Tapering Talk to Fade

Friday when I woke, I checked the price of gold as I always do. Before I was aware of the new COVID variant, the cash price of gold was up 25.25 to over $1,800 again. But from there it was downhill for the safest of all safe havens as the big bullion banks went to work in the paper markets to disguise the true price of gold. Only the T-Bond proved to be a safe haven on Friday, which of course is exactly what the bullion banks want. But as Alasdair Macleod tweeted on Friday: “A few more days with falls on Wall Street like this and you can say goodbye to tapering.” In fact, I’d add that not only can we expect a cessation of taper talk but also a return to QE, perhaps at a lightning-like pace! But to keep the con game going, it is imperative that the masses do not trade paper money in for gold or the money printing scam by the Fed will end and all those rich folks who live in the Military Industrial Complex will see their wealth disappear, except those of course like the Ray Dalio types who understand gold is ultimate money.

Alasdair Macleod told me last week that we should expect the bullion creeps to keep pounding gold to keep their call options on gold from being exercised before their December 2021 contracts expire. Keep in mind that most of these are naked short positions, meaning the bullion banks don’t own the gold they are writing futures and options against. So they desperately don’t want to have to buy gold in the market to cover. Therefore, we can expect these massive paper fraudsters to keep doing what they are doing to hold the line below $1,800 through December if they can.

For King World News, Alasdair wrote the following on Friday, November 26: “While bullion banks demonstrate their collusive power in the paper markets, they appear to be creating a problem for themselves in the physical. Since the end of August, Comex longs have taken delivery of 77.12 tonnes. And if we look at London’s vault statistics, we see that between end-August and end-October, vaulted gold has declined by 57 tonnes (4.98 tonnes of which have been withdrawn from the Bank of England). And in those two months, according to the World Gold Council, ETFs liquidated 40.7 tonnes. That’s 174.82 tonnes gone from the vault statistics. But to this we need to add the daily mine supply coming mostly into London or pre-ordered from LBMA member refiners. At roughly 50 tonnes per week that’s a further 400 tonnes, which if the bullion banks were getting them would add to vaulting statistics. 

Plainly, while the retail investment market (ETFs) is net sellers, some parties are quietly accumulating large quantities of bullion, and it is not the bullion banks for their own account. This is important, because it is only five weeks before the Basel 3 net stable funding ratio regulations are applied to the banking members of the LBMA. Therefore, while the bullion banks appear to be in manipulative control of their paper gold liabilities, they are losing their grip of the physical market… 

It would be wrong to suggest that the LBMA members’ year-end deadline requires full regulatory compliance. The point about the NSFR is it makes it more expensive for bullion banks to maintain derivative positions. It could be argued that taking money off the Managed Money muppets on Comex is so profitable that it is worth paying the Basel 3 funding penalty. But that will not be the only consideration facing banking executives and their treasury departments. 

It is becoming increasingly obvious that the major central banks face an inflation problem that’s not going away. And in the last fortnight, much of Europe is re-entering covid lockdowns and restrictions, and only this morning it appears there is a new South African variant which is causing concern for epidemiologists. The combination is of rising prices and a further economic slump, at least in Europe. As a best guess, it will be big money in Germany, Switzerland etc. selling euros to hoard any bullion available.

I personally like to look at gold on a monthly average basis because that eliminates some of the shorter-term price discovery manipulation by the bullion banks, although for sure, I think it has a longer-term suppressive impact on the yellow metal because it serves to perpetually keep non-gold bugs away from thinking of gold as the superior safe haven to U.S. Treasuries, as it most certainly is. Natural forces will dictate gold’s return as money in the hearts and minds even of Americans whose understanding of gold has been retarded by a prolonged anti-gold propaganda campaign by the foxes that are guarding the Federal Reserve hen house. 

With just two more trading days left in November, the average price of gold for the month is $1,822.29. The 20-month average is $1,814.87 and the 40-month average is $1,595.88. 

Regarding the markets as a whole, I do think a major deflation in the financial markets is possible and with that could also go commodity prices, especially if we are about to be treated with a serious pandemic whether it’s real or a product more of propaganda to keep people fearful and thus controlled. Whatever the case, I believe adding to gold and perhaps silver as well makes a great deal of sense right now when gold is artificially suppressed while central banks continue toward hyperinflation, and that is a condition that could accelerate with a new variant. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.