Today London metals trader Andrew Maguire told King World News that bullion banks are now panicking because the London gold hub is finally imploding.  Maguire also warned the bullion banks are not the only one who are panicking.  Below is what Maguire had to say in Part I of a powerful series of interviews that will be released.

Maguire:  “The paper markets are nothing more than a mirage, but due to the massive leverage involved, it’s been able to continue to be the tail that’s wagged the physical market dog for longer than any of us imagined.  However this last move into the $1,130s was a historic move….

Continue reading the Andrew Maguire interview below…


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“And we knew it was coming — the two markets (paper and physical) have now fully broken apart.  So what is different as we speak at the end of 2014?  In other words, why can’t these synthetic players just keep up the same old game and try to engineer another false breakout?

Eric, it’s been quite a roller-coaster journey for gold and silver investors but what we discussed back in January, the demise of the fractional reserve banking system has now finally happened.  The paper gold and silver markets are now fully broken apart and there are good reasons why it cannot be patched back together.

The final straw was the options-related wash and rinse two weeks ago into December option expiry, and all because there were a vast amount of bearish bets at stake.  So here we are again, Eric, at a point in history where 2015 is going to be a stellar year for the precious metals.

The real supply/demand equation has become so distorted, and for such a long time, that it’s irreversibly damaged the market as we know it today.  I am close to the wholesale market here in London and what I’m seeing is worse, and by that I mean (even) tighter physical conditions, than when gold was trading in the $280 range — before setting off on a 10+ year bull market.

Looking at the current conditions from a wholesale perspective, the very tight supplies of immediately deliverable gold here in London, which is the central bullion hub, are in worse shape than in 2001 or 2008.  I have never seen a situation where miners, refiners, fabricators, and the like, have been finding it so hard to borrow gold that it’s forced them to seek very expensive alternative hedges, or to fly gold from other hubs into London, which is ramping up the premiums.

We’ve been witnessing the final stages of a long-coming reset.  The London hub is failing because of the growing disconnect between the massive multi-billion naked short derivative bets and the underlying physical market that it’s anchored to.  There is no argument that can justify this disconnect as a temporary one.  The paper markets have pushed too far this time.  The wholesale markets are starting to backwash derivatives positions and that is a dangerous thing for the too-big-too fail bullion banks.” KWN has now released a second powerful written interview with Maguire.  Also, the incredible Andrew Maguire audio interview is available now and you can listen to it by CLICKING HERE.

IMPORTANT – KWN has many more interviews being released today.

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The audio interviews with Stephen Leeb, Andrew Maguire, John Embry, Gerald Celente, Rick Rule, Bill Fleckenstein, Ben Davies, Greyerz-Turk-Stamm, David Stockman, William Kaye, Eric Sprott, Rick Santelli, John Mauldin and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.

Eric King