As the title says, there’s two major Gold stories on the radar from late last week.
If they are accurate, either has the potential to explode the gold price, if both are true the explosion will be thermonuclear, and the sky is quite literally the limit as to where the price might end up, assuming it were even possible to buy it anymore.
Firstly Janet Tavakoli – if you don’t know who she is, Janet has been one of the main voices trying to hold Goldman Sachs to account for the AIG skullduggery.
Her Cv is impressive, and she is as tenacious as a terrier, so you have to take this story seriously really..
Watch the whole interview in the video, it is well worth your time (or read on below)
“Congress should act immediately to abolish credit default swaps on the United States, because these derivatives will foment distortions in global currencies and gold.
Failure to act now will only mean the U.S. will be forced to act after these “financial weapons of mass destruction” levy heavy casualties.
These obligations now settle in euros, but the end game is to settle them in gold. This is so ripe for speculative manipulation that you might as well cover the U.S. map with a bull’s-eye.
Speculators Want U.S. CDS Payoffs in Gold
Remember AIG? When prices moved against AIG on its credit default swap contracts, AIG owed cash (collateral) to its trading partners. AIG paid billions of dollars and owed billions more when U.S. taxpayers bailed it out in September 2008.
U.S. credit default swaps currently trade in euros. After all, if the U.S. defaults, who will want payment in devalued U.S. dollars?
The euro recently weakened relative to the dollar, and market participants are calling for contracts that require payment in gold.
If they get their way, speculators on the winning side of a price move will demand collateral paid in gold.
The market can create an unlimited number of these contracts very rapidly. The U.S. wouldn’t have to ever default to trigger a major disruption in the gold market.
Spreads (or prices) on the credit default swaps could simply move based on “news,” and demand for gold would soar.
If this speculation drives up the price of gold, and the available gold supply becomes limited, are you willing to post your children as collateral? I am pushing the point so that we put a stop to this before it is too late.”
And on the same day, GATA – the Gold Anti Trust Action who have been doggedly rooting out the now clear-as-day Gold price manipulation for several years now announced that they finally have proof that:
“GATA has evidence that there are enormous physical short positions in the gold and silver markets that cannot be covered.“
If GATA is not bluffing and indeed has evidence of massively uncoverable physical positions, and should this evidence be made public, the repercussions for the price of gold will be unprecedented.
So we (allegedly) have a fraudulent Gold Comex exchange with enormous fraudulent manipulative Short Gold trades that cannot be covered, and we have the CDS traders eying and wanting to be paid their multiple billion payouts for their “weapons of financial destruction” in Gold…
Which way do you think the price is going?