Plummeting Oil Prices Could Destroy The Banks That Are Holding Trillions In Commodity Derivatives

"Could rapidly falling oil prices trigger a nightmare scenario for the commodity derivatives market?  The big Wall Street banks did not expect plunging home prices to cause a mortgage-backed securities implosion back in 2008, and their models did not anticipate a decline in the price of oil by more than 40 dollars in less than six months this time either.  If the price of oil stays at this level or goes down even more, someone out there is going to have to absorb some absolutely massive losses.  In some cases, the losses will be absorbed by oil producers, but many of the big players in the industry have already locked in high prices for their oil next year through derivatives contracts.  The companies enter into these derivatives contracts for a couple of reasons.  Number one, many lenders do not want to give them any money unless they can show that they have locked in a price for their oil that is higher than the cost of production.  Secondly, derivatives contracts protect the profits of oil producers from dramatic swings in the marketplace.  These dramatic swings rarely happen, but when they do they can be absolutely crippling.  So the oil companies that have locked in high prices for their oil in 2015 and 2016 are feeling pretty good right about now.  But who is on the other end of those contracts?  In many cases, it is the big Wall Street banks, and if the price of oil does not rebound substantially they could be facing absolutely colossal losses..."

at http://theeconomiccollapseblog.com/archives/plummeting-oil-prices-destroy-banks-holding-trillions-commodity-derivatives

Is The U.S. & London Based Gold Scheme Coming Unraveled?

"Today one of the top names in the gold world covered the all-important question, is the U.S. and London based gold and silver Ponzi scheme finally beginning to come unraveled?  This is another trip down the rabbit hole of negative gold lease rates, backwardation, and corruption at the highest levels of the banking industry..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/3_Is_The_U.S._%26_London_Based_Gold_Scheme_Coming_Unraveled.html

Is Another Popular Metals Dealer Losing People’s Money?

"John Embry of Sprott Asset Management:  “Investors are doing the right thing by attempting to buy physical gold and silver at these depressed price levels.  But it’s absolutely critical that the dealer with whom people are placing orders can guarantee you almost immediate delivery.

I think the gold and silver paper market is one of the greatwar Ponzi schemes on earth.  So if you are going to buy physical, make sure the entity you are buying it from has it immediately available for shipment.  If they are telling it’s going to be many weeks or months, I would run the other way because there is absolutely no excuse for that.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/4_Is_Another_Popular_Metals_Dealer_Losing_Peoples_Money.html

Hathaway - Banks Scrambling To Find Metal To Cover Shorts

"With tremendous chaos taking place around the globe and incredible volatility in the gold, silver, and oil markets, today one of the greats in the gold world told King World News that the bullion banks are now scrambling to find metal in order to cover their shorts.  John Hathaway of Tocqueville Asset Management also said that many bullion banks’ balance sheets may be in great peril if gold and silver prices begin a massive surge.

Hathaway:  “It’s so hard to know in the short-term where the price of gold is headed, but it just seems to me that this is all a process of bottoming.  When you look at the bigger picture, you’ve got an inverse relationship between financial assets and gold.  I see the market is at record highs but underneath that you see technical deterioration.  You also see the U.S. Dollar Index moving higher and this is pushing more funds into stocks because of index buyers and capital flight from Europe and Japan.

And I think the opposite of that trade is for gold to be under pressure.  But we are reaching an inflection point where those trends will reverse and investors will start to lose confidence in financial assets, the Fed, and central banks in general...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/2_Hathaway_-_Banks_Scrambling_To_Find_Metal_To_Cover_Shorts.html

Mystery Gold Buyer Took On & Crushed All Paper Shorts

"As we head into the tail end of 2014, today an acclaimed money manager spoke with King World News about the historic trading in the gold, silver, and oil markets.  Stephen Leeb also discussed a mystery buyer who propped up the gold market and took on and eventually crushed all paper shorts after Sunday’s vote in Switzerland.

Leeb:  “What caught my attention was the trading in the gold market on Sunday evening (early Asian trading).  This trading followed the huge fall in oil and oil stocks on Friday.  It also followed the no vote in Switzerland.  But after gold’s initial decline on Sunday evening, gold just straight-lined for what seemed like 6 hours.  Some entity was in there buying every ounce of gold that was being offered for sale....

