Why central banks use paper gold:
So basically the government/Central Banks use the paper gold futures market as a price control mechanism for Gold (of course, they can’t impose price controls on Gold overtly as it would reveal the lie – if Gold is a barbarous, meaningless relic why would you need to impose price controls on it?). But what happens when price controls are imposed on something? Shortages start to occur resulting in an even greater moonshot in price than would have otherwise occurred. A “black” market (which is actually the free market at play and depicts the true price of the commodity) eventually emerges where it sells at a premium to the official price. There are two reasons for this:
1. Buyers – aware that the commodity/good is available at a discounted price – beat a path to the door of whoever is foolish enough to sell it at the government mandated price. Availability at that price soon runs out.
2. The good becomes even scarcer as the costs of producing and selling it are no longer covered by the government mandated price. Aware of this, sellers withdraw from the market and demand ever higher prices for the good.
https://mikesmoneytalks.ca/buy-phys...-you-must-abandon-the-fake-paper-gold-market/
This is what central banks fear:
Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right – Gold. All the world’s capital – trillions, perhaps quadrillions of it – will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.
https://mikesmoneytalks.ca/buy-phys...-you-must-abandon-the-fake-paper-gold-market/
Why buying physical matters:
ALWAYS – convert those paper gains to real profit by buying the physical metal because Gold will never ever attain its true price in the futures markets. They can always issue an unlimited supply of naked paper contracts.
https://mikesmoneytalks.ca/buy-phys...-you-must-abandon-the-fake-paper-gold-market/
The gold paper market is rigged and fraudulent:
The futures market is nothing but a tool for the dollar managers (US Government/Fed/Bullion banks) to manage/control the price of Gold. Whenever the price rises (or threatens to rise) the big bullion banks ala JP Morgan create massive naked shorts introducing fake supply of Gold in the market, thus driving the price down. “But the price has been rising for the past decade, hasn’t it? So how can you say they are driving it down?”, many people ask. Well, the constraint on the bullion banks has been the availability of the physical metal. If the metal is not available, the fraud of the paper market is exposed and they lose their price managing ability. So they allow the price rise to a level at which there are some weak hands willing to sell and then they hold it there till all the sellers have been exhausted (I am assuming the Fed has already sold all the US Gold during the past decade). So strong are Gold’s fundamentals that despite the massive rigging, all they have been able to do is slow its rise. The weak hands who sell the physical metal at every price rise have helped them in this endeavor. But soon, as the bond market implodes, they will run out of sellers.
To those who think that the Comex shorts will be crushed one day and the price of paper Gold will do a moonshot, to them I will say that you are dreaming. The Comex shorts will be crushed, but not in their own casino! If and when a majority of paper Gold longs demand delivery a force majure (who do you think the US Government will side with?) will be declared with cash settlements and/or offers of equally worthless GLD shares (don’t tell me you didn’t know about this). By some accounts, this is already happening. What will happen to the paper price then? That’s right – it will utterly collapse even as the physical’s price is rocketing. Paper gold holders will dump it all to buy the physical – which, unfortunately – will most likely not be available at all…in light of the sum total of the recent developments mentioned in this update I think it is too risky to be trading right now and one should just sit 100% in physical Gold and some currency for day-to-day needs…Trading paper markets for paper gains is like picking up pennies in front of the steamroller. It’s time to stop trading and just buy the physical metal….
https://mikesmoneytalks.ca/buy-phys...-you-must-abandon-the-fake-paper-gold-market/
The goal is when prices are low, punish the US by buying gold and silver and other precious metals. China needs to buy more physical for their central banks, and do so covertly. Make gold/silver scarce in the West, not in China.
So when everybody complains about gold's collapse to 1000 usd an ounce and how people lost money, then is the time for China to use their hundreds of billions and slowly buy up the worlds supply of gold, at low prices.
Base metals are cheap now, stock up.
