GOLD INVESTMENT REPORT
PRECIOUS METAL & ENERGY
CURRENCIES & STOCK INDEXES

* Intro Golden Nuggets
* Paradigm Shifts in Gold
* Gold Ambush Aftermath
* Global Gold Demand Surges
* Phony Gold Price Factors



HAT TRICK LETTER
Issue #110
Jim Willie CB, 
“the Golden Jackass”
19 May 2013


QUOTES ON GOLD

"Until the gold mining industry is prepared to defend itself against market manipulation, it will remain the helpful patsy of the Western central banks and the enemy of its own investors." ~ Chris Powell (from Gold Anti-Trust Action)

"When we hear about the LBMA not willing to deliver Gold, and JPMorgan's inventories at the COMEX have gone from 2.4 million (ounces) down to 160,000 ounces, it just makes you realize that all of this paper trading means nothing. It is the real physical market that you have to rely on. I think demand exceeds supply by at least 60%. The central banks are surreptitiously supplying that Gold, and ultimately they will be running on fumes." ~ Eric Sprott

"The only thing keeping the USEconomy afloat is the government running trillion dollar plus deficits, the vast majority of which is being monetized at interest rates which are absolutely preposterous given the longer-term risk to paper in the United States. This is clearly unsustainable." ~ John Embry (Sprott Asset Mgmt)

"What is interesting about Gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down was Gold coins, tangible real Gold. That is going to show you, people do not want certificates. They do not want anything else. They want the real product." ~ Terry Duffy (CME President, who aided the MF-Global thefts)

"Our present Silver coins will not disappear and they will not even become rarities. We estimate that there are now 12 billion, I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins. Since the life of a Silver coin is about 25 years, we expect our traditional Silver coins to be with us in large numbers for a long, long time. If anybody has any idea of hoarding our Silver coins, let me say this. Treasury has a lot of Silver on hand, and it can be, and it will be used to keep the price of Silver in line with its value in our present Silver coin. There will be no profit in holding them out of circulation for the value of their Silver content." ~ President Lyndon Johnson (following passage of the Coinage Act of 1965, since he never heard of Gresham's Law, only to find tremendous meltdown of Silver coins while they did become investor items)

"On the physical front, strong appetite for Gold out of Asia continues. Our index of physical flows to India continues to indicate very strong demand coming in, at least five times the average over the last 12 months. Premiums in India are now quite high, particularly for the 0.9995 purity kilo bar, the more popular product, amid extremely limited supplies at the moment." ~UBS brokerage house

"The price of Gold is headed for extinction. I for one do not believe that the price of Gold is headed for five digits. Long before that might happen, permanent backwardation would shut down the gold futures markets. Gold could no longer be purchased at any price. Gold would only be available through barter. World trade is facing an avalanche-like transformation, flattening out monetary economy into a barter economy. Practically all economists, financial writers, and market analysts have missed this possible scenario. That will pull the rug from underneath the international monetary system. Barter is the ultimate in deflation, and that is what the world economy is getting." ~ Antal Fekete (who has decided to put aside his stupid Gold Basis theme, and now backs up my barter theme. Remember that gold settlement is the manifestation of barter, if conducted with true valid pricing.)

"[The big wealth and money in tangible form] is not fooled by the paper markets. The picture is not as it seems. So this bear market is 100 percent in the virtual market. Yet this underlying physical market has diverged into a full-fledged bull market, as evidence by hard official data showing the strongest physical demand in 18 months." ~ Andrew Maguire

"Barter and Gold are identical. People who understand this also understand what barter is.  Both Barter and Gold allow for free re-valuation of currencies that are blocked by central banks." ~ Dr Dieter Spethmann (honorary Chairman of PEL-EX Trading Ltd and former CEO Thyssen AG, also a current Hat Trick Letter subscriber)

"What I find most damning [in the COMEX gold suppression] is the uneconomic trades. These are smoking guns, proof positive, that the trades are fraudulent and manipulative in nature. Since permitted and ongoing, they must have official consent, most likely under the aegis of the Exchange Stabilization Fund run by the USDept Treasury." ~ Aaron Krowne (editor of the Implode/Explode website)

"We [at Charles Schwab brokerage firm] are more hurt by the manipulation of what is going on at the Fed. There is manipulation in oil prices, in milk prices, in monetary prices. We are highly dependent on the free market system. But we are getting into a funny situation by having every little thing manipulated by government. Eventually it becomes something closer to socialism." ~ Charles Schwab (yes, Chuck, national socialism, known as nazi)

"Eighty percent of our country [USA] is underwater. People are much poorer. They have lost 40% of their net worth. Their income is down 10%. Eighty percent of the people walking around. They are destroyed. It is the same thing in Europe, 80% killed. They do not have jobs. When they have a job, they are working fewer hours, and their job is insecure, and their house is underwater. Everything about their lives is terrible economically. They are watching every nickel, and they have to. They are right to do it." ~ Howard Davidowitz (a little exaggerated, but real and scary)

## INTRO GOLDEN NUGGETS

◄$$$ AN INTRIGUING AND QUITE REALISTIC VIEWPOINT OF THE S.P.D.R. GOLD TRUST WAS PROVIDED BY A SHARP CLIENT IN EUROPE. THE HYPOTHESIS IS THAT THE SO-CALLED G.L.D. FUND IS GOLD IN TRANSIT BEING DELIVERED BY THE BANKS UNDER CONTRACT. INVESTORS HAVE BOUGHT GOLD IN MOVEMENT, A KITING FUND. THEREFORE THE BANKS CAN PLAY WITH IT, IN FULLY ABUSIVE DECEPTIVE MANNER, FOR A SPECIFIC PERIOD OF TIME. IN THE MACRO SENSE, GOLD IS ALWAYS IN TRANSIT, WHICH HAS BEEN SOLD AS AN INVENTORY SHELF TO CLUELESS DOPEY GULLIBLE INVESTORS. $$$

The banks import gold on a consignment basis from mining firms without investing anything. The gold bars remain the property of the miner until the bullion dealers take delivery. The popular corrupt exchange traded funds (GLD & SLV) hold precious bars, but it is just Gold in transit. Imagine a stagecoach shipping a 100-oz bar of gold over seven days from me in Denver to you in Chicago. The gold belongs legally to me until arrival. But the bank can abuse its ownership for seven days as long as the bar is delivered properly. Extrapolate this to the big picture of gold producers (miners) who deliver gold to the banks and gold consumers (jewelers, central banks, individuals) who take delivery from the banks. The banks know 1600 tons will be produced every year which they have committed to buy via forward futures contracts. They have committed to sell 1600 tons one year out. In the interim, they can play with the gold in movement. They trade it, set up derivative financial instruments, lend it, lease it, and set up an ETFund for sappy dimwitted investors who own nothing but the buzz from a pack of flying insects. Banks are in the business of exploiting Maturity Transformation, and Gold in transit fits their model. The gold behind GLD is gold perpetually in transit, never still for actual ownership, only a shell game. The banks via maturity transformation claim to own it in the interim. Investors are not wise to the charade. The banks and shareholders will never ever be able to claim the gold in transit because it is already committed to a seller, and will find the buyer.

The sharp decline in the GLD official inventory can be interpreted. It is not from investors selling, like the lapdog subservient press reports. It is not inventory, but rather allocated Gold in transit. The reduction in inventory can be attributed to decreases in bullion bank supply, and increase in demands to bullion banks. The rising demand is obvious from the investor side, due to concerns over wealth and its security. The popular funds are down in inventory, due to mining output declines, and thus reduction of Gold in transit. The supply decrease can be attributed to several things. Mining firms are selling forward less, since they dislike the official price. They object and react. They sell Gold at spot to the highest bidder. The the bullion banks are being cut off behind the scenes. China has embarked on broad plans to buy up mining firms, and to capture their forward contracts, assuring the delivery of physical gold bars. Large Asian interests have increasingly been going to the pit, essentially buying Gold at the source and maintaining claim custody of output through the refining process. The Asians snatch the Gold bars before they ever enter the system. Many hundreds of tons that formerly went through the Western bullion banks a few years ago have essentially evaporated from traditional supply chains.

The rise in demand is widely reported. The Bank of Japan with its competitive currency devaluation has spawned Gold demand in response to sponsored inflation. The traditional buyers of China and India continue their torrid demand, as incomes rise and culture supports the trend. The locales of Iran, Turkey, and Dubai are hotbeds of brisk Gold demand and trade. The EuroZone problems contribute to money seeking the true safe haven in Gold, no longer in sovereign bonds, not even USTreasury Bonds that offer no yield in return. The USFed sponsored inflation with bond monetization (Quantitative Easing) has become institutionalized, deterring bond purchase and encouraging gold demand. A general lack of trust in the Western banking system leads to gold demand. The non-G-7 central banks continue to buy heavily. The G-20 nations are working toward trade settlement in Gold, to be known later as the Gold Trade Standard. At some point the GLD fund will be shut down when the inventory tonnage decline accelerates to an alarming level, and shareholders will be cashed out. If the cashout is conducted at sufficiently low prices, expect a massive wave of lawsuits. The GOLD inventory is in fast decline. It started the year 2013 at 1350 tons, but now is at 1075 tons. It has lost 275 tons in four months, equal to 80 trading days. The loss comes to about 60 tons per month. See the official GLD rap sheet (CLICK HERE).

Mining supply has decreased, most notably from the interrupted big projects like Pascua Lama on the Chile border of Argentina, and like the Kennecott property in Utah that suffered the monstrous landslide. High grade projects are being depleted, which leaves the lower grade reserves to be tapped. Eric Sprott recently told friend and colleague Rob Kirby that the scrap Gold market business in 1Q2013 is roughly one half the volume from prior years. It is a fast depleting source. Also, as the global economy slows, the copper mine output slowly collapses. Gold is a byproduct of copper mining. See the Markit Economics article on the global economy slowing to a standstill in manufacturing (CLICK HERE). Thanks to EuroRaj with his extensive knowledge of the physical Gold market from Indian and Turkish experience, for sharing the Gold in transit concept. The investors buy the gold, pay the funds, ride the stagecoach, and are led to believe they own the baggage onboard. But their baggage is handed to a client for delivery, only to be replaced by another fungible bag that is tied down with the other baggage atop the moving stagecoach. The passenger is none the wiser.

◄$$$ SOUTH AFRICA RECEIVED $1.1 BILLION IN GOLD SHIPMENTS FROM J.F.K. AIRPORT IN NEW YORK CITY. THE UNWROUGHT GOLD TIPPED 20,013 TONS. THE INDICATION IS SHORTAGE OF MINE OUTPUT IN SOUTH AFRICA FOR KRUGERRANDS. POSSIBLY SOME NORTH AMERICAN MINING FIRMS BYPASS THE C.O.M.E.X. IN SECURING A HIGHER FAIR GOLD PRICE, BUT NOT LIKELY. $$$

In just four short months, an astounding $1.1 billion in gold has been shipped from New York to South Africa. The bulk were shipment of unusual nature in February and March. So far this year, a whopping 20,013 kg of unwrought gold worth $982 million has left John F Kennedy Intl Airport in New York, bound for South Africa. The report is from the US Census Bureau foreign trade division. Unwrought gold includes bars created from scrap as well as cast bars, even dory bars of higher impurity, but not bullion bars, not jewelry, not gold dust. The surmised destination for the gold is the South African Mint, which produces the popular gold coins called Krugerrands after an initial refinement process. The SA mining industry has seen a rather harsh decline in precious metals output over the last few years since the stupid marxist morons took control of the government, screwed up the electrical grid, rationed power and imposed taxes on the mining firms. As footnote, the word Rand means Ridge (as in mountain ridge) in their native language, the site of the biggest, most extensive, and deepest gold mine deposits ever discovered in the world. See the Quantz artic le (CLICK HERE), but the site is spurious for recovering the story.

James Turk pitched in with an interpretation that makes a lot of sense. He wrote, "The Rand Refinery is one of the largest in the world. South Africa used to mine 1000 tons per year, all of which was refined at Rand Refinery. South Africa now mines less than one third of that weight. So there is a lot of unused fabricating capacity at the Rand Refinery. Given that the Swiss refiners are working 24 hours by 7 days per week with backlogs, it is not surprising to me that someone would send gold to the Rand Refinery for fabricating, whether Krugerrands, kilobars, tael bars, or whatever. That exports from JFK Airport are rising is not surprising either. The USEconomy continues to do poorly. So a lot of old jewelry and stuff is being sold for cash, to help make ends meet. These growing shipments from JFK is just part of the now well-established trend that Gold is being shipped from West to East." Note confirmation that lower South African mine output has disrupted their famous Krugerrand coin business. The key is that the shipments are non-monetary, meaning not coming from the USFed or major New York banks. Turk focused on jewelry, but unwrought gold would exclude such jewelry. Gold melt in dory bars might be part of the shipments.

Two other perspectives. The first is from a gold trader who has clients on every continent. He pointed out that the micro minority that controls the United States also controls South Africa. These people are skipping town, leaving North America, taking their wealth with them, and intend to seek out safer havens. They see the writing on the wall. Several high ranking US officials have made formal inquiries about foreign asylum. My conjecture is that some North American mining firms are shipping dory bars to the Rand Refinery, bypassing the COMEX where the price paid is artificially held down low. Dory bars are not considered monetary products, since typically of 80% to 90% in gold purity level. Concentrated mine ore would qualify. The Sprott Fund and other funds have been actively working to snatch the mining output usually headed for the COMEX vaults, but they must break the linkage to forward sales created in years past under formal contract. One might wonder if the South Africans offer a premium of $100/oz or more to secure the supply. It would result in lower profit margins, but the Krugs might be sold with a rising premium over spot gold price.

My friend and colleague Rob Kirby reminded that this is not likely as explanation. The mints can currently buy 0.995 pure 400-oz good delivery bars from Scotia Mocatta at spot plus 2%, with no refining costs associated. The remaining task is simply recasting the bars since arrival in pure gold form. The long shot argument in another obtuse angle might be the South Africans redeeming USTreasury Bonds, bringing money home, doing so in the form on non-monetary gold. Possibly, the Johannesburg government was on the receiving end of fake gold tungsten bars from the Clinton-Rubin gang. Like Hong Kong and Germany, the South Africans might be victims of the big ugly scheme with several hundred large fake gold bars entering those foreign banking systems. The shipments from New York would be restitution to keep the story out of the press. Time might tell.

