Author Bill Holter
10-14-2013 10:00:02 AM
Friday morning started off with a "bang" or should I more correctly say a FRAUD! Over a 4 minute span right at the open, 2 million ounces of gold were sold. The first minute saw 800,000 ounces dumped followed by 3 more "at the market" minutes which actually closed the CME for 20 seconds. These 4 minutes took over $20 off of the price of gold while you left your computer, went to fix a cup of coffee and came back.
WHO could have "dunnit?" 2 million ounces? 2 million ounces is just over 62 tons of gold. To put this in perspective for you, the top 22 sovereign holders of gold ends with Pakistan which holds 64.4 tons followed by Argentina with 61.7 tons? ALL of the COMEX inventories combined (dealers and customers) are less than 7 million ounces and the amount "registered" (available for delivery) is only 721,000 ounces or only a mere 22 tons. GLD purportedly holds 890 tons and they have been "bleeding" gold for about a year now but never have they had 1 single day where they puked 62 tons. Another way to look at this is that 2 million ounces are produced across the globe every 10 days; it was all "sold" in only 4 minutes!
Even if there was some entity that actually had 62 tons of gold to sell, no one anywhere on the planet would be stupid enough to sell it all in this manner...NO ONE! Any "seller for economic gain" would parcel this trade out over a day or several days so as not to disrupt the market and do it "quietly" so that they'd get the best price. What was done Friday morning was obvious, it was done to make headlines, it was done "for your benefit"...it was done so that "you" would think twice about buying and hopefully to scare you into selling what you already have...it was done as psychological warfare. Repeat after me...gold=bad, paper=good!
My point is this, no one (or VERY few) even have this amount of gold to sell and NO ONE (truly no one) would ever, EVER sell in this fashion unless they wanted to crush the price. This was not "real gold" that was sold. No, these were contracts, pieces of paper with no gold or anything else backing them which were sold...strictly to push the price down. We have seen this many times before. You have seen it, I have seen it (heck, even Art Cashin finally saw it), everyone everywhere has seen it...except for the CFTC. They didn't see it. No, they couldn't have seen it because they are shutdown as a "non-essential" part of the government. Of course, if they weren't shut down they would have gone into their "Sargent Schultz" mode of Hogan's Heroes and said, "I see nuttink" like their 5 year "thorough investigation" of the silver market. Yes this is a teaser and I am as irritated as you are but there is nothing we can do except buy more (as the Chinese are doing) or as much as possible because we are being offered a subsidy. Take the metal and say "thank you"...and wait. "Wait" until the Chinese are told "sorry, there is no more" which will be the final day that COMEX or LBMA will get to "make" price. If you think that $20 or $50 "down" is scary...what is going to happen on the upside after the mathematically coming physical call is made will be the scariest financial event in human history!
Speaking of "scary," Saturday morning must have been a scary thing for WalMart as millions of filled shopping carts were left abandoned in 17 states. 17 states saw their "EBT" (food stamps) cards shut off. For round numbers, there are 50 million people on the EBT program in a society of 330 million. This is a little over 15% or 1 out of every 6 or 7 people. So roughly 17 million people were turned away with no food, do you think some of these people might be a little bit hungry? Or even mad? This was supposedly a "test" gone awry. This is reportedly a "computer problem"which I fully believe but that raises a couple of questions in my mind. What if we were "attacked" technologically which we have already been told is a 100% certainty? Or what would happen if the government actually did just "shut down" as is the current threat?
Over the weekend the Chinese state media posed a solution for the rest of the world should (when) the U.S. shuts down. They have proposed a "new world order." A new world orders that "de Americanizes" the world after we "shut down." I have been laughed at for even suggesting the possibility of our banking and financial system shutting down; it seems to me that the Chinese see this as a foregone conclusion!