Last week Barrick Resources announced the postponement of their giant Pascua Lama mine. This was to be one of the worlds largest mines and is now tied up in litigation over true ownership as it appears to show that Barrick does not have clear title. The probable reserves were nearly 18 million ounces of gold and almost 700 million ounces of silver. Work on this mine was completely ceased last Wednesday.
Last Wednesday was also an important day for the Kennecott copper mine in Utah, the ground started to shift more rapidly prior to this weekend’s landslide. They knew this was coming as they closed the visitor center on April 1st and had all equipment and personnel out of harms way. This mine produces some 400,000 ounces of gold and over 3 million ounces of silver as a by product of copper. This is the largest copper mine on the planet. Have you heard even a peep out of the mainstream media on this on? I didn’t think so.
Is it not strange that these two events came to a head last Wednesday? The same day that out of nowhere gold reversed from being up and give up $40? And then of course there was Friday with $85 and another $75 this morning. gold is now down $200 per ounce in just over 3 trading days. Between these two projects, one not coming online and the other going off line, a VERY significant amount of production is not going to happen. Does this make sense? Did you not learn in school that “less” supply meant higher prices? In the real world?
We don’t live in “the real world”, we live in a world where everything financial is manipulated. Here is what I see happening. They knew that this mine was going to collapse and the production would stop. Then the ruling on the Pascua Lama mine was sent down. Last Thursday president Obama met with 15 heads of the biggest banks and brokers in the country, THIS was discussed as sure as the sun came up this morning: we have hit the bottom of the barrel! Reserves that could be fed into the market are and have dried up at the same time that production has dropped and future production delayed. The paper game is blowing up …RIGHT NOW and the topic of discussion at the White House was about “how it would play out.”
The COMEX will default in the next week or several weeks and people will be “settled” with dollars, no more metal will be delivered! So, knowing that “game over” has arrived, they are dumping a massive volume of paper contracts with impunity to push the metals prices as low as possible before the “default.” This way the “shorts” do not have to and will not be “covered” when “supply” cannot be obtained because of “an act of God.” They will be settled in cash (at a profit no less) because these “unforeseen” disruptions in supply. “Who could have seen it coming?” will be the mantra. I would suspect that banking stress and “bail ins” will also become prevalent globally. The pricing structure will now push any and all physical sellers away from the markets and the “door” to safety is effectively being shut. Either you own metal or you don’t.
I tried to “be nice” in my piece from last night talking to those who worry about price. What is now happening is exactly what I spoke of. You must count ounces because “availability” is going away right here and right now! After the closure of the COMEX and LBMA doors there will be no availability and “price” will be meaningless. Your ability to protect yourself is right now for all intents and purposes being eliminated.
We received a few (very few) angry letters from customers who say that Jim Sinclair, Mr. Sprott and Embry, James Turk and others including myself are and were wrong. That we should hang our heads in shame and that we are nothing more than charlatans hawking gold and silver. We will soon, very soon, see just how right or wrong we really are. What is happening right now is very clear to me, what I don’t understand is how anyone could miss this as it has all been laid out for you to see (for years now), understand and prepare for. Life, all of life as we knew it, is about to change forever. Hopefully you understood this and have already prepared for it!
Bill you are 100% correct in my opinion.
However, the sheeple, soon to be fleeced, just can not see the big picture. They react with knee jerk reactions on a daily basis.
They will soon see that there will be ZERO gold or silver available at any price !!!
And then their precious Federal Reserve notes that they dearly hang on to will become worthless.
They WILL NOT research the 599 previous paper currencies that all resulted in being worth $0.00. Soon the planets current unbacked paper money systems (all ponzi schemes) will join the list of the previous 599.
Now would also be a good time to buy or grow some extra food.
Best of luck to all.
