold Council on official government reserves show Greece
sitting with over 111 tons of gold. And as victims of the MF Global
collapse have learned the hard way, our criminal governments (and the
bankers who pull their strings) no longer see it as necessary to even report
when they have taken something from people. Thus the bankers could have
looted every ounce of Greece’s gold from its people and it could be
months, years, or never before we finally find out about it.
One hundred and eleven
tons is a lot of gold to lease, but it’s certainly not the only gold
hoard onto which the bankers could have recently latched their talons.
Those who followed the “Libyan revolution” will have recalled a
remarkable flip-flop by the West.
At one moment, we had
the vastly superior military forces of Muammar Gaddafi steamrolling the
rag-tag, disorganized rabble we knew as the “Libyan rebels”. They were
on the verge of collapsing. All hope was lost. Western leaders lamented
that the lack of “UN authorization” prevented these upstanding citizens
of the global community from doing anything to assist the rebels – and
there was absolutely no sign of any “movement” in those negotiations.
The next moment, the
same disorganized rabble which didn’t even have a military command
structure (let alone a nation to command) announced they had created a
“central bank”. About ten seconds after that announcement, Western
leaders announce a “sudden breakthrough” at the UN, and a
drafted-and-approved resolution instantly materialized. And before the
ink was even dry on that document, war-planes from several Western
nations were on the way to Libya to enforce a “no-fly zone”.
At that point we
witnessed how much regard these Western nations had for international
law. When following the UN mandate and merely enforcing the “no-fly
zone” was not producing the result these nations desired, they simply
tore up the resolution and threw it away. Instead, they began
carpet-bombing any/all areas under the control of Gaddafi, slaughtering
his ground forces (and large numbers of civilians) in what is a textbook
example of “war crimes”.
This brings us back to
the pivotal moment when Libya’s central bank was created. What possible
purpose could there have been for the rebels to create a central bank
before they had even created a real army to take control of the country?
There was no “banking” to be done. And yet it was the creation of that
symbol which was the obvious catalyst for a massive military commitment
by the West.
One thing we do know
about central banks is that they are the official receptacles for a
nation’s gold reserves. Turning again to WGC statistics on national gold
reserves, we see that Libya had even more gold than Greece, 143.8 tons
to be precise – and more than enough for a group of gold-hungry bankers
to instruct their lackeys in government to mobilize their war-machines.
Let’s summarize the
facts. We had Western central banks totally running out of any gold to
sell onto the market, with all gold sales having ceased for more than a
year. Suddenly, we have the bullion banks announcing they have so much gold on their hands
that they are doing more than just giving it away, they are literally
paying people to “borrow” it – in the greatest “gold sale” in all of
We have the same
bankers announcing that the gold of Greece was now “collateral” for its
sovereign debts. We then had the Greek government defaulting on those
debts, directly implying the seizure of that collateral.
We had the”rebels” of
Libya on the verge of total annihilation, while Western governments
claimed they were helpless to intervene because it was “against
international law”. We suddenly saw the rebels create an official
receptacle for their nations gold, and then had those same Western
nations instantly launching a massive military intervention
into Libya, where Western governments flagrantly disregarded
international law while committing their war crimes.
You be the judge.
For newer or more
timid investors in the gold market who fear that this latest operation
is somehow an indication of bankster omnipotence, relax. It was less
than two years ago that the scheming banksters thought they could
torpedo the gold market through getting the IMF to dump 400 tons of gold
onto the market (50% more gold than that of Greece and Libya combined).
What happened then? As soon as that gold hit the market, India swallowed-up half of it
in one gulp. The price of gold was permanently launched above the
$1000/oz mark – and the gold market has never looked back since.
We know that the
banksters are capable of depressing the price of gold over the
short-term. We also know from the six-fold increase in the price of gold
over the past decade that they are losing this “war”. Meanwhile, it is
only a matter of time until the masses realize that the worthless paper in their wallets is worthless. Sounds like a great time to buy gold – on sale.
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