London Trader - The LBMA Is A Massive Ponzi Scheme

On July 20th, the ‘London Trader’ told King World News, “The LBMA’s price fixing scheme is coming to an end.”  Gold quickly rose $200 after that interview.  Today the source now tells KWN the LBMA has, “... incredibly large quantities of paper silver and gold being traded each day, but the real problem here is there is virtually nothing to back this up.”  The source also said, “This is all part of the LBMA Ponzi scheme.”

King World News has now released a total of three written interviews with the London Trader.  This is the third in a series of blockbuster interviews which uncovers what is happening behind the scenes in the gold and silver markets.  The source also discussed the incredible tightness in the physical silver market.

Here is what the source had to say in Part III of the interview:  “The physical silver market is extraordinarily tight.  It’s insanely tight right now.  In other words, there isn’t any for sale.  We are seeing large premiums in places like Shanghai.  If a buyer wants size in physical silver, you are going to have to wait a long time.”

The London Trader continues: 

“When the commercials see a large order enter the market, they just turn the market around.  They don’t have that quantity of silver in inventory.  Every day the London Bullion Market Association (LBMA) clears 5,000 tons of silver, and between 600 and 700 tons of gold through paper trading.  When you think about it, that is a ridiculous amount.

This is all part of the LBMA Ponzi scheme.  You have these incredibly large quantities of paper silver and gold being traded each day, but the real problem here is there is virtually nothing to back this up....

“So they have paper silver as an example, and it’s heavily leveraged.

So if I turn up to the LBMA and I say, ‘Out of your 5,000 tons of silver that you clear every day, I just want 300 tons.’  It shouldn’t be a problem.  It shouldn’t even cause a ripple.  But when you think about it, and that physical silver is leveraged 100 to 1, that’s more than the annual mine production of silver for the entire year when you do the math, including the leverage implications.

Of course they can’t deliver the 300 tons.  They don’t have it.  So when you actually go and send a Brinks truck to go and pick this silver up at the back door of Scotia Mocatta, you aren’t going to get it.  An order like that takes at least two months to get filled.

The problem right now is that there is such a large overhang of orders in both of these markets, and specifically silver.  Every day there are people turning up at the fix to buy physical, regardless of price.  As the markets are taken down, it exponentially increases the amount of physical silver that needs to be filled.

I would also add that the local traders are heavily short now.  So we are seeing a large short position building in silver on this price decline.  And don’t forget, the COT reports are groomed.  I don’t trust them.  

So when they see a large physical order enter the market, that’s the point where the commercials start covering.  Remember, the gold and silver markets on the COMEX are all about chasing out leveraged longs.  That’s all that market is about right now.

But we will see a day when silver can no longer be capped through paper trading and various games being played at the LBMA and COMEX, and in the end, it will be the physical market which will be the deciding factor.  At that point you will see the real price of silver for the first time, and it will leave people in disbelief.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/17_London_Trader_-_The_LBMA_Is_A_Massive_Ponzi_Scheme.html