Thursday, October 27, 2016

What should the real price of gold and silver be with all the paper contracts sold for each bullion ounce

With the rise of the Shanghai Gold Exchange over in Asia, there are now three primary gold markets functioning globally.  But only one is an actual physical gold market since both London (LBMA) and New York (Comex) are paper gold based derivative markets.

For years organizations like GATA have sought to prove price manipulation and the use of bullion banks by the Fed and the U.S. Treasury to keep down the paper spot price to protect these derivative contracts.  And this proof of manipulation was finally validated earlier this year with a public mia culpa by Deutsche Bank that they and others have been purposely manipulating gold prices through the use of naked shorts dumped periodically onto the gold markets.

So even with these new disclosures of price fixing and illegal market trades, one has to ask why are the central banks and government finance agencies still continuing to manipulate markets without a care that they would be prosecuted, and most importantly, is there an underlying purpose behind such mechanisms?

The answer may lie in a new interview discussing data derived from GATA analyst Adrian Douglas who suggests that the real gold price should be well over $50,000 per ounce to backstop the $14 trillion in foreign held debt, and that the 40 -100:1 paper contract to physical gold ratio currently used in the Comex is a means to keep the paper price down while protecting the debt held by foreigners, which are using held gold as collateral denominated at its true value.

Silver Doctors: GATA's Adrian Douglas has done extensive research into the paper manipulation of gold and silver.  But the precious metals world changed overnight when Jeffrey Christian from CPM Group made this startling admission at the CFTC hearing in March. 
Jeffrey Christian: And you've heard people out there saying it today, that there is just not that much physical metal out there.  There isn't.  But as the physical market uses that term, there is much more metal that that... there is a 100 times more metal (paper metal).
Precious metals are financial assets, and like currencies and T-Bills and T-Bonds, they trade in multiples of 100 times the underlying physical. 
Silver Doctors:  Adrian Douglas's research leads him to conclude that the outstanding paper metals manipulation in gold is 45:1.  Meaning there are 45 paper ounces of gold sold for every one ounce of physical gold in the vault.
Which multiplies the 'apparent' gold supply 45 times.  Therefore suppressing price to what we see today. 
Adrian Douglas:  The Supply of gold is artificially increased by this paper gold about 45 times the actual supply.  So that means when that is exposed, and people are asking for gold that isn't there, the potential is that gold's purchasing power will be multiplied by 45 times. 
Silver Doctors:  There are 45 times the amount of gold sold as there is in the bullion banks, so what is the price of gold for the bullion banker?  $56,000 an ounce.
That is because they sold 45 ounces total (at approx. $1245 per ounce) for every physical ounce they owned.  In essence, they received $56,000 for every physical ounce sold.
Now the U.S. government claims they have 261.5 million ounces of gold held in reserves, so let's take them at face value and assume the gold isn't encumbered.  People say the dollar is backed by nothing, but it actually is backed by the gold reserves they claim they have. 
Now let's consider the dollar.  We've issued $14 trillion in (debt held by foreigners) against 261.5 million ounces.  If you do the division ($14 trillion / 261.5 million) the price comes out to... 
Approximately between $53,500 - $56,000 per ounce.  The exact same amount as the LBMA and Comex selling 45 times in paper gold the number of actual physical gold held in their vaults.
It appears that the paper gold manipulation is purposely being done to protect the dollar during this era of massive money expansion, and increase in debt.  And they are using the paper derivatives markets of the Comex and LBMA to suppress the TRUE VALUE of physical gold since if it were to run free to achieve its actual value it would collapse the dollar as well as the rest of the world's fiat currency mechanisms.


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