I think I said this was going to happen a couple weeks or so ago, and you said, no way, and if it does, it will be game over…tic, toc…lets see if you are right…you will be in time, but maybe in a year or 2 or 5…it will be business as usual in a week, and dang gone it, I spend all my dry powder this morning..,prices will be back to 28 in a flash.
nice trade, how much premium and what size? Junk is now unattianable since early morning when only a few half bags were offered 5 above spot. APMEX is apparently out of all Silver products. My point is if prices stay here the actual supply will be gone. I do not buy your argument as to “why” this has happened because too much paper was sold to be credible…AND at a time when the largest copper mine in the world and second largest Silver mine in the US collapses and goes off line…which you cannot find in the news unless you search for it. “This” was not a natural evewnt caused by what you term deflation
I have gold stocks with good companies. I’ve taken a beaten, but stood my ground, had no choice. Lost pretty much everything. Are you suggesting that my stocks won’t be worth anything. Please explain.
no, not at all. I was speaking about the COMEX. A force majeur is when the exchange stops any deliveries because of an “act of God” or something out of their control. COMEX has far more contracts outstanding than can ever be delivered on compared to their inventories, I said nothing regarding mining companies with known reserves.
All I know is they are good. Lets see if the COMEX shuts down. Not believing the hype. I’ll check back in a week. Heck, I’ll even give you 2. I’m not discounting the value of PM’s, I am discounting anyone who thinks they are the ‘prophet of Moses’ come back to life…and you know what I mean by that statement. When you predict, you hurt a lot of people who trust your opinion. Then you get nasty grams. Wouldn’t you save them and you a lot of headaches if you would simply espouse the value of PM’s, instead of saying, this is it, we’re done in a week….this is it, COMEX is closing…this is it, we’ll never see 30, 29, 28, 27, 26…19…just doesn’t make sense why you smart guys predict what will happen tomorrow…today has enough worries of its own…focus on the moment…why silver is valuable today. Anywhoo, that’s my rant for the day. I do appreciate all you guys do, but get out of the prophecy business, please. You’ll save yourself and thise whomlisten to you a lot of heartburn.
Response on that one Bill?
as I said, the conditions for a force majeur are in place with far more contracts outstanding than they could ever hope to deliver on. I see it as a very definite possibility if the price does not rise and buyers stand for their metal. I suppose you could say that a “main street” force majeur is already occurring as Silver is now very difficult to find. We only turned away junk buyers today because there is none to be had. Other coin was available to us today, tomorrow? Who knows. This is not a sales pitch, we addsd a disclaimer to the website and confirmations today in case the metal that we are promised cannot be procured. Supply is rapidly becoming an issue which is what I have written avbout in my last 3 pieces.
Do you see what happened and has not been reported anywhere in the news? The worlds largest copper mine (in Utah) collapsed which happens to provide between 10 and 16% of ALL US Silver production (5% of Gold). If the price of Silver does not rise, the measly COMEX inventories will be wiped out (and the usual bribe to not take delivery will be scoffed at). The dealer market for physical is already close to empty, shop the internet this evening and you will see what I am saying. As for a market “closure” I stand by that. At some point in time everything financial will close and a “re set” done. As for “force majeur” I can easily see this happening especially if paper prices were to stay here or go lower as it will only bring out more demand. It is obvious that paper was sold (short) with abandon and I suspect that a force majeur would be the perfect way to extricate the paper shorts (with profit) at the same time they positioned themselves long physically…unethical but will be deemed legal. This I believe is a scenario close to what Sinclair has said all along “shorts will be repositioned” long. As for you “Moses”, I write what I believe. Sometimes early, sometimes wrong but usually not far from the reality. This for the time being is America, if you don’t like what I write then you are free to read anyone else that you’d like. We at Miles Franklin offer you information for free and supply metals with far lower than industry average markups, a great company to be associated with for me and a great deal for anyone looking for information or product.
Bob, you should get into The Stock market. Its not overvalued at All. They are rising, because The recovery is going Well, The housing market is rising, and unemployment is low too. Wuhuuu, everything about our economy is great, just great. Dont Worry about The 40 mill People ón foodstamps. Im out. The world is messed up.
I don’t think the banks are going to lose.
