Investing in Gold and Silver. James Turk comments on Gold Cartel
Regardless of the frantic efforts by the gold cartel, the demand for physical metal has not diminished. Even with gold’s big jump this past week, buyers of physical metal are still accumulating, which is not hard to understand. Given the ongoing financial crisis and growing sovereign debt worries, the integrity of government promises and other debtors is becoming increasingly doubted. So tangible assets like gold are being accumulated as a simple and practical way to avoid the risk of financial assets.
Buy Gold and Silver – “paper or the real thing”
In the final analysis, the demand for physical metal always drives the gold price. Consequently, if the paper shorts are unsuccessful in driving the gold price lower, they have to deliver metal, buy back their shorts, or default.
A default would mean ‘game-over’ for the gold cartel, and as a consequence, the gold price would soar much higher to its free-market level. The gold cartel obviously doesn’t want that outcome, so they are stuck with only one alternative. The gold cartel must keep selling paper in an attempt to cap the gold price in the hope that the gold price will climb only a little before the demand for physical metal subsides. In that way, the gold price would fall back in a correction, and the gold cartel would use that opportunity to cover this week’s new shorts.
Given that the market is becoming increasingly aware from GATA’s efforts that the gold cartel is a naked short, it is unlikely that the demand for physical metal will subside here. I expect in fact that it will continue to grow. After all, what would you rather own? Physical gold, or a piece of paper purporting to represent your ownership of gold? Or a comparison even more stark, would you rather own physical gold or the debt of Greece, UK, Spain, the US or any other overleveraged debtor?
You thought you had been Investing in Gold and Silver – or was it a paper promise?
The revelations from the CFTC hearing are earth-shaking, and indeed a “new dynamic” has emerged. The gold cartel now has a big target painted on its forehead. One can never predict the future, but it seems to me that as this news about the gold cartel’s huge naked short position spreads, two things will happen.
It is inevitable that the big traders and hedge funds will push the naked shorts to the wall by asking for physical metal. We could therefore see more hedge funds switching out of GLD like Greenlight Capital did last summer, which leads to the second likely outcome. If we get a squeeze on the naked shorts, the sky is the limit for precious metal prices.
Could be a good idea to be buying Gold Coins or Silver Bullion Bars now.
The gold cartel may not yet be finished, and won’t be until the unholy Wall Street-D.C. axis is dismantled. But the gold cartel is on its way out.
Over the past ten years, the gold cartel has staged a controlled retreat. It has been fighting the advancing gold price with propaganda, paper short sales and the occasional dishoarding of physical metal from central bank vaults and more recently, the IMF. This retreat is I suspect about to turn into a rout, which means the upside potential for the precious metals is huge.
Do your research well so you know Where to buy Gold and Silver bullion Bars
