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JS Kim on Max Keiser Discusses Banker Manipulation of Gold & Silver Futures
Please find below my interview with Max Keiser and our
discussion regarding the Greek crisis and continued banker price suppression
and manipulation schemes executed against gold and silver to prop up the US
dollar and prevent a US dollar collapse. Max raises the issue of the European
Parliament’s move to accept gold from EU nations as collateral as reported on
Zero Hedge here, which I believe is a step towards making gold acceptable as
money for the purposes of debt repayment.
However, this step is nothing new as Bankers have long been known to
make loans in weak currencies and demand repayment in much stronger currencies
before, even when dealing with fiat currencies. For example, the World Bank,
which has long dispensed loans in US dollars to struggling nations, started a
program in the early1990s whereby it asked nations to repay their USD loans in
local currencies, fully aware of the fact that the US dollar was falling
against many global currencies very rapidly. The World Bank aggressively
instituted this “we lend you money in junk US dollar fiat currency and repay us
in better currency” program in 15 different currencies in the early 1990s and
aggressively pushed it further in the 2000s. So it is no surprise at all that the
European Parliament has extended and refined this World Bank program for their
own use into a “collateralize your debt with real money (physical gold) but
continue to take out loans in our junk fiat currencies”.
I also discuss the shenanigans of the gold/futures silver
market with Max. Here is the link to the evidence and the letter I sent to CFTC
Commissioner Bart Chilton in late summer of 2008 of Banker fraud in the gold
futures markets and his reply to me. Mr. Chilton replied that the enormous arbitrage opportunities daily
for several months in the summer of 2008 of $20, $30, $40 and $50 an ounce
higher prices of gold futures in Asia versus the New York COMEX was due to
Chinese banker manipulation of gold prices higher and not due to Western banker manipulation of
gold prices lower. You can read, in that same article, my
further line of questioning of Mr. Chilton’s response that went
unanswered by the CFTC. Furthermore,
I discuss with Max the recent shenanigans in gold and silver futures markets
where nearly 99% of all daily transactions for the month of May, 2011 consisted
of paper for paper swaps in the form of EFP (Exchange of Futures for Physical)
and EFS (Exchange of Futures for Swaps). While at first the Exchange of Futures for Physical transaction
may sound legitimate in name, all legitimacy disappears when one realizes that
paper may be substituted for the “physical” component of this transaction.
Exchange Rule 104.36 enacted on February 18, 2005, which
allows for the substitution of gold ETFs for physical gold, states that the
“physical” part of the transaction “need only be substantially the economic
equivalent of the futures contract being exchanged” and that “the purpose of
this Notice is to confirm that the Exchange would accept gold-backed
exchange-traded funds ('ETF') shares as the physical commodity component for an
EFP transaction involving COMEX gold futures contracts, provided that all
elements of a bona fide EFP pursuant to Exchange Rule 104.36 are satisfied. Thus,
acceptable gold-backed and exchange-traded ETF funds include, but are not
limited to, the iSharesCOMEX Gold Trust (ticker: IAU), which began trading on
the American Stock Exchange on January 28, 2005.”
GATA’s Adrian Douglas first brought to my attention Exchange
Rule 104.36 in his article, “Commodity Exchanges Can Dump Gold Debts on ETFs”, prompting me to search the CFTC database
even further. My search revealed a further amendment to the
“exchange of future
for physical” transactions enacted on March 11, 2005. This amendment stated that
“for purposes of this Rule 414, the term ‘Related Position’ [Physical] shall
include, but not be limited to, a security [a group or basket of securities],
an option, [or] any commodity as that term is defined by the CEA or a group or
basket of any of the foregoing. The Related Position [Physical] being exchanged
need not be the same as the underlying of the Futures transaction being
exchanged, but the Related Position [Physical] must have a high degree of price
correlation to the underlying of the Futures transaction so that the Futures
transaction would serve as an appropriate hedge for the Related Position
[Physical].”
This amendment not only opens up PM ETFs as substitutes for the
“physical” component of a gold/silver futures transaction but even other metal
ETFs or physical metals that have a “high degree of price correlation” to gold
and silver.
