Kaye:  “The short interest in GLD right now is incredibly high.  It’s roughly 30 million shares, and the key point here is that this is taking place while the shareholder count keeps contracting.  The shareholder count is down to just over 300 million shares, so the short interest is roughly 10%.

The shareholder count keeps contracting because the physical gold keeps getting redeemed....

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“The reason this is important is because shareholders who aren’t selling their gold are nevertheless having their shares borrowed.  So the bullion banks are now net short almost 10% of GLD.  That’s several billion dollars worth of gold.  This also leads me to believe that, despite the prospectus, each share of GLD is not backed by the physical gold.

This is pretty important because what it means is that because of the massive short position you now have 338 million net shares long of GLD.  This is a problem because it is 30 million more shares than what they are reflecting in their accounts.  So somebody is going to have to eventually come up with that gold.  This is another reason why the gold market is setting up for an enormous short squeeze at some point.

But, Eric, there are a lot of things happening now at a rapid pace, which is usually indicative of an end game.  There have been rumblings about more problems inside the LBMA delivery system.  All of this leads me to believe we are very near a major turning point.

It is now apparent that part of the feed stock (1,300 tons) for the takedown in the price of gold came from the Bank of England, as reported by Alasdair Macleod.  The problem with that is the Bank of England only owns about 300 tons.  So this is not their gold that is being sold.  Instead, this is gold being sold by the Bank of England which is owned by nations that have entrusted the Bank of England to store their gold. 

Well, guess what?  If those countries go to the Bank of England and ask for their gold back what they will get is the same type of answer that the Germans got when they asked the Federal Reserve to send Germany’s gold back to them, which is essentially, ‘You can’t have it, but we will give you a very tiny portion of the gold you are supposed to have stored with us, and it will take 7 years for you to get it.’  We don’t know whose gold was sold, but we do know that it didn’t belong to the Bank of England because as I said they don’t own that much gold.

This just confirms everything that you and I and people like Andrew Maguire have been discussing on your program which is the fact that this has all been an orchestrated raid by the central banks, who have been acting in a coordinated manner.  This is a documented fact, not speculation.

So everything seems to be reaching a very interesting climax.  We now have more evidence of a lack of gold in the LBMA system, we have these curious actions by the Bank of England, and we have what we’ve just discussed with the SPDR Gold Trust, which is, at a minimum, disturbing to people who might own some of those trust units. 

So we are reaching a point that would certainly appear to be the end game for the smash on gold.  And when gold resets to a greatly elevated price, people will be surprised at just how quickly the move occurs, and how high the move will be.  The primary reason for this will be because the physical gold does not to exist in the system. 

We will reach a point where the shorts will need to cover, and when they need to cover there is not going to be the physical gold available that they will be required to be deliver.  As a result, I believe we are on the precipice of what will be the biggest short squeeze in modern financial history.”

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Eric King

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