Dear Friend of GATA and Gold:
In extended comments given this week for a weekly promotional video for Kinesis Money, London metals trader Andrew Maguire reviews in detail the ongoing collapse of the fractional-reserve gold banking system based in London.
While Maguire’s topic is complicated, this seems to be the essence of his remarks:
— The new gold futures contract offered by the New York Commodities Exchange, purporting to represent a quarter interest in an unallocated 400-ounce bar held in London, is just another form of “paper” gold meant to replace the “exchange for physicals” form that recently has purported to settle most contracts in New York.
— Gold price suppression lately has been meant to protect the U.S. bond market and bond derivatives held by too-big-to-fail banks.
— Recent overwhelming demand for physical delivery in gold in London has caused the unprecedented divergence between spot gold and gold futures prices.
— In recent days gold contracts presented for delivery in London have been defaulted on, while other deliveries have been fulfilled only partially, metal being rationed among claimants, with huge premium payments required for delivery.
— The London Bullion Market Association no longer can make an effective daily market in gold and has irretrievably lost its credibility.
— Ever since a discussion of the gold issue in Parliament last summer, British market regulators often have been warned about the danger posed to taxpayer-backed banks by naked shorting in the gold market but have done nothing about it.
— Pent-up demand for physical gold is far greater than what can be met by the limited resumption of operations by Swiss refineries.
— Foreign-exchange price ratios now imply a gold price well above $2,000 and a silver price above $50.
— The world financial system was already breaking down before the virus epidemic, with the epidemic just accelerating it.
Maguire’s comments begin at the 16:40 mark of the Kinesis Money video at YouTube here (video embedded below will start playing at the correct time-stamp):
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Toast to a free gold market
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