this was written by adrian douglas, and explains how the manipulation of gold and silver will end when the banks cover their shorts. goldman sachs has already begun the process of using the sell-off in metals to go long in the tokyo market.

But now the banking system is failing due to over-leveraged lending schemes. The banks are now on the hook for all the gold and silver they have essentially sold short. By selling the obscene amount of contracts short they were able to trigger a massive sell off on the long side allowing them to buy back their short contracts and the long contracts that are being dumped by panicked long holders. But in doing this criminal maneuver they have created a market price for gold and silver which are ridiculously low, or put another way, a ridiculously overvalued price for the US dollar.

Just like in 1971 this is an excellent opportunity to cash in the dollars for precious metals. This can no longer be done at the Central Bank as in 1971 but it can be done at any coin or bullion dealer. And that is exactly what has been going on. Many smart investors have been exchanging overvalued dollars for precious metals to the extent that all available silver inventory of the bullion and coin dealers in the US are depleted and gold is becoming scarce also in that Eagles and Kruggerands are unavailable.

The bullion dealers have behaved like a proxy for a central bank on a precious metals standard. They have handed over their inventory in exchange for the dollars! What will happen next? The crooked gold Cartel through their blatantly manipulative short selling is working on covering and even becoming net long. I have shown how Goldman Sachs has adroitly almost achieved this in the last 30 months on TOCOM. The poor speculator who has been bludgeoned to death on the long side will probably think that he should switch to the short side!

Once the Cartel is long or neutral and the speculators are short the metals will come roaring back as the new weakly capitalized shorts will have to cover. As the metal prices soar the bullion and coin dealers will be able to buy only a fraction of the size of the inventory they had when they try to re-stock from the refiners because the dollars they hold for having liquidated their inventory will not go very far. This will exacerbate the shortage in the retail market just as higher prices act to turbo-charge retail demand.