Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

[jtabeb]

Re: Latest gold manipulation scheme story supresses gold price

EJ, I can understand your frustration about how conspiracy theories, however legitimate, may turn off the retail segment from Gold.

But I think it may be irrelevant. The US Gov't and Wall Street are paper driven. They will do whatever it takes to maintain the paper ponzi machine; including disparaging those that ask for transparency.

Yet other governments are acting differently. What do you think about this:



Source: http://online.wsj.com/article/SB1000...on_Commodities

So China is *encouraging* it's people to buy gold. Why is that? My view is that gold will increasingly play a role in international financial settlements/trade in the future. China needs to ramp up it's gold acquisition, and one way is to have its population increase its purchases of gold. This is being done because these small individual purchases do not directly affect the market price - they are not official buyers like the Chinese PBoC is. The Chinese gov't, thru SAFE, is likely still buying gold (at a discount) from their own domestic production - yet again, a method that does not directly affect the markets.

What is China's goal here? I'm guessing that one day China will "encourage" its people to sell their gold to the PBoC, at a decent price, then voila, the PBoC's gold reserves skyrocket. China's short term goal is to get as much gold as possible within its borders - one way or the other, and with minimal impact on the markets so as not to push the price up during their acquisition mode. This gold will eventually make it's way into the PBoC's vaults. A mere balance sheet entry later, and China's percentage of gold to forex reserves skyrockets.

What is going on in the US? The US gov't belittles gold and those that chase it, and we have shops sprouting up like weeds that will gladly take our "useless" gold.

This troubles me. Who is being more strategic long term? The US gov't or the Chinese gov't?

If China does what you describe (and I think they WILL), they are setting up the exact same foundation that supports the EURO Structure. (The euro zone marks-to-market their gold reserves on a monthly basis). The initial allocation of gold reserves supporting the euro was 15%. They have SOLD GOLD and issued more Euro currency and you know what the percentage of gold reserves backing the Euro is now? OVER 60%!

How?

The market price of GOLD ROSE FASTER than currency issuance and in fact rose fast enough to also mitiage the effects of gold sales. Talk about brilliant.

I wish we HAD any of these wonderful develpments in our currency zone.

//Sigh//

[gnk]

Re: Latest gold manipulation scheme story supresses gold price

I wish we HAD any of these wonderful develpments in our currency zone.

//Sigh//

Having the world's reserve currency and largest military budget has a lot to do with our current view and use of gold.

However, eventually Triffin's dilemma rears it's ugly head.

http://en.wikipedia.org/wiki/Triffin_dilemma

Thus, we were able to postpone the problem of The Triffin Dilemma with Nixon closing the gold window and entering a new paper debt system. But now our paper debt has reached critical mass. Servicing and expanding it has become questionable. You can't stop without killing the economy. Catch 22.

I can understand going from gold to paper... but.. once paper reaches peak...

What next?

[FRED]

Re: Latest gold manipulation scheme story supresses gold price

Having the world's reserve currency and largest military budget has a lot to do with our current view and use of gold.

However, eventually Triffin's dilemma rears it's ugly head.

http://en.wikipedia.org/wiki/Triffin_dilemma

Thus, we were able to postpone the problem of The Triffin Dilemma with Nixon closing the gold window and entering a new paper debt system. But now our paper debt has reached critical mass. Servicing and expanding it has become questionable. You can't stop without killing the economy. Catch 22.

I can understand going from gold to paper... but.. once paper reaches peak...

What next?

Funny you should mention Triffin. We use his name in the headline of the section of the upcoming "Forecasting in Hell" that covers capital flows.

Certainly there was a Triffin crisis in 2008.

The US pulled out of it with the addition of several trillion dollars of new debt to the Fed's and the federal balance sheet. Was that the last time?

[bill]

Re: Latest gold manipulation scheme story supresses gold price

I can understand going from gold to paper... but.. once paper reaches peak...

What next?

Paper needs a new resource game and its not just oil.
http://www.itulip.com/forums/showthr...33297#poststop

[jtabeb]

Re: Latest gold manipulation scheme story supresses gold price

I can understand going from gold to paper... but.. once paper reaches peak...

