Harvey Organ is a pharmacist who’s studied gold for over 20 years. He’s an interesting man because he is: 1) intelligent; 2) dedicated to the point of being obsessive; but, 3) not a very good communicator. I’ve visited his blog at http://harveyorgan.blogspot.com/ and it’s more like an accounting ledger than a collection of articles written in prose. I can easily imagine how Mr. Organ has dedicated the last 20 years of his life to intently studying the numbers and mathematics of gold and having thereby achieved a significant expertise on that subject and yet, having so far been unable to communicate his knowledge in a way that can be easily understood by most people.
I think the man has worked to know a lot about gold. But I also think that you have to work to understand what he knows because he hasn’t worked to become a “communicator”. I think he’s only used to talking to people with his level of expertise–and that’s a pretty small crowd.
What follows is a video interview of Mr. Organ by Greg Hunter. I infer from this interview that Mr. Organ doesn’t focus on the prices and politics behind paper gold and silver. Instead, he focuses on the mathematics of the production, supply and consumption of physical gold.
In theory, every Comex gold investor is entitled to take his proceeds in the form of physical gold–but only a small percentage actually do take physical delivery. Most are content to take fiat dollar rather than physical gold. Mr. Organ contends that 100 ounces of “paper gold” are traded on Comex and the LBMA for every ounce of physical gold that’s actually delivered.
It’s critical to understand that the paper-gold market is built on the foundation principle that anyone who invests in that market and wants to take delivery of physical gold can do so. So long as Comex can supply gold to the few who take physical delivery, the paper-market can continue to control the price of gold. But if Comex and the LBMA could no longer supply physical gold to their few investors who take physical delivery, the paper-gold market would disintegrate.
Mr. Organ contends that the US Treasury of gold is exhausted and can no longer be relied on to secretly supply gold to back up the Comex and/or LBMA gold bullion markets. Judging from the Federal Reserve’s inability to return more than 5 tons of the 300 tons of gold recently demanded by Germany, he’s probably right. If he is right, Comex and LBMA gold markets will soon be unable to supply physical gold to any of their investors. At that moment, those paper markets (and their ability to manipulate the price of physical gold) should cease to exist.
- Put another way, according to Mr. Organ, the mathematics of the current demand for gold (4,000 tons per year) versus the supply of new gold (2,200 tons per year) leaves a deficit of 1,800 tons per year.
Mr. Organ contends:
1) This 1,800 tons/year deficit has been secretly supplied into the Comex and LBMA markets by the US Treasury, the Federal Reserve and other central banks for the purpose of suppressing the price of gold.
2) Knowing the amount of gold that is secretly removed from the US Treasury, Federal Reserve and other central banks, and knowing what those institutions probably hold as their previous and current gold supply, Mr. Organ calculates that those institutions, plus Comex and the LBMA markets will be completely devoid of physical gold by about November of this year.
3) Without the secret supply of gold (from the US Treasury, Fed, etc.) to back the Comex & LBMA paper gold markets, those markets will be unable to deliver physical gold to settle their accounts. That inability to deliver will constitute a default. Once the markets for paper gold default on delivery of physical gold, the system’s ability to manipulate and suppress the price of physical gold prices will end.
4) Once the paper-gold price manipulation scheme ends, the price of physical gold will skyrocket.
Mr. Organ predicts that the price of gold could hit $4,000 in November of this year and $10,000 in January of A.D. 2015.
- I’m not convinced that the US Treasury’s, Fed’s and other central banks’ supply of gold will be absolutely exhausted in the next 60 to 90 days. It might happen. It might not.
I’m not convinced that nations like China will vehemently demand to receive the gold that they’ve contracted to receive on Comex and LBMA markets after the US Treasury et al are shown to be bankrupt of physical gold. If the gold is gone, it can’t be supplied. I doubt that China would be willing to go to war if they can’t regain the gold and silver that’s owed them.
I’d bet that, for China, it may be sufficient victory to force the US to admit it has no more gold.
I doubt that China would want to collapse the world economy by making a big fuss because it can’t get the gold it’s contracted to receive on the LBMA or Comex. If China can’t get more physical gold at paper-gold prices, I suspect that China will simply grimace and bear it.
Nevertheless, I’m convinced that Mr. Organ’s fundamental argument is correct: the key to the gold-price suppression scheme is the supply of physical gold held by the US Treasury, Federal Reserve and other central banks that’s being secretly supplied to Comex and LBMA markets. When the supply of physical gold is exhausted, the markets for paper gold won’t be able to deliver any physical gold, the paper markets will collapse, and the price of physical gold will rise significantly.
I’d be delighted if Mr. Organ’s price predictions for gold ($4,000 this November; $10,000 next January) were correct–but I’m not betting on those prices in that time frame. I’d be just as pleased if we had $4,000 by November of A.D. 2015 and $10,000 by January of A.D. 2017. (But then, I’m somewhat childlike in my capacity to be easily amused and easily delighted.)
I’d not only be delighted, I’d also be amazed if, as per Mr. Organ’s predictions, I went to bed one night next November when the price of gold was $1,300/ounce–and woke up the next day to find that gold had doubled or even tripled overnight. Although that kind of drama is the stuff of novels and movies—but it could happen. However, I’m more inclined to think that I’ll go to bed one night next November with the price of gold at $1,300 and “wake up” a year later to find the price is $4,000. Mr. Organ is inclined to anticipate one sudden, blinding flash of price rises. I’m more inclined to expect (and more comfortable with) a slower but steady price rise.
My reading of The Powers That Be is that those diabolical bastards almost always have another trick up their sleeves. One of these days, they’re going to run out of cards, but I’m not betting that day will arrive this year. Even if Mr. Organ were correct and the US Treasury et al were shown to be bankrupt of physical gold in November, I’d expect the “Powers” to “drag it out” over a period of months or even years rather than succumb to a single, explosive, economy-collapsing, overnight rise in the price of gold. I’m not denying the possibility of such drama. I’m simply saying that a slower process is more likely. I’ll wait and see.
In the meantime, here’s Greg Hunter’s 30 minute interview of Harvey Organ. It’s well worth your time to view this video at least once: