The next run on physical gold will dwarf the last, worldwide run. Long before the current lockdown, exchanges in London and New York were short of bars “eligible for delivery.” *


Today, the true price of gold is quite a bit higher than the “spot” price quoted in the paper market. Shortages are driving the price of physical gold sky-high.

The soaring price is propelled by HUGE supply-deficits in New York and London of “Good Delivery” bullion (100-oz & 400-oz bars).

Large buyers want actual gold,
not promissory pieces of paper.


In the West, few investors own PHYSICAL gold. Most people prefer the ease of buying and selling precious metals in the form of derivatives: ETFs (Exchange Traded Funds), swaps, options & commodities futures contracts.

Tremendous flows of money into these highly-leveraged instruments establish prices. However, the fractional reserves underlying their value are now depleted. Since 2008, the Eastern Hemisphere has been vacuuming up “Good Delivery” bullion from the exchanges.

The transfer of gold and silver from the West to the East is massive and ongoing. As physical bullion flows to the private vaults of the über-rich, the trading desk of the Federal Reserve “manages” spot prices in the paper market.**


  • The exchanges rarely deliver PHYSICAL bars.
  • The vast majority of accounts are settled with cash.
  • Banks have unlimited supplies of synthetic bullion.

Over-the-counter markets in London and Zürich alone trade more than 940 tons of gold PER DAY. Yet, global mine production increases the gold supply by only 2,500 to 3,000 tons PER YEAR. This means more gold is traded in Europe every 3-4 days than is mined worldwide in 1 yr.

How is it possible?
According to trade data from the LBMA (London Bullion Market Association), UBS (Union Bank of Switzerland), ICBC Standard Bank (Industrial & Commercial Bank of China), HSBC (Hong Kong and Shanghai Banking Corp) & JPMorgan predominantly trade PAPER gold (“synthetic positions”), rather than PHYSICAL gold.

  1. Most bullion traded in this market is mere PAPER.
  2. Digital supplies enable unlimited naked-shorting.**
  3. Prices are determined by banks’ synthetic positions.

2011 Bullion Bank Run

PAPER short-sellers can usually keep a lid on prices. The last time the pricing mechanism for precious metals was controlled by PHYSICAL FUNDAMENTALS was in 2011.

That summer, major mints in Canada, Austria, Perth, South Africa and the U.S. completely ran out of gold. Silver supplies were just as tight. For six to eight weeks, dealers across the nation were unable to satisfy over-the-counter demands. Dealers went “Bid only” — “No offer.”

Spot silver rose from $4.56 [Jan. 2002] to $6.40 [Jan. 2005] to $9 [Jan. 2006] to $13 [Jan. 2007] to $15 [Jan. 2008]. On April 28, 2011, silver hit $49.82/oz.

The year before the global credit-collapse, gold was $525/oz [Jan.5, 2006]. The day credit FROZE worldwide, gold was $662.60/oz [Aug. 9, 2007]. On March 14, 2008, gold surged past $1,000/oz for the first time ever. At year-end in 2010, gold was $1,180/oz. Acute shortages drove that run-on-gold to $1,903.30/oz [Aug. 22, 2011].


Today, there is little connection between the enormous “paper short” positions held by the bullion banks and the meager stocks of unencumbered bars (deliverable bars*) vaulted in their warehouses.

Since the 2008 crash, the world’s biggest refiners have been working around-the-clock (24/7) to satisfy demand for gold and silver. However, shortages and delays have occurred every year at the 5 major mints. Product scarcity is now obvious to coin dealers across the United States.

PHYSICAL gold & silver eliminate counter-party risk. Take delivery of available products before the PAPER market completely loses its grip on spot prices.

Gold’s rise is just getting started. On the upside, there will be little resistance for a long, long way.

Submitted by Denise Rhyne

* “REHYPOTHECATION is the practice of using the assets held as collateral for one client in transactions for another. This allows the prime broker to re-lend client securities (or gold) held as collateral… Collateral is used by investment banks for their own purposes” (Financial Times Lexicon).
“Encumbered” fractional-reserves have been “rehypothecated“ − lent, leased, swapped, shipped, sold, resold (the same bars sold to multiple owners), or pledged as collateral multiple times.
** NAKED SHORTING is a trading technique used whenever metals break to the upside. Prices are brought down by massive, concentrated sales of PAPER gold or PAPER silver. Contracts representing millions of ounces are dumped simultaneously on exchanges.
Short-sales are “naked” when sellers do not insure that the bullion can be borrowed or secured prior to sales. If sellers do not have the gold or silver to fill the contracts (if bullion is unavailable), the corresponding half of the transactions cannot be fulfilled. A handful of banks perpetually control the “open interest.”

Washington Gold Exchange LLC
Craig Rhyne offers personalized service and competitive prices.
Call (206) 719-6368.
See our
Model Precious Metals Portfolios.

INFLATION: “An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices. The rise in prices is caused by an increase in the volume of paper money issued.”Webster’s Twentieth Century Dictionary, George Ogilvie, USA, 1904.





As a currency’s value goes down, it takes more and more of the FUNNY MONEY to buy REAL MONEY.

We Already Have HYPER-CREDIT.

The combination of currency debasement, falling production, and rising debt always ends in credit collapse. In all history, there are no exceptions. But ten years ago, few Americans had ever considered the possibility.

Image result for credit freeze

Suddenly, on Aug. 9, 2007, inter-bank lending locked up; the dollar was in free-fall; and credit completely FROZE here and around the world. The following year, Bear Stearns collapsed (March); Merrill Lynch and Lehman Brothers collapsed (Sept. 15); and the stock market crashed (Sept. 29, 2008). The Dow Jones Industrial Average had the biggest one-day drop in U.S. history; Lehman was the largest bankruptcy in U.S. history. 

