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SMART of 'em! And a harbinger of things to come I bet!
As so the quasi black market begins to take shape. I can't wait until I trade my old mercury dimes for a shopping cart of food.
We shall know it has arrived when the shop keeper keeps conversion tables taped to the cash register.
we're all barbaric relics!
All your barbaric relics is ours
advance in advance..Amen!
It's on! Once the institutions start shifting towards PMs for biz transactions the rest is sure to follow.
More importantly than institutions, this looks like gold replacing the dollar as the petro exchange currency. We went to war over pricing oil in euro...this is a shot across the bow.
Time will tell.
I thought the language was interesting: "Both the addition of gold bullion collateral and the availability of collateral via Euroclear Bank are intended to enhance the stability and flexibility of the clearing house"
If we reverse this it seems to imply that the previous collateral (1. gov't secs and 2. cash - which is really just another gov't sec) cause instability. Looks like the institutional and ZH community opinions are convergining (in our favor!).
I find it interesting the gold will be an "electronic" transfer, can you say leveraged paper gold to play commodity markets? Who has that? Government bonds? like Greece, Ireland and Portuguese Bonds? Bring us your garbage and we will give you control of commodities- the very items we all need to live.
gold is not a currency...
If it is under the explicit control of the LBMA...
gold is money, period
Right, gold is not a currency, gold is real money. Unbuggerable by any central banksters!
Yeah right, then why do I have this priapism every day when I wake to green? It ain't no spinal cord injury either
The biggest unintended consequence of QE2 is going to be the ramp up in commodities caused by investors chasing returns. Clearly demand for these goods in not increasing commensurate with price hikes. The money printing is not reaching the consumer which means the normal monetary theory of printing money causing to many dollars chasing to few goods doesn't apply. Instead the money printing is reaching the big oligarchs who will bid up everything in reach - consumer be damned. Way to go Ben you're Brilliant!
but...but...YOU CAN'T EAT IT!!!! and it's in the throws of a bubble! $200 oz before year end!
I think a "</sarcasm>" would have avoided the 2 junks. Hard to tell sometimes.
Hmmm... does someone desperately NEED physical gold ASAP??? Ok, which one of you insider guys is trading paper gold and coming up short in physical delivery?
That's a nice piece of news. Cheers for that
First Gold ATMs, now Gold as cash-equivalent collateral.
Is this how the dollar gets abandoned? One small but quick step at a time?
ya can't rock the boat so yeah..probably, maybe
ICE true intentions: They'll collect that gold then lease it out 100X!
Why would you pay in gold when you can pay in paper?
Greasham's Law: Bad money will drive out the good.
Why did you change your avatar? I liked the old one. It was the highlight comments section.
He must rotate is mammary gland selection or die from a lack of substantial substance.
Show me the most beautiful woman in the world and I'll show you a man that is sick of her.
So true. Although I only had periodic glimpses of your previous avatar, you had to live with her. Congrats on the new one.
"In other words, the ICE will gladly take your gold. Period."
Anyone dumb enough to give ICE their gold will soon be separated from it.
Don't plan on getting it back.
but the books say I own it! see, it's right there! "you own some gold".......do you mind being paid in paper for your gold though?
It's the end of the world as we know it, and I feel fine....
Wow...just needed to say that.
The latest webot report predict that once gold goes above a $5 increase in 1 day, we are witnessing the beginning collapse of the USD.
This is going to get ugly.
I am not associated with the webbot people.
What's next? Gold being the only currency used by drug cartels? Oh, wait. That's probably already been the case for several years.
Credit default swaps are WMD's in the hands of terrorists and we are the schmucks standing in the crowded markets when they set them off. They should be illegal. There is no respectable argument that can be made, otherwise. There is nothing positive about the fact that the terrorists are using gold to buy those WMD's. I'll grant that it is further evidence that total surrender to currency collapse is approaching.
The OTC derivatives market is the playground for criminals. They used to perpetrate the greatest fraud and theft in the history of the world. They now run the world, with unfettered power to take down entire countries. Unrest will be met with violence. Buy gold, by all means
OK, WTF is going on right now in silver? Posters on this thread are understandably happy because we own physical, but you also get a sense that we are verydisconcerted by this price action... like the market is saying something but we cannot figure out what.
Can anyone explain why we have this parabolic action in silver, and more particularly, why NOW? This isn't just dollar-deval driven, it isn't just 'the public' starting to get into the game... the price action is too violent. Is there something big players know that is lurking under the surface? An ugly tipping point that the connected see coming soon, and if so, what the hell is it?
Never thought that making $ would make me nervous, but it is...
Buy some (portfolio) insurance
You are witnessing the early stage collapse of the USD. China, the Pres of the World Bank are calling for its removal.
