David Kranzler: Gold Price Signaling Imminent Stimulus
Tom welcomes David Kranzler of Investment Research Dynamics back to the show. David discusses how banks like JP Morgan leverage commodity market options via manipulating prices via massive amounts of paper contracts. This manipulation is a source of massive profits for these bullion banks and is permitted because it benefits Central Banks. These shock and awe hits to the market are designed to shake out weak participants.
There are indications that a larger population of retail investors are looking to take physical delivery. However, many Comex deliveries remain on the exchange for safekeeping. The Comex encourages this by charging lower fees for storage than other vault services. If a run on those stored bars was to occur, there could be a default.
David outlines how the miners are cheaper now than at any point in the last twenty years. For example, the HUI index should be much higher based on the price gold has reached.
David discusses what he defines as a junior mining company. Large-cap companies are waiting until the last minute to decide who they should buy. A lot of these junior companies with good prospects will be taken over by the majors.
Time Stamp References:
0:00 – Intro
0:57 – Options and Gold
6:36 – Comex Deliveries
11:45 – Who is taking delivery?
15:00 – Run on the Comex
17:42 – Gold Hypothecation
20:24 – Manipulation
28:50 – Gold Price and Central Banks
31:49 – Stimulus and Gold Higher?
36:00 – Junior Miners
41:53 – Takeover Targets
44:09 – Junior Considerations
45:58 – Economy is Weak
Talking Points From This Episode
- Comex Delivery and Manipulation
- How the Manipulation works.
- Central Bank Involvement.
- Juniors Explorers and Takeovers.
David Kranzler spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, he traded junk bonds for Bankers Trust. Dave earned a master’s degree in business administration from the University of Chicago, concentrating on accounting and finance. He writes a blog to help people understand and analyze what is going on in our financial system and economy.