Sinclair:  “The worst thing they (central planners) could have done was to smash the paper gold price down into an unprecedented bull market for physical.  Should it ever occur again, the results will be the same.  What this has done for the keen observers is to reveal how the future mechanism for gold price discovery will in fact be set.

This initiative by the gold banks, who are both members and directors of the COMEX, insures that the COMEX will lose its position in terms of price discovery for gold....

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Eric King:  “Keith Barron reported to KWN that the Japanese have literally come rushing into the physical gold market.  He said there were $500 premiums for US one ounce American Gold Eagles and you couldn’t find any in all of Tokyo.”

Sinclair:  “The Japanese have what almost appears as an insured bet in gold with the central bank of Japan purchasing not only Japanese denominated debt, but also euro debt and US Treasuries.  It’s clear that the currency has nowhere to go but lower.  This is another way of saying there is a central bank put being offered on the purchase of gold, denominated in yen.” 

Eric King:  “The Japanese are known as very savvy traders in these currency markets, but it’s like someone just flipped a switch and the whole country is stampeding into physical gold.”

Sinclair:  “It’s because the whole country is very knowledgeable regarding currency risk, and they are also recognizing that Japan is taking over the lead from the US Fed.  Japan is acting almost as if it was a state of the United States and it is bringing QE to the world in infinite amounts.  Gold then becomes a sure thing denominated in yen, and the Japanese know this.

But remember that all of Asia has some had some very bad experiences with paper currencies.  They have had some extraordinary currency upsets.  Part of their experience has been to be attacked by prominent hedge fund traders such as George Soros.  Soros is at it once again in Japan where he has recently been attacking the yen.

People have to understand that Soros attacked Asian currencies 15 years ago and this memory is alive and well in many parts of Asia.  They have very strong memories of the wealth destruction that took place at that time.  This is having the side effect of pushing the country of Japan very heavily into physical gold.

The reality is that what you are seeing all over the world is a vote by the general public for fully paid for physical gold.  This phenomenon has only been accelerated by recent events in Cyprus.  The result of challenging bank deposits has been to drive money away from the banking industry and into gold which has been the premier storage of wealth for thousands of years.

Any time there is a replay of an attempt by the gold banks to artificially suppress and to falsely price the gold market, this will only serve to accelerate the end of their most important tool for manipulation, fraudulent paper.”

Eric King:  “Where do we go from here, Jim?”

Sinclair:  “The physical market for gold has quite clearly proven to have an insatiable appetite for the ‘Metal of Kings.’  We have also seen that the supply of physical gold, at best, is questionable.  The net result of high demand and low supply is always significantly higher prices, and that is without a doubt what we will see in the coming days, months, and years ahead.


What KWN readers around the world need to understand going forward is that as the price of paper gold rises, the willingness of the physical market to buy it will now track it.  As the gold war rages in the future, even modest reactions will run into voracious physical buying from people in various countries as we continue to see unprecedented financial destruction around the globe.”

***IMPORTANT - The first Jim Sinclair Q&A meeting is completely sold out, but a second meeting was added due to overwhelming demand in Los Angeles on Sunday, May 19th from 11 AM to 3 PM.  For details and to sign up to attend this event while seats are still available CLICK HERE.

© 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 Egon von Greyerz, Gerald Celente, Andrew Maguire, William Kaye, Rick Rule, Nigel Farage, Dr. Paul Craig Roberts, John Embry, Art Cashin and John Mauldin are available now.  Also, be sure to hear the other recent KWN interviews which include Eric Sprott, Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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