What next?

I would argue, it's back to gold. Not in a Gold Standard way, but in the same manner as the Europeans have (and I think the Chinese will)

[LargoWinch]

Re: Latest gold manipulation scheme story supresses gold price

Funny you should mention Triffin. We use his name in the headline of the section of the upcoming "Forecasting in Hell" that covers capital flows.

Certainly there was a Triffin crisis in 2008.

The US pulled out of it with the addition of several trillion dollars of new debt to the Fed's and the federal balance sheet. Was that the last time?

Is it me FRED, or it looks like the patient suffered a heart attack? ;)

[LargoWinch]

Re: Latest gold manipulation scheme story supresses gold price

What next?

La guerre.

[gnk]

Re: Latest gold manipulation scheme story supresses gold price

Funny you should mention Triffin. We use his name in the headline of the section of the upcoming "Forecasting in Hell" that covers capital flows.

Certainly there was a Triffin crisis in 2008.

The US pulled out of it with the addition of several trillion dollars of new debt to the Fed's and the federal balance sheet. Was that the last time?

Wow.

I certainly look forward to the next article. And the big question: "Was that the last time?"

I think we're running out of steam here. I see three future options if things continue to deteriorate and a new global reserve system is needed:

1) IMF/SDRs as supported by DSK, Russia, and China for example; Kind of a supra-soveriegn SIV and reserve currency that takes on all the agency/recycled sovereign debt of the US and others in exchange for more paper? After all, who bails out the reserve currency holder? No one else left that's big enough.

2) Gold or a combination of gold and the above... after all, China may be for SDRs, but why the ongoing domestic gold splurge program? China and Russia and India are loading up on gold. There has to be a long-term strategic reason for doing so. And what about Europe? I believe Geithner recently offered China a larger stake in the IMF - at the expense of the EU! I could see the EU, whose combined gold in the Eurosystem surpasses all others, supporting this option.

and,

3) the worst option - c'est la guerre, as Largowinch said.

[icm63]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

Recent stories of gold price manipulation and reports of a murder attempt on the life of a supposed gold manipulation scheme whistle blower do serve one purpose: they reinforce the view of 95% of the investing public that gold investing is the realm of crackpots and conspiracy theorists.

I believe the whistle blower and Gata made a more important point rather than mere price manipulation, the point that concerns me was that paper gold may not be backed with 1 x 1 physical gold, and that it could be as high as 100 x 1 (paper gold to physical gold).

NOTE: Enron, Lehman, had auditors as well.

[aaron]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

I believe the whistle blower and Gata made a more important point rather than mere price manipulation, the point that concerns me was that paper gold may not be backed with 1 x 1 physical gold, and that it could be as high as 100 x 1 (paper gold to physical gold).

NOTE: Enron, Lehman, had auditors as well.

If the demand for gold is X per year and 90% of that is being filled by paper, I can see how limits on short positions might be very metal positive. In other words, the SUPPLY of gold will drop substantially if the CFTC does its job. In the case of gold, gold SUPPLY = gold metal + paper gold. If the quantity of paper gold goes down because of better enforcement of collateral requirements, I think we should see the price go up substantially. I remember price & supply/demand curves from econ 101. As the total gold supply goes down price should go up. This will be irregardless of money printing and inflation and gold going mainstream.

[icm63]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

UPDATE:

I also understand that some say LBMA ( ie BV as a member) and gold certificate could be $100 x $1 ( paper to physical gold) is acting like the futures market. Where some one buys a bushel of corn on margin and never expects delivery.

Well that's the point of difference, if all the customers turned up at Bullion Vault and said "Please give me my gold, thanks", do you think all would get it ?? If you think so, stay at BV, otherwise own physical gold.

[metalman]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

UPDATE:

I also understand that some say LBMA ( ie BV as a member) and gold certificate could be $100 x $1 ( paper to physical gold) is acting like the futures market. Where some one buys a bushel of corn on margin and never expects delivery.

