Hedge Funds Gold Shorts To Get Massacred

Today whistleblower Andrew Maguire stunned King World News when he said that hedge funds which are heavily short gold will get massacred and may in fact go under. Maguire, who recently appeared in the CBC production “The Secret World of Gold,” also spoke about extraordinary events taking place at the LBMA, where bullion banks are in serious trouble once again. Below is part two of a three part series of extraordinary written interviews that will be released today with Maguire on King World News.

Maguire: “The LBMA bullion stocks are thin. For example, the LBMA delivery conditions were extended from 2 days to 5 days. Why do you think this little known decision to extend delivery times was made at the request of the bullion banks? The fact is that the gold market has been in tight supply for some time now.

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There is just very little physical (gold) for sale in size at these current levels. In the past I reported leased gold regularly appeared at the (London) fixes, where the Bank of England would step in at the clearing hour, after the fix, to lend metal to meet these delivery shortfalls….

“Much less of this is now happening. Many of these accrued positions, they already can’t be paid back within the originating terms. So on a short-term basis they have to be rehypothecated, further rolled out, and they match even further out forwards and futures (contracts).

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/19_Andrew_Maguire_-_Hedge_Funds_Short_Gold_To_Get_Massacred.html

LBMA Now Staring At Another Gordon Brown Abyss

Today whistleblower Andrew Maguire warned King World News that the LBMA is now staring dangerously into the abyss once again.  Maguire, who recently appeared in the CBC production “The Secret World of Gold,” described this stunning situation as “very similar to the abyss that Gordon Brown stared into when the Bank of England was forced to bailout Goldman Sachs 13 years ago.”  Below is part one of a series of extraordinary written interviews that will be released today with Maguire on King World News.

Maguire:  “The mainstream media has this myopic focus on the over 600 tons of GLD redemptions, while in reality we are witnessing massive bullion demand far in excess of these relatively small ETF redemptions.  This bullion demand is actually putting enormous pressure upon immediately deliverable LBMA bullion stocks.

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What is notable, Eric, is that since the ABN AMRO bank default became public, it forced that defensive attack by the Fed and the Bank for International Settlements….

“I know we talked (on KWN) about it right as it happened, and it forced that defensive attack.  It was a desperate attempt to bail out an imminent collapse of the largest bullion houses in London.  And despite an over $400 rigged decline in the gold price, Eric, here we are back full circle, with the bullion bank inventories again under stress.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/19_Maguire_-_LBMA_Now_Staring_At_Another_Gordon_Brown_Abyss.html

South African gold output continues to fall – how much further?

LONDON (Mineweb) -

How the mighty have fallen! Not so long ago South Africa dominated global gold output with the rest coming nowhere in comparison, but the country’s gold output has been on the decline since the 1970s.

It fell to fifth largest gold producer in 2012 when it was overtaken by Russia and on the latest output figures the country has drifted downwards towards being now only the world’s sixth largest gold producer, having been overtaken by Peru as well – however that is on production so far this year.

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In yesterday’s publication of minerals output and revenues, Statistics South Africa noted that the country’s gold output fell again in May commenting that its ‘overall mining production decreased by 0.7% year-on-year in May.The largest negative growth rates were recorded for ‘other’ metallic minerals (-32.3%), diamonds (-19.7%) and gold (-14,6%). The main contributor to the 0.7% decrease was gold (contributing -2.4 percentage points). Manganese ore (contributing 1.5 percentage points) was a significant positive contributor.’

But will there be any recovery in South African gold production ahead? The short answer is that, barring a huge gold price increase, the country’s gold output will likely continue to decline at a rapid rate.

South Africa has some of the world’s highest cost producing gold mines – a recent estimate has suggested that at current gold prices around half the industry is operating at a loss – and this would suggest that gold production could continue to decrease at an escalating rate as companies will no longer be able to afford to keep unprofitable mines and shafts open.

Add to this the pressures on the companies from massive wage demands brought on by mining union competition for membership between the NUM and AMCU, and this is a recipe for the potential annihilation of the country’s gold mining sector in its current form.

Some of the production fall may be mitigated, though, by selective mining of higher grade ore to try and maintain profitability at the expense of mine longevity.

South Africa’s gold sector though is not the only part of the country’s vitally important mining industry to be affected. The platinum miners are facing many of the same problems as the gold sector although this year’s figures may end up being a little better than in 2012 given the levels of labour disruption that year.

South Africa’s gold sales have now for some time lost their dominant position in terms of revenue. The country’s No.1 revenue earner nowadays, according to Statistics South Africa, is coal, followed by platinum group metals with gold languishing in third place – and could even be knocked into fourth place by iron ore sales if the production decline continues.

The relative figures in terms of unadjusted sales in April – the latest available – according to Statistics South Africa are as follows:

Metal Mineral Sales Value (million ZAR) Sales Value (million US$)
Coal 8 506.6 847.1
Platinum Group 5 612.6 558.9
Gold 4 877.6 485.6
Iron Ore 4 875.3 485.4

Between them these four accounted for almost 80% of the total value of South African metals and minerals sales in April.

The South African government has to be particularly concerned about the fall off in the volume and value of the minerals produced, particularly with regard to gold and pgms, given that it is very much a resource economy and heavily dependent on the sector for its export earnings. Both the gold and platinum sectors are in crisis and with the mining unions set on what the industry will see as untenable demands and prone to unacceptable militancy and inter-union rivalries, things may well get worse before they get better.

Source: http://www.mineweb.com/mineweb/content/en/mineweb-gold-news