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No Bear Market in Gold
mrearlygold
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No Bear Market in Gold
by Paul Craig Roberts
You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.
Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.
In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]
The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?
The misinformation that Soros had sold his gold holdings came from misinterpreting the reason Soros’ holdings in the GLD gold trust declined. Soros did not sell the shares; he redeemed the paper claims for physical gold. Watching the gold ETFs, such as GLD, being looted by banksters, Soros cashed in some of his own paper gold for the real stuff.
The giveaway that Soros is extremely bullish on gold comes not only from his extensive holdings, but also from his $25.2 million call option on junior gold stocks. This is a highly leveraged bet on the weakest gold mines. With high production costs and falling gold price from constant short selling in the paper market, Soros’ bet makes no sense unless he thinks gold is heading up as the short raids concentrate gold in elite possession.
In previous articles I have explained how heavy short-selling triggers stop-loss orders and margin calls on investors in gold ETFs. Scared out of their shares or forced out by margin calls, investors’ add to the downward price pressure caused by the shorts. Bullion banks and prominent investors such as Soros are the only ones who can redeem GLD shares for physical metal. They purchase the shares that are sold in response to the falling gold price, and present the shares for redemption in gold metal.
Insiders familiar with the process describe it as looting the ETFs of their gold basis.
In my last column I described how the orchestration of a falling gold price in the paper market protects the dollar’s value from the Federal Reserve’s policy of printing 1,000 billion new ones annually. The other beneficiary of the operation is the financial elite who buy up at low prices the ETF shares sold into a falling market and redeem them for gold. Like all other forms of wealth in the West, gold is being concentrated in fewer hands, while the elite shout “bear market, get out of gold.”
The orchestrated decline in gold and silver prices is apparent from the fact that the demand for bullion in the physical market has increased while short sales in the paper market imply a flight from bullion. As a hedge fund manager told me, it is a Wall Street axiom that volume follows price. Bull markets are characterized by rising prices on high volume. Conversely bear markets feature declining prices on low volume. The current bear market in gold consists of paper gold declining steadily while demand has escalated rapidly for physical metal. This strongly indicates that demand for physical gold continues to be in a bull market despite the savage attacks on paper gold.
If the orchestration is apparent to me, a person with no experience as a gold trader, it certainly must be apparent to federal regulators. But don’t expect any action from the Commodities Futures Trading Corporation. It is headed by a former Goldman Sachs executive.
And don’t expect any investigation from the financial press. The financial press sees a bear market while supplies of bullion decline, premiums over spot rise, and even publicly declared bears such as George Soros make highly leveraged bets that will fail in the absence of a bull market in gold.
May 21, 2013
Paul Craig Roberts, a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal, has been reporting shocking cases of prosecutorial abuse for two decades. A new edition of his book, The Tyranny of Good Intentions, co-authored with Lawrence Stratton, a documented account of how americans lost the protection of law, has been released by Random House.
LINK
by Paul Craig Roberts
You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.
Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.
In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]
The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?
The misinformation that Soros had sold his gold holdings came from misinterpreting the reason Soros’ holdings in the GLD gold trust declined. Soros did not sell the shares; he redeemed the paper claims for physical gold. Watching the gold ETFs, such as GLD, being looted by banksters, Soros cashed in some of his own paper gold for the real stuff.
The giveaway that Soros is extremely bullish on gold comes not only from his extensive holdings, but also from his $25.2 million call option on junior gold stocks. This is a highly leveraged bet on the weakest gold mines. With high production costs and falling gold price from constant short selling in the paper market, Soros’ bet makes no sense unless he thinks gold is heading up as the short raids concentrate gold in elite possession.
In previous articles I have explained how heavy short-selling triggers stop-loss orders and margin calls on investors in gold ETFs. Scared out of their shares or forced out by margin calls, investors’ add to the downward price pressure caused by the shorts. Bullion banks and prominent investors such as Soros are the only ones who can redeem GLD shares for physical metal. They purchase the shares that are sold in response to the falling gold price, and present the shares for redemption in gold metal.
Insiders familiar with the process describe it as looting the ETFs of their gold basis.
In my last column I described how the orchestration of a falling gold price in the paper market protects the dollar’s value from the Federal Reserve’s policy of printing 1,000 billion new ones annually. The other beneficiary of the operation is the financial elite who buy up at low prices the ETF shares sold into a falling market and redeem them for gold. Like all other forms of wealth in the West, gold is being concentrated in fewer hands, while the elite shout “bear market, get out of gold.”
The orchestrated decline in gold and silver prices is apparent from the fact that the demand for bullion in the physical market has increased while short sales in the paper market imply a flight from bullion. As a hedge fund manager told me, it is a Wall Street axiom that volume follows price. Bull markets are characterized by rising prices on high volume. Conversely bear markets feature declining prices on low volume. The current bear market in gold consists of paper gold declining steadily while demand has escalated rapidly for physical metal. This strongly indicates that demand for physical gold continues to be in a bull market despite the savage attacks on paper gold.
