JPMorgan Reopens New York Gold Vault, Concurrently Launches Vaulting Facility In Asia (In Desperate Bid For Physical?)

Tyler Durden's picture

The key actor in the LBMA precious metal price-suppression scheme, JPMorgan, is now getting directly involved in physical gold sequestering: the FT reports that JPM has reopened its underground gold vault in New York that was mothballed in the 1990s. The timing is just a little peculiar: not ten days earlier, Jamie Dimon's bank, which has long been alleged to be the biggest shorter of the precious metal in the world via synthetic positions to the tune of 100x leverage, JPM opened a precious metals vaulting facility in Asia: "The facility, located in the Freeport area of Singapore, will provide
gold and precious metal storage capabilities for corporate,
institutional and retail clients in Asia-Pacific." Is JPM just seeing a terrific business opportunity in warehousing gold... or is the firm, which also happens to be gold custodian for Blackrock's IAU ETF with its 4+ tons of the metal, merely looking to find a way to transfer metal from the US to Asia, or vice versa. Or is JPM suddenly in dire need of actual physical now that gold is at all time highs, and clients are demanding delivery. What better way to unwind the ponzi than to transfer from one physical storage client who is depositing gold to one who is demanding it? Alternatively, the firm could be merely preparing the biggest mouse trap ever for when Executive Order number 6102.5 comes into play. Of course, all conspiracy theory conjecture aside, the most likely reason is simply that there is all that physical out there, which people have bought up and now are more than happy to give it to the one LBMA bank which is notorious for having a solitary purpose in life which is merely to decimate the price of gold... After all, Gordian's Knot and all that.

More from the FT:

Investors are piling money into gold in record quantities, pushing the price on Friday to a record nominal high of more than $1,320 a troy ounce. That has made the vaulting business highly lucrative, since banks often charge a small percentage of the value of the gold stored.

Many commercial banks dismantled their vaults in the 1980s and 1990s. But now they are rushing to build: JPMorgan recently built a vault in Singapore, while Deutsche Bank and Barclays Capital are considering opening new vaults in London.

The demand for storage comes as investors are buying physical gold rather than investing in precious metals futures or mining equities. Private investors hold about 30,000 tonnes of gold, according to the consultancy GFMS – more than a sixth of the world’s gold and, for the first time in modern history, more than central banks.

The vault reopened by JPMorgan last month joins a handful of others in Manhattan, including those owned by HSBC and the Bank of Nova Scotia, and the largest gold depository, the Federal Reserve Bank of New York’s facility, which holds reserves from 36 countries

For those hoping to see an exponential rise in the number of gold-repositories (LBMA backed no less, so you know they are safe), holding one's breath may not be the best idea:

Many historic vaults cannot be reopened as they have been converted into
restaurants: one New York vault built in 1902 for John Pierpont Morgan
is now home to a steakhouse.

After all, bankers are human too: where else will they buy their $80 porterhouses, expensed exclusively to their one real end-client: the US taxpayer...

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Jason T's picture

Cash settlement no?  .. We all know paper gold is 100x physical and that "they" can always use a cash settlement...unlike Madoff.. these folks are the ultimate den of thieves.

TraderTimm's picture

This is getting surreal. What's next, infomercials touting personal gold-vaults you bury in the backyard?

 

TraderTimm's picture

I'd also like to add Tyler, that user http://www.zerohedge.com/users/lv1 is the newest bilge-pump account spamming your site.

Like freakin' cockroaches...

truont's picture

TD is pretty busy and may miss your post on this article about lv1.

Recommend you report spammers at abuse[at]zerohedge[dot]com.  I just did.

Too bad the "this is junk (0)" flag has been so absurdly abused that spammers now have free range on ZH.  TD ignores anything flagged as junk, since it is usually just Johnny Bravo or whichever incarnation of Troll happens to be snarking happily at his keyboard in his mother's basement...

TraderTimm's picture

Ah, thanks. Duly noted. I'll keep that in mind when the next spam-factory launches a salvo.

tyler's picture

Your comment about people living in their parents basement is tired.  Thats the neocons favorite insult to people they disagree with.  I do live in my moms basement, pay rent and get along just fine.  Times are tough dude that put down don't fly these days.

Careless Whisper's picture

back in the day a bank would NEVER file a false foreclosure affidavit; now its seems that the mafia banks do it all the time. i wouldn't trust j p morgan to watch my gold or my kids.

Rahm's picture

I wouldn't trust them to watch my neighbor's dog, or what he leaves behind after a walk

mogul rider's picture

Hey I could use one. The cans I use are gettign rusty. Go buy google stock or maybe even better buy more Apple. There's a safe bet those two!When the matrix swallows your your toilet paper then maybe you'll gain perspective.

TraderTimm's picture

I've no problem with gold, just curious as to how the mainstream assimilates the rising value. No doubt, we'll have full-service companies spring up just to take care of our gold-storage needs. Already have the infomercials that want all the gold jewelry they can get their hands on.

My 'surreal' comment was touching upon this, how business sometimes gets in this feedback-loop, without asking themselves "Why is this happening". Much like the dot-com bubble mania, where people wanted to believe in startups that had no business plan. Just push your money into their eager hands and press a button, instant profit!