◄$$$ JUNIOR MINING STOCKS SEE RECORD INSIDER BUYING, AN EXCELLENT SIGNAL FOR A LOW. BUT THE JACKASS STILL DISLIKES THEM, SINCE SUBJECT TO NIL PROFITABILITY, HEAVY SHARE DILUTION, RISING COSTS, AND FOREIGN CONFISCATION THAT PERSIST. LARGE MINING FIRMS HAVE BIG TROUBLE AHEAD. MORE GREAT ARGUMENTS TO OWN THE METAL, AND NOT THE METAL PRODUCERS. $$$

Corporate executives smell bargains in the junior mining sector. Insider buying on the TMX Venture exchange is near a record high. The INK Research Venture indicator was at 715 on a recent day, just 20 points below its record peak of 735 set in October 2008. It means over seven stocks listed on the exchange are seeing insider buyers for every one seeing sellers. In early March the indicator was near 400. A high level of buying interest among officers and directors within their own businesses usually is a positive signal. The Jackass expectation is for a small bounce in mining stocks, nothing significant. The majority of the junior mining firms in my opinion will be gobbled up for pennies by the major firms, whose finance source will be either from government or tainted narco funds. Insiders see a low price relative to the past levels, and confuse it with a strong value. The ongoing threats are steady and relentless, not to go away. The low official gold price means firms not yet in production cannot boast of alternative buyers at a premium price. Share dilution is constant toward executive compensation and project finance, as are rising costs. But the killer factor is shutdowns and confiscation by increasingly hostile and cash-strapped foreign govenments, a new trend called resource nationalism. My belief is that insider executives do not want to suffer the embarrassment of their stock share prices going close to zero. See the Globe & Mail article (CLICK HERE).

Court cases are going against the large mining firms. Adverse claimants have won a decision in Chilean courts claiming that they own the Pascua Lama claims. Bias on the local judicial front is an advantage. Barrick Gold could lose the entire property, and be forced to write off some of their $billion investment. The Newmont mines are suffering from lower ore grades all the time. Their forward profit potential does not raise hopes. Even their Midas Mine in Nevada has dropped in grade substantially. The Gold supply is on the decline, favoring the pure metal bar and coin owners with no counter-party risk. Few investors comprehend that the capital exposure of mining firms is a form of counter-party risk, different from gold certificate theft risk, but instead from vanishing capital risk. The Jackass favors gold bars & coins.

◄$$$ SOME VALID REASONS STILL EXIST TO INVEST IN MINING STOCKS. BUT EXTREME CAUTION MUST BE USED, SINCE THE SECTOR IS IN DEEP TROUBLE. THE THREATS TO MINE OUTPUT ARE MANY, AS EXEMPLIFIED BY SOUTH AFRICA. WITH SUPPLY DOWN, THE JACKASS CHOICE IS TO INVEST IN THE METAL BUT NOT THE STOCK SHARES. $$$

Frank Holmes of US Global Investors maintains a positive viewpoint toward the mining stocks that is not shared by the Jackass. He presents three reasons why mining stocks are a worthwhile investment. 1) Gold companies are cheap. But they should be, since so many threats to the profitability and viable property ownership. The lower official gold price has further reduced their potential profit, unless new innovative routes are formed for selling mine output. Most mining firms still have tremendous capital needs, like to build a mill. The current climate is horrible for raising capital. 2) Gold companies are increasing their dividend. But they need the cash not for dividend payouts, but to manage the higher costs, even to perhaps engage in some payola to local government officials in order to avoid confiscations. Instead they typically permit heavy dilution of shares, which cannot coincide viably with dividend payouts. 3) Enhanced returns in a diversified portfolio. This is general mumbo jumbo. REITS for farmland would be better. The wiser course might be to diversify the personal portfolio with actual metal, like coins or bars, of course held outside the United States and Canada. They have no liability from company risk, greedy executives, over-expansive share dilution, false financial filing, and naked shorting from Canaccord or other brokerage firms, or spread strategies that suppress the stock values. See the USFund article (CLICK HERE).

Nothing makes the argument against mining firms better than South African labor problems, safety impositions, and marxist rule for several years. The situation has been described in past Hat Trick Letter reports. Although a new story focused upon platinum group metals, the same threat exists over the Gold projects in the country. As leading global platinum producer, South Africa lost over 750,000 ounces of output last year to strikes, shaft shutdowns, and safety stoppages ordered by the government, according to the metals refiner Johnson Matthey. The estimate exceeds other forecasts and highlights the grave threat from illegal strikes, rooted in a union turf war, which has hit the sector last year. The triggered violence has killed over 50 workers. A safety drive by the government resulted in several mine stoppages early in the year which also curtailed output. GFMS (formerly Gold Field Mineral Services) has estimated that 620,000 ounces of platinum production was lost last year to global production, mostly due to South Africa strife and strike. Johnson Matthey attributed the sharp fall in South African production as the main reason why global platinum shipments declined by 13% in 2012 to 5.64 million ounces. The platinum sales by South African producers had fallen 16% to the lowest level at 4.1 million ounces since year 2001. Lastly, the marxist nitwit clowns are among the dumbest managers on the planet. Their fiddling with the electrical grid and with the tax levies has brought about an endless stream of headwinds and unneeded burdens, typical of their brain-dead ilk.

◄$$$ USCONGRESS BILL SEEKS APPROVAL OF STEEL PENNIES, NICKELS, DIMES, AND QUARTERS FOR COINAGE AND USAGE. CREATION OF A NEW HIGH-TECH $100 BILL IS COMING IN OCTOBER, PROBABLY A FUTURE TOOL FOR CALLING MONEY HOME TO THE UNITED STATES FOR TRAPS. $$$

Rep Steve Stivers of Ohio introduced a bill in the House of Representatives which seeks to immediately alter the metallic composition of coins set in value at the one cent (penny), five cents (nickel), ten cents (dime), and twenty five cents (quarter). Note set value instead of true value, by declaration and not from innate value. The legislation would require the coins to be made from American steel. Current pennies cost the United States Mint 2.0 cents to produce and distribute. The nickels cost the USMint 10.09 cents to produce and distribute. Worse, the majority of the copper, nickel, and zinc currently used to produce the penny, nickel, dime, and quarter is imported from Canada. The face features of the coins would remain the same. The estimated savings from steel coins to the USGovt is $433 million over ten years. See the Coin Update article (CLICK HERE).

The new high tech $100 bill coming in October will feature the same Franklin face, with advanced tweaks intended to obstruct counterfeiters. The USGovt security agency counterfeiters will probably steal one of the devices in order to keep their crafty business going intact. Retailers will be aided in identifying fakes. New features include a blue 3-D security ribbon embedded with images of bells that change to the number 100 when the note is tilted. A Liberty Bell embedded in an inkwell on the face is copper colored. When the note is tilted, the bell changes from copper to green. The $100 bill is the most widely counterfeited US note, the chief villain being the Langley gang in the USGovt security agencies. The USFed mentions no need to trade in old $100 notes for the new ones. But they lie. A grand recycle is planned. The Jackass expects the new Benjamin to be critical in calling dollars home, as foreign banks will not accept them. The preparations for a USDollar devaluation are being made under our noses. See the NBC News article (CLICK HERE).

## PARADIGM SHIFTS IN GOLD

◄$$$ THE PRICE OF C.O.M.E.X. SEATS IS WAY DOWN COMPARED TO EIGHT YEARS AGO. THE ARENA IS FAST SLIPPING AWAY AS IRRELEVANT, DUE TO ITS CRIME CENTER AND GRADUAL EMPTY ROOM STATUS. ODDLY, THE FORMER HEAD OF THE C.M.E. WAS REFUSED 200-OZ GOLD ORDER. $$$

As the endgame approaches for fraudulent paper gold executed by the emancipation of physical gold from paper gold, the price history of seats on the COMEX exchange from year 2005 to present reveals the lack of interest in the arena. Membership has privileges, and those privileges have been abused to the hilt. A recent snapshot is highly revealing. The COMEX Division full membership seat saw bid at $100k, offer at $130k, with the last sale done at $120k, with date stamp of May 3rd. Compare to late December 2005, when the New York Mercantile Exchange announced that a seat on COMEX Division sold for a record $440,000. Break out the calculators, and note almost a 73% price decline. That is roughly how much the USDollar has declined in purchase power during the same timespan. Not kidding, check gasoline and milk. See the CMEGroup data sheet (CLICK HERE).

The COMEX is so tight on Gold & Silver inventory, that they regularly refuse their customers physical delivery of bullion under contract. It is basic contract fraud. Imagine buying a truckload of timber or coal and being refused for delivery, even though the contract was honored, and margin payment was posted, ready for full payment. Add insult to injury, and reveal the corruption at the same time. The latest report comes from Leo Mahlamed, the former CEO of the CME itself. He reportedly was refused delivery of two gold contracts on April 23rd. He stood for delivery of a scant 200 ounces. According to reports from the floor, the CME refused delivery, offering him only a worthless warehouse receipt. Well, it is worth something, evidence of fraud in a lawsuit. Mahlamed is reportedly a current CME Board Member and Chairman Emeritus of the CME. He was CEO of the exchange from 1969 to 1993. Conclude that elite status matters little, when they gots no gold. See the Silver Doctors article (CLICK HERE).

◄$$$ THE GOLD PRICE PLUNGE WAS NOT A NATURAL MARKET EVENT, ACCORDING TO FUND MANAGER AUERBACK. IT WAS PURE COLLUSION AND MARKET INTERRUPTION OF THE ILLEGAL VARIETY. HE BELIEVES THAT GERMANY IS MAKING PREPARATIONS FOR A FUTURE WITHOUT THE EURO CURRENCY BALL & CHAIN. HE FORESEES A $3000 GOLD PRICE AND AT LEAST A $50 SILVER PRICE. HOWEVER, HIS VIEWS ON GOLD WERE SKETCHY AND NOT VERY PROFOUND. HIS VIEWS ON THE USDOLLAR WERE EVEN MORE SHALLOW. $$$

Marshall Auerback commented on the currency wars and the gold market. The Jackass has followed his work for almost ten years. Honestly, the interview left me disappointed, thinking he is not very deep in his knowledge of gold. He mentioned gold as a commodity almost ten times, and made a careless comment about gold being stuck in a two-year bear market. He seems ignorant of the Gold demand story and the London drainage episodes that changed the entire face of the Gold market in year 2012. He does not believe in the Gold Standard as a theological element, which means he does not comprehend the underlying problem of the global monetary system is phony money based upon debt platforms and false pillars in support. He regards Gold as an insurance vehicle, a commodity, which itself is unencumbered by liability. He acknowledges the Gold market as heavily controlled.

Auerback's admiration of Frank Veneroso shakes my confidence, since Veneroso had shown brilliance in the 1990 decade but shameful ignorance in the 2000 decade. Frank's comprehension of commodities bordered on pathetic, as he failed to anticipate a commodity price rise from basic USDollar inflation hedge against central bank action. He stuck with the moronic Deflation klapptrapp, where economies in decline would demand less and bring about lower commodity prices. Veneroso and other deluded followers like Rick Ackerman fell victim to the dead-end intellectual alley, not the Jackass. My analysis labeled such mental lightweights as Deflation Knuckleheads, since they ignored the powerful hyper monetary inflation factor in front of their noses, executed by the USFed central bank. Inflation of money meets Deflation of capital to produce a monster storm vortex of grand historical proportions, still in progress, still raging. My personal meeting of Veneroso left me totally unimpressed, seeing an arrogant man who repeated wrong constructs (principal points) and put on false airs. He looked over those attempting to ask questions, even to offer compliments.

Auerback admires GATA for their correct arguments and warrior attitude. However, his focus is mostly on mining stocks and not metal bars, citing the firms as having well defined reserves (value now), not resources (value potentially later). He seems ignorant of mining firm equity and their vulnerability to inflation of shares through dilution, as he minimized the confiscation risk from hostile governments. He did accuse mining firms of being run recklessly by engineers with poor sense of management, men who just drill holes. He merely stated that firms must seek friendly jurisdictions, when the Jackass instead believes all jurisdictions become hostile when they are under tremendous fiscal distress. He talked about a divergence in the gold market, but between the gold price and mining stock values. He missed or overlooked or did not direct attention at the divergence between the gold paper price and the gold metal price. He showed a deep proclivity toward mining stocks which seems badly errant, if not myopic. He did not bother to explain their horrendous performance since four years ago, when the Jackass vacated all mining stocks personally.

On the April gold ambush event, Auerback pointed out an overwhelming gold demand which resulted. Auerback viewed the ambush as deep collusion between the big bank proprietary desks and bullion banks and hedge funds, but not necessarily central banks. The recent takedown in the paper gold market was not a natural market event. He misses how central banks have appendages in the big banks to conduct their business, to do their bidding, with little division and separation. He showed insight with his point that the Gold market has inelastic properties both in demand and supply. The higher price spawns greater demand, while the higher price has not resulted in much new gold supply in arrivals. His target for Gold is $3000 per ounce, and for Silver between $50 and $80 per ounce. The price will remain volatile during the fight with the power structure. He made a funny astute point, that Gold will be as asset bubble when Bill Murphy is a regular guest on CNBC, not before. His most encouraging comments came on Germany. He cited the central Bank of Italy as being an investor in the failed Long-Term Capital Mgmt firm, which had ties to 400 tons of Italian Gold bullion, perhaps lost. If Germany is to extend further loans to Italy, they might demand Gold in collateral. If so, then the Italians will be put in a position to prove their 2000 tons of Gold in reserve, and Germany will require demonstrated proof of its own Gold account. Yet their allocated gold on account is being fought over with London and Paris.

