"Missing Collateral" Virus has spread to Gold now in China and rapidly spreading across the Globe: FED and BOE "Empty Vaults" are in danger now. Bloomberg reports this morning: "China Finds $15B of Loans Backed by Falsified Gold Trades." I still have a strong personal opinion that if something is missing than the price for the Rest will go Up. If Copper and Gold is not there, but industrial demand for Copper will continue as the Investment demand for Gold, Then Prices For Both Metals will go Higher:
"China’s chief auditor discovered 94.4 billion yuan ($15.2 billion) of loans backed by falsified gold transactions, adding to signs of possible fraud in commodities financing deals.
Twenty-five bullion processors made a combined profit of more than 900 million yuan by using the loans to take advantage of the difference between onshore and offshore interest rates, and the appreciation of Chinese currency, according a report on the National Audit Office’s website. China is the biggest producer and consumer of gold. Bloomberg."
GDP Disaster: Final Q1 GDP Crashes To -2.9% And 30 More Reasons The Bear Phase In Gold Ends This Summer.
I have taken the liberty to add the horrible Q1 GDP -2.9% final print to the 30 reasons laid out by Jim Sinclair. Should we start talking QE Taper Pause again and re-tweet James Rickards old tweets now? Mr Sinclair is another my personal trusted source of information to keep The Big Picture in front of me. Read more."
Gold and Silver are acting today like if the Chinese virus "Missing Collateral" has finally reached the London BOE vaults!
In my personal opinion, we are witnessing the same game of the rehypothecation as it is happening with FED, BIS, Investment Banks and Gold. This, actually missing metal as collateral, will be the very bullish set up for the commodities markets. After initial selling due to the margin calls and unwinding of Paper Positions in the market, Mr Market will realise that all these metal accounted for the supply and demand picture is NOT there. Industrial demand will stay in place, but Supply which was supposed to be hoarded in the warehouses is missing: the collateral was used a few times for the different transactions. You can study this subject more with explanation in plane English in the very good podcast I have published yesterday: Read more."
FED has finally "succeeded" and Inflation is raising its ugly head. Everybody mortal, apart from the DC and FED System, who has visited at least few times any grocery shop this year knows that food prices are going up. And gas, and insurance, and electricity bills, and ... yes plasma TV prices are going down and iPads, but they are not very tasty for those on food stamps.
We have a positive resolution today in the Head and Shoulder Bullish Reversal pattern, which we have discussed before. Closing above $1,317 this week will be very important. Nobody can manipulate markets forever. Watch the headlines tomorrow: Inflation Is Back - Gold Surges On The FED News. Read more."