So, in summary - I believe in gold as a store of value, fiat is ultimately doomed. I just have an active imagination and could see an infomercial with lawn-vaults to store your gold stash making the rounds at 3am on cable tv.

Bartanist's picture

"value"? ... I think you may mean "price". The value of gold in terms of its utility is nowhere near its price.

Even gold is a currency and it is valued at a currency. It has very little value in terms of uses and replacement cost for almost all functions.

I gold vault is just a bank by another name ... and a "retro" one at that.

snowball777's picture

I once knew a jeweler who kept his gold on the workbench and his stash in the safe, but this was the 60s and had more to do with what he could declare on an insurance form as stolen without getting hassled.

Perhaps JPM hopes to pretend the gold is in two places at once for audit purposes.

covered's picture

They got that pretending thing down pretty good. Extend------>pretend. Forge. Tick. Tock.

traderjoe's picture

If you took physical delivery, why would you have it stored in a TBTF bank in a known gold vault? I'm going to get junked, but I'd rather store it in my basement or bury it than have it in a bank vault I have no control over (especially a TBTF bank, and even worse JPM). Of course, there are other private security deposit box companies for those that don't want the security risk. 

geminiRX's picture

No rational person would store it with a bank (California gov. even raided safety deposit boxes). Best to bury it and sell it when there is a lineup around the block to buy the shiny stuff.

Ignatius's picture

"The road will seem so straight and fair to travel, that you will kick yourself for stumbling through the brambles for so long, and wonder at your neighbors who still can't see the path, though it is truly a freeway"  FOFOA

monopoly's picture

Do you all notice how the pieces of the puzzle are slowly fitting nicely. Gonna take some time, but I do believe we are on the right track here. Ya know, we have not had a severe dump in gold in a while, maybe due one. That would be the 73 dump and 96 top call since this all began.

Will just add to physical again if that happens. As long as the sheeples keep watching Desperate Housewives and Dancing with the stars, all must be well.

Beyond words all. Gonna make a lot of people unhappy, again.

BGO's picture

I know it sounds like a hackneyed thing to say, but things are truly different now compared to even 15 years ago. Does JPM or a bank like JPM in modern times have the ability to affect gold prices in a significant way? Through fraudulent paper trading, sure. Physical seems less and less likely, but it would be interesting to watch them try. There are more gold buyers today than in any point in human history. Gold being a finite resource, seems unlikely a bank would risk dumping with the goal of driving price down. Maybe, but it seems unlikely.

 

 

monopoly's picture

traderjoe, I agree. You can have a very secure vault in your home or business. May cost some but well worth it.

Yeah, lets leave our gold stored at C, BAC or GS. Then when the shit hits the fan, they tell us we can't access it.

Trust noone and act on that.

 

anonnn's picture

Mary and the FDIC will guarantee it 100%  Full faith and credit with a very fancy, highest quality linen receipt.

What's to worry.

laosuwan's picture

no point in speculating what jp is doing. the only point in buying gold is the ability to take physical possession. for sure that does not mean giving it to wall treet. You really only have two choices; keep your gold in your house or in the bank down the street. neither option is all perfect and this is the paradox in buying gold. But, being alive is risky so what the heck. I go for half in the bank down the street and half in the house next to the doberman's bed

truont's picture

JPM has reopened its underground gold vault in New York

Maybe people really are as dumb as the ruling class think...if people will deposit their gold with JPM.

I think Jamie Dimon once said:  "If God did not want them fleeced, he would have not made them sheep!"  Or maybe he was just thinking that...

Apostate's picture

This is one of the most fascinating pieces of news I've seen on ZH in a while. Perhaps my enthusiasm is unwarranted, but I feel like the psychology on money is changing rapidly before our eyes.

The market demands a better class of money. There is no way around this immutable fact. The most interesting sentence is

"The facility, located in the Freeport area of Singapore, will provide gold and precious metal storage capabilities for corporate, institutional and retail clients in Asia-Pacific."

The FX markets have become too choppy and central bank-driven to be played by ordinary corporations. The domestic inflation/deflation dynamic has also become too unpredictable for any kind of reasonable predictive economic calculation. 

Does anyone else feel a sense of giddy anticipation of being paid in gold coins in the near future instead of paper checks?

silvertrain's picture

  This is very , well, I dont know what to think..I feel kinda like you do..I am thinking that maybe this is a vault for a one world currency backed by Gold...They will keep the gold that backs there paper in the vault and the paper for you at all of there branches..Except I wouldnt trust them to have the amount they say..But then again for us regular people they wont be letting us trade ours in anyway...That will just be for larger peeps..Welcome to ponzi scheme 2.0

Honestly though, you guys are alot smarter than me, I have no freakin clue what there up to..But make no mistake about it, there up to no good...

Apostate's picture

Gold itself could be a one-world currency. Personally, I regard theories that posit that a Bancor-like system could be instituted as infeasible.

I would prefer a hodgepodge of competing currencies. Whatever people want to use, would rule. As long as there is no monopoly, it's all well and good.