“And that entity continued to buy every ounce of gold available until the gold market then began to reverse course and rally in a huge way.  This rally was happening even with what seemed like every possible negative news item in place.  So the gold market surprised many people.

And in the midst of the plunge in oil prices, China has ramped up their purchases and is storing the excess crude anywhere they can.  China has also begun doing military drills with Iran and they strengthening their relationship with Saudi Arabia.

At the same time, India’s leader, Modi, has decided to invest in Russia’s energy industry.  This is a huge slap in the face of the United States for Modi to be negotiating with Russia.  So what you are seeing here, Eric, is a coalescing of the East.  And for what it’s worth, China is getting what it wants.  They are getting a strong Eastern bloc and a Silk Road, plus Germany, together..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/3_Mystery_Gold_Buyer_Took_On_%26_Crushed_All_Paper_Shorts.html

Gold Selling for at least 50% over Spot in Asia-Rob Kirby

"By Greg Hunter’s USAWatchdog.com   (Early Sunday Release)

A few months ago, financial analyst Rob Kirby said the gold price was ready to go up. In the international market, where it is sold by the ton–it has. Kirby explains, “For large amounts of bullion in the Asian market, the pricing mechanism has completely and utterly divorced itself from the fraudulent paper prices that are being reflected in the exchanges in the Western world.

In the Asian market, if you could find . . . physical bullion . . . as cheap as spot plus 50%, you’d be doing really, really, really well . . . and you’d be hard pressed to find serious tonnage at that price in Asia.” 

Kirby, who specializes in acquiring large amounts of physical gold for clients, sees physical gold bullion selling for at least “50%” over spot, which would put the price of gold in Asia at least $1,800 per ounce.   Kirby also says, “Prices being paid right now in Asia make a mockery of the prices being shown in COMEX and the LBMA (London Bullion Market Association).  These paper markets have divorced themselves from the laws of economics.  The paper gold price and the paper silver price has utterly stood economics on its ear because rudimentary economics tells you as demand increases, prices are supposed to increase.  Simple supply and demand dictate this.  The precious metals market in the Western world is the only market in the world where increased demand means a lower price, if you want to believe that.”

Kirby contends fraud is the only way to explain skyrocketing demand and plunging prices and says,“So, we’re all being treated to a colossal fraud, and the people perpetrating this fraud are the controllers of the western financial system and the people behind U.S. dollar hegemony.They are pulling a massive, massive fraud on humanity, and it’s not sustainable.  It will ultimately break down.”

at http://usawatchdog.com/gold-selling-for-at-least-50-over-spot-in-asia-rob-kirby/

Wild Metals Trading & Shocking Reason Dutch Got Their Gold

"On the heels of one of the wildest days of metals trading in history, today one of the most respected veterans in the gold world stunned King World News when he spoke about the real reason he believes the Dutch got their gold back from the Federal Reserve.  He also covered the incredible action in gold and silver.

James Turk:  “What a wild day this has been, Eric. The volatility and the huge price swings remind me of the 1970s, but here is the important point. After getting smashed in the frenzied selling in the aftermath of the defeat of the Swiss Gold Initiative, both gold and silver had key upside reversals...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/1_Wild_Metals_Trading_%26_Shocking_Reason_Dutch_Got_Their_Gold.html

Wild Trading Action In Gold & Silver Stuns Market Participants

"After a remarkable day of trading in the gold and silver markets, today the man who made one of the greatest market calls in history told King World News that the wild trading action in gold and silver has stunned market participants, and a historic buy signal has just taken place.  Below is the incredible interview from Ben Davies.

Davies:  “Eric, I was interviewed on CNBC yesterday with Chris Powell.  We were talking about surreptitious behavior in the gold and silver markets, particularly last Friday and early Monday.  We were on for about 15 minutes but unfortunately there wasn’t a long clip.  So I wanted to tell the King World News readers globally my viewpoint in light of the incredibly volatile action we have just witnessed and the quite deliberate call I made in last week’s KWN interview.  The wild trading action in gold and silver has stunned market participants and caught the shorts completely off guard...