In my opinion, Goldman Sachs are trying to get people to buy short contracts while Goldman Sachs sells their shorts to these people.
Then the banks, are going to go long if they haven’t already.
Somebody will be left holding the bag, but I rather doubt it’s going to be either Goldman or JP Morgan.
Everybody thinks JP Morgan is short, well, there’s a lot more markets than just COMEX. I bet they are net long, somewhere else and I expect them to be absolutely fine.
they may even be net long who knows? My guess is short paper, long physical and the conditions ripe for a force majeur where they would win on their shorts…and then again with the physical during the “re set”.
I don’t believe there will be an force majeur while the banks are short contracts. If they were short at the time of a force majeur, it would confirm everything GATA has been saying for 12 years, unequivocally.
That would destroy the CFTC, would destroy the banking system, would humiliate all the regulatory agencies, and would dangerously anger the buyers in these markets, which aren’t all Americans, but the Chinese and Russians as well – people who are actually dangerous.
I don’t see this as much different than the last takedown when silver went from $20 to $9. There’s silver and gold out there, for a price. They’ll be able to make good on deliveries – and they have unlimited amounts of money and they are perfectly willing to lose money.
why would it destroy the banking system, the “shorts” would in effect be let off the hook right?…AND depending on price, at a profit! The CFTC has already shown us that they don’t give a rats ass what people think of them. Between the current mine in Utah being shut down and another “unforeseen event” (false flag?)? Could they get the public to believe that a power outage in So. Africa was an “act of God”? Pumps run on electricity and those mines will flood without pumps…would that do it? I’m just saying that the paper price is now in the range where if they “wiped the slate clean” the shorts might be winners if they could settle for cash and not raise the price by buying to close. It would be a neat trick and be believeable enough. Have you even seen anything on the news about the mine collapse? Curious thing huh?
> why would it destroy the banking system,
> the “shorts” would in effect be let off
> the hook right?…AND depending on price,
> at a profit!
If the system is viewed as a corrupt game, people stop playing. If nobody plays, there is no system.
Here we are, a few weeks later, and no default.
> the shorts might be winners if they could settle
> for cash and not raise the price by buying to close.
Settling for cash would just cause longs to get another contract
The reality is that although the shorts don’t have the metal, the longs don’t have the money. Even if the COMEX and LBMA were to run out of metal, they’d just go over to China and start buying he metals on the Shanghai exchange there – and maybe delay delivery.
There’s never going to be an outright default.
The shorts have an infinite amount of money. Heck, they could buy silver in China at $50 an ounce and delivery it at $25 here. If this were to happen, our media would be saying Chinese people are stupid to be paying $50 an ounce for the metal and at the same time, Chinese would be shut out from participation on the COMEX or LBMA.
The banks aren’t ever going to go broke, just WE are.
This system is utterly corrupt. Far more corrupt than even you think. A default can be prevented, and it will be prevented, at whatever cost it takes.
Sorry Richard I disagree because physical cannot be printed. “The COMEX would go to China and pay $50 for Silver while delivering it at $25 here”…what makes you so positive the Chinese in the end will sell any metal for ANY fiat Dollar price? In my opinion the system will crack up and COMEX will not be able to deliver as metal for sale will go into hiding at the same time that demand turns into a bank run
Bill, you’re right that physical can’t be printed.
But it can be bought.
Hey, if I offered you $1000 per ounce for silver right now, would you take it? Would you keep your mouth shut as a condition of doing this?
If you wouldn’t somebody else would.
Everybody has their price, except idealists and fools. You can buy silence as well. You think the banking system is entirely corrupt and run by conspiracies, and in truth it probably is, why do you think corruption and conspiracies can’t obtain the metal?
For whom is it advantageous to actually bring down the COMEX or LBMA? Not for China that wants to actually get the metals – they don’t want to see the price go up. Not the banks. Not the US government. For the average dumb American?
Prices very well, and probably will, skyrocket – eventually. I calculate that when silver hits it’s peak, it will take 40 billion ounces of silver to pay off the national debt. You can calculate what that value will be yourself when the time comes.
