Shock & Awe in London and New York: In one day (April 12), more than 400 tons of PAPER gold were dumped on the market —to crash gold and to defend the dollar.
Something desperate is going on in the financial markets for
the Federal Reserve to coordinate this extraordinary “event.”
Former Treasury official Dr. Paul Craig Roberts called today’s gold smash an act of desperation orchestrated by the Federal Reserve to protect the exchange value of the dollar:
“It’s just paper. It’s naked shorts… I have assumed from the beginning that it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.
“The exchange value of the dollar is threatened; and if that collapses, the Fed loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail.”
Are foreign creditors beginning a revolt against the petro-dollar? Currently, the world needs dollar reserves to buy OPEC oil. Indeed, recent evidence suggests negative sentiment against the petro-dollar has spread from the Middle East, the Far East, and to the rest of the globe. In response to out-of-control-dollar-printing (open-ended Quantitative Easing – QEI, QEII, QEIII), countries are beginning to abandon the use of the dollar as international payment:
BRICS nations (Brazil, Russia, India, China, & South Africa), Middle Eastern countries, Australia, Japan, and Korea have been forming bi-lateral trade agreements which shut out the dollar. Is the status of the dollar threatened? Yes. Non-dollar trade deals are threatening the dollar’s status as the world’s reserve currency.
In an interview with King World News, London gold-trader Andrew Maguire discussed today’s take-down of the gold market. During the broadcast, Maguire said PHYSICAL gold is no longer available for delivery on commodities exchanges. He said gold trading is now all PAPER gold.
Naked-shorting — tons of PAPER gold
Commodity short-sales are “naked” when sellers do not have the goods to fill the orders. On April 12, 2013, naked-short-sellers drove down the price of gold by flooding the market with more than 400 tons of PAPER gold. There is no actual gold available to “cover” those orders. Today’s massive sell-orders were naked because they can not possibly be filled. No one on the exchanges in London (LBMA) or New York (COMEX) will deliver 1 ton of PHYSICAL gold — much less 400+ metric tons of gold bullion…(unless it is to a central bank).
Buyers will be not be able to take delivery on delivery contracts unless the gold is “stored” within the bullion bank system. Bullion bank system: Members of the London Bullion Market Association (LBMA):
- HSBC Bank -Hong Kong & Shanghai Banking Corp-a custodian for GLD.
- Barclays Bank PLC
- Deutsche Bank AG
- J P Morgan Chase Bank -a custodian for SLV.
Remember what happened to MFGLOBAL customers who “stored” their gold (and silver) within the bullion bank system? Investors owned the gold and silver outright, but the precious metals ended up in the possession of JPMorgan.
By Denise Rhyne
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2 thoughts on “Gold Market Crashed to Defend the Dollar”
Hey Craig and Denise
This event with the rise and fall of gold and silver is indelible on my Brain.
You and I talked almost daily about the gold and silver markets.
I left ContiCommodities on Fri, Jan 12th and went to Smith Barney on the 15th. The highs were in both commodities around that day. And the crash happened. I had a client from Calif. that bot silver that day at 49.50, placed a stop at 48.50. At 10:30, prices collapsed. The stop was filled at
37.50. Roughly a $20,000 loss.
Craig and Denise
Thanks for the well written and informative info
This $200 drop in two days took everyone by surprise after Goldman Saks said to everyone last Wed to short or get out of gold
After the $75 drop on last Friday people at the PNNA convention bought all the available gold bullion and now on Tuesday very few shops have anything avail. With high premiums for anything left behind
Very interesting week to follow