Eric King:  “I have to ask you about this Grant Williams piece that I know you’ve had a chance to look at on the King World News site where it actually illustrates the (extraordinary) paper claims on gold.  We’ve seen a parabolic explosion (on paper claims).  There is a massive run on gold as the inventories at the COMEX are collapsing and we have all of these paper claims.”

Dr. Roberts:  “What this shows is the consequence of repealing the position limits on speculation, because you now have a situation where derivatives drive the actual physical market.  This is the exact opposite of what sound economics would have.

In previous times, the actual markets drove things and derivatives were the tail of the dog.  Now the derivatives are the dog.  Now stocks, bonds, gold and the commodities, they are the tail that gets wagged by the derivatives....

Continue reading the Dr. Paul Craig Roberts interview below...


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“This is a completely unstable situation, and I don’t understand why it’s permitted or why it’s tolerated.  I suppose it’s simply because the authorities are so corrupt that they’ve allowed the financial system to rig everything in their behalf.

But I don’t think you can have this go on forever.  You can’t, forever, have more claims on assets than there are assets, and a financial system that’s in that condition is in a very serious situation.  And it’s true across the board, it’s not just in the gold market. 

If you look in the wider derivatives market, the total sum is huge!  It’s many multiples of all the wealth in the world added up together.  When you get a situation like that it’s got to have some (type of) fantastic explosion.”

Dr. Roberts also added:  “Paper claims have exceeded the actual amount of gold ever since they took the limits off of speculators’ positions.  And this is what we’ve been seeing, isn’t it? 

We’ve been seeing the demand for physical gold rising, and it’s being exported (from the West) to Asia very rapidly, and yet the paper price, the derivative price, has been driven down (laughter ensues).  It’s nonsensical.  Why this doesn’t result in an enormous investigation with arrests and indictments, it just shows that the system is corrupt.  Wherever you look it’s corrupt.

If we look at Grant Williams’ chart, it says for every ounce of gold we have claims on that gold from 42.5 people (laughter ensues).  So that means the claims on gold are 42.5 times the amount (that exists on the COMEX).

Well, what happens when it gets to be 50, 60, 100, 200? (more laughter)  At some point, even the people gambling in this market have got to see this can’t continue to work.  I don’t really understand how it’s gone on this long, and I don’t see how it can continue, particularly when the paper claims so vastly exceed the actual supply.”

IMPORTANT - This write-up is only a small portion of what Dr. Roberts had to say in his extraordinary interview.  He spoke about gold and silver, the Fed’s operations in key markets, the end game and much more.  The KWN audio interview with Dr. Paul Craig Roberts is available now and you can hear 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 Gerald Celente, James Turk, Hugo Salinas Price, Chris Powell, Bill Fleckenstein, Eric Sprott, Egon von Greyerz, David Stockman, Andrew Maguire, Art Cashin and Marc Faber are available now. Also, other outstanding recent KWN interviews include Jim Grant and Felix Zulauf to listen CLICKING HERE.

Eric King

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