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Morning Gold Fixing: Gold Bullion Considered As Collateral By International Clearing House – LCH.Clearnet

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From Gold Core

Gold is higher in most currencies today except for the Aussie and Kiwi dollars; silver has risen by some 1% in US dollars and is higher against all currencies. Asian equities were mixed with the Nikkei higher (+0.41%) and the Hang Seng lower (-0.29%). European equities are mixed with tentative gains being seen in the BE 500 and the Stoxx 50.

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Silver U.S. Dollars – 40 Year (Weekly) GoldCore

Silver U.S. Dollars – 40 Year (Weekly)

European sovereign debt yields are flat but Greek 10 year debt has risen 8 basis points to 10.88%. The Japanese 10 year rose 3 basis points overnight but remains near historic lows at 1.32%.

Commodities are also mixed with NYMEX crude oil down 0.25% to $87.27 and Brent up 0.28% to $99.47 a barrel.

#666666;">Silver Spot (USD) and CFTC CEI Silver Total Open Interest/ Futures Only – 5 Years (Daily) GoldCore

Silver Spot (USD) and CFTC CEI Silver Total Open Interest/ Futures Only – 5 Years (Daily)

Gold Bullion Considered as Collateral by International Clearing House – LCH.Clearnet

A further sign of how gold bullion is increasingly seen as not only a safe haven asset and a currency but also a financial asset, is news that the LCH.Clearnet is giving further consideration to a plan to accept gold bullion as collateral. They may accept gold bullion as collateral against margin positions on a range of asset classes and derivatives in the international financial markets.

LCH.Clearnet have been considering allowing gold as collateral since October 2009 and the move by the CME and JP Morgan to allow physical gold as collateral may have made their plans in this regard more concrete. "We’re looking at it closely,” David Farrar, LCH.Clearnet Director of Commodities told CNBC (see News). “It’s something that, subject to regulatory approval, we’d look to introduce later this year."

LCH.Clearnet (previously known as the London Clearing House and the Paris based Clearnet) is an independent financial clearing house, serving major international exchanges and trading platforms, as well as a range of OTC markets. Its main business is in Europe and it is the largest over-the-counter interest rate swap clearer. In December 2009, LCH.Clearnet began guaranteeing trades between banks and their buy side clients in the $342 trillion interest-rate swaps market.

LCH.Clearnet clears for a large number of commodity, derivative and equity exchanges. It clears a broad range of asset classes including securities, exchange traded derivatives, energy, freight, interbank interest rate swaps, and euro and sterling denominated bonds and repos.

The nominal value of European government bond and repo trades cleared by the LCH.Clearnet group in 2010 increased by 28% year on year, a record fuelled by increased demand as banks seek to manage their counterparty risk exposures. The total nominal value of fixed income trades alone cleared by LCH.Clearnet during 2010 reached EUR137 trillion, equating to over EUR500 billion in nominal value cleared daily.

Also in 2010, LCH.Clearnet launched the first clearing service for under pressure Spanish government bonds and repos. A notional value close to EUR700 billion was cleared during the year.

John Burke, director and head of fixed income at LCH.Clearnet said recently that “at times of market stress, clearing becomes increasingly important" and that “maintaining liquidity and managing collateral are top of the list of priorities for banks.”

With counterparty and sovereign risk remaining elevated, gold is no longer being seen simply as a commodity. Rather, it is increasingly viewed by market participants as an important asset and a currency with no counterparty risk. We are gradually seeing the monetisation and indeed the ’financialisation’ of gold, as gold is gradually being reincorporated into the modern financial and monetary system.

Keynes’s ‘barbaric relic’ is becoming less barbaric by the day. However, the man in the street remains completely unaware of this trend as it continues to be ignored by mainstream media and its implications not realised.

NEWS

(South China Morning Post) -- The Chinese Gold & Silver Exchange Society may trade Hong Kong's first-ever yuan denominated gold contracts next month, said its president Haywood Cheung.