But I don’t think there is going to be a default. This is delusional thinking. You’re not dealing with a fair system here. You are dealing with a bunch of mafiosos who will do literally anything to maintain the system they created, because it’s so lucrative. They’d just as well kill every single Libyan or even a few thousand Americans to maintain it because it generates INFINITE profits for them. You underestimate their power, and their ruthlessness.
I think these predictions of things that are supposed to happen “just around the corner” are very annoying. It kills credibility. This will be a slow, painful, long process. We’re not going to wake up in a 3 weeks with COMEX and the LBMA closed. That’s utter BS, and when it doesn’t happen, you’re going to discourage people out of a position. I could be wrong, but I doubt I am.
All I know is the Federal government increases it’s debt by 9.4% a year on average, and has for 42 years. You can do your own calculation of what the debt will be by 2020 and 2030. You can also graph the federal tax revenue as a percentage of that debt, which now stands at 15%. It will be at 8% at some point – and that’s about as low as it can go in my estimation.
All this speculation about COMEX and the LBMA, it’s counter productive. It doesn’t matter a bit.
You have a bunch of people going long on contracts they never will EVER buy. And you have a bunch of people going short on contracts, they will never EVER sell.
If there is a physical shortage caused by delivery, it will be resolved by buying people off. All these people care about is making money.
These aren’t people you’re dealing with, they are corporations and hedge funds. They aren’t evil either, they are ammoral.
I’m a person though and you’re talking to people, and you’re saying something is going to happen which would be advantageous to them – but when it doesn’t happen, how do they feel? Are people buying the metal here because they need it, or because they hope to profit from it?
I think putting false short term hope is destructive to what people like me are trying to do. You’re going to shake people from a position if you’re wrong, and there’s a 99% probability you are wrong.
Everyone is entitled to their own opinion, the “slow death” that you describe has been and is happening (for well over a decade already). I am convinced that we will have a “bank holiday” and reset of prices, have believed this was the end game to crossover from the Dollar as THE reserve currency. Would I take $1,000 for an ounce of Silver? I don’t know, I guess it depends on if I was confident that I could replace my Silver ounce with another one for less than $1,000. If none was available? No, I nor anyone will be a seller. As for being “wrong” and shaking people’s confidence, I write my opinion. I am no God with a creystal ball, I can only write my opinion. It is my opinion that a default of delivery of physical will occur. If I am wrong? Hopefully I have caused more people to buy and protect themselves against a declining Dollar than to sell because they are “disappointed” that Bill Holter was wrong and that they didn’t “get rich quick”. We are not anyone’s “Nannys” and everyone must think and decide for themselves, during pullbacks (normal or fraudulent like the current one) we do do a lot of hand holding, believing that a default will ultimately occur is not “hand holding”, it is MY personal opinion to which I for the time being am still entitled to.
> Would I take $1,000 for an ounce of Silver?
> I don’t know, I guess it depends on if I
> was confident that I could replace my Silver
> ounce with another one for less than $1,000
Sure you would. Doesn’t matter if you could get more silver or not, you could get platinum, palladium, gold – heck, perhaps a house, an apartment complex…
> If none was available? No, I nor anyone
> will be a seller
Perhaps the first statement is true, the second is one is not.
> If I am wrong? Hopefully I have caused
> more people to buy and protect themselves
> against a declining Dollar than to sell
> because they are “disappointed” that Bill
> Holter was wrong and that they didn’t
> “get rich quick”.
I think it’s best to have realistic expectations.
This is a frustrating grind, and of course it is going to be. Every damned market is like this. It’s slow, painful, hard to stay on. It’s annoying, aggravating, and tiresome.
That’s how it should be protrayed.
The @#$ running this system also are NOT going to get the short end of the stick at the end of this. In the former USSR, the party became the oligarchy and remain so today. The same will happen here.
