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Maguire:  “One thing is certain today, the bullion banks are on the long side of all of this selling.  We are seeing cracks appearing in the fractional reserve LBMA and COMEX price setting mechanisms.  It’s really thanks to the most recent paper market discount that we are evidencing this accelerated migration of bullion from the West to the East. 


The more obvious this becomes, the more it exposes these bullion banks as holding real naked shorts that are absolutely undeliverable fractional reserve bullion positions....


Continue reading the Andrew Maguire interview below...  




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“Fractional reserve bullion banking has now become so mismatched to the fundamentals that it’s going to be extinguished as the increased delivery demand forces this unwinding of the leverage. 


This hot money (hedge fund money) is currently so short at unprecedented levels, while the bullion banks are taking the long side of this fresh short supply that’s coming in from weak hands.  This short fuel above the market is actually a tinder box ready to ignite, and it has set up the current driver for the next move.


The COMEX inventories have been steadily drained, but it’s accelerated rapidly over the last three months.  These mismatched leases are forced to be extended now beyond any historical extremes that I can ever recall, and I talk to other people in the wholesale market and we are all seeing this crack in the system.  On April 12th we saw official defense come in (to the gold market) and it was to avert this imminent LBMA bullion bank default.  But it was just the way it was executed.  It was grossly misjudged. 


And even though this activity (intervention) bought a little more time for these guys, the immediate and unanticipated but accelerated bullion demand (all over the world), actually ended up digging an even deeper hole for the Fed, the Bank for International Settlements (BIS), and the agent bullion banks.  They have actually shot themselves in the foot.


By simply tracking the movements in the international wholesale market, it’s clear that a major supply problem is brewing.  Where has this bullion gone?  It is clearly Fed and Bank for International Settlements borrowed bullion.  What they are doing is seeking to avert a fractional reserve delivery default.  These are in the price setting centers of London and the COMEX.  And it is further extenuated by arbitragers who are moving bullion out of the COMEX and reselling it at higher, real global prices. 


So you have a perfect storm here.  This (Western gold) bullion is not coming back.  It’s being re-melted, cast into kilobars, and it’s ending up directly in Eastern hemisphere central bank and sovereign vaults.  And all of this time the bullion banks are calling for lower prices, and the mainstream media is touting a bear market.  The bullion banks are fully aware of this threat, and they are exiting these mismatched short positions.”


IMPORTANT - Andrew Maguire’s trading service has returned a staggering $98,715 for each and every (single) contract traded in the gold market over the past 12 months.  For those who would like to get more information on Maguire’s incredible trading service and to sign up you can do so by CLICKING HERE.


This is part II of a written interview series which will be released today and it is only a small portion of what Maguire had to say in his extraordinary audio interview.  The KWN audio interview with Andrew Maguire is available now and you can listen to it by CLICKING 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 James Turk, Andrew Maguire, John Hathaway, John Embry, Dr. Paul Craig Roberts, Jean-Marie Eveillard, Eric Sprott, Gerald Celente and Nigel Farage are available now.  Also, be sure to hear the other recent KWN interviews which include Art Cashin, Marc Faber and Felix Zulauf by CLICKING HERE.


Eric King

KingWorldNews.com

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