On this momentous day, where the JPM stocks have been blasted, little old SFMI has not budged. A good omen methinks. The fraudsters have smashed the PM markets and the nevous nillies are selling right into their hands. What a fabulous time to buy!

Well ladies and gentlemen, the end game is in sight as the cracks the gold manipulation scheme begin to ooze and fester. Physical demand for gold is now unstoppable as volume and premiums over spot continue to rise. Production has been declining for the last few years and is in decline for many reasons. Gold contract deliveries are being settled in cash with growing cash bonuses being offered in lieu of physical delivery and escalating in December to 25%. This is technically a gold default in progress. There remains only a miniscule gold inventory in the London Bullion Market to satisfy overwhelming demand. The tenticles of this massive fraud extend into many crevices whilst the perpetrators frantically push the paper cover ups to the limits. Many awkward questions are being confronted. How much real gold backs up the GLD ETF in the US? Why is the custodian of that ETF JPMorgan, with its outsized short n the bullion markets. Why can the ETF certificates be used as if they were actual bullion? How much gold is really in the US Treasury? Why have Germany and the Saudis demanded their gold to be delivered from the US and London , where it has been supposedly stored? How much gold has really been sold from the western central banks over the last 12 years? Why is it dupilcitly double counted on their books when it has been sold/loaned out multiple times and leveraged? These are but a few hard questions begging to be answered.

Excerpts from Jim Willie today: “The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing. Private billionaires from China, central Europe and Switzerland are demanding to take possession of their allocated gold in London.

"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace…

The officials in the LBMA, COMEX, USDept Treasury, and elsewhere are struggling to maintain the current system, and reportedly are not in step with awareness of the newly devised structures coming into place... The true gold price might very soon become unknown, an extremely positive development…

Right now, we see extremely strong tactics using naked gold short contracts at theLondon metals exchange (LBMA) and the COMEX in the United States to drive down the gold price. It is all illegal and permitted. Margin calls have hit, forcing further selling of paper contracts. Gold investor sentiment among the naive and less informed has been dragging, ever since early December….

But with Europe in flux, the USCongress in flux, the Persian Gulf in flux, the US-China trade battles escalating, and USTreasury debt finance recognized more and more as monetized printing press activity, we are truly approaching a climax event as gold metal has exited the London market.”

Willie cautions that we will not see in the mainstream press that London has almost no gold but still sells paper contracts against it because the perpetrators need time. “The press will not report that billionaires are emptying their gold bullion accounts at rapidfire pace, out of gross distrust of the bankers, since gold leasing has illegally been standard practice for many years. Imagine selling lumber contracts without wood delivered.”

DIVERGENCE TOWARD COLLAPSE

My forecast on gold made a couple months ago within the Hat Trick Letter was clear.The gold price will experience a remarkable divergence. As the collapse approaches, the paper gold price (from futures contracts) will decline while the physical gold price (from bullion purchases) will rise sharply. The differential will grow gradually at first, then burst into a grotesque price disparity. When this occurs, expect darkness to fall upon the gold market. At this point, pure speculation follows. My expectation is for the official gold metal exchanges to shut down, at least temporarily. They have no gold, after all, so there aint nuthin to sell! To remain open only aggravates their contract and legal risk. Look for prosecutions of middle level officials from the exchanges, heavy police pressures put on them, and deals cut to bring down the kingpins. This is standard police procedure. Lawsuits are the wild card, hard to control, difficult to predict.”…

“Gold inspectors have arrived in London, barbarians at the gate. The drainage of gold bullion at the exchanges is well along. Revelations of contract fraud and delivery failures has begun. Some analysts have dished out criticism of an article written by the Jackass last May 2009 about hitmen coming to bust the COMEX. Eric deCarbonnel of Market Skeptics seemed to require the signed contracts with dates and ordered hits, even weapons used, methods detailed, blood spray patterns documented, in a very foolish rebuttal. Curiously, Eric deC has provided corroborating evidence to fortify my arguments, with details on irregularities in well written articles to cover events from London. Otherwise, he does excellent analysis. My comments were general in the article, offered figuratively. In no way were they intended in literal fashion, like men with uzis and machine guns in a hail of bullets directed at exchange officials, laying waste to the corrupt halls leaving pools of blood. The process has begun, as hitmen have indeed arrived. The location is London, not New York, but no difference since a strong umbilical cord of fraud connects the two primary locations.

The hitmen came in two types. The first were contract holders who drained the London Bullion Market Assn of its gold in late autumn, especially December. Many were wealthy Chinese billionaires, demanding return of their own gold bullion, forcing return with legal action and hired attorneys. Others more recently were Swiss wealthy individuals, whose demands confirm suspicion of illegal and illicit practices, like leasing from gold accounts for sales. Now secondly have come the inspectors, hired by individual billionaire account holders who could soon demonstrate improperly leased gold. The inspectors are the HITMEN!! They actually began arriving in early December but have widened their scope of work. The metals exchanges cannot stop them from performing their inspections and verifying hundreds of million$ in gold account holdings, sometimes billion$. Gold bullion has improperly been leased. Exchange officials should be worried about lawsuits and claims of contract fraud, as well as prosecutions and middle level employees offering state's evidence. They might be more worried about angry billionaires defrauded of their gold bullion, who hold mere paper certificates. Such men indeed have hefty budgets to hire professionals to do some dirty work in the shadows. Eric deC might actually see contract hits if patient enough.”

See: http://news.goldseek.com/GoldenJackass/1265248800.php