Auerback believes Germany might wish to monetize a new Deutsche Mark currency after the Euro Monetary Union splits and Germany exits the Euro currency. He redeemed himself somewhat with insights on Europe, not to sound patronizing on my end. He believes Germany is fast losing faith with the Euro Central Bank, is fearful of past debts with dodgy collateral, and is reluctant to extend credit without collateral. His comments on China were shallow, centered upon further diversification, as they wish to discard tainted FX paper reserves (called them dirty shirts). His comments about USGovt gold lease were beyond shallow and cockeyed. He actually said the leased gold issue is not important unless the central banks are forced to buy back the forward sales. The raid on Fort Knox was not forward sales, but rather gold lease and colossal dump on the market, under the controlled 0% lease rate to facilitate the crime scene. The Rubin Gang under the Clinton Admin can be accused of setting the dials and opening doorways in order to steal the t reasury of the United States. He actually said the USDollar will go to where the private portfolio managers take it, an astonishingly careless dim-witted comment. His ignorance of the Eastern initiatives to put in place a USDollar alternative to trade settlement seem glaring in its absence. Sorry, but my perception of Marshall Auerback went from very high to watered down half-blind smart guy in the last month. He still has insights, but like from a brilliant man who uses only one eye to see, and half of brain hemisphere. See the Gold Switzerland interview by Lars Schall (CLICK HERE) done on behalf of Matterhorn Asset Mgmt. Don't blame Lars.

Despite the disappointment, the interview had critical value. The interview convinced the Jackass that depth of comprehension even in the gold community is not impressive, and secondly, that the attraction of mining stocks is still prevalent despite the fact that it is DEAD MONEY. The leading figures in the gold community do not have good access to important developments, either from lack of contacts or lack of interest. Perhaps, they do not impress the big players, like The Voice, a trusted valued respected source in gold, currency, banking, and trade. The mining stocks will gradually be seen as a good mine shaft to middle earth in which to discard hard earned money, like with Tom Sawyer.

◄$$$ NICK BARISHEFF URGES UNCOMPROMISED BULLION TO BE HELD IN TRUE ALLOCATED STORAGE. IT IS WISE TO USE A CHECKLIST. MANY GOLD ACCOUNTS OFFER NO PROMISE OF GOLD BAR OR COIN DELIVERY. THE SHOCK COMES WHEN DEMAND FOR DELIVERY OF METAL IS MADE. MOST SWISS BANKS RENEGE ON DEMANDS. THE KEY IS TO KNOW REFINER SEAL AND SERIAL NUMBER PER BAR OWNED. TYPICALLY A LOWER ACCOUNT FEE MEANS GOLD IS NOT ALLOCATED. MUCH DECEPTION IS PREVALENT. $$$

Nick Barisheff of Bullion Management Group has set the record straight on a confusing but crucial point concerning stored wealth. Much of the confusion stems from a misunderstanding of the terms allocated storage and unallocated storage. His respected firm (which hired a very bright personal friend in Toronto) specializes in uncompromised bullion held in secure allocated storage. The issue is simple. Either a client owns uncompromised bullion bars with documented title bearing serial number ID that are stored in secure allocated storage, or the client does not, in which case the unallocated account is settled in cash at the issuer discretion upon redemption. There is nothing illegal or conspiratorial about this. The fine print on the precious metals account or bank certificate should make it clear. Yet many investors with unallocated accounts are shocked when they attempt to take delivery of the gold. They were lazy. They assumed. They were not thorough and careful.

At the inception of the BMG BullionBars program in 2008, it became clear that many bullion sellers and storage facilities were not entirely honest with their clients. Here is a key indicator of slippery custodian supervision with crafty sales pitches by firms that deceive. Barisheff told a story of a client, but the final point will be recited. Deceitful firms will offer what they call gold investment at a low fee, and lead the investor to believe it is fully allocated, when it is not. The key selling point is fee. If very low, then almost certainly it is not allocated. If truly allocated, then the refiner seal and serial number should be made available. On a macro level, if truly allocated, the firm should disclose the total number of bars being held on behalf of clients. These are the litmus tests for allocated account ownership. Gold Money will provide bar lists with serial numbers of the entire collective account, since theirs is joint allocation, with full integrity. Gold Money will disclose the total bullion held in vaults for the collection of clients, with total value. Most firms offering gold investment accounts offer bullion which, just like a cash account, is an unsecured and uninsured liability of the dealer. BMG does business with true allocated storage for its accounts, complete with Bullion Deeds for each bar, including a confirmation of trade detailing the refiner, serial number, exact weight, and purity of each bar purchased.

The BMG executive crew is thorough, and decided to do a field trip. During a recent visit to Geneva Switzerland, Paul de Sousa visited a supposedly cheap storage facility offered by Swiss banks, advertising falsely their allocated storage. Being Swiss does not mean accounts are allocated. The conclusion was that none of the Swiss banks questioned offered true allocated storage. In fact, they strongly resisted the allocated program, claiming the extra cost was not worth it. They lacked in documentation to satisfy the investor that any gold was actually owned. Bank certificates are not Gold bars under ownership with direct claim, much like a garage receipt for a luxury car stored in a long-term parking garage. The confusion comes from the banks who issue deceptive sales pitches. The burden ultimately lies with the investor, who must read the fine print, and ignore the attraction of artificially low costs. When a few $million or hundreds of $million worth of Gold & Silver bars, low-cost storage should not be the major criterion. Direct ownership of the bullion should be the primary concern. See the BMG Bullion article (CLICK HERE), whose investment house the Jackass gives a strong endorsement for integrity. Be sure to know that Matterhorn Asset Mgmt in Switzerland is also a reputable firm with true allocated gold ownership for investors. Its manager Egon Von Greyerz is a Hat Trick Letter subscriber.

◄$$$ THE RUSSIANS OWN A TREMENOUS AMOUNT OF GOLD. THEY DOWNPLAY THEIR GOLD RESERVES TO THE WESTERN BANKERS, IN A DECEPTION ON REBOUND. THEY ARE READY FOR THE NEXT CHAPTER WITH GOLD-BACKED CURRENCY AND GOLD TRADE SETTLEMENT. THE KREMLIN IS PLAYING ITS POKER HAND VERY ASTUTELY, HOLDING THREE TIMES AS MUCH GOLD IN RESERVE AS THE UNITED STATES HELD IN FORT KNOX. SOME PAST EVENTS MIGHT BE IN THE PROCESS OF BEING RESOLVED. $$$

Some stories have circulated that at the turn of the millennium, the Kremlin dumped 330 million ounces of gold on the market in order to support its economy and manage a transition from the Soviet state. The story is entirely incorrect, according to a source with reliable Central European banker connections and direct personal experience in the post-Yeltsin period. He worked as a consultant within Russia, and is fluent in the Russian language. He shared some astonishing thoughts, which were collected. The last comment is a zinger, and reminiscent of the overturned Barrick property rights working through the court system. He wrote the following in a message.

"That 330 million oz number claim is incorrect. The Kremlin could have done such a sale but did not. They used diamonds at that time and nearly broke DeBeer's spine. By the way, Russia holds approximately 25,000 to 30,000 metric tons of Gold bullion, at least three times what Fort Knox ever held before being removed by the Rubin Gold desk at Goldman Sachs from years 1992 to 2000. Recall the gold carry trade enabled by the 0% lease rate at the time. The Russian total does not include the 200 tons still being held by France, which was stolen in 1917 from St Petersburg and transferred to Paris by imperial loyalists. An ongoing battle continues between the Romanov Trust (managed illegally by the United States) and the Russian government to repatriate those assets, worth a couple of billion dollars. Russia is currently negotiating with the US, claiming that the Alaska deal was a land lease and not a sale. Refer to the Seward deal a century and a half ago. Perhaps it can be said that Sarah Palin does not only see Russia from her living room, since she actually is living in Russia. The mainstream media keeps mum on all these issues." Wow! A long shot, but wow!

Talk about a nasty backlash on gold leasing, seen potentially with land lease in challenge. By the way, if the USGovt defaults on its debt, any Russia claim on Russia will enter a whole new room. Moreover, the Russian ownership of significant USGovt debt changes the negotiation and tilt on the table. Bargaining position for the debtor is usually very poor. The gigantic USMilitary Base where the killer swine flu vaccine was developed is located in Alaska. Deep freeze storage of hundreds of dead bodies from the virulent Spanish Flu outbreak from 1910 decade is located on the base. The Russians can have it all. To be sure, the loss of Alaska is a grand long shot. The official story was that in 1867, fearing a loss of the Alaskan territory to the British, the Russian Govt sold 586 thousand square miles (1.5 million sqkm) for $7.2 million. The territory was called Seward's Icebox, equal to twice the size of Texas, named after William Seward, the Secretary of State at the time who negotiated the deal.

The main item to take away is that the Russia Govt owns over three times the gold volume of Fort Knox at its zenith, before the Kentucky facility was gutted by Wall Street and later converted into a USGovt nerve gas repository. Russia is fully prepared for the next chapter, which will be governed by the Gold Trade Standard. The USDollar will be relegated to the US dustbin of history, the currency for the De-Industrialized Third World. Vladimir Putin and Dmitri Medvedev believe that the true Russian gold reserves are a state secret, critical for establishment of the next global monetary system built upon trade platforms. The other leverage will be the considerable Russian official FX reserves, valued at $528 billion as of April 2013. The majority of reserve assets are USTreasury Bonds. Given the Rosneft oil deal for which London banks helped facilitate the loan, the Kremlin might have more to exert leverage pressure than the standard USTBond debt dump threat. They might be in possession of some tungsten gold bars spread by the Rubin-Clinton gang. Perhaps they have some juicy brinksman high jinks information from the Yeltsin power grab using the Big Oil firms to attempt to control Russia when the Soviet Union fell. As footnote, the Chinese Govt also owns multiples greater gold reserves than published. Both Russia & China will lead the next chapter where trade is conducted in the Eurasian Trade Zone. The unit of trade in settlement will be Gold, and the vehicle will be Gold Trade Notes. The USDollar will be trash.

◄$$$ AUSTRALIAN GOLD MINERS HAVE DECIDED NO LONGER TO HEDGE FORWARD OUTPUT. THEY WILL CHANGE THEIR STRATEGY WITH PROJECTS. THEY REACT TO ARTIFICIALLY LOW GOLD PRICE. HENCE MORE REDUCTION TO THE WALL STREET AND C.O.M.E.X. FLOWS WILL BE THE EFFECT. THE MINERS SHOULD HALT PROJECTS AND GO ON STRIKE, BUT THEY WILL INSTEAD WASTE THEIR BEST PROPERTIES, BOASTING OF PRUDENT MANAGEMENT. $$$

On a worldwide basis, gold mining firms led by Australia have begun to give the cold shoulder to the idea of hedging future production. Their decision is in direct reaction to the gold price ambush, replete with corruption and collusion. Years ago, the firms were happy to sell forward the majority of future production at fixed prices in order to guarantee revenue streams. The practice was both devious, enabling Wall Street to suppress the gold price, and stupid, since the mining firms lost money on the hedge book. The practice all but dried up by the second half of the last decade as mining companies scrambled to gain full exposure to rising bullion prices and to exploit the market advances. Major producers such as Barrick Gold and Newcrest Mining in Australia wasted $billions of investment capital to unwind their hedge books. Suddenly, the norm is not to hedge at all, if not to seek alternative avenues to sell mine output. The mining firms will gradually bypass the COMEX and Anglo bankers for their corruption and absurd low price paid for gold bars. For instance, CFO Andrew Coles of Oz Minerals, which expects to mine 150,000 ounces of gold this year, boasts that they do not hedge anything.

The stumbling bumbling large mining firms might talk of prudent management, but they will act in mindless ways. Newcrest talks about being stingy with allocating capital. They talk of chasing value ounces in projects instead of total ounces in output, in order to combat lower the gold price. Producers will target higher-grade ore instead of lower-grade material, which became more economic to mine as gold prices soared to $1900 per ounce. Not smart long-term! In order to remain profitable, the mining firms will deplete their most valued ore deposits, when they should go on strike and object to the corrupt gold price. They should temporarily shut down operations. Instead, they will halt the marginal projects that feature low grade ore, and waste their best properties by continuing production, not earning a proper profit. The trend to deliberately reduce their gold ore grades with a rising official gold price will go into reverse. Less gold will be produced by the mining firms collectively, a direct effect of lower official gold price. Expect numerous small mining firms to halt projects, and not waste their best properties, waiting for a fair gold price to be restored in the marketplace. See the Mining Web article (CLICK HERE).

◄$$$ ARIZONA HAS BECOME THE SECOND STATE TO MAKE GOLD & SILVER LEGAL TENDER. THEY HOLD LITTLE RESPECT OR CONFIDENCE FOR THE MONETARY MANAGEMENT OF THE NATION. INSULT GIVEN TO CHAIRMAN AND THE USFED CENTRAL BANK, IF NOT TO THE USGOVT ITSELF. THE PROPONENTS ARGUE THAT SOUND MONETARY SYSTEM IS REQUIRED TO RESTORE STABILITY. $$$

The parade of states continues to follow Utah down the path of Gold & Silver as legal tender, as directed by the terrorist Constitution, enemy to the fascists in power. Utah authorized the precious metals for usage as currency in 2011. Regard the legislation as a deafening loud signal of discontent with monetary policy. The hyper monetary inflation has eroded confidence in what constitutes money, the current version an errant renegade. Then again, the Constitution has been ripped apart for over 40 years. On April 30th, the Arizona Senate approved a measure to make Gold & Silver legal currency in the state. Its supporters have spoken clearly on a lack of confidence in the international monetary system. The bill will make Gold & Silver coins legal tender starting in mid-2014. To be sure, a dozen other states continue to consider the transition, according to the National Conference of State Legislatures. A few states such as Virginia and Indiana have proposed the revived Gold acceptance, but they failed to pass the legislation. Few antagonists against the Arizona bill realize that breaking the Gold Standard in 1971, a direct violation of the Constitution, has led to a series of financial crises culminating in complete banking system insolvency and USGovt fiscal ruin. Supporters argued that a sound monetary system such as Gold & Silver is urgently required to restore stability. The floating fiat currency system is widely seen as a recipe for worldwide bankruptcy. See the Zero Hedge article (CLICK HERE).

