“Is the gold really there”? This is truly the question of all questions and at the core of everything that’s about to come! Before getting into the topic itself, it is worth breaking the simple question itself down and into parts. What gold? Who’s gold? And Where? The answers are, your gold, your country’s gold, the gold claimed to be stored and backing various “receipts” like COMEX and GLD. Is the claimed gold really sitting in New York, London, Zurich, Dubai, Shanghai and all the rest? This is a hugely broad topic and I apologize if I miss something but the question itself is now more important than ever before, I’ll explain this in Part two.
As you know, the gold market is probably the most “secret” market of all and purposely shrouded. The most obvious question regarding gold (because we are supposedly the largest holder) is “why has there been no audit of Ft Knox and the other U.S. depositories since 1955?”. We have been told because an audit would be too expensive. Really? We can afford to spend millions (billions) on bridges to uninhabited islands and studies on the effects of broccoli consumption on the sex lives of giraffes but verifying our nation’s gold holdings is “too expensive”? The obvious answer to this question is because the gold is not there and if it were proven or made public, the value of the dollar would evaporate …along with the power of those pushing and pulling the financial levers!
Over the last 2 months we have seen “movements” of gold more rapid and widespread than at any time since 1971. The Netherlands reportedly received 122.5 tons from New York and the Germans just received 85 tons from New York and Paris. Last year at this time, the Germans announced receiving only 5 tons which raised many eyebrows. We were told then, there were “logistic” problems moving large quantities of gold. I reported back then that a cargo Boeing 747 could carry 123 ton payloads (would you like to bet the Dutch received their 122.5 tons of gold in one single flight?).
Last year’s 5 tons were “recast” which also raised some questions, this time around 50 tons were recast in the U.S. prior to shipment, why? Why not just send back the original bars “we were holding” all these years? It’s OK, you can say it out loud if you’d like …BECAUSE IT’S NOT THE ORIGINAL GOLD! As an additional note, isn’t it strange that Ukraine saw their 36.1 tons of gold (2 tons turned out to be painted lead) go missing just as Germany received 35 tons? Coincidence I am sure!
This past week we received the commitment of traders report showing the commercials increased their short position in COMEX gold by some 31,000 contracts …in a week! This represents 3.1 million ounces, for perspective, this is more than 2 weeks worth of global mine supply. We also have another benchmark to compare this 3.1 million ounces to, “inventory”. The COMEX registered gold category now holds 770,000 gold ounces. So, the commercials increased the amount of potential gold they are liable to deliver by more than four times what is even claimed as the total available to deliver!
Last August and again in November I wrote two articles questioning the very high open interest in COMEX gold and silver with only a few days left going into first notice day. Well, here we are again! There are only five trading days left going into first notice day for Feb. gold, currently there are 172,500 February contracts open representing over 17 million ounces of gold. With only five days left, there are roughly 25 ounces of gold contracted for potential delivery versus every one single ounce claimed to be available. Yes I know, each time this has “happened” in the past, “nothing happened”. As I believed in August last year, I still believe this position held by the longs is some sort of a “kill switch” where the longs can demand delivery and force the COMEX into default. I also believe the reason to “flip” such a switch is now more likely and could be the result of our own actions. The U.S. has pushed Russia very hard with sanctions upon sanctions, for less than $1 billion, Russia (and China) could end the Western financial system as we know it!
Will it be this time around? There is no telling but I do believe this will be done as soon as gold is no longer made available for delivery. Remember, China (and to a lesser extent Russia who just purchased another 20.73 tons last month) is importing close to 200 tons of gold per month. Koos Jansen reported that China imported 70 tons last week alone. To put this in perspective, China imported in just one week, more than three times the total amount of gold the COMEX claims they have to deliver! A run rate of 50 tons per week is what the world produces, China is buying ALL of it by themselves! (A side note regarding Koos work, he asked the Central Bank of Netherlands about their recent repatriation of 122.5 tons, whether or not the bars were the originals or recast? …to no response). One more note about COMEX before moving on, the daily volume has been very low for the last two months. Since we bottomed in November, daily volume has been less than half of what it once was. Very strange to see commercial short open interest expand and the price to rise over 10% with such low volume. Please understand the importance of this paragraph, we live in a world where a market having less than 1/3rd the inventory that China imports in a week …is “making” the price on the global markets? Maybe Rob Kirby is correct and there is a huge premium being paid for large scale purchases.
Another area we have seen large “inventory” movement has been in GLD. They once had (purportedly) 1,300 tons of gold. This number dropped all the way down to 700 tons last month and has risen to a little over 740. GLD inventory used to remain constant for several days in a row and then a change in inventory announced. Recently, their inventory has been changing nearly every single day. A week ago, they announced close to 35 tons being brought in in just 3 days. Where does tonnage of real gold like this come from? And just last year the Germans told us of the “logistical nightmare” of moving five tons of gold?
Other recent events to add that have or will change are the new “collars” and the GOFO rate reporting. As I understand it, this coming week will be the last reports we will see on the gold forward rates. Why are these being discontinued? Would they be discontinued if they were largely positive and showed physical gold supplies as very plentiful? Are they being discontinued because they are incompatible with low prices with supply being portrayed currently as very scarce? And what of the new CME “collars” on gold, silver and other metals? Why now? Why are collars even necessary unless volatility is expected to expand greatly? These are two very real questions …their simultaneous timing is even more questionable.
That does it for part one, in part two we will look more to the demand side, at the question itself and the ramifications if “the gold isn’t really there”.
Regards, Bill Holter
Bill,
Great article and update.
I use to work for Price Waterhouse and audits are not that expensive.
Gold isn’t there. You and I both know it.
…and hasn’t been for years.
Please understand the importance of this paragraph, we live in a world where a market having less than 1/3rd the inventory that China imports in a week …is “making” the price on the global markets? Maybe Rob Kirby is correct and there is a huge premium being paid for large scale purchases?
This says it all Bill.
The fragility of the paper system is so obvious to many now that logic says that it is just a matter of time before the system just cannot be held together with lies.
Great piece.. Looking forward to part 2
thank you Mike.
Heck, I would go and audit it for free! Just to touch and see it…I believe it has been gone for decades.
My 2 cents on the Rob Kirby issue. Let’s just say that you worked hard and during the dot com boom or pick any boom of the market, you got in/out at the right times.
Let’s pretend (for S&G’s) that by cautiously letting it run, that your mill is now worth $10 mill. So…now you got 9 extra in a relatively short time…paper funds.
Suddenly, you wtfu and realize that all that paper could be gone/worthless overnight. Suddenly, you realize that you were very lucky. You didn’t get robbed by paper markets like a lot of people do several times in their lives because they were conditioned to just leave that/their money alone “for the long haul.”
If, that was me,and I realized that I was nearly out of time to purchase pm’s, and I wanted my family to have a chance to survive, and I had made 9 mill, basically out of thin air…why itf would I care if I had to pay $1,800 an oz. for Au or $30 an oz. for Ag to immediately secure a pile of it?! I would be just glad that I could get some…whatever the cost if I believed that it might save my kids and grandkids future.
Regarding the people Rob is talking about…$10 mill is freaking chump change. Frankly, I believe those kind of transactions are probably occurring as we speak.
Look at the quantities of metal that they say are available. Hell, rumor has it that that a couple billion dollars could buy all of the current above ground silver.
I think that as the meltdown continues and once metal acquisition becomes more difficult, you will see this on a local level.
But hey, what the hell do I know…What I do ask from those of you here is please…
“don’t go down without one helluva fight”
Ps…I woke someone up yday and they bought their first gold and silver.
good man! Hopefully he let us bid on his business?
A lady…I will turn her on to your blog.
please do!
you can’t audit air …to be on the 100% safe side, $10 billion would clean the street of any and all silver…though $2 billion might just do the job.
I have a couple of people close to me that are doing their own research on the issues that we speak of each day here.
They have yet to prepare but at least they are paying attention.
Then there are the rest who think I focus on the negative and have lost my mind.
Nobody here doubts that this has gone on much longer than we ever thought possible.
However, so far this year we have seen tremendous evidence that they are loosing control.
Soon we pass the point of critical mass.