Well that's the point of difference, if all the customers turned up at Bullion Vault and said "Please give me my gold, thanks", do you think all would get it ?? If you think so, stay at BV, otherwise own physical gold.

from the bv faq...

Your safety & security assured

• For as long as you own it your gold remains your outright property, stored in specialist facilities reserved exclusively for BullionVault clients and run by accredited professional vault operators who are wholly independent of BullionVault. You choose the storage location :- London, New York or Zurich.
• You are truly isolated from the systemic risks in the financial system. You have taken legal delivery of your gold and you own it directly in physical form. Unlike the huge majority of investment products no company's financial failure can deprive you of this gold. Lloyds, Via Mat and BullionVault could all fail - and your gold is still safely yours.
• Each and every working day BullionVault publishes on the internet the complete register of all its gold owners - with each owner listed under a public nickname known only to themselves.
• This register reconciles exactly to the official bar list published with it. The bar list is produced by the vault operator, independently of BullionVault. No other custody business in the world subjects its records to this continual, daily, public scrutiny.
• You even have the right to withdraw gold from the vault, although the huge majority of BullionVault users leave their gold right where it is. That way they continue to enjoy the benefits of owning Good Delivery gold which - remember - does not leave the professional vaulting circuit.

[icm63]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

You even have the right to withdraw gold from the vault, although the huge majority of BullionVault users leave their gold right where it is. That way they continue to enjoy the benefits of owning Good Delivery gold which - remember - does not leave the professional vaulting circuit.

Well thats fine.

But sh*t does happen...

http://www.businessinsider.com/2008/...tz-lie-on-cnbc-

[ThePythonicCow]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

Well thats fine.

But sh*t does happen...

Every alternative has its risks. Every alternative.

We each individually have to weight the various risks, as best we anticipate them and in the light of our own circumstances. It is useful to discuss those risks with others, to share insights and knowledge, but carte blanche dismissal or endorsement for another is seldom useful, except in such cases as when you have some relevant and proper care taking role for the other (say a minor children or an incompetent relative you're tending,) or when they are your client in some relevant professional business, such as that of an investment advisor.

[jtabeb]

Re: Eric King Interviews Whistleblower Andrew Maguire And Adrian Douglas Of GATA

Well thats fine.

But sh*t does happen...

http://www.businessinsider.com/2008/...tz-lie-on-cnbc-

BUT ONLY if you are forced to expatriate (it's in the fine print).

So no, you can't just take your metal anytime you want. You have to be forced to flee your home domicile first.

From BV's own FAQ.
Can I get physical custody of my gold?

Yes - BullionVault allows physical withdrawal of gold, but only in special circumstances. The most likely case is when your bank is no longer a practicable recipient of your funds - as might be the case after political or economic upheaval in your country of residence.
It is to guard against those types of circumstance that some gold buyers seek immediate personal custody of their gold. The supposed security may be an illusion. Gold is commonly unusable when stored in the country where it is needed, because use of it exposes the owner to great risks; either through confiscation, personal safety or physical loss.
To be useful as a store of value in uncertain times gold works best when held in a place which consistently recognises foreign ownership rights and is not itself in crisis. Then it can be sold for full value. Its owner will generally find the proceeds are welcome all over the world - even at home.
Since nowhere can guarantee to remain permanently immune from crisis it is also sensible to retain a degree of flexibility, and this is why BullionVault offers a choice of storage locations. We also use a vault manager and technology which allow the choice of storage locations to be extended by us as geopolitical circumstances change.
In addition to these strategic reasons for avoiding personal custody of gold there are tactical ones:-

• Privately held gold is not fully trusted when sold back to bullion markets, and loses value proportionately.
• Privately held gold is physically less safe than vaulted gold, and very much more expensive to insure.
• Upon taking private custody bar buyers must still trust the gold content unless they are competent to assay.

These are the reasons BullionVault offers private custody only as a last resort in cases of unavoidable emigration.
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So for all intents and purposes YOU Ain't NEVER getting no actual gold out of bullion vault, unless you're running like a refugee.