Don't make the mistake and think it's business as usual. It's not. What you are seeing is precious metals in the early stages of becoming the defacto fiat currency... probably for the next 24 to 30 months... once the end begins.
If you think this is bad... once the default happens... what do you people are going to do with hard cash??? You got it.... hyperinflation in food stuffs....
It's going to get really ugly.
What is making this all the more disconcerting... along with the violent moves in pricing is that silver and gold have been surpressed and manipulated. So now, we are starting to see the major manipulators being squeezed and starting to cover their shorts.... which is driving the pricing. Also, people are starting to realize that something is up and are starting to request physical delivery....
With estimates of contracts/physical at 100:1... there won't be enough to fulfill.... then the cascade begins....
Web bot ALTA analysis is showing that the tipping point is November 14th... and we are in a full collapse of the USD.
I am not associated with these people... you can check out their site at http://www.halfpasthuman.com
They are a little weird... but their linguistical analysis is very telling of what is happening.
"Never thought that making $ would make me nervous, but it is.."
My feelings exactly. Are we just seeing the regular big money guys playing with silver for a while, only to be tossed away in a few weeks for another toy/commodity, or is that foul breeze really the shit hitting the fan?
This is not business as usual...
1. ICE evaluates all customers bullion holdings at the London gold fix to determine daily margin availability. Let's say for the sake of example, $1000/oz.
2. Black swan type event occurs 10 mins after the fix.
3. Gold goes lock limit up, risk instruments go lock limit down. Margin calls ensue.
4. ICE redeems some of your gold at the spot price (let's say $1100) to cover the margin call and then gets to retain whatever ounces are left based on the difference between daily pre-crisis fix price and post-crisis spot price.
5. Rinse repeat for a jillion customers. In the event of a huge lock limit down Black Swan type move ICE takes your gold at what is probably the cheapest price on the day. Some sort of rape-our-customers structural hedge?
My thoughts exactly.
say you buy oil and use gold for margin and
gold sells off $100/oz and oil sells off 5 buks and it happens fast?
Did you just loose everything including your house and the canned goods stocked up in the basement?
Just a thought.
The casino can't play that game more than once, else all the players would leave. I don't think they intend to bite (off!) the hand that feeds them. The OTC CDS players pay fees to ICE to clear these trades - why piss them off for a huge one time gain and earn a ruined reputation? No, I think this is simply an invitation to replace some of the weaker paper bricks in the clearing houses' foundation with stronger (albeit, still paper/electronic) bricks , exactly what ZH community has been preaching to all for a while now.
Not sure you understood the post. What you said there, is not what I meant. This is certainly not a foundation replacement. Margin is margin and margin call is margin call. A debt that requires settlement. The backing is irrelevant, gold or otherwise, the asset is liquidated to pay the margin. The difference being, by using a fix price on an asset which has spot price with a tendency to go up during times of financial uncertainty (even/especially on an intraday basis in this case) ICE has introduced a slippage through which they can accumulate bullion in small but extremely frequent intervals at no risk to themselves.
Agree, this mechanism now exists. But I don't think it will be exploited as it's probably not in ICE's long-term interests to gouge their customers (the TBTFs) or steal their gold. Just my opinion.
Tell it to Goldman-Sachs.
This is Gods work.
Welcome to the future. First ICE accepts gold. Others follow their lead. Then other commodities are added to the mix as the "gold" experiment works. Soon, you can use US dollars or any commodity you want so long as it is housed at a secure third party location (complete with carrying costs).
How is this different than what we have today? Well, what is the role of the other fiat currencies in the world? Has gold et al replaced the dollar or has it replaced the other fiat currencies?
When the other currencies collapse, expect a run to US dollars. By that time, commodities will be priced to the moon and the only way to take "profits" will be to convert those commodities into US dollars.
sure... unfunded US government liabilities of $23,000,000,000,000.00 and trillion dollar deficits for the next decade.... everyone is going to run to the USD.
You are either very nieve or are heavily invested in the USD.
I really wish you were right... the world as we knew it would continue. Unfortunately, I think you're in for a rude awakening.
Folks, with respect to the integrity of the ICE clearing corp and all associated counter-parties, this is not as good an idea as it first sounds.Unintended consequences shall, as always prevail. All's needed is for a momentous event to transpire during which the price of gold plummets, thereby eroding the value of the initial margin posted therein. Along side a significant failure of parties to meet variation margin calls, the value of the initial margin is then not enough to satisfy the contractual requirement.And viola, boom, bang, crapola, shit meet fan, the integrity of the entire exchange has been irrevocably destroyed.
Say good night, Alice.
Bad idea. Initial margin should always constitute a pool of assets which inherently display nominal price stability with respect to the settlement means of payment.
Knukles the prophet--You mean like the $33 drop the last hour?
Wonder if this is setting margin calls right now on the early bullion players.
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