If would be nice if it wasn’t the same here, but why get people’s hopes up? If people want to remove the manure, they’re going to have to actually get a shovel, a bucket, and get their hands dirty. It’s not going to be done for them. That’s the awful truth.
As I wrote before, I write my opinion, people need to think and decide for themselves.
by the way, there are plentiful Picassos or anything else out there for the right price.
Bill: Another well written article with a clear, logical arquent for force majeure as long as the price does not rise significantly from here. How high do you think the price would have to rise to make force majeure a non factor? $28-$30 ? Like many in our camp I would be plesed to see the COMEX put out of business,
I don’t know, it may be higher depending on who the “stubborn longs” are and whether they stand for delivery. I can think of the cherry on top for a force majeure and may write about it tomorrow. In any case, in the end the physical price will BE the price.
Except is really is “different this time”. THIS time it is the commercial banks who are changing from short to long. At least from the governemnt’s data via the CoT report.
So it would seem that JPM et al is positioned to make money by allowing commodity prices to rise, as opposed to making money by suppressing prices, as the have done for a couple of decades.
Maybe, we don’t really know this yet but you can bet they will try to be long by the time this operation is done. As wrote to another reader, it is possible that they don’t even care about their paper shorts and are long physical. Were we to actually see a force majeur, they would be a winner and settle their contracts for cash and then win again with theior physical when that gets marked up.
Whenever there is a shortage, prices tend to go up, not down.
What we have witnessed of late is just the opposite.
Shortages in metals and prices drop precipitously does not fit the supply and demand curve.
Bill,
I am in your camp and believe you are correct. Like I said above the sheeple (aka “Believers that all is fine) will get the fleecing soon enough. We may not know the day, but its coming.
Regarding “Forced Majeur”
I would like to give it the new name “Forced Manure” as the COMEX is a bunch of poo poo. Ted Butler and many other writers refer to them as the “Crimex” for a reason.
I hope the belly achers and nay sayers keep commenting as it gives me a feel for the 98% to 99% of the sheeple’s opinions out there.
I believe they have their opinion and I like hearing it, however my mind is already made up that were are being lied to and the published stats are bogus.
But in any case I hope the best for everyone.
Why are premiums so low on buy backs, if there are shortages? Indicates to me dealers planning for prolonged low prices.
You must understand how a dealer works. Normally dealers hold very little inventory on hand. When they accept your order they actually purchase the product from their supply network. If they bought product back from the public they would have to hold it in inventory and be subject to price movement. While they do hold some product, a move like we just saw would have put many dealers out of business. A dealer may however “cross” product where they have an existing buyer looking to purchase exactly what you are trying to sell, in this instance your buyback would be at a better price. Hope this helps.
You may be right, and am a big believer in gold/silver…but some of these guys sure are suspect; as for Sprott, please explain why he says to buy buy buy but he dumped over a million oz of PSLV in the last two weeks????
Mr. Sprott is a straight shooter, as I understand it these sales were pre planned and have something to do with a charitable trust or contribution. I know of no one on the planet more bullish Silver than Eric Sprott.
Hi! Bill read your article on Doc’s site and it really intrigued me. Also your one of my favorites on Doc’s to read. Can you do a follow up article what your opinions would be on what may happen if and when the COMEX collapses? I would love to know your thoughts. Charlie
…a very real potential to be “Mad Max”
Whether you( and I) are right or wrong is for us all to find out. What is ridiculous is people calling you angrily that PM prices are dropping. Everyone is responsible for their own actions and everyone needs to do their own due diligence.
then why aren’t the miners catching a bid? If TPTB knew a default was coming they would be fighting amongst themselves to buy the miners at any price, let alone the beaten up prices that they trade at. I’m just not buying it.
If you were trying to scare investors out of a sector (which is what Maguire says they did to scare investors from standing for delivery) it would be pretty curious if the miners were exploding while their paper charade of sales was ongoing. ALL markets are now managed in my opinion, if you agree with this then do not forget it and think that anything should make sense. The physical market is telling you what the truth is…there is massive buying globally.