-- GOLD, SILVER, PLATINUM AND PALLADIUM

As we get closer to June Comex delivery there is great concern that gold delivery of physical contracts cannot be met due to what can be called naked shorting.

Commercials have sold gold they cannot deliver. It looks like the US government, which is behind these positions, will again have to call in help for delivery like they did recently from the ECB and Deutsche Bank. All of this, of course, is illegal, but your government has its own set of rules. What could end in a classic debacle are the June gold options if enough are in the money and are called for delivery. It is our guess that if this happens and the government doesn't come up with the gold again, that the gold pit could collapse. What we will witness over the next two weeks could be a gold explosion, especially if gold were to breakout above $1,000. Massive demands for delivery could take place. The forces of darkness again attacked gold last week as well as the shares and both have rebounded. The elitists are unable to keep the gold price down for any period of time. If the Comex collapse doesn't come this month it most certainly will come in September. This is why we use a long-term buy and hold strategy and buying each time there is a dip in prices. Government is terrified and has put up every roadblock imaginable to inhibit and retard delivery. In the course of all this the elitists who have a revolving door between Wall Street, Washington and the Fed refuse to fix the system and they continue to add massive debt to the system, which only makes the situation worse. The system has to be restructured - purged - via bankruptcy and an exchange of equity for debt. We know the elitists won't do that. If they do their power will be broken. This is why those who understand the problem are taking delivery of gold and in the case of most small investors taking delivery of coins and bullion and buying gold and silver shares.

Jeff Henry

Posted: Jun 12 2009 By: Jim Sinclair Post Edited: June 12, 2009 at 11:52 pm

Filed under: General Editorial

Dear Friends,

I have been speaking with many people this evening who have taken gold delivery.

What I am hearing is not impressive.

For decades warehouses have held, but rarely delivered as compared to store.

When examined closely it is a paper system that may have fallen badly behind as gold moved ahead since 2001.

There is a possibility the system is antiquated and more FUBAR than anyone, even the warehouses themselves, realize.

I have been told that bars delivered do not correspond with the receipts from exchanges.

I have been told that bars of slightly different weight (higher) have been received.

This may well be a system that has never been asked to handle volumes as are now taking place. This may well be like the old hand clearing equity systems that broke down as volume of trading increased in the early 70s.

F.I. Dupont went out of business because their back office could not meet the growing clearing and trading at that firm.

Pershing, and Vilas & Hickey were the two largest equity clearing firms.

Vilas & Hickey, a NYSE firm of which I was a general partner (at 27 years old) recognized the growing problem and transferred our clearing business to Pershing and merged our activities into another firm, Muller & Company, in order to avoid the impending problem.

I was the sole general partner of the merged NYSE firm so I know what I talk about. We preserved our capital and side stepped a problem that busted many firms.

I smell exactly the same thing in the precious metals warehouse business. How pervasive it is we all will soon find out.

Regards,
Jim

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