“The Gold System Is Based On Trust & Trust Is Breaking Down”
Today one of the savviest and well connected hedge fund managers in the world told King World News that unprecedented events taking place in the gold market signal that the all-important trust in the delivery system is now breaking down. Outspoken Hong Kong hedge fund manager William Kaye also spoke about what the breakdown in trust in the delivery system means for the future gold price. Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in his fascinating and powerful interview.
Kaye: “Part of the reason we’ve had this smash on gold is because it was very important to the central bankers and to the BIS that gold and silver not be seen as a viable alternative currency. The reality is that the physical above ground stock of gold only increases at roughly 1% to 2% each year,whereas the amount of digital money that is printed by the Federal Reserve of US dollars greatly exceeds that by a huge factor.
Negative
lease rates simply mean that the strains are so great in the system, as
it relates to delivery of physical bullion, that banks will pay a
premium. This is a bizarre situation. What this strongly suggests is
that the system is breaking down.
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Today one of the savviest and well connected hedge fund managers in the world told King World News that unprecedented events taking place in the gold market signal that the all-important trust in the delivery system is now breaking down. Outspoken Hong Kong hedge fund manager William Kaye also spoke about what the breakdown in trust in the delivery system means for the future gold price. Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in his fascinating and powerful interview.
Kaye: “Part of the reason we’ve had this smash on gold is because it was very important to the central bankers and to the BIS that gold and silver not be seen as a viable alternative currency. The reality is that the physical above ground stock of gold only increases at roughly 1% to 2% each year,whereas the amount of digital money that is printed by the Federal Reserve of US dollars greatly exceeds that by a huge factor.
“Now the central
bankers are devious but not stupid. They know that what I just said is
true and they know that the market will catch on to that very quickly,
so it’s very important for them to manage and suppress the price of
gold, and that’s what they have done through the paper market.
But we
are reaching an important pivot. As I’m talking to you gold is actually
under pressure again, but what’s going on now is the typical gaming
that you see which is related to the options expiry. Options expire
tomorrow. This weakness is all by design. These guys are extremely
devious and very coordinated in the way they manage the price of gold.
The
trading action now in gold is meant to discourage people who have
reentered the gold market because of the improved technicals. But
despite the ongoing manipulation we have incredibly strong fundamentals,
one example being the fact that the lease rates for gold have gone
negative and stayed negative for two weeks.
What
this means is people are paying a premium for physical gold today vs
taking a paper promise from the COMEX or a bullion bank for delivery in a
week, two weeks, or a month in the future. So the fact that people
will pay a premium for delivery of gold today tells you everything you
need to know.
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