I think in the coming weeks we see major evidence of a coming calamity.
More lay offs, more store closures, more bankruptcies, more gold repatriations, more pressure on the remaining pm inventories.
it’s coming to a head with not enough fingers in the dike.
This subject has been “analysed” ten ways to Sunday over the years, by almost every financial pundit and their Mother’s!
Most always come up with the same, or a variation of the same conclusion, namely that…. IT’S NOT THERE. Period.
We may well trod over this same well trodden road again, but to no avail. Unless there is some new revelation, or some new whistleblower comes forward (which I highly doubt considering the number of “suicided” insiders recently) there will be no ‘new’ information coming from TPTB.
Any conclusion that’s reached is pure conjecture. That being said, I believe the overwhelming anecdotal and statistical evidence presented to date, says unequivocally that the gold does exist, except in another place with a different owner or owners.
common sense tells you most of the gold was gone a long time ago.
Much to think about as usual Bill. Good questions. But where did you find the information about the two tons of “lead gold”. I can only find a reference to two painted lead bars apparently slipped into the vaults by a central bank employee.
Just curious.
mark
I believe this was gold held in Odessa, ZH reported on it at the time.
I believe that in 2009 some tungsten was sent from the USA to the Canadian Mint.
I will see if I can locate a reference.
http://www.silverdoctors.com/royal-canadian-mints-tungsten-twostep/
the Chinese also received some tungsten in one shipment back in 2009 0r 2010.
OutLookingin is right in that “…the gold does exist…”, it’s just not in Ft Knox or at the Federal Reserve.
It’s most likely in China, Russia, and/or India.
Thus there will be no audit in the USA!
China’s imports prove this, it is more firm than “anecdotal” evidence. 8…-1-1-1-1-2-2=0 Please equate each number to 2009, ’10. ’11. ’12. ’13 and’14 and you can see 8,000 tons moved to China PLUS rest of world demand covered new mine supply. The hour glass is empty.
“anecdotal and statistical”
If they (the Fed) have nothing to hide or to fear, then why the obtuse and opaque behavior?
Simply stated – put up or shut up! Put your money (gold) where your mouth is! Otherwise ALL evidence points toward a zero Fed gold bullion balance sheet.
this will be termed a “gold call”.
Oh but Bill haven’t you heard? According to Mr Rickards. The Usa does indeed have 8000 + tons of Gold & China really needs to step up their accumulation if they want a seat at the SDR round table. Me personally I’ve had with PMs & gonna load up on these SDR hot cakes (sarc off). Seriously though what garbage Mr.Rickards is disseminating at this point. A Langley insider dis info half truth bloke if you ask me. Do you think China, Russia et all will really go along with this SDR ponzi?
http://www.silverdoctors.com/jim-rickards-the-fix-is-in/
I saw, I also saw with my own two eyes and ears Rickards tell me face to face he was not aware the U.S. gold had not been done since 1955. Eric Sprott saw the conversation and just shook his head in disbelief.
Bill, was that the conversation where you told a crestfallen and heart broken Mr. Rickards that there was no Easter Bunny–the one where he got on the phone to Langley and then the NY Fed to tell them the bad news that they hadn’t heard before either? . . . : )
“No Easter Bunny” will be added to the next Pentagon war games on martial law, undoubtedly. Who knows this, and are they telling other people? Time to go door to door, house to house. All in the interests of keeping us safe, of course.
Nice topic and while it has been discussed more than once, there are always fresh faces joining the game who need education which your writing style makes easy and fun.
So taking a page from you and drilling down a bit on the subject of who has the gold and how much do they have may lead a fresh face (or an old hand) to ask: How much gold is there to count? What is the size of the world pie of gold? With the secrecy surrounding the subject of ownership (understandably) all I have seen are guesses (with assumptions) that the world’s pile is in the neighborhood of 170-220,000 metric tonnes. So I was wondering if you personally are working from any particular number as a starting point in your analysis?
The same question should be asked of silver. I recall reading Ted Butler’s analysis at the turn of the century on silver inventory, then watching as the US government finished burning through all of their stockpile (as forecast) but still we have not seen shortages appear. Some of that shortfall, maybe all, is the amount of paper silver/gold issued since then. Or it could be the starting inventory numbers for both are too low. Probably a combination of both reasons.