◄$$$ THE STATE OF CONNECTICUT IS ON THE VERGE OF IMPOSING HARSH REGULATIONS AGAINST COIN DEALERS. MANY WILL SHUT DOWN, RATHER THAN COMPLY WITH RULES. A PARALLEL IS SEEN WITH GUNSHOPS THAT SELL BOTH WEAPONS AND AMMUNITION IN NUMEROUS STATES. $$$

A bill to require complete record keeping on all sales, including photos of every coin sold, and identification of every buyer and seller, is imminent as law in Connecticut. In a pathetic display across the nation, including places like Houston, transactions in precious metals are increasingly being obstructed. The USGovt guidelines make reference to precious metals owners as tiptoeing with terrorist activity. The cost of complying with the new CT law will shut down many stores. See the CGA Connecticut article (CLICK HERE). Notice how ammunition and gold are regarded to be devices in defiance of the fascists in power. Defending oneself will eventually be illegal.

◄$$$ THE UNITED STATES HAS SHIPPED OUT 4500 METRIC TONS OF GOLD IN THE LAST 20 YEARS. MOST OF THAT AMOUNT HAS COME IN THE LAST FEW MONTHS. THE SUPPLY MUST BE COMING FROM THE NEW YORK FED, IN A SHADOWY OPERATION TO OBSCURE THE PATH. $$$

The gold market day of reckoning will come to the physical market. The ready supplier is running out of gold. The FT900 document is a little known item published by the US Census. It details the exports and imports of the United States, published every month, known as the international trade report. The energetic and irrepressible Eric Sprott has scrutinized all the FT900 reports published since 1991. He has added the numbers, compared them against production and consumption statistics from the CPM yearbooks, and has made a stark discovery. Sprott concludes that a minimum of 4500 tons of gold, beyond what the USA can produce, both from mining and recycling, have been exported since 1991. The exported gold is definitely not coming from American gold investors, since gold coins are not being sold. The gold exports are listed under the ledger item as 'Non-Monetary' which means they are not from the central bank. The Jackass has cited the story before, and my belief is that the gold bars are exported directly from refiners (non-bank entities). In previous reports, the further evidence is that the export is directed to Hong Kong. It is possible that the HK banks are receiving restitution for fake gold bars containing tungsten. It is also possible that China is redeeming some of their USTreasury Bonds in gold, as part of a high pressure redemption to minimize the damage from a run on the toxic USTBonds that is overdue, and will arrive.

The recycle supply is a different ledger item altogether. Sprott points out that even if American consumers and financial firms wanted to sell 4500 tons of privately owned gold, they are not in possession of sufficient volume to sell that much. Most American-owned gold, he claims, is in the hands of the government, or is held outside the borders of the United States, in the form of ETFs like the SPDR Gold Trust (GLD) and the SGOL funds, which store gold in London and Zurich vaults. Sprott makes the basic conclusion. The thousands of tons of commodity-like gold bars have been coming for 20 years from the basement vault of the New York Federal Reserve. If so, then the FY900 report is being manipulated so as to obscure the central bank participation, which must oversee the exodus (possibly theft). My belief is that the central bank is requesting refiners to recast the gold bars, to put new serial numbers on the bars in a recasting process, and to ship them to China through Hong Kong. See the Zero Hedge article (CLICK HERE) and the GoldSeek article (CLICK HERE).

## GOLD AMBUSH AFTERMATH

◄$$$ THE MID-APRIL GOLD MARKET AMBUSH REVEALS A GANGSTER STATE WHICH PROTECTS BOTH THE CRIMINAL BANKS AND SUPPORTS THE TOXIC USDOLLAR. THE AMBUSH WAS DONE BY NAKED GOLD SHORT CONTRACT ABUSE AND WAS MOTIVATED BY INADEQUATE GOLD INVENTORY (DEFAULT) TO MEET DELIVERY REQUIREMENTS. $$$

Paul Craig Roberts is a brave man, former assistant secretary at the USDept Treasury in the Reagan Admin. He wrote the following stern concise note. "There are many signs of gangster state America. One is the collusion between federal authorities and banksters in a criminal conspiracy to rig the markets for Gold & Silver. My explanation that the sudden appearance of an unprecedented 400 ton short sale of gold on the COMEX in April was a manipulation designed to protect the dollar from the Federal Reserve's Quantitative Easing policy has found acceptance among gold investors and hedge fund managers. The sale was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery. No one but the Federal Reserve could have placed such an order, and the order came from one of the Fed's bullion banks, one of the entities Too Big to Fail. Bill Kaye of the Greater Asian Hedge Fund in Hong Kong and Dave Kranzler of Golden Returns Capital have filled in the details of how the manipulation worked. Being sophisticated investors of many years of experience, both Kaye and Kranzler understand that the financial press runs with the authorized story planted to serve the agenda that has been put into play." See the Institues for Political Economy article (CLICK HERE). Roberts is to be admired, a valiant warrior with a pen who confronts the fascist evil force. For another harsh review of the banker vile confiscation plan, a veritable expropriation scheme, see the Global Research article (CLICK HERE).

◄$$$ ANDREW MAGUIRE ELABORATED ON THE ENSUING GOLD PANIC, AFTER THE L.B.M.A. GOLD DEFAULT THAT TRIGGERED THE GOLD MARKET AMBUSH ASSAULT. THE DETAILS ARE CHILLING, UGLY, REVEALING. CLIENTS WILL BE FORCIBLY SETTLED IN CASH. IT WAS DIFFICULT IN THE PAST TO RECEIVE GOLD & SILVER BAR DELIVERY FROM THE BULLION BANKS AND EXCHANGES. IN THE FUTURE, IT WILL BE NEXT TO IMPOSSIBLE. A CRITICAL DEFAULT IS IN PROGRESS. $$$

Andrew Maguire has shared his observations, as he elaborated on the Gold market default by the London-based LBMA and the ensuing panic in April. The vast gold leasing practiced over the last two decades has come back to haunt London finally. They are caught short on gold supply. The London bankers never anticipated running out of gold bars from which to deliver. Over the years, events turned against them. They find themselves with inadequate Gold & Silver in their inventory to be able to meet client demands for delivery upon demand under contract. So they smashed the market with $billions in naked shorting in order to relieve the pressure.

The London corrupt crew have sold precious metals bars for years, all leased at nearly zero percent, financed almost for nothing. They invested the money, but also suppressed the Gold price. They were heavily seriously dangerously over-collateralized within a fractional banking system, but for the bullion bars. It became urgent to defend the price of Gold & Silver from rising because they did not actually have the physical. They could not meet delivery demands, simply stated. Many big clients turned up at the window, requested their Gold bars, but were refused their bullion, told only that they would be settled in cash. The word is finally coming out on the criminal fraud. ABN Amro defaulting on gold contracts and on gold investment instruments was the tip of the iceberg.

Other influential clients are now panicking, according to Maguire. He is advising clients and those who send him public email to remove their stored physical Gold & Silver bars held in any bank related warehouse (whore house), whether it be COMEX or LBMA. He described how the upcoming default will not be called a default. It will be called a forced cash settlement. He has not discussed any force majeure. The USFed could bail out the bullion banks with a few $billion in cash in just a few electronic keystrokes. People will miss the Gold bull market, because they will be sitting on the sidelines not in possession of their physical Gold bars. Maguire reminded that it has been several years since he has taken any delivery from the COMEX, or any of his clients. On past occasions, it was already difficult to obtain the physical bars. Arranging to actually bring a Brinks truck to the COMEX warehouse door incurred every defensive tactic imaginable, like the unreturned phone calls, requested to submit paperwork over again, and questions why the metal was desired. A critical default is unfolding. It will be difficult and next to impossible to extract physical gold from the bullion bank vaults from this point in time forward. See the King World News article (CLICK HERE). For other insights from experts on the gold market smashdown, see the Gold Seek article by Michael Kosares (CLICK HERE).

◄$$$ THE L.B.M.A. SHUT DOWN ITS COMPUTER SYSTEMS TO INTERFERE WITH GOLD DELIVERY DEMANDS DURING THE MID-APRIL SMASHDOWN. ALL OF A SUDDEN THE LONDON PHYSICAL PLATFORM THAT BUYS AND SELLS PHYSICAL GOLD BECAME LOCKED UP. THE SYSTEM FROZE. RATHER THAN FACE A GOLD DEFAULT, LONDON FLIPPED THE SWITCH OFF. THEY PERMITTED SALES BUT NO PURCHASES, AS A RESULT. THE REAL LOSER IS THE INTEGRITY OF LONDON GOLD BANKERS AND THEIR SLANTED MART. $$$

Deceptions were ripe in mid-April, as seen in the rubble and aftermath with dust settling. The report circulated that Cyprus would have to sell 400 million Euros in gold as part of the bailout package for their failed banking system. The next day, Cyprus bankers informed that they did not discuss selling any gold. Smelled like an ambush with a key propaganda lead diversion story. On Friday April 12th, the unstable gold market fell on its face with waterfalls and massive ambushes mixed. Insiders report that Goldman Sachs started the process with outsized GLD fund share sales. Other reports from Commerzbank indicate that 75% of the GLD sell orders came from institutional clients, namely the hedge funds. Then came a nasty tactic. Some call is a coincidence. The Jackass calls it bold faced evil genius. It was a gift on a platter to those short the market. It was a requirement for those responsible to deliver gold should the inventory be depleted. It was indeed depleted.

ALL OF A SUDDEN THE LONDON PHYSICAL PLATFORM THAT BUYS AND SELLS PHYSICAL GOLD BECAME LOCKED UP. THE SYSTEM FROZE. The screens all froze. Nobody was given the opportunity to purchase at the price posted with flickers. Nobody could protect positions. The system froze, enabling a massive price decline. The physical market holders began to panic. The only activity permitted was selling gold positions and shorting the gold price. Based on 350,000 contracts sold that Friday and the massive drop, many contracts were tossed, the result of the physical market having no choice but take urgent instinctive action. It was all reaction mode, no time to think, pure instinct for survival. The physical holders most likely did what they could to protect themselves, exposed to inherent leverage. The diabolical bankers went in and shorted the futures market, and locked the door for entry to buyers. The market went into a freefall, enabled by the lock on buyers from a frozen computer system. One direction locked out, the other direction permitted, even opened with wide berth. Nice job, corrupt market kings, mafia dons! See the Gold Trends article (CLICK HERE). For more evidence and accounts on the technical glitches inserted to interrupt the London gold exchange, from around the world, see the collection in article form by Rocket Rich (CLICK HERE).

◄$$$ THE SOUTH AFRICAN PRESS OPENLY MENTIONED GOLD PRICE MANIPULATION AND SUPPRESSION, WITH MORE REALISTIC PORTRAYAL OF A GOLD MARKET ENJOYING HUGE DEMAND AND WIDESPREAD SHORTAGES, AGAINST A BACKDROP OF HORRENDOUS CENTRAL BANK MONETARY DEBASEMENT FROM INFLATION. THEIR PRESS DESCRIBES GOLD CONTRACT DUMPING, WITH NO DIRECT REFERENCE TO ITS ILLICIT NATURE WITHIN A CORRUPTED MARKET. BUT THEY PAINT A CORRUPTED PICTURE. $$$

The South African nation is a traditional gold producer, sympathetic to the market's integrity. They recognize the main price setting of gold takes place in London and New York. They note the main demand comes from China and India, where demand has grown significantly in the last few years. They cite the halt to European central bank gold sales, replaced by central bank purchases mainly by emerging countries. However, the South African press goes further in pointing out that in the past six months, the gold market has been subjected to what they referred to as paper bombing attacks. They accuse the New York Commodities Exchange (COMEX) as overseeing a large number of contracts being dumped on the over a very short period.

On April 12th, the South African press reported that the gold market was bombed with more than 500 tons of gold in a manner that caused great downward price pressure which panicked the market into selling. No such press report would be permitted from New York or London, since truthful and damaging. The enlightened SAPress report continued. The bombing of the gold market has been a frequent trading feature over the last two quarters. But the persistence of concentrated selling over the past two quarters has been unusual. At the same time, interesting data regarding physical stocks has emerged, which would indicate the opposite conditions to price decline. The COMEX physical inventory has been drained substantially over the past two quarters, a reversal of the trend over recent years. At the same time, Chinese gold imports through Hong Kong have soared. US trade data also reflects a level of gold exports way beyond any domestic production. The SAPress actually noticed the US export of gold. The decline in COMEX inventories, together with US gold trade data and Hong Kong trade data, suggest the mobilization of physical gold has resulted in a large transfer from Western vaults to Eastern vaults. The nation of South Africa indeed has excellent gold press reporting.

The SAPress went on to mention burgeoning gold demand for coins and gold bars at the retail level. They concluded in excellent summation, with "The consequence is that there appears to be a battle between the price setting centers of London and New York and the demand centers of India and China. Against the backdrop of strong physical demand, the underlying fiscal conditions and complementary monetary policy remain highly supportive of the gold price. In terms of quantitative easing (QE), or money printing, the Japanese are virtually matching the scale of what the US Federal Reserve is doing but in an economy only one third the size. Central banks, including the The Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of China, are almost in a competition to debase their currencies. One consequence of QE is the escalation of debt levels, which is creating some systemic stress. Already monetary policy has exhausted its interest rate tool. Languishing economies and rising debt levels mean countries are trapped in their low interest rate environment. The bottom line is that over-indebtedness will ultimately result in higher inflation or deflation. These are systemic problems where Gold provides one of the better chances of protection." The South Africans really comprehend the gold market, the misguided monetary destruction, and the global confrontation over Gold market forces. See the BD Live article out of South Africa (CLICK HERE).