Furthermore, remember that an EFP transaction can be used to
either initiate or liquidate a futures position. Thus, from this amendment,
though not specifically mentioned, it is obvious that SLV shares could be used
in an EFP transaction to represent the “physical silver” part of a futures
transaction. If you look at my
below diagram, this may also explain why a huge number of spread positions in
the gold/silver futures markets are initiated from time to time in the COMEX. I
have illustrated how an EFP in silver futures may work below:
In recent months, the number of EFP transactions in silver
AND gold, as opposed to the number of contracts settled in cash or settled in
physical delivery, has exploded. When the majority of gold/silver futures transactions daily consist of EFP and EFS transactions versus cash settlement or
physical settlement, this points to a pronounced manipulation of this market
and an absence of any true price discovery in gold/silver futures markets.
ZeroHedge recently reported that JP Morgan was one of the
largest owners of the likely bogus SLV ETF, holding 3,600,000 shares as of the end
of the 2010 fiscal year calendar. ZeroHedge also reported that
bullion banks, in early May, moved 20% of COMEX physical silver out of the
registered category that is available to satisfy requests for physical delivery
and into the eligible category that is not “eligible” for physical delivery.
Scottia Mocatta followed this significant move by transferring 186,000 of their
physical silver ounces from registered to eligible as well. JP Morgan, as of
the May 27, 2011 CME report, held ZERO ounces of registered silver in the
COMEX vaults.
In the meantime, selling of SLV shares reached an all time
high in May. What does this all mean? I’m not quite sure I have the full answer
yet as I keep digging, but I’m quite certain that whatever is going on in these paper for paper
swaps in the gold/silver futures markets on the COMEX is not kosher and an
attempt to hide physical shortages of precious metals that exist versus the open interest
numbers in gold/silver futures.
The CME makes it very difficult to compile stats regarding EFS and EFP
transactions because while they provide a running total of month-to-date
transactions for gold/silver futures contracts settled in cash and settled
through physical delivery, they do NOT provide a running total of EFS and EFP
transactions month-to-date in their daily metal reports nor do they respond to
any requests for such information.
When one of my staff members wrote the CME and inquired if running
totals were available each month for EFS and EFP transactions in gold/silver
futures, the CME staff answered no. Thus, one of my staff compiled the daily
totals for EFS and EFP transactions for the month of May by pulling every daily
report for gold/silver futures. This is what the totals looked like from May 2
to May 26, 2011.
For gold futures, from May 2, 2011 until May 26,2011,
0.01% of transactions settled in cash, 0.27% settled in physical, 78.22% consisted of EFP and
21.50% consisted of EFS (for a combined 99.72% of all gold futures transactions in EFP
and EFS). For silver futures, from May 2, 2011 until May 26, 2011,
0.19% settled in cash, 0.93% settled in physical, 85.39% consisted of EFP, and 13.49% consisted of EFS (for
a combined 98.88% of all silver futures transactions in EFP and EFS). Thus these
paper for (possibly) paper swaps, if that is indeed what is happening in the
EFP transactions, are casting huge distortions in the price of gold and silver
to the downside.
About the author: JS Kim is the Chief Investment Strategist
for SmartKnowledgeU, a fiercely independent investment research, education,
& consulting firm that helps clients position themselves properly to profit
from the ongoing global monetary crisis being executed by the world's Central
Banks. The returns of his Crisis Investment Opportunities newsletter since
its launch in June 15, 2007 are as a follows. 2007: +23.78%;
2008 +3.21%, 2009: +63.32%; 2010: +32.59%; and YTD as of the end of May 2011:
+5.79%. Cumulative returns from launch to May, 2011: +192.66%.
»
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listen, guys, sometimes when you have no idea what you're talking about, it's best to listen to the people who DO.
it's got nothing to do with "liquidity." There are market participants who have futures and want bullion. There are market participants who have bullion and want futures. There are others who have GLD and want bullion, or have GLD and want futures. etc etc etc.
All an EFP does is allow offsetting sides of these trades to match up and exchange positions. there's nothing spurious, convoluted, or "banker shill" about it.
"All an EFP does is allow offsetting sides of these trades to match up and exchange positions"
AND AVOID PHYSICAL METAL DELIVERY.
Right.
Banker Shill or just brainwashed ???