Fresh faces joining us should remember that whatever the starting number is/was for real metal, the world printers are moving much faster than the miners. So the only rational way to go is real metal in your hand (in secret of course).
Always look forward to your essays, Bill. Thanks again.
thanks Perspective. The widely held number held by central banks is 32,000 tons, now surely diminished.
Bill,
This is the first time that I decided NOT to read your column. Who’s gold,,, I’m tired of hearing that. How about Telling everyone that the Dutch (in December) increased their gold holdings by 8%.
Sorry if I missed something important in your hard work (writing every day, I now [sic] {spelling check missed it!} it’s difficult) but I’m tired of hearing about the 100:1 paper vs physical gold,,,
Please write more newsworthy articles for the folks that already know Abbott & Costello’s Who’s on first routine,,
your friend
Marty
sorry Marty, I have to write for an audience from newbies just waking up to cutting edge and everyone in between. Not everything I write can be earthshattering new news. I wrote this piece on Saturday, long before the WGC claimed the Dutch bought another 10 tons which has been denied by the Dutch. Maybe you should write four articles per week and submit them to Miles Franklin or elsewhere and see if each and every one of them fits each and every reader? …or, you could just read someone else more suitable to your high intellect. Nice spammish youtube link by the way!
https://www.youtube.com/watch?v=kTcRRaXV-fg
Thanks Bill. For us rookies, it is very helpful to see the examples of manipulation … 25 ounces promised for every ounce in the vault, etc. Question: Why do I typically hear these types of leverage numbers about the COMEX or LBMA. Wouldn’t it be appropriate to combine all paper promises and compare to all existing known quantities of gold or silver available for sale? For example, when COMEX and LBMA promises are combined, it has to be a phenomenal number compared to the registered bullion in both vaults … or new bullion mined … or all the known bullion that exists.
Jeffrey Christian testified before the CFTC in 2010 that LBMA was 100-1 fractional reserve at the time. Whatever the real was then, it is definitely larger now. Also, 25-1 or 100-1, or 1,000-1, a fraud is a fraud is a fraud…
Some said that comex gold deliveries are not “advised” if not forbidden (depending who has the long contracts) for 18 months…
To be more explicit/precise, that is quite possible that comex is no longer a gold delivery markets and it has been so for some quarters : consequently, comex will not because cannot default but can disappear ie being irrelevant to gold pricing in the future.
COMEX “can” default and it will matter, the pricing mechanism will be gone AND confidence broken.
Well Bill you certainly asked some good questions and put forward interesting points and i will take it that you are factually correct with the data you work with.
And as I have stated before I do believe that it is inevitable that gold will go NO OFFER one day, someday.
I have no idea when. Could be tomorrow but I suspect quite a while yet.
NOBODY is talking about gold here thats for sure.
I cannot believe that the Fed,the USA Gov’t, The banks or whatever would be so stupid to sell their Gold holdings.
No audit = no proof either way and therefore everything else is pure speculation
“No audit = no proof either way and therefore everything else is pure speculation”. …Maybe you should use common sense for an answer?
Jeez Bill you’re getting a tad sad
???
silversurfer:
“I cannot believe the Fed, USA Gov., Banks, would be so stupid….”
Really? 18 trillion in debt, no desire to have a border, 0 interest rates, failure to acknowledge a radical Islamic problem, believing climate change is the biggest threat to the world today…want me to go on? ….can’t believe they are so stupid?
I can’t believe you are so….unbelieveing.
in case you had not noticed, silversmurfer is a troll with opposing opinions each and every other day.
The gold is in the hands of individuals that control the fed, us gub, banks.
…and those who are the tip of the earthly spear that will return it to those that understand how the planet works.
the gold has been spread out to the four corners of the Earth.
The Central Bankers know how much (how little) shiny stuff they have in their control. They also know that those who are awake are suspicious of reported amounts. They also know that their deception can’t continue forever. They therefore must have plans on how to counteract an eventual pitchfork brigade. I think I want to be elsewhere when things get hairy.