“But we strongly believe as a firm that the gold market has bottomed.  Silver has finally given me the egregious bullish divergence that I was looking for.  We saw a 6 percent downdraft in a totally illiquid market in early Asian trading on Monday -- just asinine price movement..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/2_Wild_Trading_Action_In_Gold_%26_Silver_Stuns_Market_Participants.html

It Wasn't The Swiss: Continuing Plunge In GOFO Means No Easing Of Worst Gold Shortage In Over A Decade

"Yesterday, when we commented on what was largely a pre-determined outcome of the Swiss gold referendum, we said that there still "is the question of what happens to the tension in the gold swap market: as noted last week, the 1 Month GOFO rate had tumbled to the most negative in over a decade. It was not clear if this collateral gold squeeze was the result of Swiss referendum overhang or due to other reasons. The market's reaction on Monday should answer those questions."
Well, a few hours ago we got the GOFO update for the "day after" and the answer is clear: it wasn't fear of the Swiss referendum after all because the 1 Month GOFO just crashed even deeper into negative territory with the entire curve through 6M now red, and with 12 month GOFO just 0.6 bps away from negative for the first time. At this rate, tomorrow's update will suggest that big institutions expect the gold swap shortage to persist through the end of 2015!
Also, judging by the gold reaction, which is about $50 from the overnight lows, someone else appears to have noticed that the rather shocking shortage of synthetic gold among institutions, which is finally seeping through into that whole "price discovery" process, where supply and demand actually matter.

Bottom line: whatever caused the record scramble for rehypothecated gold, it wasn't fears about the outcome of the Swiss referendum. Something else spooked the precious metal a month ago, and as seen on the chart above, things have only gotten progressively worse since then.
Source: LBMA"

at http://www.zerohedge.com/news/2014-12-01/what-happened-gold-correlation

What Happened To The Gold Correlation?

"Submitted by Jim Quinn via The Burning Platform blog,
The correlation between gold and the national debt was clear for 13 years. It made perfect sense in a free market. You can’t print more gold. It is a relatively scarce metal that has represented wealth for centuries. Fiat currency can be printed at will by corrupt bankers and politicians. Every paper currency ever created eventually reached its intrinsic value of ZERO, as human beings always take the easy way in attempting to create wealth.



So what happened in 2013? The national debt has gone from $16.5 trillion to $18 trillion, but the price of gold has dropped from $1,750 to $1,200. Is gold no longer a store of value? Is creating $2.5 billion per day in new debt now the path to long term prosperity and wealth accumulation? If gold is no longer insurance against the corrupt machinations of bankers and politicians, then why are China and Russia accumulating as much physical gold as they can get their hands on?
There seems to be only one logical explanation for the abrupt break in the correlation between gold and the national debt. The free market has been manipulated to artificially suppress the price of gold. A rising gold price reveals the inflationary monetary policies of the Fed and the outrageous spending of politicians. The Fed and their owners on Wall Street, with the approval of their captured political hacks in D.C., are using the paper markets, derivatives, and lack of market transparency to keep the price of gold from rising.
The bankers are winning for now. Can they suppress the price of gold forever? Can they prop up the stock market forever? Does history provide even one example of a fiat currency that did not ultimately reach its true intrinsic value?
Are you going to bet on Grandma Yellen or gold?"

at http://www.zerohedge.com/news/2014-12-01/what-happened-gold-correlation

Silver Soars 17% From Intraday Lows: Biggest Swing On Record; Gold Tops $1210 (+$70 Off Lows)

"Silver is up over 17% from its intraday lows today - this is the biggest positive swing since our data began. All the previous major swings have been downshifts, most recently in September 2011 (-22% and -18% over 2 days). Volume is very high also. Gold is back above $1,210,up over $70 from its intraday lows...

The biggest intraday positive swing on record... ($16.82 is next test for SIlver at 50DMA)

And gold and silver are exploding... (gold has broken above its 50DMA at $1205)

Silver & Gold are back above pre-OPEC decision leak levels...

at http://www.zerohedge.com/news/2014-12-01/silver-soars-17-intraday-lows-biggest-swing-record-gold-tops-1210-70-lows

We Are Closing In On Absolute Panic In The Gold Market

"On the heels of the news that more European central banks are coming under enormous pressure to repatriate their gold held abroad, today Egon von Greyerz said we are closing in on absolute panic in the gold market.  Below are his comments about the stunning ramifications of what is transpiring.