Who knows, who cares, just boycott the CRIMEX and demand and own physical at ev ery turn; that's how you defeat these criminals.
dude. do you understand that it's something that BOTH SIDES must agree to? Please tell me that you understand that.
So, anyone who wants to get physical metal delivery still gets it. We know for a fact, though that MOST people who trade futures do not want physical metal delivery. That's another thing that's not debatable.
Bottom line: if you're long futures, no one can force you to take GLD or SLV instead of bullion to satisfy their obligation on the short side.
So SLV has all the physical silver they say they do? Just so there is no confusion about 'conflicts of interest' regarding your comments, would you care to disclose your SLV/GLD positions?
"Bottom line: if you're long futures, no one can force you to take GLD or SLV instead of bullion to satisfy their obligation on the short side."
So YOU say...
I have no positions in the metals (including ETFs) at all at this time, save for a 1 ounce generic KITCO silver round sitting on my desk.
Conflicts of interest and SLV/GLD have nothing to do with this. it's about mass mis-education of the masses.
and it's not just "so you say." it's fact. that's what I'm explaining to you, despite the hysteria that others are trying to drum into you.
Kid Dynamite -
I wish you'd post more around here.
Believe it or not, there are actually a few of us at ZeroHedge who are more concerned with the truth than conspiratorial disinformation and propaganda. Isn't it hilarious (or pathetic?) how you can voice the simple truth about matters, and people get angry? And the fact that this happens on a forum that prides itself on exposing fraud and manipulation makes it doubly funny. lol
In a few weeks, it will be the one year anniversary of when Sprott released his first prospectus for PSLV. I've come to accept this day as the exact moment when any semblance of truth regarding the silver market was abandoned and replaced with fear-mongering propaganda and hysteria. Right about that time is when disinformation about the silver market went parabolic, and all the conspiracy lemmings eagerly jumped on the bandwagon and never looked back.
Pathetic.
Hey Slinger,
Kid has his own site. Go over there if you don't like it here. Personally, I don't think Kid's analysis is even close to the truth, but that's just my opinion. Bashing Sprott has nothing to do with the article but I'm not suprised to see you slinging shit again like usual.
Personally, I don't think Kid's analysis is even close to the truth...
That's because you're an idiot, and you have no fucking ability to discern truth from propaganda. He gave you the fucking facts on a silver platter, wrapped with a bow and yet you still don't believe it. Sorry mate, but you're an idiot and a propaganda lemming - there's simply no other explanation. And that applies to the vast majority of regular PM posters around here, especially the most vocal ones.
Sprott has everything to do with this. But that requires you to peel back a few layers, which I would never expect from a VIP card holder on the Lemming Express.
Go off yourself troll sockpuppet.
by Texas Gunslingeron Thu, 04/28/2011 - 02:34
#1214953
Hi ya'll.
This is my first post at Zero Hedge, and I just wanted to tip my hat and say hello.
I've been reading this website for the past few months (my coin dealer referred me here), and have really learned a lot about silver, gold and all the evil of the Federal Reserve. I've probably learned more here in the past two months, than I did during all my years of high school.
I decided to join, so I could ask questions and keep learning. You guys seem really smart (except the trolls!), so I hope I can learn from everyone. By the way, I hope I don't get attacked by trolls. I see the way they always try to harass everyone with opposite opinions, and it just sucks.
I'm just a simple man trying to learn what happened to my country, and what I can do to get her back to the days before Obummer and his socialist agenda. I'm mad. I'm armed, and ain't no one going to take my country, especially an African.
ok...so anyway, that's that.
God bless, and god bless the USA.
by Texas Gunslingeron Thu, 04/28/2011 - 21:13
#1218713
Who the hell are YOU? WTF is "marapoiddyslexia"? If you've got it, perhaps you should put some creame on it.
Why is everyone so damn rude and arrogant around here?
I don't know as much about economics, commodity trading or Wall Street as you guys, and I openly admit that. I was referred to this site by my coin dealer, who told me this was the best information source on the internet - so I joined. I'm just here to learn, and you guys continually sling insults at me.
There was absolutely nothing in my post that was inflamatory, anti-silver or troll-like.