(Xinhua via COMTEX) -- Gold price closes higher in Hong Kong

The gold price in Hong Kong closed up 48 HK dollars at 12,563 HK dollars per tael on Tuesday, according to the Chinese Gold and Silver Exchange Society.
The price is equivalent to 1,355.30 U.S. dollars, up 5.17 U.S. dollars a troy ounce at latest exchange rate of one U.S. dollar against 7.781 HK dollars.

(Bloomberg) -- China could be the “next big buyer” of gold driven by both institutional and retail investors, Credit Suisse Group AG analyst Tom Kendall said in a speech in Cape Town today.

“If you’re sitting there in China with money in a deposit account, you’re losing between 1-2 percent a year through inflation,” he said. “But if you look at the growth of gold in renminbi terms, there are clearly some strong reasons for Chinese to be buyers of gold.”

(Bloomberg) -- Gold-Silver Ratio Drops to Lowest Since December 2006

The ratio of gold to silver dropped to the lowest level since December 2006 as speculation the global economic recovery is strengthening eroded demand for the yellow metal as a protector of wealth.

One ounce of gold bought as little as 45.88 ounces of silver today, according to Bloomberg News calculations. Bullion for immediate delivery was little changed at $1,350.97 an ounce at 12:34 p.m. in Singapore after fluctuating between a gain of 0.2 percent and a loss of 0.2 percent. Silver traded at $29.405.

“With the recent bout of economic optimism in the markets, demand for gold as a hedge against uncertainty is reduced,” said Ong Yi Ling, Singapore-based investment analyst with Phillip Futures Pte. “Hence, gains in gold could be capped. On the other hand, silver may benefit more from the economic recovery” as industrial use increases.

Hedge-fund managers and other large speculators decreased net-long positions in New York gold futures in the week ended Feb. 1, U.S. Commodity Futures Trading Commission data showed.

Speculative long positions, or bets prices will rise, outnumbered short positions by 151,194 contracts on the Comex division of the New York Mercantile Exchange, the commission said in its Commitments of Traders report. Net-long positions fell by 9,395 contracts, or 6 percent, from a week earlier.

Asian stocks gained after U.S. consumer borrowing rose in December for a third consecutive month. Adding to further evidence of economic recovery, Japan’s current account surplus widened in December, the Finance Ministry said in Tokyo today.

(Reuters) - Anglogold says $1,500 gold possible in 2011
Top African gold producer Anglogold Ashanti expects record gold prices to be sustained in 2011, with the precious metal between $1,300 and $1,500 an ounce, its chief executive said on Monday. "I certainly believe they are sustainable. The fundamentals are very strong," Mark Cutifani told Reuters on the sidelines of an African mining conference in Cape Town. "I believe it will trade north of $1,300 and there is a good chance it will go through $1,400 and even possibly $1,500. The $1,300-$1,500 an ounce range would be the most likely outcome this year," he said.

(Bloomberg) -- Austrian Mint Stops Selling 5 Euro Coin On High Silver Price
The Austrian Mint has stopped selling its 5-euro silver coin because of the high price for the metal, it said on its website.

The mint’s 5-euro circulation coin, whose December issuance shows the “Pummerin” bell of Vienna’s St. Stephen’s Cathedral, contains 8 grams of silver.

Based on the spot price of $29.47 per troy ounce, the market value of the metal used for the coin is $7.58, or 5.56 euros, exceeding the coin’s face value, according to Bloomberg calculations.

(Bloomberg) -- S. Africa May Consider ‘Use It Or Lose It’ Mine Rights Approach
South Africa’s Mines Minister Susan Shabangu said she may consider “a use it or lose it” approach to mine exploration rights because of inadequate exploration despite the issue of a large number of rights.

Shabangu spoke at the Mining Indaba conference in Cape Town today.

