Gold is no longer held captive by a fixed parity with the dollar. Today it is trapped politically in parity with a price discovery futures market leveraged at 100:1. But free gold is where we are heading, without a doubt. It is where monetary evolution is taking us. It is where debt evolution is taking us. It is where global political evolution is taking us. It is both a market process and a political process, global in scale. And we ask, "how will freegold materialize?" Ask how, not when.
As for when, I already have my answer. It is materializing now, right before my eyes.
Something important has changed. Can you feel it? It started about 12 months ago and has changed more in the last month alone than it did in the previous 12 months, and more in the previous 12 months than in the past 12 years.
Can you figure out what it is?
Here are two important interviews from Eric King and King World News. The first interview is with Adrian Douglas of GATA and Andrew Maguire, The Whistleblower. And the second interview is with Bill Murphy, Chris Powell and Adrian Douglas of GATA.
Andrew Maguire & Adrian Douglas - Tuesday, March 30, 2010
GATA - Wednesday, March 31, 2010
Partial Transcript from the GATA interview:
Adrian Douglas: ...then I said "this is a Ponzi scheme", selling several times the amount of gold that they actually have...and then at that point, as you say, the oxygen went out of the room, and there was quiet for eight seconds.
I thought that was going to be it, that it would be swept under the lumpy carpet at that point...
But then, amazingly, Jeff Christian of the CPM Group who was coming in by satellite communication said that the previous speaker was absolutely correct, that it was paper hedging paper. You know, so this was an amazing admission.
And he went on several times while he was speaking and reconfirmed it in several different ways. So it wasn't that he just made a mistake, or said something incorrectly. He reconfirmed it several times.
And as Chris pointed out, he actually told us that the CFTC and CPM Group use the term "physical market" in a very loose way. And he said it actually means all the paper and the physical metal is when they refer to the physical market.
And then he gave us the bombshell that it's actually 100 to 1. That they sell 100 times more gold than they actually have as physical metal.
Eric King: Bill, let me ask you, because you were there with Adrian, obviously, at the CFTC meeting... were you shocked when Christian confirmed that?
Bill Murphy: Fell off my chair. Because Adrian's the one who's been saying this for a long time, and I was concerned that well, you know the London Bullion dealers, which is very [?] especially in a public forum. It's not because I didn't believe Adrian, it's just that... way above my paygrade, and I have no way of confirming that, and Adrian and I used to talk about 50 times... and then this goofball comes out and makes our case, and... except that Adrian's too conservative!
And he's supposed to be... his business is dealing with the dealer community! So, they gave the whole joint away. And he gave GATA more credibility than you can imagine!
It's just... I sat there with my mouth open.
Eric King: Chris, let me ask you as you watched this unfold. You've seen the tapes. You know all about this. Is part of it, maybe, that he just didn't know who Adrian Douglas was? And he was giving a tip of the hat to GATA. Can you help me on that?
Chris Powell: I don't know what was going through his head. I know that he has spoken at conferences where GATA has had speakers. So he is certainly aware of our work. I don't think he's been an admirer of our work in any way. But, you know, he was speaking at a public hearing before a United States government agency and you know, and like many people, he felt obliged to tell the truth, and maybe he felt that, well, this is no big deal because this is how the situation has been for many years.
The situation in the futures market... the overwhelming of the real physical market by paper is not peculiar to gold. It is the situation, really, in many futures markets, though perhaps not as much as in gold and silver.
The British economist Peter Warburton wrote, really, the original paper on this as far as I can determine, in 2001. He perceived that governments were encouraging investment banks to get into derivatives because derivatives were proving to be a wonderful way of diverting monetary inflation out of real things. And out of things whose increase in price would show up in consumer price indexes... and into mere financial instruments.
It was even mentioned by other witnesses at the CFTC hearing that this was a wonderful thing. Because if people were trying to hedge their currency holdings by buying real things, and real things were actually taken out of the market and put into storage, we'd have all these price increases in real things.
So the futures markets, it was pretty much admitted at the CFTC's hearing last week, are pretty much designed and intended to mask inflation. And to prevent people from actually hedging their currency exposure by buying real things.
The futures markets are an act of fraud!
Bill Murphy: Eric, I can tell you this for a fact, having been around Jeff Christian a lot... he loathes GATA! He has no idea what he was saying... how it was a bonanza for us. I mean, he's one of our biggest critics...
