Bullion-ETF Shrinkage GOOD For Sector

An article put out by Reuters this morning noted that holdings of the largest (so-called) bullion-ETF's shrank significantly in January. As with most “analysis” of precious metals by mainstream talking-heads, Reuters totally misunderstood the dynamics at work.

“Analysts fear sustained outflows from gold ETF's if investors' attitude towards bullion sours, which could be a drag on prices,” said Reuters, proving that these anonymous “analysts” know nothing about the precious metals sector.

As I have written on numerous occasions, the large “bullion-ETF's” - which are backed by nothing but banker promises – exist for one purpose: to dramatically dilute the number of dollars entering this sector, in order to assist the anti-gold cabal of bankers in their three-decade long price-fixing campaign.

Thanks to the banksters' allies (the CPM Group, and GFMS), the quasi-official “consultants” who provide supply and demand data on the precious metals sector, every ounce of ETF-silver has been added to global “inventories” (see “Your ETF-Silver is For Sale”)- despite the fact that (by definition) every ounce of this silver is privately held by the unit-holders. This ridiculous farce leads to either of two conclusions. Either ETF's like SLV hold nothing but paper, and all the silver it supposedly “holds” is sitting in warehouses ready to be sold to the first bidder or global silver inventories are only 1/3 as large as claimed. This must be the case, since bullion-ETF's account for 2/3 of all silver inventories (see “Silver Market Fundamentals Destroyed by Bullion-ETF's”).

While I have been unable to locate any charts or data which indicate whether (or not) the gold bullion-ETF's are also added to global inventories, I must assume that they are – for two reasons. One, it's obviously impossible to justify including the “silver” in silver bullion-ETF's as part of global inventories if the same people don't do the same thing with gold. Secondly, since the raison d'etre of these funds is to dilute precious metals dollars to the greatest degree possible, this scheme is furthered by adding the “gold” in bullion-ETF's to inventories, as well.

What this means is that redemptions in these so-called bullion-ETF's are great news for the precious metals sector – and those investors holding real gold and silver. Here's how the unwinding of these scams will work. First of all, since the bullion in these ETF's is already included in global inventories even if every unit was liquidated, inventories cannot rise.