Greyerz:  “Eric, I think 2015 will be the year when the world finally discovers that the emperor has no clothes because there is a total disconnect between reality and financial markets around the globe.  We have stagnant growth and there is no net investment anywhere in the West, and there is no investment in infrastructure in the West.  Private debts are at record highs and public debts are even bigger, and none of this will ever be repaid.  This is the backdrop even as financial markets hit new all-time highs...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/28_We_Are_Closing_In_On_Absolute_Panic_In_The_Gold_Market.html

Historic & Unprecedented Events Unfolding In The Gold Market

"Today one of the wealthiest people in the financial world spoke with King World News about the historic and unprecedented events that are now unfolding in the gold market.  Rick Rule, who is business partners with Eric Sprott, also discussed why other countries becoming so concerned that the U.S. gold is gone, and why this is sparking panic on the part of some countries to get their gold back before all hell breaks loose.

Eric King:  “Rick, you’ve heard the news about Marine Le Pen sending the letter to the French central bank demanding their gold be repatriated back to France, and to also put a halt to any future gold sales.”

Rule:  “I personally think that having control of one’s own gold is a prudent thing to do.  The topic of repatriating gold is getting a lot of play in Europe as a consequence of the Swiss referendum, which you reminded me is coming up on Sunday.

 

And I think there is an undercurrent, an intelligent undercurrent frankly, of voters in Europe, particularly older voters, who remember that times aren’t alway good.  Who believe this (gold) is part of their national patrimony, it’s part of their wealth, why should we store it in a repository that doesn’t subject itself to an audit?  Why don’t we keep it ourselves?...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/29_Historic_%26_Unprecedented_Events_Unfolding_In_The_Gold_Market.html

Gold Repatriation Stunner: Dutch Central Bank Secretly Withdrew 122 Tons Of Gold From The New York Fed

"A week ago, we penned "The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed", in which we got, for the first time ever, an admission by an official source, namely the bank that knows everything that takes place in Germany - Deutsche Bank - what the real reason was for Germany's gold repatriation halt after obtaining a meager 5 tons from the NY Fed:

... the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.
Some took offense with this, pointing out, accurately, that the gold held at the NY Fed in deposit form for foreign institutions had continued to decline into 2014 despite the alleged German halt. Well, today we know the answer: it wasn't Germany who was secretly withdrawing gold from the NYFed contrary to what it had publicly disclosed.

It was the Netherlands.

This is the stunning statement made by the Dutch Central Bank earlier today, and which, all compliments to China's rate cut, is truly the biggest news of the day, as it shows that one doesn't need a referendum to repatriate their gold, nor does one run into logistic or diplomatic problems if one is truly set on procuring their physical.

As to why the DNB decided it was time to cut its gold held at the NY Fed by 122 tons? ""It is no longer wise to keep half of our gold in one part of the world," a DNB spokesman told Telegraaf. "Maybe it was desirable during the Cold War, but not now."

From the source:..."

at http://www.zerohedge.com/news/2014-11-21/gold-repatriation-stunner-dutch-central-bank-secretly-withdrew-122-tons-gold-new-yor

Why Banks Should Not Be Allowed To Manipulate Metals Markets In 4 Simple Points

"Four negative effects of allowing FHCs to engage in Complementary Commodity Activities stand out in particular (and for further detail, please see http://www.sunesiscapital.com/aluminum):

1) FHCs have been permitted to own an outsize share of official LME metals warehousing. With such warehouse market power, they can exercise manipulative control over aluminum prices and stifle competition. Anyone who buys metal on the LME and wishes to take possession of it is forced to do so through an LME warehouse. Warehouse owners with such outsize market power have driven up wait times for these buyers to hundreds of days, and have increased rents on their metal during the wait. This behavior constricts supply and drives up the costs of getting metal out of the LME system. In turn, this creates a distortive force on the broader market for metal—thereby driving up industrial costs, which are passed down to consumers in the form of higher prices. The LME system—a so-called market of last resort—should be a force for keeping industrial premiums down, but it has ceased to function in this role.

