Response on Reddit Wallstreetsilver from Andrew Maguire in the UK:
Yes my friend, this physically driven price reset is certainly well overdue. I will take a bit of time on this as it also answers several other questions I have received.There are several new factors that will drive this reset and I see Basil 3 and Basil 4 playing into this.In our Last Live From the Vault episode we viewed the gold and silver markets though a wholesale lens to assist us in tightening up the timelines that lead into the impossible-to-avert gold price reset and we will continue to look at how this is likely to roll out, but clearly, this must begin to unfold a little ahead of the June 28th Basil 111 deadline.However, there has been a lot of confusion about the implementation dates of Basil 111 standards which I will address now.What is causing confusion is that there is a whole raft of Basil 111 compliance Standards that need to be implemented, some before June 28th and some by the 1st of Jan 2022 deadline. Our focus in on the Net Stable Funding Requirements, (NSFR) as this is the primary Gold (and by default silver), revaluation component.While the general rule for full Basil 111 compliance of has been extended to 1st January 2022, our focus is on how these rules will still impact the Gold markets forcing the 1st leg of a gold price reset by the 2nd Q 2021. To be clear, currently the EU, Switzerland and the US has adopted and will as of June 28th enforce the all-important Net Stable Funding Ratio (NSFR), standards, while the UK has been granted an extension until January 1st, 2022.As we previously assessed, given physical golds fungibility, and that the primary global physical trading hubs and LBMA refineries are centred in Switzerland, Europe and Asia, (where Hong Kong, China & India are also compliant), and that all the Market making LBMA bullion banks also have physical presence in the EU, Switzerland and Asia, the LBMA will largely be exposed to these standards by June 28th.Bottom line, the LBMA member banks exposed to EU, Swiss and Asian compliance will not be able to shuffle paper positions for settlement if it is not backed by physical. It only takes one of the daily chain of LBMA bullion banks breaking rank to short circuit the cabals paper shuffle scam.Tell us more about the hit and run from 2010Well, actually this is not something I enjoy talking about and I will leave it up to you to decide whether this hit and run was just a coincidence or not. It occurred within hours of GATA dumping some of my evidence at the CFTC Metals market meeting in March 2010. (The 6-hour metals market manipulation meeting is still on the CFTC website). The odd thing is that although the driver was well known to the police, hit 4 other vehicles while making an escape, was chased by helicopter and when captured and he came to court, received a slap on the wrist and 6 points on his driver’s licence! Also, the CCTV of the incident was somehow erased by the time of the court appearance.My Friend and trusted mentor Hugo Salinas Price thought it was a warning.What is preventing the bullion banks from doing another wash and rinse cycle as they always do?While we should anticipate volatility into the BIS efforts to unwind unallocated contracts ahead of the end of the 2nd Q, The Catch 22 arbitrage trade will limit any downside from here.We covered it in our last few episodes but essentially the Comex has inadvertently put itself into the crosshairs as a physical delivery market, and with physical markets tight for immediate delivery, if futures are sufficiently backwardated to spot the Comex will be forced to deliver physical bullion at paper generated prices.Last Friday night selling triggered very large size European, Loco London and Swiss bank buying of April GC futures for delivery. Anything over $2.00 discount covers the 50c. delivery cost and air freight transportation into Europe. This was activated again for the 1st time since November 2020.Last week In Silver, we evidenced a very unusual Forward to spot backwardation, this screams of a silver market under stress at current paper driven prices, and I will put this down to thew silver squeeze you here should all take credit for. This is an effect not seen since June 2010 when silver commenced a physically driven rally rising almost without pause from 17.265 into 1st May 2011 at $49.820 for a gain of $32.50 per oz.
What is his 2021 price target?
Medium term, Gold 2500 by end of 2nd Q Silver $60 would not be unreasonable. Longer term by the time Basil 4 is implemented in 2023, all Central Banks will require a higher gold price, so a minimum of 6K to 12K for gold and we see Silver reverting back to its historical norm of 16/1 vs. gold so a minimum of £375-$750 per oz. for Silver.
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