◄$$$ A REPORT FROM THE FIELD ON GOLD PRICE AND PREMIUM PAID (MAY 7TH). CHAOS IS ARRIVING LIKE A WILD BITTER WIND. A DISCONNECT HAS OCCURRED BETWEEN THE SCREEN PRICE AND PHYSICAL OFFERINGS. ANY PRODUCT ARRIVING TO MARKET AT THE OFFICIAL PRICE IS A DRIP IN VOLUME. ASIAN AND ARAB PURCHASE PATTERNS HAVE CHANGED RADICALLY. INVESTORS ARE SEEKING GOLD SUPPLY AT ANY PRICE. VERY LARGE CLIENTS AND INSTITUTIONS ARE PURSUING GOLD. THEY WANT VOLUME AND ARE NOT FOCUSED ON PRICE. $$$

A gold trader with a key connection to the Dubai market reported the following, a testimony to chaos and a market in disintegration. He wrote, "There is total chaos out there. Each transaction of substance is like an Emergency Room case. Only the people at the table in the ER know what really goes on and what needs to be done. The premiums for Au vary from spot+$3 per ounce to spot+$750 per ounce, depending on the location in the world. The buyers with a lot of real cash do not care about price. For them the priority is to get as much physical as possible. There is a total disconnect between the screen price and physical. I reckon one could get Au and Ag at spot in certain places but not in others, although in tiny  volume. The system is coming apart bigtime here and now. It is like being on a ship during a sea quake, with incredible turbulences."

Another gold trader source with Hong Kong and Beijing connections reported that Chinese buyers are interested in buying aggressively. They have told the broker that price is not a primary concern, only to obtain as much volume as possible and to seek sources vigorously. They have deep pockets and sturdy motive, as they see the collapse of the global monetary system in relentless progress. Block sales will come in steady large purchases, as client pressure to secure very large volume is relentless while communicated as urgent. Broker pressures in response are to keep a cool hand and not to disrupt the market, to show discipline in a gradual but substantial accumulation. The result will be powerful strong demand that is manifested in a continual flow of gold bars to the East, a strong floor on the physical gold price with strong hands, very big strong hands. They see the breakdown in the global monetary system, a coordinated destruction by central banks, and the rancid integrity of paper assets (led by sovereign bonds) as a weak substitute for wealth. The two gold trader reports are a powerful indication to a total breakdown between the price discovery system with futures contracts against the physical demand of historic proportions and gigantic investment allocations. A fracture is to come.

◄$$$ SILVER PRICE PREMIUM CONTINUES TO RISE, AS SEEN ON E-BAY IN THE UNITED STATES. IT POSTS A 33% PREMIUM OVER SILVER SPOT PRICE. $$$

On May 8th, the silver 100-oz bars were going for around $3200 on E-Bay. At the implied $32/oz price, from completed sale listings, as in actual sales, the premium is significantly higher compared to immediately after the mid-April massacre and crime scene. The official COMEX price was in the $23 to $25 range per ounce. In contrast, a friend in Vancouver purchased ten large 1000-oz silver bars in his beautiful city over the last month. The price paid varied from C$24,000 to C$26,000. No identification was required, as long as the transaction cost was kept under C$30,000. He considers himself very fortunate.

◄$$$ THE C.O.M.E.X. GOLD PRICE IS SLOWLY BECOMING IRRELEVANT, AS THE DISCONNECTION BETWEEN PRICE DISCOVERY AND ACTUAL DELIVERY FURTHER BREAKS THE BOND OF TRUST IN THE GOLD MARKET. THE IRRELEVANT PAPER GOLD PRICE IS THE KISS OF DEATH, CERTAIN TO SPARK A HUNT FOR REAL GOLD, NOT PAPER IMITATIONS. $$$

As the divergence widens between the fake paper gold market and the true metal Gold market, the integrity and trust behind the market itself is fast vanishing along with COMEX inventory. Price discovery must be accompanied by assured delivery. If not, then market integrity is gone and participants flee, leaving an empty arena. The corruption is more visible. During the exposure process, the spot price of precious metals is fast becoming irrelevant. In an honest valid legitimate market, supply meets demand to establish price. In the COMEX, the price is set by naked shorting regular exercises in full view. In the aftermath of the outrageous gold ambush in April, the Hard Assets Alliance has identified three effects as fallout from the unprosecuted crime scene. 1) Demand has exploded upward. One brokerage house reported, "We had four to five times as many buy orders and sell orders, both in number of trades and in volume. Far more significant buying than selling, and it is continued throughout the week." The phenomenon is global. 2) The demand comes from existing customers who return to market to buy in bigger volume. They respond to the deep discounts in price perceived, like a massive fire sale. They return with bigger allocations. 3) The surge in physical buying slams against tight supply, resulting in the premium paid over spot price for physical bullion to rise quickly higher.

The entire price discovery mechanism behind the COMEX is eroding, fading, and crumbling amidst criminal operators being given free rein. The pricing mechanisms are in a state of flux. If and when the physical bullion market dominates to set price, as forecasted by the Jackass for three straight years, the spot price quoted in the paper market for Gold & Silver will become an irrelevance, a thing of the past, a posted billboard in an deserted room viewed by unoccupied desks. It will in time be viewed as a historical artifact. See the Zero Hedge article (CLICK HERE). The Jackass forecasts that the COMEX will in the next year gradually become an empty arena, devoid of clients fearful of criminal metal seizures, devoid of participants who see no connection between price discovery and physical metal delivery. Such is the essence of a market. The COMEX is being recognized as no longer a market, but rather a crime scene without police action.

◄$$$ ABN AMRO DELUSION, FROM THE SAME HOUSE THAT DEFAULTED ON GOLD DELIVERY. THE CRAFTSMEN OF CONTRACT FRAUD HAVE SPOKEN OUT IN THE CONTINUED CHARADE. THEY CLAIM SHORTAGE DOES NOT FIGURE INTO THE GOLD PRICE. THEY PUBLISHED A RESEARCH REPORT CLAIMING SYSTEMIC RISK IS REDUCED, GROWTH IS ON COURSE, AND THE USFED IS DUE TO HIKE RATES. THEY ARE WRONG ON ALL COUNTS, BUT FULLY AWARE OF THEIR LIES. $$$

Let the ABN Amro executives speak and wrap a noose around their own necks. They began the waterfall sequence of events from the Netherlands in late March with a renege on the delivery from their own investment vehicles. The state owned giant Dutch bank issued a formal report that skips over their contract fraud episode. They have revised the global macro and gold outlook, forecasting a $1300 gold price by the end of this year. They have shed all semblance of integrity and legitimacy, with harlot publications. The foppish farce firm forecasts $1000 gold by December 2014, and $800 gold in 2015. Their reasoning is like from a discredited comic book. They might actually be correct, but for the discredited divergent paper gold price, which will greatly distance itself from the true physical Gold price. If correct, the ABN Amro crew might be writing the obituary for the COMEX & LBMA. If only they could look out the window from their ivory towers and notice the mess in France, Spain, and Italy. Like their ailing neighbors, the Dutch banker harlots might be out of work soon.

They wrote, "The authorities, especially in Europe, have acted to reduce systemic risks. Inflation is going down rather than up. Other assets will become increasingly more attractive as the growth outlook improves. Systemic risks to the financial system and the global economy have declined notably, despite the bailout of Cyprus. Another blow [to the gold price] will come when the Fed's first rate hike (that we expect in early 2015) comes into view." Wow! No mention of Mary Poppins or Donald Duck as economic architect and business executor. The systemic risks are acute and growing worse, seen in bank insolvency, wild government deficits, and broad intractible unemployment. The USFed is stuck in quicksand, never to raise the official rate unless it wishes to wreck the big US banks engaged in USTBond carry trade, wreck the USGovt deficit from higher borrowing costs, wreck the financial derivative structure which already teeters wobbly, and wreck the USEconomy stuck in a downward spiral. ABN Amro is categorically inept and delusional, but predictable. See the Commodity Online article (CLICK HERE). The ABN Amro research would ordinarily be ignored as rubbish, except that it reveals an intellectual immorality.

◄$$$ STUNNING GOLD SHORTAGES PERSIST AS THE WESTERN PONZI SCHEME IS COLLAPSING. REFINERS ARE RUNNING AROUND THE CLOCK IN PRODUCTION MODE. PRICE PREMIUMS ARE RISING. HUGE DEMAND FROM THE SHANGHAI METALS EXCHANGE COMES IN CONTRAST TO STEEP DECLINES IN THE C.O.M.E.X. GOLD INVENTORY, DURING A TIME WHEN THE SWISS REFINERS STRUGGLE MIGHTILY TO MEET UNPRECEDENTED DEMAND. $$$

Egon von Greyerz of Matterhorn Asset Mgmt has attested to stunning shortages of physical gold, despite the strong increase in Swiss refinery output. He reported that Swiss refiners are working 24 hours a day, 7 days a week, unable to keep up with the massive surge in global demand. Outlined are some of his important points. See the King World News interview (CLICK HERE).

  • The world economy is starting to disintegrate. It is declining at an alarming rate. The situation in Southern Europe is disastrous, spreading to all of Europe. The ruin of money is evident and an underlying cause. The climax is timed with the 100-year anniversary of the creation of the US Federal Reserve, a Ponzi project in conclusion.
  • What comes in the next few years is a hyper-inflationary depression of unimaginable proportions. To preserve their wealth, people must depart from paper assets and secure hard asset wealth with a precious metals core.
  • The gold market ambush attack through paper devices has backfired and failed. The price declined is dubious in light of unprecedented demand and major shortages in the physical market. The Swiss refiners are increasing premiums substantially and repeatedly. Some refiners warn of major delays, up to four weeks, because they cannot keep up with demand. A real shortage has cropped up in the physical gold market.
  • The Shanghai gold exchange has seen deliveries of 1030 tons since January. Contrast to world gold production for the same period of only 934 tons. Shanghai had sold more than the entire world produced.
  • The JPMorgan  eligible gold stacks (subject to delivery) was down 65% just in a couple recent days. The COMEX gold bar stock is down to half of inventory from a year ago.

◄$$$ SHANGHAI HALTED PHYSICAL DELIVERY, PROBABLY DUE TO HAVING RUN OUT OF INVENTORY AT THIS ABSURD LOW PRICE. THE MARKET MECHANISM HAS A RESPONSE TO SHORTAGE, CALLED NO MOVEMENT OF PRODUCT, AN EMPTY BLOCK FOR SALE. WITNESS A CORRUPTED MARKET. $$$


The Shanghai Gold Exchange has seen gold volume reduced to a trickle, even less. In the week of April 26th, it saw a strange decline in physical delivery. As of April 25th, physical deliveries on the SGE were all of 1 ton, after 0 tons on April 22nd, April 24th, and April 25th. One must go back to January 2012 to find such a sparse week of activity, when in that month it saw 21 days with less than one ton of gold delivered per day. One can only conclude the exchange has a deep problem with lack of inventory, insufficient supply coming to market at the artificially low gold price. A grand shortage exists and plays havoc with the gold market. Expect either rations and a corresponding price runup, perhaps more attempts to smash the market with the risk of relegating the COMEX to a vacant arena overrun by spiders and cobwebs with shrill echos. See the Gold Miner Pulse article (CLICK HERE).

## GLOBAL GOLD DEMAND SURGES

◄$$$ CHINESE GOLD PURCHASE SOARED IN MARCH. THE MOVEMENT OF GOLD FROM HONG KONG TO CHINA SINCE 2012 EXCEEDS THE BEIJING OFFICIAL GOVERNMENT STATEMENT OF TOTAL GOLD HELD IN RESERVES. THE MARCH PURCHASES WERE MORE THAN DOUBLE THOSE OF FEBRUARY. CHINA IS PREPARED FOR THE NEXT CHAPTER WITH GOLD-BACKED CURRENCY AND GOLD TRADE SETTLEMENT. $$$

Chinese Gold imports soared on seemingly insatiable demand, setting monthly records. As gold was in a price decline in March, before its targeted smashdown in April, China was continuing its powerful onslaught of gold purchases of the bars and smaller units. The export data has been released by the Hong Kong Census & Statistics Dept. Chinese Gold imports in March exploded to an all time record high of 223.5 tons, which follows the 97.1 tons in February. All this before the April electronic price cuts, a massive discount offered. The heavy buying spree brought the total imports for the first quarter of 2013 to a whopping 372 tons, on par with what China imported in the entire first half of 2012. Put the totals in a different perspective. It means that since January 2012, a 15-month period, China has imported an absolutely stunning 1206 tons of gold. The number is 20% more than the entire reported official gold holdings of 1054 tons, and represents almost half of the total 2500 tons of gold mined every year on a global basis, not just from inside China. Of course, China tells lies about its gold held in reserves by the central bank, like the United States. Except China lies by under-stating the total, while the United States has no gold at all. The next chapter with a gold-backed Yuan currency, and Gold Trade Standard for settlement will see Russia & China the leading pioneer nations. The development of gold trade settlement will isolate the USDollar, and jettison the United States into the Third World. See the Zero Hedge article (CLICK HERE).

◄$$$ CHINESE WOMEN ARE SCOOPING UP GOLD. THEY HAVE BOUGHT 300 TONS OF GOLD IN TWO WEEKS, EQUAL TO 10% OF ANNUAL GLOBAL MINE OUTPUT. THE CHINESE GOVT ACTUALLY PROMOTES BUYING OF GOLD BY THE PUBLIC. THE VOLUME IS STAGGERING, AND RIVALS CENTRAL BANK PURCHASES AND DOMESTIC MINE OUTPUT. THE PROCESS DRIVES THE PARADIGM SHIFT. $$$

Before, during, and after the May Day holiday, a mad rush to purchase gold was seen by the Chinese. From widespread accounts, gold bullion and jewelry dealers were overwhelmed by the numbers of people flooding in to buy gold, even in Hong Kong where premiums were not as high as on the mainland. The headline stories are making the news across the world, but on the internet journals, not the mainstream news, where information is suppressed as much as the gold price by the Fascists in power. The Asian buying spree was supported equally by their Indian, other Asian, and Persian Gulf counterparts. Years after the end of the Chinese public purchase gold ban, their populace is seeking the true security of gold ownership. The Chinese Govt has actually been encouraging its citizens to buy both gold and silver. They probably wish to put pressure on the corrupt paper mache merchants in New York and London.

