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Craig Hemke at Sprott Money: Some golden speculation
6a ET Wednesday, February 19, 2025
Dear Friend of GATA and Gold:
The TF Metals Report's Craig Hemke, writing today at Sprott Money, details the most probable scenario arising from the seemingly frantic transfer of gold from London to New York. Fear of tariffs, Hemke writes, is just a cover story to prevent panic while the United States recovers the gold it needs to have in hand for a revaluation.
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Hemke writes: "And what kind of 'panic' are they trying to avoid? A delivery squeeze.
"Since the dissolution of the London Gold Pool in 1968, the gold bullion banking world has relied upon a fractional reserve pricing scheme that utilizes a just-in-time delivery schedule. This system has created the illusion that gold is plentiful, and the price has been suppressed accordingly.
"But it's not plentiful. What's plentiful are the derivatives of gold that serve as 'low-cost alternatives' and 'gold price exposure.' The real thing has been leveraged, hypothecated, rehypothecated, leased, loaned, and borrowed for over 50 years, and now no one can say for certain just how many ounces remain with clear title and provenance.
"Already, the London Bullion Market Association is in a state of technical default as delivery delays stretch to four to eight weeks from the generally accepted two or three days. What happens to the just-in-time delivery system -- and the bullion banks that facilitate it -- if the delays begin to stretch even further? And now you see why the tariff cover story has been so eagerly promoted in the mainstream financial media."
Hemke's analysis is headlined "Some Golden Speculation" and it's posted at Sprott Money here:
https://www.sprottmoney.com/blog/some-golden-speculation
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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