Sorry if my questions aren't as brilliant as all you guys. Sorry I didn't get a chance to go to Harvard like everyone here.
Tough crowd around here. Maybe I should just act like I know everything.
by Texas Gunslingeron Thu, 04/28/2011 - 21:27
#1218758
What the hell is Hephasteus? Why do you guys pick such large words for your avatar? Maybe I should get a dictionary, find the largest, most bizzare word I can and hide behind it so everyone thinks I'm smart. Will you guys accept me then?
What is wrong with you people, and why are you so rude?
by Texas Gunslingeron Fri, 04/29/2011 - 00:13
#1219206
Just another Wall Street moron who thinks silver is in a bubble. I wonder what this guy's track record is like? Anyone heard of him or know his history? This is why I closed my account with Morgan Stanley in 2008, and manage my own damn money. Who the hell would sell silver for paper? Fucking dumb!
My coin dealer has a price target of $115. Even if he is wrong by 25%, that is still a double from here.
by Texas Gunslingeron Mon, 05/02/2011 - 16:32
#1231461
You shouldn't be so mean to others, especially when the other person is right! There is not enough silver to meet demand, and this has been confirmed by my coin dealer.
My coin dealer coined (get it? IT'S A PUN! LOLOLOLOLOLOL) the phrase, "price doesn't matter when there's no availability."
If you do a little research on silver you will quickly learn there is simply not enough silver to handle the overwhelming demand of the entire Western Hemisphere slowly transforming their currencies from paper to metal. And that doesn't even include industrial production of earrings and dinner wear.
Those of us who buy physical silver today will be the rich aristocrats of tomorrow.
Don't be so mean. There is far too much hostility in this forum. Even if you aren't a Christian, I think it's important to treat others with some respect. We are all fighting the same fight.
And there you have it. Thanks Temporalist.
Of course there is more but I already ruined the thread with this pathetic subhuman's trash posts.
You've been exposed as a liar and a hypocrite by plenty of posters.
Gold set an all time high today London PM fix @ $1549 you douchebag.
Lemming? LOL.
most of the old timers here are in on gold at -$1,000 an oz.. so lemmingings is harsh..
given most of the old timers here are in on silver at $10 an oz or less.. as well is no lemming trade.
but you can banter all the live-long-day with the salesmen of gold and silver here but the old timers dont give you the time of day becuase your pro-paper, non-tangible arguement holds no water.
I would hope that you have something tangible and that not all of your holdings are in paper for your benefit.
good luck!
on Mon, 06/06/2011 - 10:48
#1343250
I have no positions in the metals (including ETFs) at all at this time, save for a 1 ounce generic KITCO silver round sitting on my desk.
Conflicts of interest and SLV/GLD have nothing to do with this. it's about mass mis-education of the masses.
and it's not just "so you say." it's fact. that's what I'm explaining to you, despite the hysteria that others are trying to drum into you.
*************************************************************
KidDynamite,
I thank you for your candor and offering the truth.
One of the realities that you have skipped over is who.. is shorting into long paper positions for the purposes of price control?
I would be interested, if someone like you.. as opposed to one of us crazy tin foil hat wearing gold / silver bugs posted the information.
can you see who settled the most into long paper (which maybe they could convert into metal depending on the amount and terms.. does one of the two ETF's allow a conversion from paper to metal delivery? that you can quote?)
if you could provide the ETF position on communicating the paper into physical as well who are the entities who are settling into ETF paper long.
If we can see who is trading paper for physical in the land of ETF's.. and we can see who is pushing into the paper market the most.. we can decide on who is rigging the game if at all.. seems like a straight forward apporach?
if anyone would like to add to this please do!
TIA KidDynamite for any work you offer up for the greater good of Fight Club!
JW
Is your conclusion based on experience or conjecture? IE You ever tried closing 5000 silver contracts in practice, or you all theory?
Update: KD, for years I`ve heard the word 'hysteria' used so many times in reference to another monetary PM, but despite all the angst this created between me and 90% of the people I knew I ignored it.
And this presumably is where we get the 100:1 paper:physical (?)