The Peoples Bank of China could work to amplify that pressure with a greater diversified buying program, of perhaps another 1000 metric tons of gold bullion this year. They probably have close to 10,000 metric tons in gold reserves, just like Russia. The trade war is hot with the United States, with sparks flying, and competition over the global reserve currency hot as well. A huge gold purchase of such volume would hardly make a dent on their $3.4 trillion reserves under management. Rumors are brisk that the Chinese Govt might have already bought an enormous amount of additional gold within its official reserves, but has chosen not yet to report it. The formal denials should serve as proof.

Back to the housewives. If the Chinese housewives have indeed bought 300 tonnes of gold, as stating on the Voice of China radio program, that represents more than 10% of annual global gold mine output purchased in just two weeks. The amount is staggering, in direct response to the criminal COMEX ambush. Gold price premiums in China are coming down a little at last report, but by Western standards they still remain high. Fabricated gold is mostly being purchased. The Gold bullion bars, even smaller ones, are hard to find. The housewives view the gold price as cheap, with the only direction up. A strange fact must be cited. The Chinese are not alone, joined by the Indians, Turks, residents of many Middle East. The buying frenzy is well reported in these nations. The total reduction in the mangled corrupted SPDR Gold Trust is far less than the amounts being absorbed in Asia and the Middle East. However, the GLD fund is not seeing investor sales, but rather big bank raids to deplete it. They are defrauding the GLD investors, who are truly a sleepy bunch of brain-dead gullible imbeciles. It is hard to call them betrayed, when the information is so plentiful on the fraud and deception. They are brain-dead simpletons.

The migration of gold from West to East is the grand story of the decade. China wants the Yuan to have at least a role in the next global reserve currency. They demand respect. They wish to use their trade advantages in such a manner that results in more power and influence to be gained from their Yuan currency in surplus and their Gold reserves in accumulation. They strive for reserve currency status, but it is a mixed bag of benefits and burdens. See the MineWeb article (CLICK HERE).

◄$$$ FIRE SALE IN CHINA, AS BUYERS FLOCK TO PURCHASE DISCOUNTED GOLD. THE STORES IN BEIJING, SHANGHAI, AND HONG KONG ARE UNDER STRAIN TO REMAIN STOCKED, SO AS TO MEET DEMAND. $$$

The Caishikou Department Store is the largest gold dealer in downtown Beijing. In the store, the Gold bars have sold out and gold accessories are selling quickly. Waiting periods have been imposed. People with lower incomes, not only the wealthy, are paricipating in the Chinese gold rush. Older dealers who have been in the business for 20 to 50 years have never seen such a rush to purchase gold. This is what the New York and London bankers have ignited, a global gold rush. No turning back. Stores are seeing customer lines build and inventory shrink. Record volumes are seen at the Shanghai exchange. The corrupt Western bankers have grown desperate, opening the door to massive bargain prices and frenzied buying across Asia and the world. Their actions have provided a multi-decade global buying opportunity. See the GATA article (CLICK HERE).

◄$$$ PHYSICAL DEMAND IN CHINA HAS RESULTED IN AN EMERGENCY ORDER FROM SWITZERLAND AND LONDON. CALL IT A RUSH ORDER TO MEET THE HUGE DEMAND. BUYERS ARE FROM HONG KONG AND FROM CHINESE TOURISM. PREMIUMS ARE RISING, EVEN IN VIETNAM. $$$

With Asian gold supplies depleted from the massive demand spurred by price discounts, the Chinese Gold & Silver Exchange Society has registered a rush order. Its size is four times the usual amount of gold bars, requested from Switzerland and London. The merchants in China wish to meet the increased demand. Customers will have to be patient, the usual wait being a week or two to fulfill their orders. Zhang Dexi is the president of the exchange society. He said, "Stimulated by the plummeting gold price last week, the Gold transactions in Hong Kong have been very active. Daily total transaction multiplied [grew] to 160 billion Hong Kong Dollars (=US$20.6 billion). All of our gold stock is gone now. But hopefully by purchasing from Europe, we can satisfy the demand for gold here in Asia." Buyers in late April were forced to wait until early May to pick up their orders. Almost every corner of Hong Kong is seeing heavy buying traffic, as local residents and tourists from mainland China are involved in the rush. The surge of buying has created a premium in some Asian markets. See the Intl Business Times article (CLICK HERE). A subscriber recounted a live experience. The physical supply situation is very strained. The premiums in Vietnam have been ranging between $190 and $210 per ounce this week. Typical premiums had been closer to $100 from recent months in the past.

◄$$$ GOLD IMPORTS BY INDIA ARE SEEN TOPPING 100 TONS FOR A SECOND MONTH IN A ROW. SOME RESTRICTIONS WILL CRIMP DEMAND, PLACED BY THE INDIAN CENTRAL BANK, INCLUDING IMPORT TAXES. THEY ARE CONCERNED ABOUT CURRENT ACCOUNT DEFICITS AND THE WEAKENED RUPEE CURRENCY. THE ISSUE IS PRICE INFLATION. INDIA NEEDS MORE GOLD MINING IN THE HIMALAYAN HILLS. THE NORMAL MONSOON SEASON IS A GOOD HARBINGER FOR CONSISTENT STRONG GOLD DEMAND. $$$

Gold imports in May by India are on pace to exceed 100 metric tons for a second straight month as jewelers rush to beat central bank curbs on overseas bullion purchases by banks. India is by far the world's largest consumer of gold jewelry. The MMTC-PAMP refinery in the northern Indian state of Haryana can process 100 tons of gold, 600 tons of silver, and make 2.5 million coins per year. The refinery is a venture between state-owned MMTC Ltd  and PAMP SA of Switzerland. Purchases this month will match April's imports. However, the head wind is provided by the central bank guidelines, the Reserve Bank of India (RBI). Its guidelines to be issued by the end of May will restrict banks from importing gold on a consignment basis. The goal is actually to bring down domestic demand and thereby to reduce the record high Current Account deficit. The Rupee currency is weak, thus spawning price inflation which has been problematic for several months.

The consignment rules will soon require the purchase to be fully funded. A mad rush has come to import as much as possible before the new RBI guidelines kick in. The Indian Economy has been stuck in the lowest growth stage in a decade, while price inflation rages above 10% annually. Thus the RBI response, which will surely result in a small decline in gold imports. The problem would be alleviated if Indian produced (not just refined) the gold from domestic mines. Surely the Himalayan base has tremendous supply, only to be discovered and developed. The investment capital is surely available locally.

In the past two years, declines have been recorded. India's gold imports dropped 11% last year to 860 tons, from a record 969 tons in 2011. Demand for jewelry and investment fell to 864.2 tons in 2012, the second straight year of decline, according to the World Gold Council. The Indian Govt has tripled import taxes on gold from as low as 2% in January last year to over 6% now. Their action was in response to the Current Account deficit, the broadest measure of trade, which widened. At the same time, the Indian Rupee currency fell to a record low against the USDollar. India has the worst budget deficit among the so-called BRICS nations. The deficit grew to $32.6 billion in 4Q2012. See the Bloomberg article (CLICK HERE) but ignore their nonsense about investors selling gold to bring about the price decline in April. It was the bankers in huge naked short selling. Indian gold demand should be strong from a normal monsoon season, according to EuroRaj, with his steady monitor of the conditions. This year's monsoon (rainfall) is expected to be normal, which means good crop output, higher discretionary income for farmers, and thus higher gold demand. See the LBMA document (CLICK HERE).

◄$$$ UNITED ARAB EMIRATE GOLD RETAILERS BUY BULLION AT ANY COST. THE GOLD RUSH FROM DUBAI TO ISTANBUL IS DRAINING SUPPLY AND LIFTING PREMIUMS. THE PHENOMENON IS GLOBAL, LED BY ASIA. THE PAPER GOLD CRASH UNLEASHED AN UNPRECEDENTED DEMAND FOR PHYSICAL GOLD & SILVER. $$$

The gold demand in Dubai is described as sustained and excessive. Retailers are willing to pay the premium, but the market continues to see shortfalls in gold bars and biscuits, as they call them. The strongest retail buying comes for the small and medium gold bars, whose weight is between 10 and 1000 grams. The demand has been fortified (even aggravating supply, claim merchants) by buyers in the Persian Gulf, the Middle East & North Africa region, Turkey, and India. A regional dependence has developed from the Dubai gold traders and refiners. Some stability will return, if and when the gold price stabilizes. A strange phenomenon has arisen, whereby the high premium paid to acquire the gold has not been passed on to the store and showroom prices. Pure Gold and Sky Jewellery, a local firm, confirmed the higher cost of bullion deliveries is being absorbed by retailers. The custom is never to be out of stock in Dubai at the Souks, where competition is fierce and loyalty is fostered. Availability is linked to capacity to produce the smaller bars, rather than the availability of the raw material itself. See the Gulf News article (CLICK HERE).

Further surging demand for gold items from Dubai to Istanbul has pushed physical premiums in the region to levels not seen in years, in response to the gold  price discount, according to MKS Precious Metals in Switzerland. Similar recounted stories are told by INTL FCStone from Dubai. See the Bloomberg article (CLICK HERE). The same rhyming story is heard from Keith Barron, a consultant for major gold companies around the world. He made his bones (earned fame) by making one of the largest gold discoveries in the last quarter century. He privately co-founded Aurelian Resources, an gold exploration firm with projects in Ecuador. Under his aegis, the firm made the colossal Fruta del Norte gold discovery in 2006. The company was later acquired in 2008 by Kinross Gold for $1.2 billion. Barron reports that a massive run on physical Gold & Silver continues. See the King World News interview (CLICK HERE). For a nice summary, see the guest article by Michael Snyder on Zero Hedge (CLICK HERE) where 10 important signs are outlined for a global gold rush.

◄$$$ DUBAI GOLD DEMAND HAS RISEN 10-FOLD, FROM REPORTS ON THE GROUND. A GRAND DISCONNECT HAS OCCURRED BETWEEN THE PHYSICAL GOLD PURCHASE DEMAND VERSUS THE FALLING PAPER DERIVATIVE PRICE THAT PERMITS NAKED SHORTING. PERSIAN GULF DEMAND IS ON FIRE, AS HOT AS THE SUN AND SAND. $$$

Reports from Dubai are astounding. Since the mid-April paper price crash, a stunning 50 tons of Gold has been purchased in Dubai alone, equal to the entire amount of 51.8 tons purchased across all the United Arab Emirates in full year 2012. The Emirates 24/7 journal cites a massive surge in demand in the last few weeks, with demand far outstripping supply. Various estimates suggest that demand since April 15th has surged by 10 times the normal demand. The precious metals weekly report by Gerhard Schubert, Head of Precious Metals at local bank Emirates NBD, verifies the huge gold sales but with a nasty insult twist. It stated, "Participants of the physical industry in Dubai believe that an additional 50 tons of Gold have been bought since the price crash in April. These sales figures are in addition to the usual numbers, and put a little perspective on the derivative side of the market." A nice slam at the New York and London illicit paper leverage games.

It bears repeating. The World Gold Council data cites total consumer demand for Gold in the entire UAE (not just Dubai) stood at 51.8 tonnes for the entire year 2012. More details are provided by Schubert. He pointed out that gold coins are sold before they reach the stores, and gold bars are pre-booked for sale, picked up by dedicated clients when inventory arrives. Gold refineries are working worldwide around the clock to meet demand, strained by the crazy discount offered by the corrupt bankers. The Allocated Gold Accounts must surely be raided. The bullion bankers are going to be caught red handed. See the Liberty Blitzkrieg article (CLICK HERE) and the original Emirates 24/7 article (CLICK HERE).

◄$$$ TURKISH GOLD IMPORTS JUMPED IN THE FIRST THREE WEEKS OF APRIL. THE SALES VOLUME LEVEL IS HIGHER THAN THE PREVIOUS NINE MONTHS. $$$

Turkey is a major gold buyer. The nation has imported more gold in April than in any month since last July following a surge in domestic demand. All this again in response to the paper gold price discount offered by the corrupt Western bankers. The Bourse Istanbul reported that imports rose to 18.52 tonnes between April 1st and 22nd, a higher level than any of the previous nine months. Imports for the month of April were on track to surpass 20 tons. The ramp-up is evident, as gold imports were 18.26 tonnes in March, 17.34 tonnes in February, and 11.27 tonnes in January. See the MineWeb article (CLICK HERE).

◄$$$ SINGAPORE SHORTAGE IS REPORTED. THE FINANCIAL MECCA IS ALMOST TOTALLY DEPLETED OF GOLD. THE PROSPECT OF QUICK RESTOCK IS NOT THE CASE. $$$

Silver Bullion in Singapore reported that its inventory of gold bars has fallen to just 54 ounces from 60,000 ounces in the last two and a half weeks. The depletion is over 99.9% in all. The restocking process is not quick, as it will take around six weeks to be done. They compare the long delay to under half that time before the electronically induced gold price correction in April. Lower Silver prices have encouraged bargain hunters.

◄$$$ NO GOLD SUPPLY IN TOKYO, WHERE ENORMOUS PREMIUMS ARE BEING DEMANDED FOR 1-OZ AMERICAN GOLD EAGLE COINS. WAITING TIMES ARE COMMON, WHILE BIG MONEY SNATCHES BIG GOLD BARS. THE FRENZY WITH DOUBLED GOLD COIN AND BAR DEMAND HAS SPREAD FROM JAPAN TO CHINA TO AUSTRALIA ACROSS ASIA. $$$

Honestly, the quote cannot be attributed, but it arrived to my ample email INBOX. The unidentified friend of my friend wrote, "One of my colleagues, who was in Tokyo, just told me there were stunning $500 premiums on 1-oz American Gold Eagles, and there were none to be found anywhere in Tokyo. So the Japanese were taking advantage of the price drop to buy seemingly everything available in terms of physical Gold in the entire country. Right now if you want brand new Silver American Eagles, you are going to have to wait two months for them to be delivered. The retail physical market for the metals is on fire right now, and the same thing is true for the big money buying the 400-oz fine gold bars as well."