FOA (10/9/01; 10:05:48MT - usagold.com msg#117)
Lost in all the confusion is the distinction between investing in the price of gold and investing in gold itself. Perhaps 90% of all the investing in today's worldwide, dollar settled, gold market is done in this first way mentioned. Yes, the market is structured, contractually, to settle in gold. However, in practice, in norm, and in past legal precedent, it is accepted that paper gold trading is meant to only capture the price movements in gold while ceding, what could be, controlling physical trades and their price setting function to other market areas.
Obviously, this is the way it all started, years ago, with the physical trading and its fundamentals dominating the lesser paper trading. But the market evolved with the paper contractual trading becoming 100 or more times the size of the physical side. But everyone already knows all this, right?
What doesn't seem to be obvious is the "why" the paper market grew so large. It grew to dominate because world wide dollar expansion reached its "non hedged" peak. In other words, the dollar's timeline was ending as its ability to produce non price inflationary economic gains came into sight.
In order to push dollar holdings further, international players needed and purchased "paper financial hedges" to balance their risk. Within their total mix of derivative hedges were found "paper gold price hedges"; modern gold derivatives. The important thing to remember is that these positions are not and never will be used to demand physical gold. They are held to buffer financial and currency risk associated with holding any form of dollar based asset. To work these items don't need to really perform "dollar price movements" in the holders favor as much as they are present in the portfolio to act as insurance stickers.
In that truth, these paper gold positions act like FDIC insurance at our banks.
FOA (05/06/00; 16:45:21MT - usagold.com msg#20)
For Your Eyes Only!
By holding physical gold you are owning a super leveraged "derivative" that will be exchangeable against the value of real things at a par level lost to the minds of most investors. Today, physical gold purchased in dollar values is discounting its worth by perhaps 100 times. For us PGAs (physical gold advocates), that is a leverage worth "playing the physical game for"! (smile)
As the only real wealth money this earth has ever had, it's unthinkable what value physical gold would have had to attain to denominate our created holdings. This is where so many "gold advocates" completely sell themselves short in projecting gold's future price. They try to somehow reconcile gold's value with its cost of production. In fact, once man's drive to attach his official currency / fiat money to gold is broken (as it is about to be), all the gold "IN" the earth today could not represent human created things at 10 times its current price! Throw in the fact that the earth will not give up all its gold any time soon, present world gold holdings in reserve currency today must rise in value at least 100 times to match what assets now exist. On top of that add in the fact that dollar gold will go sky high just to equal past dollar creation (as the dollar fails) and one can see where physical gold is "the play" in modern times. Forget stocks, business valuations, land or currencies: physical gold is the wealth for the next generation.
LBMA Mystery - circa 1997
From Red Baron's THE GRAND LBMA EXPOSÉ...
Literally at the crack of London dawn on January 30, 1997, the London Financial Times printed the following:
Gold global market revealed
THURSDAY JANUARY 30 1997
By Kenneth Gooding, Mining Correspondent
Deals involving about 30 million troy ounces, or 930 tonnes, of gold valued at more than $10 billion are cleared every working day in London, the international settlement centre for gold bullion.
This is the first authoritative indication of the size of the global gold market, and was revealed yesterday by the London Bullion Market Association.
With the blessing of the Bank of England, the association overturned years of tradition and secrecy to provide statistics illustrating the size and depth of the London market.
The volume of gold cleared every day in London represented nearly twice the production from South African mines in a year, Mr. Alan Baker, chairman of the association, pointed out.
It was also equivalent to the amount of gold held in the reserves of European Union central banks.
The size of the gold market will surprise many observers, but traders insisted the association's statistics were only part of the picture because matched orders are cleared without appearing in the statistics. Mr. Jeffrey Rhodes, of Standard Bank, London, said the 30m ounces should be "multiplied by three, and possibly five, to give the full scope of the global market".
Mr. Baker said the association would produce average daily clearance figures every month. "They will provide a useful benchmark for comparison and analysis of trends in the volume of the global bullion business," he predicted.
He denied suggestions that the move might drive business away from London by upsetting clients who preferred secrecy. "These figures do not in any way affect the confidentiality of the market. While discretion and integrity will always be bywords in the London bullion market, the LBMA is nevertheless conscious of the general call for greater transparency in markets.
