Kaye:  “As we get into November things are likely to change radically (in the gold market).  I had my staff look at the seasonality of gold trading earlier this week.  It’s late here in Hong Kong but if I remember the data, November has been one of the best months of the year for a number of years for gold.

The average gain over the course of November was 4.9% to 5% for the last 10 years.  That’s astonishing when you think about it.  I’m told from our sources that the premiums in India are as high as $200 an ounce, which is just mind-boggling because of the controls that have been place on gold by the Reserve Bank of India....

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“This would be well known by the ‘Cartel’ forces, and I suspect that’s why they are trying to set the stage -- trying to depress gold as much as they can going into what is going to be a very seasonally strong November.

The mainstream media likes to report headlines (that denigrate gold).  I saw Bloomberg today saying something along the lines of, gold was down because China demand was down.  They pointed, in particular, in that article to premiums having collapsed.  Now, that’s all pretty interesting because Chinese demand was down but it was barely down.  It was still extremely robust -- only slightly down from what was a very strong month.  In September I think it was off (only) 4%, but well up year over year, which is how these things are normally looked at.  That was totally ignored in the text of that article.

As it relates to the premiums, there is a simple answer for that, and that is senior members in China’s government, probably in the State Council, basically decided that they were sick and tired of the premiums that the Chinese people were having to pay over the London price for gold. 

We’ve dealt with this (massive premium) in a number of prior interviews, Eric.  It has been common for China to have to pay $25, $30, or even $40 premiums to the Western price for gold.  Well, that premium has all been eliminated over the last week.  And the spin put on that, unsurprisingly, is this shows that demand in China is down.

Well, if demand in China is down, then presumably volumes are down.  But volumes aren’t down, so that’s not right.  The premium has collapsed because there has obviously been a change in policy (by the Chinese).  My sources indicate that HSBC in particular, has been told to, ‘Stop the nonsense.’ 

They (Chinese officials) recognize that the bullion banks, at the expense of the population and the jewelers, have been making arbitrage profits.  I’m not going to get into the illegality of those profits, but let’s say they are (highly) suspect.  And essentially the word came down from ‘on high’ that ‘This has got to stop.’  And as things frequently happen in China, when that ‘word’ comes down, it just stops.

So now the Chinese, at least for the last several days, Eric, have been been paying what has been the world price for gold.  The (punitive) premiums have all but been eliminated.  At the end of the day, that not only makes China different, in the sense that the government is saving in gold, but also the population is being encouraged to save in gold.  The government is working to protect the population by seeing that extortive premiums, which otherwise would have gone to some of these bullion banks, are getting eliminated.”

Eric King:  “Bill, anything you want to add with regards to the end game and how this is unfolding?”

Kaye:  “It’s a question of how long the powers that be can skate on thin ice.  The only thing keeping things together at the moment is artificially suppressed interest rates ... If they (central planners) actually got that result (a recovering economy), interest rates would spike higher and we would go back not only into recessionary times, we would be facing what Gerald Celente has correctly stated would be the ‘Greatest Depression of all-time,’ because the firepower now to bail out (various) people (or entities) simply doesn’t exist.

My feeling is that this is a time for people to think very carefully about their needs.  This is a time to make sure their assets are in places that are safe.  I would encourage them to think about places other than money center banks because when the day of reckoning comes, money center banks are not going to be a safe place to be -- the template for that would be Cyprus, but there are others.

I think people need to think in terms of a survival strategy.  That would be my advice -- people need to have a survival strategy.  They need to understand that what’s likely to happen is probably even worse than their worst nightmare.  They need to be positioned so that they and their family can survive, if not prosper, during what is going to be a very difficult time for the human population.”

IMPORTANT - This is an incredibly powerful audio interview with William Kaye where he covers the war in gold, the increasing desperation on the part of Western central planners.  The KWN William Kaye audio interview is available now and you can listen to it by CLICKING HERE.

IMPORTANT - Due to the price action, KWN will be releasing interviews all day today.

© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The audio interviews with Andrew Maguire, William Kaye, Gerald Celente, Dr. Paul Craig Roberts, Michael Pento, Eric Sprott, Grant Williams, Rob Arnott, Art Cashin, Bill Fleckenstein, David Stockman and Jim Grant are available now. Other recent KWN interviews include Marc Faber and Felix Zulauf to listen CLICKING HERE.

Eric King

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