Across all of Asia, the frenzy has spread. Gold coins, gold bars, gold talens, it does not matter. Whatever is available is snatched up. Whether they react to a steep price discount suddenly offered, or a desire to protect from their government's debasement programs like in Japan, it does not matter. Shops in Asia are under pressure by customers who want the gold goods. Long lines at retail centers, it does not matter. Waiting lists to receive the delivery, it does not matter either. See the Zero Hedge article (CLICK HERE).

◄$$$ IN APRIL, THE USMINT SALES OF GOLD COINS JUMPED TO THE HIGHEST IN THREE YEARS. THE MINTS, REFINERIES, AND BROKERAGES ARE OUT OF STOCK. $$$

April Gold coin sales by the USMint rose to the highest since December 2009, partly in response to the gold market ambush and electronic paper price discount. The other reason for the surge is the endless debasement of money by the USFed, along with all the major central banks in a coordinated destruction of the monetary system. In April, total coin sales amounted to 209,500 ounces, up from 62,000 ounces in March, greater than a three-fold rise. The standing record high level was set in December 2009 at 231,500 ounces for total coin sales. Within the total, Silver coin sales at the USMint rose to 4.2 million ounces from 3.36 million in March. The USMint announced on April 23rd a suspension of Gold coin sales weighing one tenth of an ounce after demand more than doubled from a year earlier. The mint used to sell the tiny coin at a 9% price premium. For the first four full months in 2013, the USMint has sold 132,000 1-oz Gold Buffaloes, slightly over four tons. The recent four month total equals exactly the number of Gold Buffaloes sold during the entire 2012 calendar year. The demand is torrid, and not letting up. The USGovt is obligated by law to meet the coin demand by the American citizens. They do, but some recent rationing and waits. Notice in the tables how recent months are setting records, for both types of coins. Thanks to Andy Hoffman of Miles Franklin for the graphics.

Demand also surged at mints from Australia to the United Kingdom to Japan to Singapore and to China. In Australia, the Perth Mint, which refines almost all of the nation's bullion, reported that demand jumped to the highest level in five years after the paper gold price plunged. Its factory has been kept open through the weekends to meet orders. Buyers in Australia have been waiting in lines half a kilometer (0.3 mile) long to obtain minted coins. See the Bloomberg article (CLICK HERE).

◄$$$ MEXICAN COIN DEMAND HAS EXPLODED. THE PACE FOR APRIL WAS GREATER THAN THE FIRST THREE MONTHS COMBINED. $$$

Demand for Silver Libertad coins in Mexico has skyrocketed. The data is provided by the Bank of Mexico, their central bank. For April through the 23rd of the month, the central bank had sold 174,055 Libertad coins. So for partial data on the April month, more coins than were sold in the first three months of this year altogether. Actual sales data are 169,928 coins total in those three months, 46,693 in January, 80,929 in February, and 42,306 in March. Last year, demand for the Silver Libertad was down by 60% versus year 2011, following the unusual year 2010 when the Silver price spiked upward. See the Global Financial Intelligence article posted in Spanish (CLICK HERE).

## PHONY GOLD PRICE FACTORS

◄$$$ FEKETE ALSO EXPECTS THE OFFICIAL GOLD PRICE TO DISAPPEAR, AND REMINDS THAT Z.I.R.P. KILLS CAPITAL. AMIDST THE DEEP DAMAGE TO FUNCTIONAL PLATFORMS, GLOBAL TRADE WILL MOVE TOWARD BARTER. $$$

The Jackass has been a frequent critic of Antal Fekete, for his incessant babble about the gold basis, missing numerous critical topics, and putting the gold community to sleep with his boring missives like tired drones. However, he has returned with some outstanding analytic points in a recent interview with excellent depth. Fekete has validated three Jackass warnings, that the price of gold will disappear, that barter economy soon will arrive, and that the Zero Interest Rate Policy has caused great capital destruction. In this interview, he discussed three topics with some meat on the monetary bones. Fekete emphasized the unrecognized root cause of all the asset bubbles, price shocks, currency movement, and economic contractions has been the secular decline in the gold basis, translated from his Greek to mean a departure from the Gold Standard. The Big Bang occurred in 1971, when the USGovt defaulted on its international gold obligations. Total agreement by the Jackass, as the break from the Bretton Woods Gold Standard lit the fuse to chronic incessant crisis and instability. My forecast has been for the Gold price to go dark, with no more COMEX quotes, and then to remain dark for weeks, as reports filter in from around the world, like Hong Kong, Dubai, Singapore, and Johannesburg on actual traded price. My view is for uneven murky pricing, which has already begun.

The gold price is going to disappear from the official marts, Fekete claims (Jackass agrees). It is headed for extinction. Permanent backwardation will shut down the gold futures markets, after which time Gold could no longer be purchased at any price. Permanent backwardation of Silver will arrive also very soon. The reverse time versus price structure will work to drain the official exchanges rapidly, from internal arbitrage. It is an intriguing question which event will come first. Gold would then only be available through barter. A transformation is happening in world trade, with fast movement into a barter economy. Great waves of job loss come. Fekete wrote, "It never occurred to Bernanke that the new Federal Reserve notes he is printing galore could also go to purchase physical gold, causing the gold basis to shrink. Once the gold basis goes permanently negative, the total USGovt debt, all $16 trillion of it, will not be worth one ounce of gold. That will pull the rug from underneath the international monetary system. Barter is the ultimate in deflation, and that is what the world economy is getting." Gold and other major commodities have been the object of extensive hedging, like energy and farmland, among other items. The Jackass adds that after the extreme shocks, the Gold price will be reset to at least $7000 per ounce.

For the first time in my memory, an economist or monetary analyst has noticed the important point of capital destruction from interest rates held low by force. Fekete makes the argument in astute fashion, pointing out no other economists have noticed, a deep blind spot indeed for the dumbed down harlotry plying their compromised trade in officialdom (officialdumb?). He addressed the second often ignored dimension of money, namely money velocity. As it slows, the consequence is the arrival of barter from the death of monetary economy. Too high velocity means that money is unfit to be saved. Too slow velocity means saving plans are hazardous and not profitable. The current situation has worthless savings plans amidst very sluggish money velocity. He finds the optimum to be a beneficial slow but rising money velocity, with gentle inflation. Those who advocated the Quantity Theory of Money missed how the exponential explosion of debt occurred on their watch. Gold is indispensible as the only ultimate extinguisher of debt, a wise adage. It weeds out unwanted and toxic debt from its critical perch role. Fekete cleverly calls Gold the flywheel regulator of the economy by maintaining the velocity of money at its optimum.

On capital destruction, Fekete wrote the following. "You must distinguish between a low but steady interest rate regime that is salubrious and a falling interest rate regime that is lethal to the economy. Falling interest rates make it impossible for businessmen to make sound investments. Actually the situation is far worse. Not only is capital formation inhibited, but on the top of that, existing capital is endangered. Under a prolonged decline of interest rates, capital is being eroded and ultimately destroyed. If this seems paradoxical, it is because of the reluctance of the mind to admit that a higher bond price represents a higher liquidation value of the underlying debt, an obvious proposition. In other words, a fall in the rate of interest, far from alleviating the burden of debt, aggravates it. Here is what happens. The rate of interest falls. The liquidation value of debt, contracted earlier at higher rates, rises because now the stream of amortization payments is being discounted at a lower rate. Therefore, at maturity there appears a shortfall. This shortfall represents the impairment of capital. Accountants may ignore it, but only at the peril of the firm that one day will wake up to find that, surreptitiously, it has been denuded of capital. All accountants and bank examiners in the world, aided and abetted by governments, overlook the impairment of capital due to the falling interest rate structure."

Fekete approaches the capital destruction from the monetary and debt side, from debt liquidation values and incentives. The Jackass approaches the capital destruction from the market reaction side, where investors and businesses hedge against the paltry puny pathetic low interest rate earned. They hedge with commodities, which raises the entire cost structure, reduces profit margins, and results in systemic shutdown of business segments, thus retired liquidated equipment and finally job cuts. The hyper monetary inflation has a knee-jerk to lift the price of all raw materials in compensation, nullifying the effect. The disaster has come since final product prices and wages cannot rise. Hence the business shutdowns and inventory liquidations. See the Silver Bear Cafe interview article (CLICK HERE). Hats off to Fekete from keeping one foot on the ground with the plebeians, finally.

◄$$$ DETAILS ON THE KENNECOTT MINE SLIDE ARE OMINOUS AND MENACING TO THE INDUSTRY. THE OUTPUT FROM THE MINE HAD ALREADY BEEN REDUCED IN THE PAST TWO YEARS. SO THE IMPACT HAS BEEN LESS MINE OUTPUT COMING TO MARKET THAN A YEAR AGO, FOLLOWED BY NONE COMING NOW. $$$

The US Geological Survey has concluded the landslide at the Utah site for Kennecott released 128 million cubic yards of rock and dirt into a mining pit nearly a mile deep. The weight was 165 million tons. They calculated it to be equal to two-thirds of the earth material removed for the Panama Canal. Kennecott is making plans for adapting to a 50% decrease in copper production during 2013. Some misquoting of Kennecott's gold and silver production has been reported. Here are the real facts. In 2010, the firm produced 466,000 oz gold, 4.7 million oz silver. In 2011, the firm produced 384,000 oz gold, 3.2 million oz silver. In 2012, the firm produced 200,000 oz gold, 2.45 million oz silver. The news networks and websites have been throwing around figures of 400,000 oz of gold and the 4.7 million oz of silver, but that is old data from 2010, hardly recent revenue basis. The production from Kennecott fell more than 50% for gold and nearly 50% for silver in 2012 compared to 2010. As consequence, in order to maintain output, Kennecott will be transporting stockpiles of ore to the milling and refining area. At least 2000 workers at the site are in limbo, many likely to be furloughed. Kennecott Utah Copper Corp paid $53 million in taxes last year to Salt Lake County, an amount sure to go way down. The impact to local economy and schools is obviously negative. Delusion must be removed from the equation. The reality is that it will take years to clean the mine pit zone, sure to cost a tremendous amount of money (more than estimated), which can never be recovered. See the KSL News article (CLICK HERE).

◄$$$ THE GOLD MARKET IS NOT IN A BUBBLE, AND NEVER WAS IN A BUBBLE. COMPARISON TO PAST RECOGNIZED ASSET BUBBLE & BUST ERAS REVEALS RELATIVE STABILITY. GOLD CANNOT EASILY FIND ITSELF IN A BUBBLE, SINCE IT IS MONEY. A PAST COMPARISON TO CRUDE OIL AND TECH STOCKS DISPLAYS THE TRANQUILITY OF THE GOLD PRICE OVER THE DECADES. $$$

Since gold is true money, the only way the gold market can be caught in a bubble is if the USDollar is caught in a deflationary nightmare downward spiral. The typical misguided perspective is to view Gold are varying in value, while the USDollar as constant. Wrong, loud wrong!! The Gold value is nearly constant, subject to its own supply fluctuations mostly. As the USDollar is perverted, debased, and rendered toxic, the Gold price responds with a higher value following the rabid monetary inflation spew from the rapid USFed sprinkler system. The central bank activity to save the world makes the official money worth much less, actually worthless, from grand debasement. Cheaper money translates to higher perceived Gold price. If a single 1-oz Silver coin still fills the family car with gasoline after a decade, or if a single 1-oz Gold coin still buys a nice 10-year old Honda Accord car, then the Gold & Silver prices never really went up in the ten year period. Its purchase power remained constant. However, after the removal of illicit wet blankets in market suppression, the cover of a mountain of naked shorts by the big Anglo banks, and the replacement of a numerous giant vaults of stolen Allocated Gold Accounts, the Gold & Silver price will be multiples higher, where it belongs. The precious metals prices must correspond to two or three decades of monetary growth. A simple 5-fold Gold price increase and 8-fold Silver price increase will be sufficient to restore integrity.

The bull run in the Gold market began in 2002. The question of gold being in a bubble is extremely naive and reveals the ignorance toward money itself. The research team at Commerzbank recently compared the price of Gold starting in 2002 to the price of Brent crude oil starting in 1998, and to the NASDAQ Composite stock index from 1990. Immediately following each posted record high, crude oil and tech stocks declined sharply. Within nine months, tech stocks were cut half in price, while it took only three months for oil to lose half its price. Notice the dramatic rise and fall of each index on the chart. By contrast, Gold has been very stable over the past decade. Nearly 20 months after its peak reached at $1900 per oz, the official Gold price has fallen only about 25%, corrupt though it may be. Investors should take comfort in the relative price stability of Gold, and ignore the brain-dead propaganda hurled by the mainstream media, veritable information lackeys. See the USFunds article (CLICK HERE).

