"In view of the on-going manipulation in the gold and silver paper markets, I have decided to do a multi-interview with prominent voices in the precious metal markets, and ask them exactly the same questions about gold and silver manipulation : Chris Powell (GATA), Jim Willie (Goldenjackass.com) and James Rickards.
Investors (in the know about the manipulation) have a few essential questions, so I tried to focus on some that go straight to the point.
I have already explained, in my latest Market Report, that there is a disconnection going on between the paper and the physical markets but, this time, with these interviews, I wanted to share the views of key analysts who do recognize that gold and silver paper prices have been manipulated for years.
After Chris Powell, here is the second interview with Jim Willie of GoldenJackass.com.
The Golden Jackass is designed to inform and instruct in the complex ways of gold, currencies, bonds, interest rates, stocks, commodities, futures, derivatives, and the world economy, with no respect shown for inept bankers and economists, whose policies and practices contribute toward the slow motion degradation, if not destruction, of the financial world."
Fabrice Drouin Ristori
Fabrice Drouin Ristori: Mr Willie, thanks for accepting this interview. How long the manipulation of the precious metal markets can last ?
Jim Willie: Rather than focusing on the time spectrum, think instead on the event spectrum. Focus not on a sequence of time, but instead on an event schedule in a chain. Systems are sustained by the corrupt players, institutions, and policies. The Gold manipulation will continue until the Gold market is totally broken, until the big banks that control it are totally broken, or until the USDollar & USTBond structures are totally broken. Personally, I am encouraged by the mid-April events to crash the Gold price. It has resulted in exposure of the criminal element, in exposure of the COMEX & LBMA as being desperately low in Gold inventory, in exposure of the great difference between paper Gold price (futures contracts) and physical Gold price (actual high volume sales), and in tremendous motivation by the very wealthy to reclaim their Gold in Allocated Gold Accounts. The bankers have brought to the table a Prima Facie case that their corrupt Gold market attack was motivated by having no Gold for contract delivery. The Jackass forecast is for the next great scandal to be centered upon the Allocated Gold Account thefts, which my excellent source informs me involves the improper usage, leasing, and theft of over 20,000 metric tons of Gold bullion. The German Government formal request for repatriation is the tip of the iceberg. The banks will not break first since far too protected. It is a contest, a race, between the breakdown of the USD/USTBond structure and the COMEX & LMBA Gold market structure. The former is in the process of being rejected by the Eastern nations, now organized. The latter is in the process of being recognized as an empty arena with no Gold in inventory.
FDR: What will put an end to it ? Physical demand ? Geopolitical event (BRICS) ?
JW: My strong suspicion is that the COMEX & LMBA corrupt schemes will continue ad nauseum, despite the growing recognition of their corruption and empty inventory. Those in control of the Gold market are not subject to regulatory rules or legal prosecution, operating as essential parts of the sprawling fascist system. So they will continue. However, the end will come with the global isolation and then rejection of the USDollar in trade settlement. The recent G20 Meeting in Turkey brought attention to the bypass of the USD/USTBond system. The Eastern nations are working fast to create an alternative system, frustrated and angry at the abuses and corruption in the open. The Jackass forecast is for the new Gold Trade Standard to come, which will arrive within several months. It will not create a standard for banking and currency, as in SWIFT rules and FOREX rules. It will involve a new BRICS Development Fund, which will transform into a USTBond processing plant, converting the toxic USGovt debt into Gold bars. The trade settlement will work toward Gold payments, with an important intermediary function provided by Turkey. When crude oil abolishes the USDollar as the standard payment vehicle, the game is over. The G7 Meeting hastily called in emergency session in the first week of May demonstrated that the Western nations have noticed that time is almost up completely. The death of the Petro-Dollar defacto standard will coincide with the death of the USDollar global reserve currency. The end is being driven by China & Russia working within the BRICS, the G20, and the Shanghai Coop Organization.
FDR: What will be the signs proving that the manipulation is ending ?
