Should I buy gold and silver now? 

By all means you should buy gold and silver nowwhile U.S. dealers still have coins. Around the world, gold and silver shortages are very real. The exchanges in London and New York are almost tapped out of physical gold and silver.  

Silver and gold shortages are hidden by a PAPER Ponzi of epic proportions. It is true: 99% of the gold and silver sold on the exchanges is mere PAPER.

Charles Ponzi

The PAPER PONZI is a fractional reserve confidence game. It seems incredible, but most of the gold and silver sold on the COMEX [New York Commodities Futures Exchange] and the LBMA [London Bullion Market Association] DOES NOT EXIST. There is only 1 ounce of actual gold or silver stored for 100s of ounces that are sold in futures contracts and ETFs (GLD/ SLV). And now those fractional reserves are at dangerously low levels.

Gold/ silver commodities futures contracts are promises to deliver PHYSICAL bullion when contracts are paid in-full (400 oz gold bars/ 1,000 oz silver bars are supposed to be allocated and warehoused in the bullion bank system). The PAPER Ponzi can continue because most delivery customers do not actually take delivery of the bars. Instead, customers agree to “store”  their gold and silver in bullion bank warehouses. 

Existing gold bars have been REHYPOTHECATED [used as collateral]: swapped, loaned, leased, sold, and resold.

Bullion banks are “primary dealers” designated by the Federal Reserve. The PAPER Ponzi would break down if more customers demanded delivery of gold or silver outside of the warehouse system of the bullion banks.    

F A I L S    T O    D E L I V E R

When commodities exchanges (COMEX and LBMA) cannot deliver bullion on the delivery month of a contract, there is a default-mechanism for “fails to deliver.” Customers are “cash settled.” It is rumored large customers are paid 20% to 30% premiums so they will quietly accept cash instead of physical bars.

Occasionally, there is a RUN on bullion bank vaults. 

China and Russia want bullion, not dollars. When large delivery-customers refuse to be “cash settled” and demand delivery, the bullion banks bombard the market with massive, concentrated short-selling of PAPER gold (representing millions of ounces). For maximum effect, the banks dump thousands of contracts of PAPER gold on the market all at once, in the middle of the night.

The bullion banks quickly drive down the price to force “weak hands” to sell gold bullion (they must sell the gold to meet extraordinary margin calls). The banks use the freed up inventory to satisfy the delivery-contracts.

When there is not enough PHYSICAL gold to go around:

  • Bullion banks “borrow” from large customers whose segregated gold is stored in bullion bank vaults. (MF Global was a Federal Reserve “primary dealer.” When MFGlobal failed, gold bullion that was 100%- owned by individual customers ended up in the vaults of JPMorgan.)  
  • Bullion banks “borrow” gold and silver bullion from the inventories of Exchange Traded Funds [GLD and SLV] to fill delivery orders.  
  • Bullion banks “borrow” from countries. Since WWII, foreign nations have stored gold at the Federal Reserve vaults in New York [each 400 oz gold bar has a unique number]. However, when nations have asked to audit the stored bars or have requested “repatriation” of their gold [since 2011], most requests have been denied. Alarmed citizens believe the numbered gold bars are no longer stored safely in their countries’ allocated accounts. 

Exchange PAPER currency for REAL money while gold and silver coins are still available. The golden constant is portfolio insurance: Coins and bars will retain purchasing power during periods of hyper-deflation, hyper-inflation, credit collapse, or war.

by Denise Rhyne


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