The Paper Precious Metals Market Precariously Close to Diverging From the Physical MarketJeff Berwick Whether its nervous speculators or the more likely collusion of banks and the federal government, there can be no mistaking that the deviation in the gold paper and physical markets this last week is a major event for The End Of The Monetary Systems As We Know It. We can expect very shortly to see in gold what we see now in silver: that is, that the paper spot price has totally diverged from the physical price. Look across the retail and distribution fabric and you see prices for silver coins and bars higher than ever compared to the spot price. We at TDV called some of our contacts in the US about this, and found that the leading retail price for one Silver Eagle in the US is $5 over spot. This price is often below $3. That marks a rebellion by distributors and retailers against paper markets, as many of them are already hedged in paper markets against the precious metals they own. Gold is next. Although the mainstream media attempted to argue against gold, demand for the metal has not been staved-off by the added volatility and propaganda. As Financial Times wrote, inGold tumbles to two-year low: A lot of people were on margin and got caught totally offside, including at least one of my friends who used to be worth millions but who stupidly was leveraged in futures and got thrown off the bus last week. Thats another difference between physical and paper: You cant leverage physical, but too many people are playing in dangerous paper markets right now. Coordinated Action Against The Gold Price Not to say that there werent more deliberate forces at work. My good friend and near-neighbor in Acapulco, billionaire Hugo Salinas Price recently pointed out that the events of April have all the markings of a coordinated psychological operation or PsyOp using the paper gold futures contract. According to Hugo, The intention of the 4-12 operation was to make gold investors think that their judgment regarding gold as a refuge for savings was mistaken, and to change their behavior accordingly: shun gold purchases. Not surprisingly Financial Times has led the establishment charge in discrediting gold. As Hugo writes: Even if the drop in price really wasnt due to a coordinated effort by the banks, it still doesnt represent the actions of actual gold investors whose eagerness to buy gold has rapidly and drastically increased. One contributor on SeekingAlpha.com saw his custom Gold Enthusiasm chart spike on April 16, the day after the sell off. Gold Disappearing from the COMEX We are not tossing out Hugos analysis, however, because a coordinated attack of this sort is exactly the kind of thing youd expect from the banks, Federal Reserve and the federal government. Rising gold prices put the lie to the shaky existing monetary system which is terminally ill. But all the banks, central bank and federal government managed to do was affect the paper price. The physical reality is quite different. Just look at the collapse in the gold warehouse stores at the COMEX. Individual gold investors arent the only ones taking note and taking action. The governments of Germany, Mexico and Venezuala, just to name a few, all realize something is amiss and are seeking repatriation of their gold to their own vaults. Chances are very good that they will never see all their gold returned. The World Gold Council chalks up the sell off to speculators, too, rather than point the finger at banks and government. But they also recognize that actual investors have not been dissuaded. In fact, its just the opposite (emphasis mine): This is yet another claim that enthusiasm for gold buying was indeed up following the sell off. Buyers know its time to wade in. This is what led TDV Senior Analyst, Ed Bugos, to make this first among his recommendations in the latest edition of the TDV Newsletter: Dont waste this opportunity: go out and buy some gold; if it goes lower, buy some more. In the issue Ed quoted John Brimelow who puts the technical aspect in perspective Friday was a 4.88 standard deviation move in the price of gold. For simplicitys sake lets call it a five standard deviation move. Statistically we get a five standard deviation move approximately once every 4,776 years. So we should not expect another move like this out of the price of gold until May 17, 6789. Ed goes into a great detail of analysis for our subscribers in order to make his case. The fact remains, however, that actually getting physical gold simply isnt that easy anymore. Ive been receiving communications from would-be gold buyers who have literally been calling suppliers in various countries and only able to gather a few ounces on demand. A Monumental Event This is a major event that weve been predicting for years as we progress towards The End Of The Monetary System As We Know It (TEOTMSAWKI). The fake paper markets have deviated to its breaking point from the real world supply and demand. If you already own physical, then follow the smart money and take possession and store it privately some place under your own power or with a private facility you can trust. If you can, you should definitely internationalize your gold. Click here to find out more about safely storing your gold internationally in the report Get Your Gold Out Of Dodge. If you do not yet own physical gold, then waste no more time after finishing this article. Get some now. The price action has given you another chance to take a position. There will indeed be many more ups and downs in the continuing bull market, but this may be the rarest kind of good fortune offering you a chance to start piling in. And as Ed advised, if the price drops from herebuy more. Once you do amass some gold, be sure to read Get Your Gold Out Of Dodge to internationalize it. (The report is also FREE with your TDV Newsletter subscription which you can learn more about by clicking here.) Lastly, if you own paper gold, like gold futures or the GLD ETF, you may find out the hard way that you really dont own any gold at all. And, if supply issues continue you may also find out at around that same time that it will be nearly impossible to buy physical precious metals as the rest of the market begins to realize that we are deep into TEOTMSAWKI. linkwithin_text=Related Articles: 