Some of it is speculation, but it's not my speculation. I've been reading and listening to a fair number of people for several months and have come to respect them.
You've been listening to the wrong people. Don't, or you'll lose money.
And it's not groundless. They cite specific reasons for the positions they hold.
These "reasons" are just opinions. Often there is a hidden agenda (these people are trying to sell you gold or have a vested interest in talking up gold), but most of the time they are just the result of ignorance and stupidity. Yes, even when their reasoning sounds plausible and informed.
I know nothing about commodities trading
Then educate yourself instead of blindly trusting others.
but one thing I hear over and over again is that someone is shorting gold and silver on the commodities market with such extremely large contracts that they overwhelm the market.
Yes, you can manipulate a thin market (silver more so than gold) with deep pockets. However, you must realize that
1) Futures trading is a zero-sum game (unlike stock trading which has influxes due to stock issuance, mergers, dividends, and so on). If somebody sells a large number of short contracts, that might well depress the price - but later down the line, when the contracts expire, he will have to buy them back, thus similarly applying upward pressure on the price. (Theoretically, he could also deliver the commodity, but almost nobody does that. Less than 2%, as far as I remember.) You cannot continuously manipulate the market down by selling short contracts, because you will go bankrupt.
2) Manipulation is real. However, it occurs in both directions. When the price spikes, this can be the result of manipulation too - with somebody trying to make a lot of money by unloading inventory to the johnny-come-lately fools.
Gold should never be in backwardation because gold is money yet has no debasement risk.
Debasement risk has nothing to do with it. It's all about supply and demand and time preference. A commodity is in backwardation when the market participants perceive that there are future shortages risks. Note - the market participants don't have to be right. They only have to think so as a whole.
But they say gold is frequently in backwardation, not contango as it should be.
Actually, that's a relatively recent phenomenon and it usually doesn't last long. Other commodities also occasionally enter backwardation - for instance, oil did so recently, if I remember correctly.
This means knowledgeable people are fearful that there will be no gold available in the future so they're willing to pay more to get it right now.
Correct, and this is all that it means. It doesn't mean that these people are right. It only means that there are enough of them who think that they are right.
You dismiss the German gold incident, but the fact that the Germans decided to drop their demand has little to do with gold and everything to do with politics. The fact remains, they asked us to return their gold and we said we couldn't. Couldn't.
No, you didn't say that. You gave them a timetable for fulfilling their request. Many people think that the time given was unreasonably long, but most people (me and you included) simply do not know the facts behind it.
They can drive the price down with commodities shorting, which dries up most demand, but there MUST be some actual physical gold for sale to handle the remaining demand or the manipulation would fall apart.
No disagreement here. And, the fact that nothing has "fallen apart" yet (I've been hearing screams of "gold manipulation" since the 80s) proves that the gold is really there. In fact, it has been slowly but steadily flowing to the East (mostly China and India).
Saying "total ignoramus" reveals emotion.
That's because I'm
really fed up with the "gold manipulation" conspiracy theorists. They have caused more financial losses to the people who have listened to their garbage than if there were actual dark conspiracy involved.
James Turk and John Rubino
Two well-known gold promoters.
western central banks, including the Fed, are leasing gold to bullion banks, "which sell the gold on the open market."
Of course they are. Gold is a dead asset - it bears no return. So, they are trying to make some money by leasing it. Those who get it under lease, do whatever they want with it, but
they must return it (plus rent). Yes, they can sell it and suppress the price - but eventually they will have to buy it, supporting the price. Sure, they can make a bad trade and go bust - but it hasn't happened yet, so I guess they know more about gold trading than you or the two gold promoters mentioned above.
If just three countries bought more gold than was mined in 2013, where did the gold come from to satisfy all the world's other buyers?
From the sellers, of course, whoever they were. As I said, in the past decade and a half, physical gold has been slowly but steadily flowing from the West to the East. Not to mention that "gold mined" is just some minuscule quantity, relatively speaking. Less than 1.5% of the available supply. All gold mines in the world can shut down for 20-50 years (depending on how you count) and there will still be enough supply to satisfy the demand for all this time.
Some came from GLD, which was looted by the bullion banks.
Ignorant nonsense, groundless speculation, or blatant lies - take your pick.
Most of that metal was shipped to Swiss refiners, which turned the ETF's 400oz bars into 1kilo bars (China's preferred size) ...
Sigh...
1) Where do you expect it to be shipped?! To Johnny's Pawn Shop?!
Or course it will be shipped to the well-established refineries.
2) ETF, just like all the Western commodities exchanges, deals
only with 400-ounce LBMA good delivery bars.
Any "official" Western gold - no matter whether it comes from the ETF holdings, from Fort Knox, or from some London-based bullion dealer will be in this form. So,
of course this is what will have to be refined into the Chinese-preferred sizes.
3) As I already explained, GLD
has to sell (and buy!) physical gold (and ETF shares!) in order to function. When it sells physical gold, somebody has to buy it. It is perfectly possible that this "somebody" then converts it into Chinese-size bars and imports it to China. That's his business. He bought the gold, paid for it and can do whatever he damn pleases with it. So what? How does it "prove" that GLD doesn't have any gold?!
Are James Turk and John Rubino "total ignoramuses"?
They are biased gold promoters with an agenda who are misrepresenting the facts by giving their followers only one part of the story.
You work for a big bank or the Fed or Treasury Dept. or somewhere else in the cartel and you are paid to tamp down anything that could reveal truth.
LOL. My name is Vesselin Bontchev. Google me - I used to be somewhat famous. I currently work in the academia. The Bulgarian Academy of Sciences, to be precise. My field of expertise is computer viruses and computer security in general. If you doubt that I am this person, I could sign a statement with a PGP key which is widely known. Long story short, I am not even American and of course I don't work in any US institution. Do have, however, some education in the field of economy and finance and have traded various markets for a couple of decades. Non-professionally, of course.
Or you're not paid, but feel emotionally connected to the need to keep the dollar supreme regardless of the truth.
I tend to get emotionally agitated when faced with stupidity and ignorance.
You have a great deal of wealth tied up in GLD or another PM ETF and you feel trapped and you protect yourself by denial and you lash out at anyone who reveals the truth of your desperate situation.
Wrong. I have a small amount of wealth parked in physical gold, mostly for diversification, portfolio stability and financial insurance purposes. Bought long time ago, when the price was around $600 and am not selling, no matter where the price goes. I bought it not as speculation (and not as an investment, of course - you can't invest in gold) but as an expenditure for a particular purpose.
You thought you were an expert who knew more than almost anyone else
I
am an expert and know more than almost anyone else in my field of expertise.
