LONDON AS TARGET
Pressures build that contribute toward the divergence. Whenever large deliveries are made in recent months from the gold exchanges, a new rigorous procedure must be followed. Delivery verification involves strict assayer information like certificates and dates and firm names and stamps. Before autumn 2009, such procedures were unheard of. One can make two conclusions. First, the buyers are distrustful of the gold bullion quality, amidst prevalent stories of not just 80-year old bottom of the barrel London gold bar quality, but of tungsten bars with gold plating. My sources tell of widespread cooperation toward data gathering for the documentation of the pathways that prove broad tungsten bar fraud. The risk is palpable, as murder threats hang over the project. These are after all syndicates, and they have had full control of the government treasuries ever since 1992, when Robert Rubin infiltrated the scene as US Treasury Secretary from his former Goldman Sachs currency trading post.
My forecast of lower gold output at higher gold price, the inelastic factor, went like this. As large mining firms suffer the consequences of their unwise (surely illicit, perhaps illegal) future gold sales within their cratered hedge books, the losses would approach catastrophic levels. Take Barrick Gold for example. In 2007, they announced the complete cover of their disastrous hedge book. They lied and covered about one third, using dilutive new stock issuance and new long-term corporate debt. In summer 2009, they announced again the complete cover of their disastrous hedge book. The financial press forgot that they supposedly removed all future commitments just two years ago, hardly a surprise lapse of memory. Again Barrick lied, since they ran out of funds from yet another grand stock issuance that again crippled their stock from vast dilution.