"The statistics demonstrate the prominence of London in the world of bullion, something we have long been aware of but which until now has been difficult to demonstrate with statistics."
LBMA members were divided over the move. One said he was puzzled. "What will people make of it?" Another said the exercise was "futile" because it did not give a complete picture of bullion market activity.
But Standard Bank's Mr. Rhodes suggested the statistics would "become the key indicator in the world of gold, providing the numbers by which the market can be monitored".
Mr. Martin Stokes, vice-chairman of the association, said: "This shows we have a serious market with a lot of depth and deserving of more attention." The statistics showed, for example, that the 300 tonnes of gold sold recently by the Dutch central bank - a disposal that badly affected bullion market sentiment - was not a large amount by the market's standards. The association was "making a bid to attract investors' interest".
The association also gave details yesterday about the silver market. Roughly 250 million ounces of silver valued at more than $1 billion are cleared daily in London.
It also published the results of a Bank of England survey of turnover that the 14 market-making members of the LBMA in the London bullion market conducted in May last year. This showed about 7 million ounces of gold, worth nearly $3 billion, was traded daily by these market-makers.
Was the news a bureaucratic slip of utmost discreet information - indeed top secret data - or was it a well-timed and methodically planned leak to the press. Or perhaps it was the "whistle-blowing" of an irate employee, who was passed over for promotion? Who really knows? In any case we will provide all the details surrounding this monumental announcement... and allow the reader to draw his own conclusions.
This writer will present the entire situation via a chronicle of all the news publications about the subject, providing dates sources and authors - where possible. Nearly all available information was researched from Internet sources. Most comments are verbatim from respective authors.
To my knowledge it was an esoteric select few at the Kitco Gold Chat group, who really zeroed in on the draconian significance of the news.
Writer's comment: In light of these startling revelations, various observations may be gleaned from this publication by the London Financial Times.
1. In view of the humongous daily trading volume of gold by the LBMA, annual supply/demand dynamics may have little to NO INFLUENCE on the long-term price of the noble metal - albeit can cause short-term ripples one way or the other.
2. The formidable volume of daily trading strongly resembles that of currency trading -- indeed many world experts staunchly proclaim gold to be the universal currency... and history undeniably supports this assertion.
3. Fear of Central Bank sales of gold may be totally exaggerated - and may really have only a minuscule and temporary impact on gold prices.
4. The LBMA is a highly liquid gold environment, conducive for speculative trading - ESPECIALLY NOW THAT THE 'CAT IS OUT OF THE BAG.' Could this be the ulterior motive for breaking the secrecy code of ALMOST TWO CENTURIES?????????????
5. At the current daily trading rate, more than 100 TIMES THE ANNUAL WORLD'S GOLD PRODUCTION RATE IS TRADED ANNUALLY in the LBMA!!! Other than currencies, can anyone mention any commodity experiencing yearly trading volume of 100 times its annual production?! ANYONE?! Does this not pique your curiosity and question the reason or purpose of all this gold trading?!
WHY... AND MOST IMPORTANTLY, W-H-O ARE THE PLAYERS? (...from Part 1)
1. Why is gold so cheap,
2. Who prompted LBMA to go public, and
3. What are the underlying or "real" motivations for their move.
We'll know later - meanwhile we've now got a glimpse of the sunlight outside ... the exit is near! -Orpailleur (...from Part 2)
Volume: COMEX is IRRELEVANT!
The LBMA moves 60 TIMES THE VOLUME!
THEY (whoever they are) say that gold's downtrend was catalyzed by the Dutch CB sale of 300 tons of their gold last year, and further stimulated by further CB rumors of more sales. Holland's measly 300 tons (for 1996) is chicken feed alongside the WORLD gold volume at 3,720 tons PER DAY!
Anyway, it appears that the Euro CB's have banned the selling of their gold to meet the EURO monetary requirements.
??Consider this....Gold prices have dropped roughly 13% in the last 9 months....and daily gold volume on the LBMA has more than tripled in volume in the same period. It appears that, when gold is used as a currency (and not a store of value) it is not important what LEVEL the monetary (i.e. gold price to the dollar ) unit has......only that it maintains a reasonable amount of its value in the short run; long enough to make your next transaction.
