by Bob Rinear, The International Forecaster:
Each day that goes by brings us one day closer to the “end game.” One would have to be genuinely silly to try and put a date on that event, but you all know it’s coming. The US dollar’s days as the world reserve is going to come to an end.
Last Friday, “someone” or a bunch of “someone’s” thought it a good idea to dump 34 billion worth of paper shorts onto the Gold and silver market. All of it at basically the same time. Yet it brings into question, well, several questions.
When you look at the open positions from that day, you see that they weren’t opened to close out shorts, they were opened as sells. In other words, they were shorting the price of gold and silver, and since it’s price is based on paper transactions at places like the COMEX, we saw big moves down on gold and silver that day.
What was that all about? Well, obviously those “someone’s” didn’t like the look of gold and silver both looking like they were about to break out into a nice run higher. But why? Who has the ability to conjure up 34 billion worth of paper? And why don’t they want the price of these two metals going higher?
Listen up folks, this wasn’t mommy and daddy in their PJ’s trading on their Etrade account while eating Cheetos in bed. This was big time. If you add up all the gold that all the contracts represented that day, we’re talking about over a hundred tons of gold. So obviously they didn’t want the price of gold or silver going much higher. But why?
One way to look at it is this: Back in the big run up from say 2007 – 2011, the gold and silver markets were just days away from being over run. The US mint had several times “run out” of silver to make one ounce Eagle coins and the amount of gold on the COMEX for delivery, was within one big buyer of default. ( Note, the COMEX has already defaulted in the past, by passing a rule that they could settle a delivery in cash in stead of a metal, if they couldn’t get the metal to satisfy the demand)
After they finally got a handle on it and turned gold and silver lower, the pressure came off and the metals have been forgotten for a long time. But that’s not really true at all. While a lot of mom’s and pops, stopped buying it, and a lot of people who got seduced into thinking that Crypto currencies were really like gold and swung from buying it, the “big guys” kept right at it.
Let me repeat that line for a second, just for clarity. An awful lot of people that were silver ( and gold) bullion buyers, got lured into thinking that things like Bitcoin were just as wonderful, as they were told it was anonymous, and there was only “so much of it” etc. They not only stopped buying gold and silver, a lot of them sold their metals and went into crypto.
But guess what? The Chinese didn’t stop buying it. Nor did the Russians. Nor did the Central banks. In FACT, just from the first quarter of 2017 to the first quarter reading of 2018, gold buying has surged 42% at the sovereign level. (NOTE>> Russia has effectively sold half their US treasuries, but they have increased their gold holdings since the first of the year)
So that brings up the question: Who wanted to smash the price of gold and silver last Friday? I tend to think it was the very sovereigns themselves. Sure you could suggest that as the metals were about to break out, money that flowed into Crypto’s might come funneling out and back into gold and silver, especially the folks that bought bitcoin at 16,17,18 or 19,000 dollars, only to see it evaporate to 7000.
And yes a tidal wave of newly revived demand could once again push the COMEX into the situation of not having the very metal they’d be called on to deliver. But I tend to think it’s more than that. I think the CB’s, and the sovereign Governments themselves are the big players behind trying to keep the price suppressed.
Think about it like this. Let’s suppose you’re Russia and you hate the idea of the US shutting you off the SWIFT system, and being able to shut down your financing. Or you’re China and you hate that you have had to amass dollars to buy things such as oil. Or you’re one of any number of nations that see’s the US enjoy benefits of being the worlds reserve currency. If your plan is to one day reject the US dollar, who is going to want your currency? No one if it’s just another fiat currency whipped up out of thin air. But, if you back your currency with a percentage of gold, now you’ve got a more interesting animal.
They don’t want any excitement coming into the metals market. They want the public playing with overpriced stocks, and chasing this dog and that pony, and pushing any one of the 1700 crypto currencies.
I said long ago, that when the eventual “reset” hits, and there will be one, no one on earth is going to want a currency based on nothing. We’ve had decades of fiat money and all we’ve managed to do is create more debt than the planet has ever seen. We’ve seen it translate into unfair trade, currency wars, etc.
If your ultimate goal is to ride the current system until it implodes, while building a reserve of real gold in the meantime, so that when the system does implode, you have the means to back up your resultant currency, wouldn’t you want to amass it as cheaply as possible? You sure would.