Additionally, with the profits from higher rents flowing from longer queues, FHCs can incentivize producers to sell more aluminum into their warehouses, and thereby compete with industry and bid up the price of metal—again, driving up aluminum prices. As J. Christopher Giancarlo said in a confirmation hearing before the United States Senate Committee on Agriculture, Nutrition, and Forestry, "Absolute dominance can lead to absolute abuses." Sharon Bowen, at the same hearing, echoed these sentiments: "Any time you can control both the demand and supply of a commodity, that. . . needs to be looked at, because it could be recipe for manipulation,"

2) Allowing FHCs to own metal, trade derivatives, and own the LME warehouses in which metal is stored gives FHCs the ability to gain insider information about the future moves of metal in and out of the market, and then trade on such information. The rest of us, who don't own warehouses, cannot do the same. Insider trading in equities markets is illegal. Those laws are designed to prevent individuals from profiting from non-public information. But no such laws exist in commodities markets, thereby misaligning incentives, and, most importantly, eroding public trust in commodities markets. If a CEO can't sell his company's shares because he knows the company is about to report small profits, why can a trader sell metals futures right before he knows his company is about to dump large amounts of metal on the market?

3) Allowing FHCs to own metal, trade derivatives, and control warehouses allows FHCs to profit by quickly moving large amounts of metal in and out of the LME market system. When large quantities of metal leave or enter the system, the broader market perceives shifts in supply and demand. A FHC with outsize stocks of metal could take advantage of such a scenario by buying futures, moving a large quantity of metal off LME warrant (signaling a greater demand and reduced supply, causing prices to rise), and then selling the futures at a higher price. But the metal may have never left the warehouse at all. There is, in reality, no industrial demand for the metal, but its price has gone up.

4) And all of this behavior is financed by the American taxpayer. Owning and trading in physical metal requires significant upfront capital, which is typically borrowed. Because FHCs have access to the discount window, and benefit from an implied "too big to fail" loan guarantee, they have a government subsidized advantage over industrial buyers and smaller traders who must pay higher financing fees. Quite ironically then, it is the American taxpayer who is subsidizing FHC activity that causes higher prices on the everyday goods purchased by those same taxpayers..."

at http://www.zerohedge.com/news/2014-11-21/why-banks-should-not-be-allowed-manipulate-metals-markets-4-simple-points

Low Oil Prices An artificial play by the Saudis & The Americans

"The U.S. together with Saudi Arabia just want to put pressure on Russia and Venezuela. It’s an artificial play by the Saudis, with the support of the Americans to punish some; especially Russia and Iran. Maybe by following this strategy, they can get them to do what the U.S. says."
"I am buying in Russia right now. Some of these markets had been under pressure but I am buying stocks. I am optimistic about Russia." Jim Rogers told The Anadolu Agency,.."

at http://jimrogers1.blogspot.com.tr/2014/11/low-oil-prices-artificial-play-by.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+blogspot/WOHK+(Jim+Rogers+Blog)

Worldwide War For Physical - Andy Hoffman

at http://ausbullion.blogspot.com.tr/2014/11/worldwide-war-for-physical-andy-hoffman.html

Swiss Gold Initiative Leader Banned From Televised Debate

"Today King World News was stunned to learn that the Swiss politician who launched the Swiss Gold Initiative was actually banned from participating in the televised debate.  Luzi Stamm, who was one of the primary architects of the Swiss Gold Initiative, spoke with KWN about why he was banned from the televised debate and why “It is not possible (to continue) what’s (currently) going on in the Western world.”  Below is his remarkable interview..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/20_Swiss_Gold_Initiative_Leader_Banned_From_Televised_Debate.html

China & Russia To Accuse U.S. Of Not Having The Gold

"Today King World News interviewed a man who has been uncovering critical information for 25 years who said that in the not-too-distant future China and Russia are going to publicly announce to the world that they don’t believe the United States has the 8,100 tons of gold it claims to possess.  He also spoke about German gold repatriation, the Swiss Gold Initiative, and massive unofficial gold holdings in China that are held outside of the central bank.  Below Steve Quayle takes KWN readers around the world on a shocking trip down the rabbit hole of lies, propaganda, criminal international banking syndicates and murder..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/21_China_%26_Russia_To_Accuse_U.S._Of_Not_Having_The_Gold.html

Russian Gold Reserves Continue to Expand

"Russia added another 600,000 oz to its reserves in October.

Nothing to see here.  Move along.

at http://jessescrossroadscafe.blogspot.com.tr/2014/11/russian-gold-reserves-continue-to-expand.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+JessesCafeAmericain+(Jesse%27s+Caf%C3%A9+Am%C3%A9ricain)