With continued turmoil around the globe, today London metals trader Andrew Maguire spoke with King World News about a letter from a sub-custodian exposing the HSBC vault closures as the war in gold continues to rage.
War In The Gold Market Continues To Rage
Andrew Maguire: "Eric here we are once again witnessing the collusive commercial game of rigging options expiry price levels. We saw this rigging yesterday, with additional rollover gaming today, that is flying completely in the face of very strong safe haven physical demand. There are significant profits to be made for the bullion banks at options expiry, so these banks simply disregard the strong physical market and jam paper gold prices to whatever price benefits them.
This is the sort of short-sighted synthetically-driven behavior that has allowed gold to flow out of the West and into the East at bargain prices. We have now reached a point of divergence in the paper markets that they are no longer credible. Everything we see now evidences this….
Continue reading the Andrew Maguire interview below…
"The cobasis and backwardations also confirm what I am seeing on our wholesale platform, with very large non-traditional physical interest that wasn't there just one year ago. All other inputs indicate a very tight physical market and ultimately futures prices will have to factor these in.
So what’s different about these conditions? Why won’t this paper tail wagging the physical dog continue as it has in the past when we have had also strong physical demand? The key thing here is that the physical markets are now changing continents and are increasingly out of the control of the Western bullion banks.
German Gold Repatriation
Long before Germany sought to repatriate its gold reserves, China knew the Western central banks had rehypothecated their reserves. China was aware that the related bullion banks, who have gold accounts at the Bank of England, were grossly mismatched to the underlying physical assets. So the Chinese knew that by employing a strategy of stealthy accumulation, not just though the LBMA, they could rely on the Western central banks' continued interventions in the gold market to cap the rise of the price of gold.
This gave China the perfect opportunity to accumulate large amounts of physical gold without disturbing the market, while at the same time quietly divesting U.S. assets, without driving the price of gold higher. Eric it’s this simple: Selling gold means you are long the dollar, so the recent dollar strength has given the People's Bank of China (PBOC) the perfect window to divest these worthless dollars for real gold.
China's Grand Strategy
China has now accumulated enough physical gold that they are nearing the point where they will seek to revalue the price of gold significantly higher. This is now obvious as they are openly putting up billboards about a gold-backed global RMB currency (see below).
Eric, you and I talked about this 2 years ago, but now we have reached the inflection point where China is close to revaluing gold significantly higher, which will be an earth-shaking event. They will do this by surprising global markets when they announce their real reserves. This will be the knockout punch that floors the Western paper market game, run by the LBMA Ponzi participants.
There is only one backdoor for these Western bullion banks and that is a cash settlement. The only question is: Are investors properly positioned for this earth-shaking announcement? I have been warning everyone I know to allocate aggressively into physical gold, outside of the LBMA bullion banking system.
China Now Making The Rules
The western central banks have cornered themselves, realizing too late that the PBOC have stealthily dislodged the western central bank's golden anchor. The PBOC has already gained this major victory and is already implementing the next phase of a divide and rule strategy, drawing in non-U.S. Western central banks such as Britain, France, Germany, Italy, Australia, Luxembourg and several others, into the new Asian Infrastructure Investment Bank (AIIB). The Chinese are now setting the rules, and the U.S. is demonstrating how it views China as an enemy by opposing this Chinese initiative, viewing it as a shot across its hegemony bow. Well, that's exactly what it is.
The PBOC has established China as the global hub for trading gold bullion. As soon as the Chinese fix is launched, it will challenge the paper-centric markets such as London and the United States. The new physical facing exchange is also going to be launched next month. This new exchange will both influence and be influenced by the Asian physical market fixes, unlike the joke of a London dilutive paper settled fix.
Trouble For The LBMA And Comex
The bottom line here is this arbitrage will force the LBMA/Comex exchanges to either become obsolete, or radically alter their platforms. I still see a cash settlement as the only way out, to save the mismatched too-big-to-fail Western bullion banks from collapse. Of course this will reset the price of gold significantly higher, as gold seeks to establish its true market price, free of Western price suppression. Sentiment will see as few specs invested in gold as possible when this cash settlement is effected, so we are most likely closing in on this historic event now."
Silence From HSBC
Eric King: "Andrew, King World News has made 5 phone calls to HSBC, but so far HSBC has refused to issue any public statement or press release regarding the closure of their 7 vaults in London. If you look at the letter below, it was made public by an individual at Quilter Cheviot, one of the largest asset management companies in Europe, with roots dating back to 1771 (see below):
Eric King continues: "That letter was from a sub-custodian storing gold bullion for clients in HSBC vaults. In the letter they state that 'HSBC Bank Plc are closing all their vaults,' and that the vault closures are forcing them to relocate their gold stock. From the letter:
"We wish to inform you that HSBC Bank Plc are closing all their vaults including 31 Holborn, London EC1N 2HR. Therefore we shall be moving all the above-mentioned stock by Secured Delivery to new vaults in April 2015 to the address below."
Maguire: "There was some misinformation released this week by an individual who acted as a mouthpiece for HSBC. We already covered the correct HSBC information in our March 10th KWN interview. Regardless, as you can see from the letter, clearly this has to do with HSBC vault closures, not just 'retail safe deposit boxes.' Also, faced with only two months notice, some clients did in fact choose to sell their gold, rather than face the logistics and expense of moving it." ***To sign-up for Andrew Maguire's incredible gold and silver trading service CLICK HERE or email King World News for more information.
***ALSO JUST RELEASED: Richard Russell – China, IMF, World Bank, Blood In The Streets And A World In Turmoil CLICK HERE
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