As Western Bullion Banks Manipulate Paper Market Down: Asia Experiences Physical Metal Tightness and Premiums Jump. – FT Article


Now that JP Morgan has been exempted from the new positions limits and is (in my opinion) running the White House through their man Daley, new Chief of Staff at the White House, I think the growing dichotomey between actual physical demand and supply and the nefarious super concentrated short positions by the US and UK central bank primary bullion operative banks will become increasingly sharp.

Asia and much of the rest of the non-US/UK central banking community and national interests are aware of the manipulative practices and are beginning to understand the game these few giant bullion banks with all their "above the law" interventions into the gold and silver markets and how to wait for the raids and then buy at the tail end of the attacks, hold and wait again. There playing the same game at Gold $1400 and Silver $30 as the were with Gold at $1000 and and Silver at $20 and at lower levels.

The world is slowly awakening to the fact that in a world of currency backed only by ever increasing debt that gold and silver have a major and historically validated role in the reserve currency equation. Its simply that the US with the help of the UK and previously France and Germany have been doing everything possible to make the world forget that the most reliable money in history, is that which is incorruptible, limited in supply and univerally appealing, i.e. gold and silver. They've done and continue to do it through clandestine and in my opinion completely illegal market manipulation through their operative primary dealers and affiliated supporting banks to the central banks. The general public is gradually awakening to these nefarious operations and also the increasing risk that these ever increasing and totally unrepayable debts. This awareness is just one of the factors fueling demand and despite the daily capping and MOPE, has been and will continue to put pressure on the exchanges as demand for physical silver and gold increases. Rather than implementing meaningful reforms and regulations for OTC derivatives and other financial instruments, the CTFC excludes the largest even the watered down position

The Financial Times article referenced in this GATA dispatch post below is evidence that what I have said before hand is the truth:

As West's gold paper price falls, metal gets scarce in Asia

Submitted by cpowell on Fri, 2011-01-14 23:08. Section: Daily Dispatches
Gold Prices Buoyed by China Demand

By Jack Farchy
Financial Times, London
Friday, January 14, 2011…

A spike in gold buying by Asian investors has created a scarcity of investment-grade gold bars in the region, supporting prices even as Western investors trim their holdings.

Traders said that gold sales to China had jumped 30 to 50 per cent since Christmas, driving the cost of kilo bars in Hong Kong more than $3 per ounce above the market price of gold, the highest level since 2008 and an indication of the tightness in the physical market.

"Physical demand has rocketed in China at the start of the year," said Walter de Wet, head of commodities research at Standard Bank.

The wave of Asian buying has propped up gold prices at about $1,360 a troy ounce, traders and analysts said.

The metal's price has dropped 4.6 per cent from its December record price of $1,430.95, trading at $1,364.10 on Friday, as optimism about prospects for U.S. growth has led Western investors to turn their attention away from gold to other commodities and equities. "We have a balanced situation where one part of the world is buying and the other part is selling," said a senior trader in Hong Kong. Chinese and Indian investors are increasingly turning to gold to protect savings against sharply rising food prices.

Investor buying of gold bars jumped 80 per cent to a record 144 tonnes last year in India, according to GFMS, the precious metals consultancy, while across east Asia bar hoarding was up 125 per cent at a 15-year high.

In another sign of the booming investment demand for gold in the region, China's first exchange-traded fund to offer exposure to physical gold, launched last month by Lion Fund Management, announced this week that it had already achieved its target of raising $500 million.

The tightness in the Asian market is likely to persist until the end of the month, traders said, as some refiners have booked out production until February and Chinese demand remains robust ahead of the new year holiday.

However, some warned that the gold market could lose its main support when China shuts down in the first week of February.

Edel Tully, precious metals strategist at UBS, said that next month, "if investors are intent on selling, gold will not have the buffer it had in January." …"

Given the FT position as an establishment bank, they had to get their MOPE in to explain why gold is a few dollar off its all time high. Their reason is due to "optimism for economic recovery in the West and then scare tactics about that China will be "shut down" in the first weak of February. All this rather than addressing the true reasons that gold remains at a minimum of half of its relative actual value as a currency and that silver is at best at 1/10th of it actual value and that is ongoing supression, capping and MOPE. They do this to keep people from understanding what Pretcher recelently wrote in the Guardian

"…Let’s attempt to define what gives the dollar objective value. As we will see in the next section, the dollar is “backed” primarily by government bonds, which are promises to pay dollars. So today, the dollar is a promise backed by a promise to pay an identical promise. What is the nature of each promise? If the Treasury will not give you anything tangible for your dollar, then the dollar is a promise to pay nothing. The Treasury should have no trouble keeping this promise…."

and that silver and gold are what used to be the object of a real promise for real money.

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