Maguire - LBMA Gold Flight Now Threatens Financial System

"Today whistleblower Andrew Maguire warned King World News that the massive flight of gold out of the LBMA “has now become a major threat to the Western central banking system.”  Maguire, who recently appeared in the CBC production “The Secret World of Gold,” takes KWN readers around the world on a trip down the rabbit hole once again in part two of a series of extraordinary written interviews that will be released today.

 

Maguire:  “The question that keeps coming up to me is how long can this paper market selling continue?  How can it continue to drive price when at the same time we are actually seeing such a massive transfer of physical underway into the Eastern trading blocs?

 

This recent heavily margined forced capitulation was absolutely Fed-induced.  And the only short-term goal of this was bailing out the defaulting bullion banks.  If you remember, we talked about this back in April after ABN AMRO exposed the whole LBMA system to a probable default.  This was a (major) crack in the system....

“The result of this official intervention:  There’s a tradeoff involved here because it’s tipped the balance and irreversibly broken the relationship between the paper markets and the global physical markets now.

 

The majority of all traded volumes are actually paper gold in the far less transparent over-the-counter foreign exchange markets.  People believe it (the manipulation) is all happening on the COMEX, but it’s not.  This (over-the-counter trading) is actually much more of a tool for the Fed and the Bank for International Settlements (BIS) than directly intervening in the COMEX.

 

You have to understand that gold/currency crosses are the primary focus of these official interventions that we see daily.  In other words, unlike all other commodities, gold and silver are first and foremost a heavily central bank manipulated (market), and are traded as a foreign exchange cross.

 

Now, Eric, here’s the rub.  This has created a huge problem for the central banks.  As a tradeoff in supporting the dollar it forces the shorting of gold, which then in turn leads to the Eastern central banks exercising the other side which is their long (gold) side.  And they convert that into real physical allocations at the daily precious metals fixes (in London).

 

In the past this (activity) was just a thorn in the Fed’s side.  The bullion could be borrowed or replaced at a later stage.  But the sheer volume of bullion being transferred out of the LBMA has now become a major threat to the Western central banking system.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/28_Maguire_-_LBMA_Gold_Flight_Now_Threatens_Financial_System.html