◄$$$ A SPROTT INTERVIEW SHARES THE BIG WISDOM. THE GOLD AMBUSH STARTED A GRAND BACKLASH IN HIGHER DEMAND AGAINST A BACKDROP OF SUPPLY REDUCTIONS. MONETARY POLICY IS FIRMLY FIXED, AND IN UNCHARTED TERRITORY. THE ENTIRE FINANCIAL SYSTEM IS OUT OF CONTROL. EXPECT ANOTHER GOLD AMBUSH SOON. HIDDEN BANK RUNS ARE OCCURRING, DETAILS REVEALED LATER. NO SILVER STOCKS EXIST ABOVE GROUND. EXPECT GOLD TO REACH $3000/OZ AND SILVER AT LEAST $150/OZ, ALL IN TIME. GOVT DEBT IS RISING FIERCELY, WHICH ASSURES AMPLIFIED MONETARY EXPANSION TO PERSIST. THE GOLD BULL MARKET HAS SEVERAL MORE YEARS TO GO. NO MONETARY POLICY WILL WORK TO STABILIZE THE SYSTEM OR TO FOSTER GROWTH. THE COLLAPSE IS UNSTOPPABLE, TO BE MARKED BY HYPER INFLATION. $$$

Eric Sprott is an emerging genius icon and courageous warrior who is blazing a new path for the gold boulevards. He has my utmost respect, along with partner John Embry. Sprott gave an interview following the magnificent electronic gold market smashdown and banker suicide on stage. He spoke volumes to Eric King, laying out tremendous details, what follows. The Gold market smashdown was the result of deep central bank manipulation executed by big banks, with possibly a key role played by derivatives in breakdown. They pushed the panic button with huge volume and set the bottom in Gold & Silver prices. A new phase has begun after the big backfire event has been hatched. Huge demand and waiting periods will be seen at USMint, UKMint, Royal Canadian Mint. Expect to see multiples higher one year from now in the true realized Gold & Silver prices (not from COMEX, says Jackass). Mining supply is down this year, contrasted by record setting demand. Already there are 23 central banks ready to buy equities. With the Zero Interest Rate Policy stuck as entrenched policy (never done before), with Quantitative Easing stuck as entrenched policy (never done before), a new very dangerous normal is firmly in place. WITNESS UNCHARTED DANGEROUS TERRITORY. The central bankers are trying hard to hold things together, which cannot be done. The stock index stock support is increasingly obvious. In evidence, note the S&P500 index has risen despite Apple (AAPL) being down 40% in share price. The inconsistency is the great tell. My rejoinder, add the flagging saggy mining stocks also for inconsistency.

The mid-April gold market slam involved the paper futures contract equivalent of 20% of the total annual mine gold output volume. Currently, Gold demand is 60% above the current global Gold mine supply, which means central bankers are providers of bullion bars to the market. Always, the physical market dictates the future path. Expect to see realized the Gold $3000 target, due to monster physical demand. Japanese customers are paying $500 premium over gold spot. The sovereign action is unknown, since they work in the dark (referring to Arab royals and Chinese wealth funds). Expect a 2-fold or 3-fold rise in mining stocks, which will outperform with inherent leverage. We are approaching the end for managing financial markets, as the bankers in control are running out of rope. Do not be surprised to witness another smashdown in the gold market soon, since the official inventory levels are again down to near zero. Bank runs are happening, their location hidden, the details and damage to be learned later (at Bullion Banks too, says Jackass). Less data exists on silver, but sales are stellar. We are seeing a 100% to 150% coin demand growth. No above ground silver stockpile are in existence anymore on a worldwide basis, as all remaining inventory has been drained and will continue to be drained. Expect the Silver price will vastly outperform the Gold price.

Bank account holders in Japan, Iceland, Cyprus, Argentina, and Venezuela should have owned gold. If they had, then they would not have lost so much of their stored wealth in bank accounts with devastating hidden risks to banker confiscations. The Gold/Silver Ratio is heading back to 16:1 again. In fact, the GSR should head to an 11:1 ratio, which is the production ratio for active working mines. Look for Gold to reach $3000 per oz and Silver to reach $150-250 per oz in the not too distant future. The debt/GDP ratios are rising across most Western nations, which will force the central banks to continue to print money, even to ramp up their monetary expansion. This year, expect possibly see Gold hit a new high, and Silver to attain the $50 level again (seems unlikely, says Jackass). Central planners have ignited a public global firestorm of demand, as consequence to their desperate actions to avoid a default. The Gold bull market has 5 to 7 more years left, proportional to continued desperation exhibited by the fracturing bank leadership. No banking or monetary policy deployed will work. All policy measures have failed, even regarded in astute circles as lunatic. The financial collapse is on track and unstoppable, marked by hyper-inflation. See the King World News article (CLICK HERE and HERE).

◄$$$ JOHN EMBRY STRESSED THE CONFUSION IN THE GOLD WORLD, AS LEASING AND HYPOTHECATION HAVE GONE WILD. HE CITES A RUN ON GOLD. THE USECONOMIC DATA IS INCONSISTENT AND WEAK. THE GOLD BULL MARKET HAS NOT ENDED. HIGH MONEY GROWTH, LOW INTEREST RATES, AND A DESIRED PURSUED HIGHER INFLATION RATE ARE ALL WORKING TO SUSTAIN VERY STRONG GOLD DEMAND. HUGE UPSIDE GOLD PRICE POTENTIAL EXISTS, AS THE DOWNSIDE RISK IS NEGLIGIBLE. $$$

John Embry of Sprott Asset Mgmt echos the Eric Sprott sentiment, but with a different perspective, always refreshing and full of insight. He generally expects a massive upside breakout in Gold. The following are his thoughts. The entire paper gold market has been gutted by leasing and other forms of hidden corrupt linkage, like with forward contracts and derivatives. Gold in the banking system has been hypothecated and rehypothecated so many times that nobody knows who owns what. The confusion is beginning to be revealed after bullion bank redemption demands by the elite wealthy. The gold market is extremely tight, with very little supply anywhere. A run on physical gold is occurring. Very wealthy entities and individuals are finally learning that they do not really own the Gold they think they do. This has been a Jackass forecast for the last 12 to 18 months, to emerge as the virulent Allocated Gold Account scandal. Embry expects that the reaction to scurry to hold the gold on account will conceivably break the gold price wide open to the upside, which will in turn break the stranglehold maintained by the the corrupt paper (futures contract) market. Slight disagreement here, as the Jackass believes the effect will be to shut the COMEX down, and end the official quoted gold price. The slow afoot, the mentally challenged, the gullible sheep, the easily deceived, these investors wonder if the Gold bull market has ended. No way!!

The entire gold market ambush slam was the most artificial paper smash in history. Gold should be kept as insurance because the financial system will edge its way closer to collapse. The USEconomic data is totally inconstent, and conceals the intense weakness. The recent Dallas Fed index imploded, a wretched sign and contradictory to much of the nonsense put forth by the press. Embry makes a great point, that the main force keeping the USEconomy afloat is the government deficits and the bond purchase program by the USFed. He regards the situation as totally unsustainable and fully propped. In response, the physical gold buying worldwide has been astounding. Unbridled money growth, ultra low interest yield to savers, and a goal to raise inflation by central banks should provide ample motive to buy gold. Embry concluded that the corrupted official gold price might have a few dollars risk on the downside, but the true physical Gold price has hundreds if not thousands of dollars potential on the upside. See the King World News interview (CLICK HERE).

◄$$$ A GREAT GOLD DEFICIT IS EVIDENT IN GOLD MINING FIRM RESERVES OVER THE LAST 21 YEARS. NEW DISCOVERIES ARE IN A DOWNTREND. DISCOVERIES FROM 1999 TO 2011 HAVE REPLACED ONLY 56% OF MINE OUTPUT. THE SUPPLY CHAIN FOR GOLD IS IN TROUBLE. $$$

The graph represents 189 gold deposits discovered since 1990, each with at least two million ounces of gold in total reserves, resources, and past production (or at least one million oz in reserves). Expect future mine output to be reduced, since discoveries are the lead indicator. Credit goes to Exeter for a tremendous fundamental chart, which does not address the monetary side of the demand equation, spurred by central bank inflation. It is not intended to do so. With reduced supply of gold coming to market, a pipeline of supply in decline, and fast accelerating demand, the true Gold market will reflect a much higher true price. The official COMEX & LBMA gold price are insults to market intelligence, and will be eventually pushed aside, then ignored. Later come the lawsuits and empty arenas filled with cobwebs. See the Exeter presentation (CLICK HERE).

◄$$$ C.M.E. CHAIRMAN DUFFY ADMITTED THAT PHYSICAL GOLD SETS THE GOLD PRICE ULTIMATELY. HE ALSO ACKNOWLEDGED THAT COINS DID NOT DECLINE MUCH IN PRICE DURING THE SMASHDOWN. $$$

Terrence Duffy is Chairman of the CME Board, the main futures contract arena. He played a critical role in protecting MF-Global from damage when they stole private client accounts, other collusion coming directly from JPMorgan. At the Milken Conference, Duffy shared his view of the Gold market. He admitted that the physical gold interaction determines the gold price ultimately, a remarkable admission by a paper mache merchant. He made a startling comment, when he mentioned how the gold coins did not fall in price during the massive price decline. They are desired by the investors, since they have true value. See the Bloomberg video (CLICK HERE). Contrast his views to executives at Discovery Gold, who expressed their suspicions openly of manipulation and interference in the gold market. See the Yahoo Finance article (CLICK HERE).

◄$$$ SINCLAIR VERIFIED THAT GOLD BUYERS IN TOKYO JAPAN ARE PAYING RICH $500 PREMIUMS FOR GOLD. THE ENTIRE NATION IS HEDGING AGAINST THEIR OWN CENTRAL BANK. THE BANK OF JAPAN IS PUSHING DOWN THE YEN CURRENCY HARD. NO SOLUTION WILL COME, ONLY INFLATION AND A RISING GOLD PRICE. ASIA WILL FORCE WIDER THE PRICE DIVERGENCE IN HIGHER EASTERN METAL PRICE, VERSUS LOWER WESTERN PAPER PRICE. PRICE IS DETERMINED AT THE MARGIN. WATCH THE SPROTT FUND AND OTHER FUNDS FOR REPORTS ON PAID PREMIUMS TO OBTAIN THE PHYSICAL METAL, WHICH IS IN RARE SUPPLY. $$$

Keith Barron reported that the Japanese have come rushing into the physical gold market, paying $500 premiums for US 1-oz American Gold Eagle coins. The shortage in Tokyo is acute. Jim Sinclair provided the motive for such fierce buying. He said, "The Japanese have what almost appears as an insured bet in Gold, with the central bank of Japan purchasing not only Japanese denominated debt, but also Euro debt and USTreasurys. It is clear that the [Yen] currency has nowhere to go but lower. This is another way of saying there is a central bank put contract being offered on the purchase of Gold, denominated in Yen." Regard the Asians collectively as the fighting force pulling apart the paper versus metal Gold price divergence. The phenomenon has been at work for over a year, and is gaining momentum. Price is always determined at the margin, where buyers meet sellers. It is places like the Sprott Fund agent buyers, where premium is paid to obtain real metal under investment roofs, that fireworks can be expected. Management staff makes public statements about the difficulty to secure Gold & Silver in sufficient quantities to match the investment inflows. See the King World News interview (CLICK HERE).

Do not be overly impressed with a 3.5% GDP growth for the Japanese Economy in 1Q2013. It is a quarter over quarter calculation, with annualization imposed. Consumer spending rose by 3.7%, a strong number, and residential investment increased by 7.9% but following a 15% increase in Q4. One must wonder how much of the rise was strictly due to rising prices from the intentionally weakened JapYen. Net exports also contributed to the upside surprise, as exports jumped by a big 16.1%, while import growth at 4.0% was tepid. The jury remains out on the whether competitive JapYen devaluation will result in net gains, as their industry cost structure and household cost of living are ramping up quickly. My belief is that much of the stated GDP growth is pure inflation, improperly adjusted. A big negative future signal was the 2.6% pullback in CAPEX, its fifth consecutive quarterly decline. Capital expenditure is vital to businesses, as it is the investment in plant & equipment and more. Japan is committed to Kamikaze monetary policy, which can be called a sham for its concealed defense of the USDollar. The pending USDollar collapse (from isolation and rejection) has great implications to Japan and its strange economics. Their big banks have been suffering from near zero bond yields for many years. Now they suffer from a falling JapYen currency. See the Global Research article (CLICK HERE).

◄$$$ THE WESTERN BANKING CARTEL'S GOLD & SILVER PRICE SLAM WILL BACKFIRE. THE AMBUSH ASSAULT WAS ORGANIZED AND PLANNED, THE EVENT SEQUENCE HIGHLY REVEALING. PEOPLE MUST PROTECT THEMSELVES FROM THE INEVITABLE BLOWBACK. A QUICK REVIEW OF EVENTS SHOULD MOTIVATE TOWARD REPLENISHED GOLD PURCHASES. $$$

FACT #1: The COMEX gold vaults were recently drained of two million ounces of physical gold in one quarter. It was the largest withdrawal of physical gold bullion from COMEX vaults in one quarter during this entire 12-year gold and silver bull market. FACT #2: One of the largest European banks, ABN Amro defaulted on their gold contracts and informed their clients that they would only settle their gold bullion contracts in cash, no longer in physical. Expect lawsuits to come. The warning signal was clear and loud. FACT #3: London trader Andrew Maguire (silver market fraud whistle blower) stated that the LBMA was in deep dire straits with bare bones inventory. They had trouble settling gold contracts in bullion. They told institutions which asked for physical settlement that they would be cash settled instead. In plain English, this is a default. FACT #4: The bankers were in a tremendous jam, a tightening vise. The Obama Admin called a meeting of 15 leading bankers just one day before the infamous banker gold and silver raid on April 12th, the great ambush. The sequence is revealed. Investors did not sell gold and silver down, as reported by the press harlot pumps. The bankers did, using corrupt naked shorting devices.

To be sure, the bankers delayed the default of the COMEX & LBMA with their typical oft-repeated executed paper slam of gold and silver. The corrupt banker methods have assured and even will accelerate the path toward the absolute failure of the LBMA & COMEX, to be followed by failure of all global fiat currencies. Their mart will go dark. The sovereign bonds will suffer great distress when the official corrupt gold market shuts down, and confusion reins supreme. Some powerful dire blowback consequences are in progress at work in the wake of the ambush assault on gold with deep criminal overtones. The smart investors are converting their remaining fiat cash in the damaged major currencies into Gold & Silver bars and coins, taking advantage of the provided price discount. Good luck to find any supply. See the Underground Investor article (CLICK HERE). For another perspective on the gold market manipulation backfiring, see the Before Its News article (CLICK HERE). Recall that MF-Global happened only once. The next gold paper market slam will have a bigger victim, COMEX integrity. Its corruption will have gone into the open, the criminality in full view, the devices clearly identified. Worse, the depleted metals exchange inventory will become the biggest story, followed by the Allocated Gold Account scandal.

## THANKS

Thanks to the following for charts StockCharts, Financial Times, UK Independent, Wall Street Journal, Zero Hedge, Business Insider, Calculated Risk, Shadow Govt Statistics, Market Watch, and more.