Remember, these huge volumes on the LBMA
are NOT from hoarders....these are the
numbers of merchants using gold as a
CURRENCY. Who says gold is not money?
??Consider this: Gold production to demand ratios are no longer important.........the LBMA moves the world's entire yearly production in ONE day.
Is all this a "power play" by the LBMA?? In light of the preceding paragraph.....what would YOU do in their shoes?? The LBMA press release undermines ALL CB's propaganda....they are bitter enemies........... but just don't know it YET. The LBMA is that infamous voice that first screamed in an audible tone the king has no clothes. Period.
The LBMA change to "transparency" is a definite power play. This could be their move to push gold into a de facto currency.
Even SCARIER.... (or maybe exciting?) is that if all U.S. money in circulation was re-monetized (backed by gold) once again......gold would be around $34,000 an ounce! (Gee...did I really say that? There's gonna be hell to pay tomorrow....Maybe I better just hide for a few days)
The LBMA press release.......Pandora's box
just opened.......now HOW LONG????????
It is interesting to speculate who exactly is on the other side of the trades the silly shorts and hedgers are making. John N's comment about rickety trucks going along the silk road may be smack on the money. Doom on them all if someone wants physical delivery of the gold they bought from the shorts..... (...from Part 3)
This 'smokescreen' from the LMBA has obscured what may really be going on now. I can not believe that the amount of bullion changing hands is of this magnitude without price movement. Rather I think you should pay very close attention to the wording of their statements. They say that 'deals' for that amount are transacted on a daily basis, not that actual bullion sales occurred.
No my friends, I think the cupboard is BARE
and we will soon see the results!
As to why the COMEX seemingly has such a large influence on price when considering its relative size to the LBMA, I suppose it is not unlike many other markets which are influenced by the futures markets. A price change, owing to the size and nature of trading would seem to be more easily accomplished on the futures market as opposed to the OTC market. But it may also be because a lot of the trading on the LBMA is done independent of price as above reasoned. In any event, a price change induced by the futures market should hold only if traders on the LBMA accept it, and that is based on the above cumulative trading considerations and others.
The above collage is based primarily on supposition, many parts of which could be in error. Your comments are welcomed, as well as others on this forum who are more knowledgeable. (...from Part 4)
Internet Commentary #26 -
Posted on the Internet September 14, 1997 by "ANOTHER"
This could be an answer directed to the "Red Baron"?
The CBs are becoming "primary suppliers" to the gold market. Understand that they are not doing this because they want to, they have to. The words are spoken to show a need to raise capital but we knew that was a screen from long ago. You will find the answer to the LBMA problem if you follow a route that connects South Africa, The middle east, India and then into Asia!
the western world uses paper as a real value, but oil and gold will never flow in the same direction. Big Trader (...from Part 5)
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 1
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 2
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 3
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 4
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 5
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 6
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 7
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 8
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 9
THE GRAND LBMA EXPOSÉ: A Collective-Mind Analysis - Part 10
From a Friend
Ref: "In other words, the current price of gold means that you are buying a slice of the world’s gold supply with a proportionately smaller slice of the world’s money. You can currently buy x% of the world’s gold with y% of the world’s money, where x is much bigger than y. When gold will become the unit of account of the world’s wealth, you will find yourself able to claim a much bigger slice of that wealth than you would have been able to do with fiat money before the collapse."
This means that CBs and gold-clearinghouse BIS must attach a much higher VALUE to the gold they exchange (redistribute) than the public (visible) goldprice(s).
Note the difference between Value and price. The price is for bookkeeping purposes. The Value is for wealth reserve purposes.
That's why a private person cannot buy goldmetal directly from any CB (or BIS/IMF) ! We are not allowed to know how CB gold " flows " (and is valued in the inner circle). We have no idea how bullion banks intermediaries let goldmetal circulate from goldmine to state and private entities.
We are not allowed to know how the CB/IMF gold auctions really happen. How can we possibly verify the goldprices that are publicised ? Who are the receivers of the WAG gold redistribution ?
So much CB gold-Action and so little transparency. WHY !?
Because of Big difference between price and Value !?
to be continued....
Adrian Douglas: "I think what will come out of this is that people who want to be owners of gold and silver will realize that they have to look very carefully at their investments and make sure that they do have actual physical gold and silver in their possession. And, as Chris pointed out, the only real way to do that is to take possession yourself."