HA!

how's this one........snip......

........When this happens, all your debt problems will be reset to manageable and sustainable levels again. In fact, the entire monetary and financial order will be reset. This is going to happen. And the Central Bankers can make it happen whenever they want, when they finally feel the heat of the fire on their own butts.

Jim Rickards, Senior Managing Director for Market Intelligence at Omnis, Inc., made this comment recently:

"One point that does not get enough attention is the impact of size in the physical market. It’s one thing to say that COMEX is $1,100 per ounce and physical might be $1,200 per ounce for one metric tonne if you can find it. But what about 100 tonnes? 500 tonnes? Physical orders of that size are impossible to execute outside of official channels. Size of order is relevant in any market but I have never seen a market (short of a full blown manipulation or short squeeze) with as much price inelasticity as physical gold which is why the buy side overhang keep their intentions to themselves."

Interesting statements, eh? And believe it or not, they actually let this guy on CNBC! "Keep their intentions to themselves." Do they? That would be mighty benevolent of them. Or do they have another place to go for their big transactions?

So here's what's going on: The regular gold market suffices for the general public, some of the "big money" like the ETFs and hedge funds, and the hedging needs of the commercial banks. The majority of this demand for gold is for hedging against a currency crisis like... uh... this one! And the banks are perfectly happy with their contracts to show on paper that they are hedged. Fine. Whatever. But what the regular market CANNOT handle is the really big physical gold transactions. That's where the BIS comes in.

So this is what the BIS is doing, and has been doing for probably 20 years. It is making the market for a second-tier, physical only, sovereign and central bank gold market. This market is totally separate from the LBMA and the COMEX because it has a separate market-maker and... a separate price! More on this in a moment, because we do have a clue as to what that secret price might be!

Now, before you run to your respective national central bankers to verify my story, let me just say that this is a very small secret market. That is, there are only a small number of people in positions of authority that know about it. And I don't know if all the EU member states' national central banks ever participated in the "bid and offer" portion of this second-tier market. It probably started during the run-up to the euro launch and the BIS might have been dealing with EU members differently.

You see, before 1971 central bank gold transfers were part of the monetary adjustment mechanism. And during the run-up to the euro launch it is reasonable to assume that eurosystem gold was returned to this function. So inter-central bank gold transfers within the EMU during the 1990's were likely "managed" by the BIS to smooth the monetary transition, rather than being a free market system of bids and offers. So go ahead and ask them, but if they don't know what I'm talking about that doesn't mean it doesn't exist.

I'll tell you who probably does know... The ECB knows. Trichet. The BIS. The SNB. The PBOC. The Saudis. Probably Russia and maybe even the BOE. I also suspect the IMF knows about it because they refused to sell any of their announced "gold for sale" to the private sector at the COMEX price...

See: Eric Sprott: "That left 191.3 metric tonnes left available for purchase to qualified buyers, which include central banks and sovereign nations. According to Kitco, Eric Sprott bid to buy the remaining 191.3 tonnes and the IMF refused to sell it"
...and...
GATA: "Coincidentally, GATA learned this week on the best authority that a financial house far bigger than Sprott also recently tried to purchase gold from the IMF, also was refused, and wasn't very happy about the refusal."

Hmm... strange.

http://investorvillage.com/smbd.asp?mb=144&mn=43921&pt=msg&mid=8981782