Jim Willie Bombshell: Global Lehman Moment Comes Next!
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For the last year or more, not an elephant, not a gorilla, but a dragon has been found at the dinner table. Its breath has just made everybody at the table totally bald with some scorched red faces. Now all are looking at each other, wondering who will first mention the bald guys at the table. The Shanghai levers are finally functioning, starting with the Gold Fix and continuing with the RMB-based gold futures contract (which delivers gold metal oddly). The game is finally on, as in the climax chapter to the End Game.
Paper gold is totally disconnected from fundamentals. The paper charade is as impressive as it is corrupt. Its enemy is physical gold and related demand. Silk Road nations have strong gold demand, which will disrupt the entire geopolitical balance of power, extending from trade and non-USDollar platforms. The West has the corner on toilet paper used in the gold market. The United States has the corner on the USDollar, used in fraud and illicit tolls.
PAPER GOLD FRAUD
Paper Gold is a term used to describe the actively traded futures contracts which determine the gold price. Owning such paper instruments is not the same as owning physical gold bullion, since corruption defrauds the investor and interrupts the claim. Most investors remain largely unaware of how disconnected the paper markets (COMEX in United States & LBMA in England) are from reality. The entire concept of contractual (paper) price discovery has been corrupted beyond all recognition. The activity in the last couple years has raised great alarm due to the rapid pace of divergence between paper gold prices and the tangible world fundamentals within the gold arena.
The claims of paper contracts per ounce versus actual gold has run to almost 300-to-1 in recent months. It was considered outrageous two years ago when at only 25-to-1 or 40-to-1 in ratio. Imagine the lunacy of even five to six people claiming ownership to your car or house, or better yet your summer cottage by the lake. The dominance of paper gold pricing mechanisms has resulted in profound shortages in supply, as well as horrendous conditions for mining firms. They have been forced to shut down marginal mines, since not profitable. Only a rare few among mining firms like Majestic Silver has undertaken to deny supply to the COMEX, and to call a partial strike against the criminal COMEX organization. Absolutely no equilibrium exists in the gold market, as demand outstrips supply, which quickly vanishes. The shortages have made history in recent months and years.
Paper Gold on COMEX and LBMA is a crime scene. It is toilet paper with gilded surfaces, better described as elaborate corrupt contracts with a few gilded letters at the top. Trading gold futures, which are essentially delivery contracts, must entail some degree of abstract financialization. If someone is merely trading a gold contract in order to arbitrage, then it would be costly, time consuming, and ultimately pointless to shift physical gold around. It is only the paper gold contracts that trade hands, not the physical metal on ramps. The banker cartel relies upon this hardship of movement to create the corrupt scheme. People do not wish to carry 80 silver coins in their pockets or a kilogram of gold in a suitcase, so instead they use certificates which become instantly corrupted. The necessary evil has grown far beyond its intended proportions, a practice refined and led mainly by the big banks.
Currently, the number of contracts on the COMEX represents 300 times as much paper gold as there is physical metal in the COMEX vaults. Moreover, this number has ballooned at a faster pace over the past two years or so. The 300:1 ratio of contracts to physical ounces is propped by powerful restrictions. The COMEX forbids delivery of gold on the ramps to satisfy a gold contract, under threat of banning the party from participation and entry in the door. Almost nobody takes actual delivery of their metal, except for the big Wall Street banks which steal gold from other depositors.
These banks also routinely rig the windows to enable removal of investor gold in the GLD Exchange Traded Fund, and silver from the similar SLV fund. Imagine a gold futures contract with no delivery possible. How absurd! But it has been the reality since June 2012.
The situation is perhaps even more frightening in the London Bullion Market Assn (LBMA). This market sees $trillions worth of gold trades every day. The activity is truly baffling. On individual trading days, more gold changes hands within contract trading (paper shuffling) across the London market than all the available gold in the world. Yet no metal moves anywhere, in a grand charade. These are merely paper transactions, with almost no actual metal ever in movement. The staggering leverage and dilution should not make any sense to the rational observer. However, in sharp contrast, the Eastern nations are accumulating gold in large volume.
GOLD & SILVER PRICE REVERSALS
The gold reaction to the Shanghai market development has been muted. But a powerful reversal is in progress, which should be impossible to halt or to obstruct. An unsual pattern shows itself in an upward bias Cup & Handle toward a reversal, where the $1300 level is well defended.
The signals are many on the positive side. The reversal pattern is powerful and unmistakable. The upward tilt is unusual and potent, as a very bullish signal indeed. An explosive violent rise could occur soon. It might not be noticed well by some analysts. The moving average crossover for the 20-week MA above the 50-week MA is a very reliable signal, confirmed by the stochastics cyclical index.
Gold is stodgy but it will prevail and complete the upside breakout. The banker cabal will throw a lot of paper at it, but the paper will be burned and converted to metal by force. These are exciting times. The world is on the verge of witnessing the fall of the banker cabal and the removal of the King Dollar as global reserve currency. The battle is as fierce as the dollar is toxic. See the gold weekly chart where the breakout seems imminent.
The daily gold chart shows a rather tepid response to the April 19th event, where Shanghai launched the Gold Fix and began the gold-delivered futures contract priced in RMB terms. The battle is on to defend the $1280-1300 level. Pressure builds to break out above that level. It will happen soon, but impossible to tell when. It depends on how much more worthless contract paper the banker cabal chooses to stuff in the COMEX toilets, how much more corruption they wish to be exposed for, how much more desperation they will display on a very well observed global stage.
The Chinese to be sure are very angry at continued paper stuffing of the golden ballot boxes where votes are placed on the price discovery process! Notice the absent gold rally in the last several days of trading, with no breakout evident in the daily chart.
Silver leads the precious metals breakout in impressive fashion. The Cup & Handle pattern indicates an 18 target to be reached very quickly. Both following charts exhibit a constructed launching pad for an assault on the $20 level. Suspicion has arisen that China is acquiring silver in an industrial stockpile, possibly for monetary purposes also. A bigger controversy has emerged, whereby JPMorgan might be the hired agent by China to secure vast amounts of silver bullion.
The USGovt appears to have reneged on yet another lease contract with the Middle Kingdom. The US has confirmed once more itself to be the exceptionally corrupt nation. See the weekly chart for silver, where the breakout is as clear as one’s reflection off a shiny silver surface. It is consolidating at the $17 price level.
A different pattern is shown on the daily silver chart, one that rhymes with the breakout in the weekly silver chart. Notice the surge in volume to exit the range established since February. The target for the daily chart breakout is also indicated around the $18 level. This chart and the chart above resemble a launching pad of a different look where a tilted range no longer held the price movement.
Beware the silver surge in impressive moves upward. The silver price has surged over 10% in the last two or three weeks to over $17 per ounce, where consolidation occurs. The Silver Surfer is on the move, making his presence known. The Sprott Silver fund will add $75 million to silver drainage. Gold fights the geopolitical banker battles, but silver rides through the gate on a swift white horse. Silver has surged in recent weeks. Its impressive move of nearly 80 cents on April 19th was duly noted, an echo from the Shanghai gongs. Silver easily surpassed technical resistance at $16.20/oz.The next big test is resistance at $18 per ounce. The brief peaks in early 2015 will not stop the Silver march upward. No significant activity was seen at either minor peak event, a requirement for resistance to be exerted.The Silver Surfer is ready to capture the earth’s attention again.
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