Kaye:  “We still have several (trading) days left in the week, and if the cartel does what they have historically done all year, they will look to at least cap or manage the price of this (options) contract, to discourage as many people as possible, at various strikes above $1,250, from exercising....

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“So that could be a bit of a weight on the price of paper gold.”

Eric King:  “Bill, for a long time now they (central planners) have been targeting $1,150 on gold.  They made one heck of a run at it (this week).  The idea was to break that $1,180 low, and get the last of the people (who are gold bulls) to jump out the windows.  I don’t know if they are going to take it to $1,150 or not, but do you see much point in doing that at this juncture?”

Kaye:  “I personally don’t, but I’ve been surprised at how aggressive the prosecution of this scheme has been from the outset.  The rationale for doing it would be to provide very cheap physical gold to some of these insiders who may feel they don’t have the full complement of physical gold they want and they want to get it as cheaply as they can possibly get it.

I really can’t think of a lot of reasons other than that for doing it because the downside to the cartel for massively suppressing the price to a level like $1,150 is the amount of (physical) gold they will have to lose in that process.  I would certainly anticipate China, among other countries (such as) Russia, Brazil, and I would expect the Reserve Bank of India to reappear in size, so a lot of gold would be physically lost to the cartel if they were to depress the price to such an extreme level.  That’s the main argument for not conducting a final raid like this.

At the end of the day the cartel is going to lose this.  No severe price manipulation in the history of mankind has ever gone on indefinitely.  And the reason we know they are going to lose is they will ultimately run out of physical gold.  Gold has significantly transited this year from the West to the East.  At some point that process ends because the West runs out of gold and they simply can’t make physical delivery.”

Eric King:  “Bill, talk about this action taking place in the December, 2015 (gold) contract.  That’s fascinating stuff (activity) there.”

Kaye:  “The most active series, currently, in the paper gold market is the option (contract) in December of 2015 at a $3,000 strike (price).  It’s been extremely active in the last two trading days.  You have to ask yourself, ‘Why would anyone in their right mind, with gold languishing around the $1,250 level, have any interest at all in an option series 2-years out, struck at $3,000, (which is) well in excess of the current price?’

And the answer is somebody thinks we are going to get there.  That’s the only reason.  You’ve got enormous leverage at a fairly cheap price if you are right.  I personally would not have any interest from a buy-and-hold strategy in that series, Eric, because I think the Comex shuts down long before you see $3,000.

The system itself is so leveraged that they (the Comex) would declare, as two bullion banks already have, a force majeure long before we saw $3,000 because I think that would potentially bankrupt the Comex and the bullion banks.  But those footprints are extremely bullish.  Someone is making a bet, essentially an important bet, that we are going to see levels in excess of $3,000 an ounce within the next 2 years.”

IMPORTANT - Part II of Kaye’s fascinating interview series will be released within hours.  Also, this is an incredibly powerful audio interview with William Kaye where he covers the war in gold, as well as 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 William Kaye, Michael Pento, Andrew Maguire, Gerald Celente, David Stockman, Art Cashin, Dr. Stephen Leeb, John Hathaway, Bill Fleckenstein, James Turk, Eric Sprott and Jim Grant are available now. Other recent KWN interviews include Marc Faber and Felix Zulauf -- to listen CLICK HERE.

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