Gold battered by heavy selling in the futures paper markets

The big sell-off in gold and silver lately has been driven by the paper market. Falling prices triggered pre-set stop loss orders resulting in additional selling. As is typical in the commodity markets, selling begets more selling and the ultimate result is the commodity gets vastly oversold. It is the banksters “oversell” manipulation to suppress price so they can rig in as much gold in one helping as they can. Here’s a look into the golden lens…

The Fed is rigging the bullion market in order to protect the US dollar’s exchange value.

A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big to fail” balance sheets. The financial system would be in turmoil, and panic would reign.

The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. According to Andrew Maguire, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall.

He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.

In the paper gold market, the short-sell participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal; no physical gold is actually sold.

Consider the 500 tons of paper gold sold, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales. Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?

What happens when 500 tons of gold sales are dumped on the market on one day? It drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.

Who the heck can afford to lose that kind of money?

The successive declines could perhaps spook individual holders of physical gold and result in actual net sales of physical gold as people reduced their holdings of the metal.

However, bullion dealer Bill Haynes told kingworldnews.com that bullion purchasers among the public outpaced sellers by 50 to 1, and that the premiums over the spot price on gold and silver coins are the highest in decades. Gainesville Coins reported that far more buyers than sellers had responded to the price drop. See there are no stupid people out there…

I stated this before: A hundred shares of Coca-Cola is an investment. An income-producing rental property is an investment. Gold is "real money" and thus is a crisis hedge. We buy gold and hope we never have to use it… just like we do with auto insurance. The sooner people learn gold is not a conventional "investment," the better off they'll be.

Advance announcements this month first from brokerage houses and then from Goldman Sachs that hedge funds and institutional investors would be selling their gold positions. The purpose of these announcements was to encourage individual investors to get out of gold before the big boys did. Does anyone believe that hedge funds and Wall Street would announce their sales in advance so the little guys can get out of gold at a higher price than they do?

If these advanced announcements are not orchestration, what are they?

Meanwhile, China, Russia, India are loading up on physical gold at the low prices made possible by the short selling, and the Fed/central banks keep on rigging!

Remember the important factor that Hong Kong spans across the Asia time zone and it provides pricing information for the gold market after the close of New York market and before the opening of the London market.

Please also remember that if the USD should slide into a coma, you can surely bet that the Chinese government will make a one-shot revaluation of the peg; this way you can basically maintain the upside potential of holding US dollars, but limit the downside risk… so HKD is superior over the greenback indeed!

To sum it up if you have a habit of submitting to manipulation then the manipulator will have the last laugh. This is a onetime “reverse-time travel” opportunity to buy physical gold; especially if you missed the bus back in 2010.

It’s time for United States of Asia…no more WWE Bull!