'Ow's Dat Now?'

There's an app for everything now, and if you want to translate colloquialisms from Newfoundland, you can use the 'Ow's Dat Now?' app:

https://itunes.apple.com/ca/app/ows-dat-now-!/id467934850?mt=8

On the front page screen, you have a translation for '100% Certain.' I think this expression is very a-propos of the situation.

I think that Netolitzky has just laid his cards on the table.

It's 'sure as shit in a dead cat' that he's short his own company. And he's on the hook.

And, not only is he short his own company, probably through an equity swap contract, but that this position is heavily leveraged. And it's huge. It's the only logical explanation why the company looks this way, and why such bad news comes on a day when there's a major correction in the gold price, when these deals could easily have been arranged months ago. You just have to ask yourself, how on earth does anyone benefit?

He's playing the short side, and trying to get you to sell in a panic.

His insider position serves the purpose of maintaining minority control over the company through his voting position on the board, where he can easily overrule with his vote on any issue, and implement any decision, even shutting down the operation, operating in penury and firiing anybody who opposes him should he so wish. The insider position also serves as a hedge against losses of his leveraged short position, but it only represents a fraction of the derivative notional value.

He might have entered into the contract years ago, not believing in gold price advances, and with gold price corrections, engages in preposterously absurd management decisions.

Sprott, for their part have settled their equity swap contracts last year. They too were short this company with a heavily leveraged position. For their initial deposit, they get a monthly payout based on share price closes against bond market prices.

Why the change? Because bond markets are declining and have topped out. So Sprott settled their equity swaps last year, somewhat in advance. They did correctly, but Netolitzky is now risking a buy-in, or bail-in as they call it for the full notional value of the derivative.

This latest news, and the eve and the day of yet another gold price correction was the final, ritualistic clobbering of the baby seals, and meant to negatively affect gold prices, but moreover severely impairs gold mining companies.

It's been over a year since March 2012 lows in the bond market. I speculate that should bond markets decline below this value, then a buy-in will be triggered.

$Gold Monthly - 21- Month Cycle

Is the gold bull market over? Not by a long shot. What will probably happen is JP Morgan Securities will have sold the rest of their custodial accounts on the COMEX and have zero supply.

What will also happen in the event of a major sell-off in the S&P is short term interest rates will finally go nominal negative. The central bank in the U.S. will be able to fund bond market purchases without printing any money through this method. But that will mean that banks will become players in the gold futures market, much as they are the biggest players in money markets and bond markets.

The June sell-off comes through on a 21-month gold price correction cycle:

http://scharts.co/10DzGPF

A correction merely changes the goal-posts, but does not change the paradigm.

2013 June Options Expiry

Options stop trading today, Friday June 21, they expire on Saturday, precious metals options expire on Tuesday, and quarterly expiration happens next Friday. That means both bonds and indexed options, such as e-mini S&P options.

The prognosis is that gold prices will rebound, bond markets will decline along with the S&P.

http://www.marketwatch.com/optionscenter/calendar

-F6