Sorry double post, the first didn't seem to go through. this one deleted
So will the comex ever get to default? We have been waiting for many years now. It is always on the verge. But since there is unlimited money behind the shorts, it seems the game will keep going and going. Physical prices are still affected by the paper. There is a premium, but it is always based on the paper spot. I am ready for a real default with silver. But I have been reading too long that it will happen the next month and it never does.
Given this information, it would seem that the registered silver is being taken out of the market, to be replaced with paper silver as a source of settlement. Once the physical is gone, they will offer paper to settle, at which point most sensible investors will dump the paper, causing a massive loss in paper silver which will be blamed for the whole businesses, allowing the bankers to make off with the physical in all the commotion (Premise of Die Hard, You steal billions and someone will come looking for you unless they think you are dead or can blame someone else)
Bait and switch, and all legal because they write the rules.
Buy your physical, keep your physical. The only one who can take care of you is you.
Paper ETF's are one of the settlement options that are available to anyone the Comex owes.
of the settlements in May (I think, dont quote me) .1 was in cash, .2 was in physical and the rest were in ETF paper.. that is to say 99.7% of settelments were in Paper ETF's from Comex.. I am typing from memory so forgive me if I am little off here or there.. the Comex and their shills said that ETF settlement would be 2 or 3%.. it is well beyond that at 99.7%.
So Comex Players can settle in ETF paper and JP Morgan just happens to be the largest holder of some silver ETF with 3.6m shares to use for settlement.
The paper market is just more paper and more paper with some paper on top and some paper sprinkled on top.
at some point metal, or tangibles will be worth more than the shell game allows them to be now. As well the paper markets with their paper settlement that is used to suppress the natural price of silver or gold is working for you right now.. go buy when its low! it is evil that they are still able to manipulate the market pricing but use it to your benefit!
or go buy stocks!! at 4m times earnings!! LOL!!
Stay away from Gold.
Look at me!! Look at Me!!! LOOK! I SAID!
http://www.kitco.com/charts/livegold.html
stay away from Gold! it just popped! up, LOL!!!
but I would have to agree, silver is where the money is short term vol.
Mike I like you site and I like what you say and I like your over all view.. just stop fucking posting on the top spot man! its harsh... Tyler lets anyone post to shamelessly plug at least do it down the page. I am not you Mom and I am not Tyler.. I am just throwing my thoughts out there. People here are loyal to Tyler and Fight Club! until JP Morgan gives Tyler 100 Tonnes of Gold and Silver and he sells us down the river. LOL!! O wait I mean sheild for JP.. we hate Goldman! LOL!!
LOL indeed. I'll keep mine and buy more.
OT, New Peruvian Gov't, nationalizers or no?
ha I got the first comment, first time ever, sorry i could not resist. hey i wanted to ask you guys who take delivery of physical about where you store your PM's, just thinking about the future.y
i have been thinking it would be unsafe if you store it at your residence (i live in suburbia), obviously it can not be stored in a safe deposit box for historical reasons, and in a vault you have no access to it when you actually need it.
How far a drive to the countryside? Take a trip and find a secluded area, bury all your PMs in PVC tubes 4ft or deeper. mark the spot on GPS.
Or dig two holes if you don't want all your eggs in one basket.
Pick up a medium size safe at a flea market. Put it in a closet and fill it with junk, cat litter or canned goods. Store your PM in a dozen places around the home (so even if they find one cache, they won't get it all.) Cheerios boxes, under the sacks of dried beans (I know you've been preparing for SHTF,) in the freezer, under the linens in the linen closet...good places are myriad. Chances are, burglars will find the safe and work on getting it (and your useless flatscreen TV) out of the house and making their getaway, ignoring all the nooks and crannies where the real goods are hidden.
I was going to buy bags of marijuana and cocaine and "hide" that throughout the house (along with small stacks of low denominated FRNs). After finding that, who would want a bunch of useless metal.
Hey thanks guys, have been considering this aspect, seems important to consider, when planning to acquire PM's.
No, you don't want to fill your safe with junk. That is a dead giveaway that you have your good stuff hidden elsewhere. Instead you want to put a small fraction of your assets there. They will assume they have gotten all of it.
+ $1550
Keep it well hidden at your place. In a decoy safe in a closet as pops suggests. Or be creative! A/C ducts. In the frozen spaghetti there in your freezer.