Since the global credit-collapse in 2007, the economy has been rocked by a series of violent after-shocks: the banking system came close to locking up again in Nov. 2011, Oct. 2014, and Aug. 2015. The Federal Reserve has kept the dollar-reserve system afloat by ‘doubling down’ on the excesses that led to the debt crisis. For nine years, the world has been on the biggest debt-binge of all time (U.S. debt has more than doubled). 

The Federal Reserve’s remedy for the on-going debt-crisis is the creation of HYPER-CREDIT. The entire financial system is sustained by exotic financial instruments called “derivatives.”

Image by Martin Kozlowski, Wall Street Journal.

The Federal Reserve monetizes debt (here and abroad). From nowhere, trillions of dollars spring into existence (new debt becomes brand-new credit). The Fed and other central banks have created, issued, financed, or enabled an estimated 1.4 QUADRILLION dollars of derivatives debt to ‘paper over’ the fragile banking system. The number attached to this debt has three more zeros than the combined value of all of the goods and services produced on earth (10 to the 15th power)!

 $1 trillion = one million million dollars
$1 quadrillion = one thousand million million dollars

By definition, one thousand trillion dollars of derivatives debt “derive value (cash flows) by reference to underlying assets.” What possible collateral could give value to more than one quadrillion dollars of derivatives debt? The following logical conclusions can be made about this historic debt bubble:

  • There is relatively little real collateral underlying the debt.
  • The debt can be repaid only by more HYPER-CREDIT.
  • The debt is merely delaying a monetary catastrophe.
  • The climactic end of the bubble is certain (Herbert Stein’s LAW): “If something cannot go on forever, it will stop.”

A few years back, Dr. Jürgen Stark, an economist with the European Central Bank, shook the financial world when he told the Ludwig von Mises Institute that the global financial system came “within hours” of collapse in Nov. 2011. He said:

“The whole system is based on pure fiction, groping since 2008 to avoid a second Lehman, which if it happens, the system will not survive.” [Professor Dr. Jürgen Stark, European Central Bank;]

Dr. Stark told the audience that the only thing keeping the system going since 2008 is money-printing; central bankers are “flying blind;” no one knows how much money (credit) is being created or where it is going. He recommended allocating savings to traditional safe-havens such as silver and gold. 


The year before the global credit-collapse, gold was $525/oz [Jan.5, 2006]. The day credit FROZE worldwide [Aug. 9, 2007], the gold price was $662.60/oz [London p.m. fix]. On March 14, 2008, people were shocked and amazed when gold surged past $1,000/oz for the first time ever. However, soon after the stock market crashed [Sept. 2008], gold dropped 30% (from $1,000 to $700/oz) and silver fell 70% (from $21 to $9/oz).

Did the precipitous fall in silver and gold prices mean low demand and abundant supply? NO. The ‘hit’ on precious metals was accomplish by “naked” short-selling.* Every scared gold-bug wanted coins; and every U.S. dealer ran completely out of coins and bars – almost overnight

Within a few days, the supply of PHYSICAL gold and silver dried up all over the country. The major world refiners had nothing. NO gold or silver was available from the five major world mints: Canada, Austria, Perth, South Africa, and U.S. Mint. Dealers could not get delivery for well over a month. In 2011, the same thing happened; and silver deliveries were delayed even longer. When the next financial crisis rocks the dollar, will supplies of gold and silver completely disappear?


Today’s market indicators do not reflect what is happening beneath the surface. The monetary system ‘as we know it’ is coming to an end. The International Monetary Fund says a “Money Standard Shift” will be concluded during the next crisis. 


If you take delivery of silver and gold, you will have protection from illiquid markets, third-party risk, and overnight currency devaluations. Today, the price of the 1-oz gold coin [above] is $1,350. Since the day credit collapsed, the PAPER dollar has lost more than half of its value against PHYSICAL gold.

Submitted by Denise Rhyne.


* Gold and the dollar are competing currencies. A rising gold price indicates a failing dollar. For this reason, the trading desk of the Federal Reserve “manages” the spot price with a trading technique called “naked” short-selling. When gold and silver break to the upside, spot prices are brought down by massive, concentrated sales of derivatives (PAPER gold and silver). Contracts representing millions of ounces are dumped simultaneously on London and New York exchanges. 

Things You Probably Didn’t Learn in School About Gold & Silver-pdf : Includes articles on NAKED SHORTING.


“Indeed, one can be deceived in many ways; one can be deceived in believing what is untrue, but on the other hand, one is also deceived in not believing what is true.” [Danish philosopher Søren Kierkegaard, 1847 Works of Love, Haper Perennial, p. 23, 1962; Kjerlighedens Gjerninger, SKS, vol. 9, Gad & Søren Kierkegaard Forskningscentret, p. 13, 2004.]

Very Little Available Gold is Left in the West.

The last time gold and silver moved like a freight train was in the 2011. One country triggered the RUN on gold and silver. Overnight, supplies of gold and silver dried up; and mints worldwide ran out of deliverable bullion.

In less than nine months, gold and silver made new highs. Gold rose $600; silver climbed 160%. Silver was just as scarce as gold. (Silver was $9 Sept. 2005; $50 April 2011.) 


When the leading currencies were backed by gold, the United States exported more than 40% of all manufactured products used by the world. While today the U.S. is the greatest debtor nation, fifty years ago, America was the greatest creditor nation. Back then, other countries needed sufficient gold to buy made-in-America products.
Continue reading Very Little Available Gold is Left in the West.