Kaye:  “The capping strategy is in place.  There is no evidence as of yet that the Fed and the BIS, who I am certain are behind all of this, have the capability, even if they wanted to, to push things much lower because they don’t have the physical gold that would be necessary to be delivered.

But they do have the ability in markets, that still aren’t quite as liquid as they are normally, to push prices around a bit and create some downside volatility....

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“We haven’t quite gotten to the point where liquidity on the buy side is enough to defeat the entities on the paper gold sell side.  This is why we have seen prices track lower today, but I think this is just temporary.  We should bottom shortly.  We will then track higher into the end of the year, and 2014 will be the launch pad for gold and silver.”

Eric King:  “We have seen markets that are relatively strong such as crude oil, which is back up near the $109 area today, and yet gold and silver have been singled out in this decline, even with currencies trading flat.  Your thoughts here?”

Kaye:  “My thoughts are that some markets are manipulated and others aren’t.  Crude oil is a more complicated market.  It isn’t controlled and can’t be controlled by the central banks.  So as you say, it’s trading $1.30 higher, while the gold market is being manipulated today by the usual suspects.  This manipulation by the central banks will continue until they lose control.  The bottom line is people that understand the gold market, they know that gold has been manipulated for more than two decades. 

But I think we are now very close to the central banks losing control of the gold market.  It could happen later this year because the evidence, which is very powerful, is that they just don’t have the gold to deliver into the system.  And when we reach that point where the physical gold can’t be delivered to make good on the promises that the fake paper gold market has made, you wind up with potentially a bifurcated market.

By that I mean you wind up with a market in which the physical market migrates well north of the paper market.  At that stage you have no paper market.  In other words, the rigged casino ends and the players leave the casino because they know it’s a rigged game and it’s not an honest market.  Then, the CME just shuts down trading precious metals altogether because they lose credibility.

So we are very close to the point where the entire paper market facade ends, and the physical market takes reign over the paper market.  The paper products have been created by all of these bullion banks, some of whom have already defaulted on those paper promises and have demanded settlement in cash because they just don’t have the physical metal to deliver. 

But as the physical market takes over, that will shut down the paper market altogether.  This is what I’m in it for, and this is what our partners are in it for.  For what it’s worth, I’ve been managing money for over 35 years, and this is the worst year I’ve ever had because we are down more than 10%. 

That’s never happened to us.  We’ve never been down more than 10%, not ever.  That includes the 1987 stock market crash, when I was on the Board of Paine Webber in New York.  It also includes the 1997 crash in Asia in the emerging markets where we actually made money.  So I have a pretty good record, particularly in bad times.

And these aren’t bad times for most investors.  So the idiots are making money, and the people who actually know what they are doing are seeing mark-to-market losses.  But I say all of this because after 35 years you learn some things.  I don’t have a problem losing money because of a miscalculation on my part, but that’s not what we are dealing with here.  What we are dealing with right now is an intentional and calculated smash on gold and silver that is meant to damage the asset class and anyone who is invested in it.

So, we have lost money, market-to-market, but I’m quite certain that money will be made back in spades, and perhaps exponentially.  The bottom line is the price of gold and silver will be much higher 1, 2, 3, and 5 years from now.  I’ve never been more confident of any forecast in my life.”

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