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Impeccably reliable sources have informed me that as recently as Sept.
30, 2009 – the last possible day of trade in the Sept. 09 gold futures
– a number of well-heeled market participants “bought”
substantial tonnage worth of gold futures on the London Bullion Market [LBMA]
and immediately told their counterparties they wanted to take instantaneous
delivery of the underlying physical bullion.
The unexpected immediate demand for substantial tonnage of gold
bullion created utter panic in at least two banks who were counterparties to
this trade – J.P. Morgan Chase and Deutsche Bank – because they
simply did not posses the gold bullion which they
had sold short [an illegal act which in trading parlance is referred to as a
“naked short”].
Because these banks did not have the bullion to honor their contracted
commitments, one or both of them approached the counterparties and asked if
there was any way they could settle this embarrassing matter quietly on a
“cash basis” to absolve the banks from fulfilling their physical
bullion delivery obligations. The
purchasers were not interested in a ‘cash settlement’ and
demanded delivery of physical bullion giving these banks 5 business days to
resolve the situation. A premium
of as much as spot plus 25 % [that would be 1,250 – 1,300 per ounce of
gold] was offered to settle this matter in fiat money instead of the
embarrassment of a very public “failure to deliver” on the part
of the London Bullion Market Association.
Earlier this week, no less than two Central Banks became involved in
effecting the physical settlement of this situation. One of these Central Banks was British
[that would be the Bank of England] – and reportedly, even they were
only capable of providing less than pure, non-compliant gold bars that did
not meet good delivery standards stipulated by the LBMA. Like it or not, this is a testament to
lack of physical gold available, folks.
To summarize: Banks like J.P. Morgan
Chase and Deutsche Bk. - who sold endless amounts of gold futures at prices
of 950 – 1025 and then tried to make “side deals” with the
folks they sold the futures to – offering them spot + 25 % [let’s
say 1,275 per ounce] to settle in fiat – only after their counter
parties demanded substantial tonnage of physical gold bullion.
Stunningly, if accurate [and there is
absolutely no doubt in my mind that this is not accurate], this means that
gold is already in SEVERE
backwardation and this fact is being hidden from the public.
Then, to protect the “integrity”
of the futures market as a ‘price discovery mechanism’ –
Central Banks – aiding and abetting - plunder the sovereign assets of
their respective countries to bail out their agents / friends in an attempt
to ‘sweep the whole bloody mess under the carpet’.
To think that anyone wonders why our financial
system and fiat money will soon to be TOAST?
What a disgraceful insult to humanity.
Rob Kirby
KirbyAnalytics.com
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by Rob Kirby
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