JW: When the COMEX & LBMA are turned into an empty arena, with very few players and very little activity and a storm of controversy about contract fraud with growing lists of lawsuit cases. When the COMEX shows no posted Gold price at all, amidst broad controversy as to why, an implicit invitation for lawsuits over contract fraud and cases to recover past losses by investors. When the COMEX official Gold price shows not a small discrepancy with the actual physical Gold price from known publicized transactions at the major trading centers, but rather a gigantic and embarrassing discrepancy. My term is the great price spread between the paper Gold price and the physical Gold price. It is growing, since very tiny supply is available at the paper price, and high premiums are required at the physical price. Shortages will become a major problem, a desired problem for the gold community. When the spread widens further, the Jackass forecast is for the debate to enter the room on whether the COMEX price is an anachronism, an artifact from a corrupt era, a recognized den of thieves under financial press scrutiny, a point in fact as evidence for legal court cases (lawsuit damage or criminal prosecution). Expect court cases long before regulatory action.
FDR: Do you anticipate an overnight ending of the manipulation or a progressive process ?
JW: A progressive degeneration is far more the case, the pathogenesis of a cancerous organism. The Jackass expects the manipulation to continue far beyond what most people anticipate. The manipulation will soon become absurd. Another Gold market ambush attack is likely soon. When the paper Gold price is $600 to $800 per ounce lower in the paper COMEX price, the banking authorities will continue their charade, but have a difficult time maintaining credibility or a straight face before public questioning of Congressional grilling. Remember their motive, which in the Jackass opinion is to escape the clutches of their mountain of short Gold futures contracts by means of a declared Force Majeure. The true Gold price might be several $100s higher than the COMEX price, but the banking cartel does not care. They wish to escape the consequences of the short Gold futures contracts with a legally recognized COMEX Gold price, even though corrupt. If the courts recognize and endorse the corrupt lower paper Gold price presented by the COMEX, then the big bankers can legally escape from catastrophic losses and slither like snakes into the forests of Paraguay. That is their goal, and they do not care if the public laughs at the process, or if the financial analysts harshly criticize them. They care about the legal escape route offered by Force Majeure, then establishment of a fascist police state.
FDR: Is the gold/silver paper spot price still relevant to value physical gold and silver ?
JW: Not at all. It is a guideline which is becoming more and more ignored. Rather the spot price is becoming more understood as the starting point, the reference point, in a negotiated price. That price will vary in different parts of the world, already the case. The remarkable fact to the Jackass is that premiums on physical Gold purchases (whether bars, coins, talens) is coming down from the rising levels seen in mid-April right after the Gold market smash assault attack with a flood of paper rubbish slamming the market. The big challenge to the banker cartel will be to bring Gold to market in order to meet the growing demand. They must avoid grand and even grotesque shortages. The bankers will be drained. Recall back in March through July, the London banks were drained of 5000 metric tons by angry motivated Asian entities. The event was kept out of the news, but not out of the Hat Trick Letter. If price is to be kept stable, then supply must meet the heightened demand. The banker cartel has two choices: to continue to bring supply to market and be drained dry, or to refuse to bring supply to market and watch the physical price premium grow toward $1000 per ounce amidst well advertised shortages and an empty COMEX.
FDR: What direct consequences would a free gold/silver market have on people worldwide -- not investors, people in general ?
JW: The consequences could fill an entire book. But the Jackass would write the chapter headings as follows. People could save in a true sense with a proper legitimate store of value, in instruments which do not represent a counter-party risk like in debt securities or gold certificate holders. People could be protected from central bank actions that exhibit extremely destructive policies toward the debasement of money itself. People could be assured that their life savings could not be leased, assigned, subjugated, hypothecated, or otherwise stolen by banking and government officials. People could build more effective barriers from the ravages of price inflation. People would not have to constantly search for investment vehicles that act as inflation hedges from the endorsed ruin of money. People could be protected from banker thefts, hidden and overt.
FDR: I would like to thanks again Jim Willie for taking the time for this interview.