If the orchestration is apparent to me, a person with no experience as a gold trader, it certainly must be apparent to federal regulators. But don’t expect any action from the Commodities Futures Trading Corporation. It is headed by a former Goldman Sachs executive.And don’t expect any investigation from the financial press. The financial press sees a bear market while supplies of bullion decline, premiums over spot rise, and even publicly declared bears such as George Soros make highly leveraged bets that will fail in the absence of a bull market in gold.
May 21, 2013
Paul Craig Roberts, a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal, has been reporting shocking cases of prosecutorial abuse for two decades. A new edition of his book, The Tyranny of Good Intentions, co-authored with Lawrence Stratton, a documented account of how americans lost the protection of law, has been released by Random House.
LINK
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
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Comments
In the U.S. $10 trillion in QE and deficit spending coupled with 0% interest rates for 5 straight years have the equity markets "re-inflated" with many selling off PMs under the assumption that our problems are solved. None of the problems that led to the 2008 crash have been solved. None. We can continue to devalue the USD and buy time. We could actually buy several more years, perhaps even a decade more.
Meanwhile silver could fall to $15 and gold to $900 short term. The fundamentals that took silver to $50 and gold to $1900 are still in place though. Keep 5% to 25% of your assets in PMs and you won't be sorry.
Knowledge is the enemy of fear
<< <i>Just like there was no bear market in stocks. >>
Correct. It's only a correction, even if the drop exceeds 20%.
<< <i>Just stay calm and remain secure in the knowledge that your gold/silver is a good investment and will remain so. Cheers, RickO >>
That may have been true in the past, depending when you bought, but I have reservations that it will be as rewarding in the foreseeable future.
<< <i>
<< <i>Just stay calm and remain secure in the knowledge that your gold/silver is a good investment and will remain so. Cheers, RickO >>
That may have been true in the past, depending when you bought, but I have reservations that it will be as rewarding in the foreseeable future. >>
For those who bought and held when when Ag was $35 or $40 and Au was $1800 or $1900? They may wait a long time for a reward. Perhaps several years, perhaps 10 years. If they needed that money to pay bills they shouldn't have spent it. It looks like there may be a terrific buying opportunity later this year if metals fall another 10% ~ 20%.
<< <i>Just like there was no bear market in stocks. >>
Which bear market in stocks are you talking about? 1929-1933? Because there certainly hasn't been a bear market since 2000. Rather we have a
13 year broadening top pattern that began in 2000 and now has a fresh peak in 2013. All brought to you by the FED. And I thought the 7 year broadening
top pattern in 1966-1973 was sort of impressive. Thing is, these things never end well. Gold hasn't shown any such broadening or blow off top as of yet...
nothing even close to what was seen in oil, nasdaq, real estate, etc. What kind of PMs bull market ends with gold and silver peaking 4 months apart?
That suggests silver's peak was more an industrial metals peak than a safe haven, precious metals peak. Silver peaked closer to sugar than to gold.
The stock market is not dead either. It may lose 1/2 its value again, but will most likely be higher, perhaps much higher, 10-20 years from today.
It all depends on inflation. If we get inflation then stocks, gold, real estate, classic cars, artwork, ect will all enjoy supposed appreciation and be a "store of value".
Knowledge is the enemy of fear
<< <i>Gold and silver havent peaked. I've never contended that. Rather I've said gold and silver will protect you from nothing--which has been proven. PMs are JUST ANOTHER ASSET CLASS. They will shine again. Then collapse into oblivion for another generation.
The stock market is not dead either. It may lose 1/2 its value again, but will most likely be higher, perhaps much higher, 10-20 years from today.
It all depends on inflation. If we get inflation then stocks, gold, real estate, classic cars, artwork, ect will all enjoy supposed appreciation and be a "store of value". >>
Good post. I agree with every word of it except, "...(PMS will) collapse into oblivion for another generation."
Liberty: Parent of Science & Industry
But not for awhile. Probably a long while.
I knew it would happen.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
So, if its QE to infinity, does the dollar then lose value? Therefore, when the dollar falls we'll have inflation. In other words, if we print and print and dollar stays strong, no inflation.
Inflation is up to us. If we are willing to accept less(er) goods or pay higher prices then we will get inflation. If we refuse, then no inflation. What we gonna do?
Knowledge is the enemy of fear
<< <i>Therefore, when the dollar falls we'll have inflation. In other words, if we print and print and dollar stays strong, no inflation
Inflation is up to us. If we are willing to accept less(er) goods or pay higher prices then we will get inflation. If we refuse, then no inflation. What we gonna do? >>
We are going to pay what ever they charge for food, gas and other necessities as long as we have the money to do so. We will continue to spoil our kids and ourselves with the latest toys. When we run out of money and the credit cards freeze up we will come up with plan B.
Give Me Liberty or Give Me Debt
Liberty: Parent of Science & Industry
<< <i>Just like there was no bear market in stocks. >>
Or housing. My favorite meme from the 2000's was "House prices in California never go down."
<< <i>
<< <i>Just like there was no bear market in stocks. >>
Or housing. My favorite meme from the 2000's was "House prices in California never go down." >>
What they should have said was: "House prices in coastal California never stay down"
Liberty: Parent of Science & Industry