Dear CIGAs,

The following is John Embry of Sprott Investment Management’s latest. In his report he discusses what we have been saying here for some time with regards to leveling the Comex playing field.

The following is an excerpt from the article:

"Jim Sinclair, an American precious metals maven, and a man who’s forgotten more about gold than most of us will ever know, recently explained how these ridiculous circumstances could end.

He believes it’s axiomatic that most of the time, the most leveraged market (i.e. the futures market) sets the price in the cash market – something that’s certainly been the case here.

However, this only applies as long as the COMEX gold warehouse isn’t significantly depleted by the holders of long gold contracts demanding delivery at settlement.

Traditionally, less than one per cent of contracts are settled in this fashion, but as conditions in financial markets deteriorate this may change.

Mr. Sinclair believes that the price will not be able to be manipulated on the COMEX much longer. He says this because the large gold buyers in Asia recognize the dangers inherent in financial institutions and are channeling their business into cash bullion.

When this market inevitably proves insufficiently large for their needs, they will move into markets like the COMEX and stand for delivery, thereby depleting the inventories.

I agree with Mr. Sinclair completely and believe that this event is much more likely to occur than most people realize."

U.S. Calls The Tune As Gold, Silver Plunge
By John Embry

Now that physical shortages of gold and silver are more pronounced, the theatre of the absurd continues to play out, as the paper price of both metals plunge.

The sharp drop in price should come as no surprise to anyone who is aware of what is really occurring in gold and silver.

Put simply, the entire fiat money system is in crisis – perhaps a terminal one – judging from the calls for a new Bretton Woods agreement by European leaders.

As a result, the powers that be in the US appear to be prepared to do virtually anything to obscure this reality from an increasingly terrified populace – one that’s now seeing its savings destroyed by the carnage in real estate.

In the eyes of the authorities, gold and silver must not be seen as attractive alternatives to financial assets; thus, the prices of both metals are crushed.

As I have said many times, it’s actually very easy to manipulate gold and silver prices in the paper market because the bad guys (i.e. the anti-gold cartel) have a lot more muscle than their adversaries.

More…