Gold-Starved Indians Still Soaking-Up Silver
Informed precious metals investors are well aware of the tremendous “squeeze” placed upon gold demand in India, via the draconian suppression of imports. Regular readers of my work understand that this gold-squeeze was, in fact, instigated by the One Bank – through placing enormous pressure on India’s government.
This economic blackmail took the form of attacking India’s currency, the rupee, in global currency markets, and driving its value to record-lows, until the government of India capitulated. With the global rigging of currency markets (by these same Banksters) now being fully-exposed; this is nothing more than “business as usual” for the One Bank.
But as readers are frequently reminded, actions have consequences. When the supply of gold to the world’s largest precious metals market (and most-astute precious metals investors) was severely restricted; Indians switched to silver – and in a big way.
Even by June of this year, the Indian stampede into silver was already apparent. As noted in a previous commentary; it was at that time that the One Bank was maximizing its efforts at Indian gold-suppression (resulting in a total ban on imports) because monthly Indian gold imports had exploded to an annualized rate of around 2,000 tonnes/year.
In the silver market meanwhile, by the end of May; India had already imported over 2,400 tonnes of silver to meet surging demand, versus 1,900 tonnes in all of 2012. By the end of October, India’s total silver imports amounted to over 4,600 tonnes. Barring a complete collapse; 2013 silver imports in India will hit an all-time high – eclipsing the previous high-water mark of 5,048 tonnes, set back in 2008.
Astute silver investors will recall that in 2008 the price of silver had also been “crashed” roughly 60% below previous highs. However, back then India’s silver imports dropped off abruptly after that. Total silver imports in 2009 and 2010 combined amounted to significantly less than the 5,000+ tonnes imported in 2008.
But note that in 2009 and 2010 the price of silver was rising dramatically, roughly tripling in price during those two years, and at that time there were no restrictions of any kind on India’s gold market. Actions have consequences.
Having driven Indian precious metals investors from gold into silver; how can the One Bank cool-off the red-hot Indian silver market (again)? It could allow the current price of silver to triple, and remove all restrictions on Indian gold imports.
One thing it cannot do is play the same currency-blackmail game which it used to force India’s government to halt all gold imports. To understand the reasoning here requires briefly reviewing how/why the One Bank was successful with its currency-blackmail in attacking the gold market.
The phony rationale behind the One Bank’s relentless assault on the rupee was that when Indians were swapping their paper currency for gold currency (in massive quantities) that this was creating a “currency deficit” in India. Obviously it’s no more possible to have a “currency deficit” when one swaps one currency for another than it is to have a “fruit deficit” if one swaps apples for oranges.
Understand that the same bankers (minions of the One Bank) who lied to the world and claimed that India’s gold imports were creating a “current account deficit” are the same bankers whose own monetary rules have always treated gold as money. India’s (supposed) current-account deficit is a lie; the attacks on the rupee were (are) a criminal fraud – yet another one of the One Bank’s financial mega-crimes.
Why can’t the One Bank employ precisely the same criminal strategy to force India to stop importing silver? Because having already manipulated the price of silver to an absurd low; even at “record levels”, the dollar-value of Indian silver imports this year is trivial in comparison to its (previous) level of gold imports.
This point was recently noted by another writer; John Rubino:
…The value of silver imports in 2012 was $1.8 billion, whereas gold imports cost $52 billion. Even record shipments of silver are therefore unlikely to put any strain on the trade deficit, in contrast to the impact of gold which is [was] India’s second-biggest import item after oil.
In fact, this is a significant understatement, in part because the gold numbers which Mr. Rubino used to make his point were at a level far below where they had spiked to when (as previously noted) at one point India was importing gold this year at the annualized rate of 2,000 tonnes/year.
Some better numbers will illustrate this. Given the current, criminal 60:1 price ratio between gold and silver; Indian silver imports would have to rise to a level of 12,000 tonnes per month (120,000 tonnes per year) to reach an equivalent dollar-value to its previous level of gold imports.
Put another way; Indian silver-imports would have to spike to a level well over 1,000% more than current, record levels before its silver imports would match the previous level of gold imports. There isn’t that much silver available in the entire world. So India’s silver imports will have to “break the bank” before there would be an equivalent pretext to manipulate India’s currency as done with respect to its gold imports.
Speaking of “breaking the bank”; this is an opportune time to dispel some mythology which was popular not too long ago among precious metals investors. In the naïve “take down JPMorgan” campaign (spearheaded by Max Keiser), it was asserted that if precious metals investors simply bought enough silver that we could bankrupt this malevolent financial entity.
Even at the time; I refused to buy into this jingoism. My reasoning was two-fold. First of all; I was extremely dubious that any such campaign ever would/could be allowed to succeed. However; simply attempting to do so would allow the Banksters to portray themselves as “victims”; and to depict silver investors as a bunch of “crazy terrorists” trying to “bring down the U.S. financial system” (through using their tool, the Corporate Media).
Since that time, with the exposure of the existence of the One Bank in my commentaries; the notion of “taking down” JPMorgan (and/or any other of the Western mega-banks) has been revealed as utterly absurd. JPMorgan is, in fact, nothing more than one, tiny tentacle of this gigantic Monopoly.
As pointed out in my most-recent commentary; the One Bank now has access to approximately $100 trillion in free money – every year. “Taking down” JPMorgan (or any other Tentacle) through buying precious metals is no more possible than “taking down” the Great Wall of China, by firing a squirt-gun at it.
Actions will always have consequences. As the One Bank plays its game of precious metals whack-a-mole; each time it “solves one problem” with its financial sledge-hammer, it creates a new one. At the same time; we will never will be free of this eternal “plague” in precious metals markets until we rid ourselves of this Financial Plague entirely.
With our governments and (supposed) regulators wholly corrupt – bought-off with a tiny portion of the One Bank’s annual mountains of free money – there is no hope of the current financial (or political) System ever being redeemed or legitimized as long as the One Bank exists.
At present, as precious metals investors; our best hope is that some sort of Decoupling will occur in the precious metals sector. Markets would divide into the (totally fraudulent) “paper bullion” markets, where practically no real metal would ever trade; and (what would most-likely be) illegal Blackmarkets for bullion.
With our governments now mere “stooges” for this Crime Syndicate; in our Matrix-reality, we would become the criminals – through doing nothing more protecting ourselves by exchanging our fraudulent (and soon worthless) paper currencies for the world’s oldest Safe Havens.
We can protect ourselves, somewhat, individually, by accumulating gold and/or silver, and (simultaneously) ridding ourselves of the One Bank’s corrupt paper. If we’re driven out of gold; it can only be with the consequence of driving us into silver (and vice versa). But collectively; we will never be anything but “moles” dodging a sledge-hammer until the One Bank ceases to exist.
Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers/investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.