We Are Witnessing Historic & Shocking Events In Gold

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.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/11_Turk_-_We_Are_Witnessing_Historic_%26_Shocking_Events_In_Gold.html

Stunning 500 Tons Of Gold Now Being Moved Each Month

On the heels of continued volatility in the gold and silver markets, today James Turk told King World News that he is seeing shocking movements of 500 tons of physical gold each month. Turk spoke about this remarkable situation as well as other key developments taking place in the ongoing war in the gold market.

Turk: “We have recently seen one of the greatest interventions in the history of the gold market by Western central banks. Gold is one of the world’s least transparent markets, and misleading central bank accounting keeps it that way. But sometimes, by looking at different pieces of the puzzle, a picture starts emerging. So I have put together some of the pieces together….

“For example, there have been bottlenecks in moving metal, which is clearly flowing from West to East. Supply from mining in the West, excluding Russia and China which do not export their production, is about 160 tons per month. In addition, there may be another 50-to-80 tons per month of gold already in the aboveground stock which moves around as a result of normal flows among countries and changing demand for different gold products.

But I estimate that recently over 500 tons per month have been moving around. This has had the effect of creating some transportation bottlenecks. The transport providers have not been able to cope with this remarkable development. Similarly, the refiners have not been able to cope with the historic level of demand by fabricating the metal needed to meet the frantic buying, even though they are operating 24/7. So we have to ask ourselves, where is all this metal coming from?

We are talking here about physical metal, Eric, and not just selling paper-gold with futures and other derivatives. The reality is that there has simply been too much metal moving from West to East — far beyond what has been dishoarded from ETFs and other visible sources like the Comex vaults. Much of this physical metal had to come from central bank vaults. That point is clear. But an important question still remains unanswered.

Even though Western central banks killed the gold price during the last couple of months with their dishoarding, we do not yet know precisely why they killed the gold price. What did the central planners want to accomplish by dishoarding so much metal in such a short period of time?

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/2_Stunning_500_Tons_Of_Gold_Now_Being_Moved_Each_Month.html

Financial System Now Headed Into A Massive Hurricane

On the heels of two days of continuous Fed propaganda, today James Turk warned King World News that the financial system is now headed directly into the “eye of a hurricane.”  Turk also spoke about what Western central planners face going forward and the accompanying market risks and dangers.

Turk: “We had the same reaction to yesterday’s FOMC statement, Eric, as we did after the meeting last month.  Interest rates continue to inch upwards.  I have been waiting to see whether this would be the result.

An ostensibly dovish statement from the Fed is nevertheless resulting in higher interest rates.  In other words, since the announcement of QE1 in March 2009, dovish statements from the Fed were bullish for Treasury paper – meaning lower yields – because the Fed’s buying of paper was soaking up supply.  However, we are now in a situation where the Fed is buying nearly all of the Treasury’s new debt issuance, but interest rates are rising….

“Admittedly, part of the reason this is happening is because the market is positioning itself in anticipation of higher interest rates given the Fed’s acknowledgment that its buying of Treasury paper will eventually be tapered, implying that QE will not last forever.

But there is also another dynamic.  The federal government continues to run horrendous deficits, and given the unwillingness of the politicians to deal with their spending deficits, there is no effort to seriously address the growing debt.  As an indication of how bad things are in Washington DC, the politicians are even playing games with the debt limit, which was the last shred of fiscal discipline being imposed.

So here is the key point:  The supply of Treasury debt – both new issuance and the selling of US paper by foreign holders, as was made clear from the latest Treasury TIC report – is now starting to overtake the paper the Fed is soaking up through its QE program.  It means that the Fed is losing control.

Because the central planners at the Fed are wedded to their crazy theories, the logical reaction is that the Fed won’t taper, but instead will do the opposite.  They will mean buying even more paper and then monetizing it.  In other words, the Fed is going to start moving much more rapidly toward monetization with even greater intervention in markets.  They are now like mice on a treadmill, so look for them to buy more to try to make their theories work.  As a result, the long-term outlook remains clear at this point — QE has put the Fed in an impossible position that will end badly.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/20_Turk_-_Financial_System_Now_Headed_Into_A_Massive_Hurricane.html