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Paper-Gold Holders Flee to Real Metal

We now have an explanation for the massive selloff in paper gold that not only is perfectly consistent with the facts but also comes with a perfect motive -- which sprung into existence at the exact moment that the paper gold liquidation began...sort of.

At this point any readers still wearing their rose-colored glasses are urged to remove them to get a very close look at the dates involved here.

As we all know, the choreographed Cyprus Steal was perpetrated in late March. However, both the liquidation of paper-gold holdings and the collapse of gold inventories (i.e. the flight out of paper gold) began in February.

Isn't this extraordinary? We have our governments creating and announcing the risk for any/all holders of paper assets held in financial institutions in late-March. And we have the Big Money responding to that sudden threat to their wealth (in a very dramatic, and very obvious way) in February.

How do we know that it was the Big Money that was dumping their paper gold at the fastest rate ever and swapping it for real metal? Because the gold ETFs are structured to only make it possible for large unit holders to "take delivery" in this manner. Small gold holders are unable to access the Comex "physical" inventories. The fact pattern makes it crystal-clear this is Big Money on the move.

Already the cacophony of the media apologists can be heard. This is a "conspiracy theory!" Yes, and one with a very interesting "precedent" of its own. As all those who have closely followed the Cyprus Steal have already heard, it turns out the Big Money had been tipped off there, too, and had begun withdrawing their funds from Cyprus banks accounts (you guessed it) in February.

As has been previously explained, the planning for the Cyprus Steal (i.e. the "bail-in") goes back at least 18 months, at least as a concept. The precise choreography -- including obtaining the secret cooperation of the Cyprus government -- is obviously more recent than that. Following that, we had the Big Money commence their flight out of paper in February and then the rest of the world was "surprised" by the Cyprus Steal in late March.

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