With gold and silver skyrocketing and the U.S. dollar plunging, today the man who first spotted the historic LBMA backwardation told King World News that we are now witnessing shocking and earth-shattering events in the gold market. Incredibly, last Monday James Turk was the first person in the world to expose the historic backwardation event at the LBMA and King World News was the first to report on it. Other sites soon followed suit by covering this earthshaking event, but today the man who first spotted it tells KWN readers around what to expect next as these incredible and historic events unfold and the gold market catches fire.
Turk: “Eric, when I told you early on Monday that something shocking had taken place in the gold market, it really was an earthshaking event and we are seeing the results of that now. It was clear that there was going to be an explosion higher in gold and silver because the prices simply could not be sustained at those critically low levels.
So there was going to have to be a catalyst and today was the first of many that are still to come….
“Bernanke has come out after-hours with some statements in a speech and it’s created this explosion in the prices of gold and silver, and the U.S. dollar appears to be in freefall.
I believe that gold has been in backwardation for quite some time, but it’s been hidden because interest rates have been manipulated. So when I pointed out early Monday that the LBMA reported official gold backwardation, that was truly an earthshaking event.
While many sites then jumped on the bandwagon and interpreted this event in different ways, the reality is that it revealed that there is a shortage of physical gold at these prices. So it is not at all surprising to me that the price has risen as sharply as it has, because those desperate to get their hands on physical gold are now bidding up the price as we speak.
This is a desperate attempt to get entities to part with their physical gold and take paper currency instead. In my view it’s going to take much, much higher prices to get these entities to part with their physical gold, if they are willing to part with it at all.
The reality is that all of the physical gold is now in extremely strong hands after the latest shakedown. So tricking people into parting with it might prove to be an incredibly difficult, if not impossible task.”
Today one of the most respected institutional minds in the entire financial world told King World News that we are in the early stages of what will be a massive short squeeze in the gold market. John Hathaway, of Tocqueville Asset Management L.P., is one of the great original thinkers in the business, and his fund was awarded a coveted 5-star rating. Below is what Hathaway had to say about the developing massive short squeeze in gold.
Hathaway: “I think the story of the day is the disconnect between physical gold and paper. I just saw a note this morning about the most current drop in COMEX warehouse inventories. Brinks also reported this week that their inventories were down 55%….
“We also have what’s been happening with the gold lease rates. This is just another indication of how hard physical gold is to come by. Bernanke also basically made a U-turn on QE by essentially saying we are going to be in this easy money mode for a long, long time. He definitely backed away from ending QE in mid-2014.
I think the shorts had been ganging up on gold with the view that there would be some sort of exit, and now it’s nowhere in sight. So now some of the shorts are running for cover. But if I’m at the Fed, I am looking at a huge mess. We also know that Bernanke is on his way out.
I have a to-do list for the next chairman of the Fed. One would be to open a direct connection so the Treasury doesn’t have to issue bonds. The Fed just gives the Treasury money to fund whatever they need to fund. The other thing they may do is force tax-deferred retirement accounts to own 20% in a Treasury security that has an interest rate ceiling of say 2%. That’s how they are going to try to get out of QE, or the alternative is we are going to have incredible inflation.”