Banks Poised For Gold & Silver Turn As Central Planners Panic

With the Fed decision taking place, and continued volatility in gold and silver, today John Embry complained about kitco’s “gobbledygook” reporting, and he stated that central panners are panicking, which is why Bernanke is leaving the Fed.  Embry also spoke with KWN about physical gold demand, what the Chinese are up to, and what to expect from the price of silver going forward.

Yesterday was another one of those days where the stock market was up sharply and the gold market was down significantly.  It’s frustrating for anybody who recognizes what’s going on.  If they were really worried about a Fed ‘taper,’  the stock market should be getting crushed.

The fact that the stock market was surging says to me that there will be no Fed tapering.  As this becomes obvious to gold market participants, the Fed will have achieved its goal of having the gold price rebound from a depressed level.  So gold remains chronically underpriced.

But I think all of this is a major ‘holding’ action.  I see the second half of the year being chaotic..

At that point gold and silver will finally reflect their true values.  The other thing that is getting to me is the commentary coming from the mainstream world.

I believe it is orchestrated because they are hammering away in a negative manner against gold and silver.  I was just looking at one (article) that popped up on kitco, ‘Gold Weighed By Downside Risks – UBS.’  They (kitco) said, ‘Gold is suffering from an atmosphere that is clearly difficult for gold at the moment and downside risks loom.’  Whatever the hell that means.

(kitco continues):  ‘Additionally the Swiss bank sees nothing in the near-term that would be strong enough to change the sentiment in gold either.  While there is a risk that Fed Chairman Ben Bernanke may sound dovish this week, given current momentum of market participants’ expectations on QE tapering, gold’s upside response may be limited.’  That’s just gobbledygook.  But that is what the public is being continually hammered with.

The fact is the offtake of physical gold and the shortage of physical gold is basically ongoing.  You see import duties in India and people being discouraged from buying it (gold).  This is the last panic on the part of the powers that be.  It’s almost over, but it’s very annoying to see the final stages of this play out.  This may explain why Bernanke wants out of his position as Chairman of the Fed.

I firmly believe that the bullion banks, which have been the major perpetrators of the gold suppression for many years, realize that the ‘jig is almost up.’  And they are making a heroic and what appears to be a successful effort to change their (gold and silver short) book around (to being long the metals).

Because the sentiment in the whole sector is so negative, there are all sorts of other speculators replacing them on the short side.  I find this absolutely unfathomable from an intellectual point of view, but in reality it’s happening.  I believe this is one of the pre-conditions that is required before the price of gold and silver goes nuts to the upside.

The one thing the powers that be realize is the banking system is so compromised that the last thing they want to see is these guys (the bullion banks) on the wrong side of gold and silver when the prices explode to the upside.  Currently they are fixing that situation, and we are very close to getting into a position where gold and silver will be released to the upside.”

Embry also added:  “One of my favorite themes has been the idea that the Chinese have not been reporting the least bit accurately on their true economic condition.  I see nothing that has transpired recently which would detract from my position on China.

I think their export numbers and a lot of other things are finally confirming that the amount of debt they are putting on is becoming less and less effective in getting the same degree of economic growth.  This is just traditional Austrian economics and nobody is exempt from it.  So this will be very negative overall for the world economic outlook going forward.

But it’s important to note that it hasn’t detracted one bit from the Chinese buying of gold.  This year their offtake of physical gold has been amazing.  The only conclusion you can draw is not only are the ETFs shedding gold, but I strongly believe that the central banks are in the final throes of trying one last effort to get the gold price down.  They must be supplying gold because for the amount of gold that is being taken, I can see no other source that could supply physical gold to this degree.”