We all start from somewhere. Don't be intimidated by the erudition and experience of the community. Learn from people, read source texts, and comfort yourself in the fact that you actually pay attention to these issues.

Lionhead's picture

silvertrain, TD answered your statement "I have no freakin clue what there [sic] up to.." Just read the article & re-read if you need to.

"Or is JPM suddenly in dire need of actual physical now that gold is at all time highs, and clients are demanding delivery. What better way to unwind the ponzi than to transfer from one physical storage client who is depositing gold to one who is demanding it?"

It's as clear as it could be. Go to Harvey Organ's blog & read his daily inventory reports at the Comex:  http://harveyorgan.blogspot.com/

Never, under any circumstance store large quanities of gold/silver at any US bank, safe deposit vault or other facility. Store your inventory in Canada or other country & keep a sufficient amount in your home safe. This minimizes your "regime risk" of confiscation & putting all your "eggs" into one basket.

As for doing any business of any kind with J.P. Morgan, I wouldn't give them the sweat off my balls.

Bartanist's picture

All preparation for the new global fiat currency, perhaps.

Fahrenheit451's picture

I've finally reached the point in my gold ownership that home storage becomes too risky. I have approximately 20% of my net worth in physical bullion sitting in a safe in my basement.  I'm sure as shit not going to trust my bank with it.  I also live just outside NYC, so stashing the metal at a bugout location isnt feasible.  I've decided to take the steps to arrange offshore storage for my gold.  After hours of combing the net, the two best options seem to be either Swiss storage in Zurich with Via Mat or storage with malca-almit in the Singapore Freeport.  It was a tough call but next week I'm shipping my aqu to Singapore.  I assume should the shtf, the good ol US will have more sway confiscating from the Swiss than from Singapore, which should be comfortably under the protection of the red chinese. 

 

 


 

Sokhmate's picture

(very seriously), how can one ship gold out of the country? rules governing such? How would you get it out? (plane, via sea, etc?)

Fahrenheit451's picture

Just file a customs form, it's completely legal for now.

Illya Kuryakin's picture

Are you sure a customs form is even required for gold bullion?

Mariposa de Oro's picture

I'm overseas and when I buy my teensy 1/10-1/4 oz au there is an electronic customs registration.  It is filed with customs/USPS but isn't plastered all over the box.  The mail clerks have no idea what's in that little box.

gwar5's picture

Sounds like a good plan. But don't use the sticky fingered JP Morgan vault in Singapore!

If the SHTF are you concerned the customs paperwork will leave a trail for the IRS to you for such things as future gold taxes, applied to holders of gold? They can see you own it, even if it's far away.

That's my concern about storage. Also, avoiding probate issues, access and estate taxes if something happens to me.

Estate taxes could go to 50-100%, depending on whether socialists or marxists are in charge.

.

Sokhmate's picture

not a bad idea, except that too many trips would be required.

Cyrano de Bivouac's picture

F451-Is it possible to ship gold to individuals in other countries? If so-who does it?

anonnn's picture

Singapore is adjacent to Malaysia and bioth are  members of British Commonwealth.

Hong Kong is governed by China under special laws that were agreed with England when the latter's "lease" ended.

doggings's picture

..After hours of combing the net, the two best options seem to be either Swiss storage in Zurich with Via Mat

That's where mine is via Bullionvault

http://bullionvault.com/help/?FAQs/FAQs_vaulting.html

Hunch Trader's picture

Singapore is a little red dot amidst somewhat hostile neighbors...and very low ground too.

 

Lux Fiat's picture

Reminds me of the CME deciding to accept gold as collateral back in Oct. 2009. (http://www.zerohedge.com/article/cme-allow-gold-margin-requirement-collateral).

I loved this line from the CME notice: 

*In order to effect a gold deposit or withdrawal transaction, the asset type used in the C21 Asset Management and Banking application will be CASH and the currency will be GLD.

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv09-452.pdf

If TSHTF, it might not be just the US who attempts to nationalize/seize gold.  Better mousetrap indeed.

quasimodo's picture

"Attempts" being the key word here.

Jasper M's picture

If the price of an item goes in a different direction than I expect, does that autometically mean it Must be manipulation? Might I just be wrong? 

or is that unthinkable?

snowball777's picture

Depends. How many times are you generally wrong in a row?

Hephasteus's picture

I have a bad feeling AIG is going to have insure one of those vaults and it's going to burn.

Strider52's picture

More likely a planned robbery by JPM itself. "Wow, it's almost like we have no gold at all now!" (never did).

Mercury's picture

I think Jamie thinks fractional reserve gold banking could be the new black.

gwar5's picture

Yes, I'd heard about the Singapore vault two months ago. Same time heard about the JP Morgan NYC vault plans, and how they'd kicked out the small account holders to make way for large buillon holders in new refurbuished vault.

Also, China has opened a buillon vault facility in Hong Kong for Asian countries and moved their buillon from the LBMS to place there. They also recently opened a buillon market to rival the LBMA of the West.

China seems pretty serious about the gold thing. Seems to be pushing others.