(CNBC) -- London Clearing House Considers Gold as Collateral
LCH.Clearnet, a leading independent clearing house, is considering a plan to accept gold bullion as collateral against margined positions. London is the world’s largest market for over-the-counter gold trading.

"We’re looking at it closely,” confirms David Farrar, LCH.Clearnet Director of Commodities. “It’s something that, subject to regulatory approval, we’d look to introduce later this year." The Financial Services Authority (FSA) is the regulator of the financial services industry in the UK. A source, close to the situation, tells CNBC that nothing is currently pending before the FSA at this time on this matter.

This follows an announcement by J.P. Morgan that it will become “ ... the only tri-party collateral manager to accept physical gold as collateral to satisfy securities lending and repo obligations with counterparties.” And according to spokesman Chris Grams, the CME accepts allocated gold at the JP Morgan vault in London as collateral against any asset class position an investor might have at the CME.

Why is this move important? Market watchers say it adds credibility to the argument that gold is an alternative asset, a type of alternative currency.

Banks are always looking at their scarce resources including, cash and gold. Leveraging an increasingly valuable gold inventory would be a natural next step, and likely welcome extension of that process.

“There will be a substantive benefit for all firms active with gold bullion and / or LME registered warrants,” says Mike Frawley, Newedge Group Global Head of Metals. “It is the direction of the overall market to use warehouse receipts and / or bullion for margin purposes.”

And, he says as the London Metals Exchange (LME) gets closer to launching its over-the counter (OTC) contracts for gold traded in London, it will be important for the gold community to lever its existing stores for margin purposes. And perhaps in the process, ease the transition to a more transparent, over-the-counter gold market.

 


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Tue, 02/08/2011 - 09:43 | Link to Comment brian0918
brian0918's picture

Gold just went vertical!

Tue, 02/08/2011 - 09:53 | Link to Comment swanpoint
Tue, 02/08/2011 - 09:56 | Link to Comment Pladizow
Pladizow's picture

"The Fed will elevate gold from intelligent diversification to practical necessity." - John Embry of Sprott AM.

Tue, 02/08/2011 - 10:56 | Link to Comment Lieutenant Dan
Lieutenant Dan's picture

Heerrrrrrrres China!

Notice the big spike in gold today. If you aren't going to take delivery of Comex and London gold, then China will.

Tue, 02/08/2011 - 09:54 | Link to Comment philgramm
philgramm's picture

so did its shiny little sidekick

Tue, 02/08/2011 - 09:56 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

I heard GLD is better.  I heard they issue you paper, when weighed, is equal to the amount of bullion you bought.  They actually tell you to store it in a vault.  God Bless the JP morgue

 

www.silvergoldsilver.blogspot.com

Tue, 02/08/2011 - 09:44 | Link to Comment BrianOFlanagan
BrianOFlanagan's picture

gold is money and nothing else

Tue, 02/08/2011 - 09:44 | Link to Comment william the bastard
william the bastard's picture

Imagine their surprise at the market last evening when I proffered payment for my 2 liter Mountain Dew and Doritios with a gold plated rabbit!

Tue, 02/08/2011 - 09:50 | Link to Comment tmosley
tmosley's picture

I tried paying for some Mountain Dew and Doritos with dollars the other day, and they told me to go fuck myself.  Of course, it wasn't in America.  Dollars must not be money!

Morons can't tell the difference between money and currency.

Tue, 02/08/2011 - 09:55 | Link to Comment william the bastard
william the bastard's picture

7-11 refuses payment in gold plated rabbits as does the Publix market in your neighborhood.

 

http://online.wsj.com/article/SB10001424052748704422204576130192457252596.html?mod=WSJ_Markets_LEFTTopNews

Tue, 02/08/2011 - 10:06 | Link to Comment ColonelCooper
ColonelCooper's picture

Honestly, do you have a point?  I tried to buy a car with the title to some land and the dealer laughed.  Does that mean the real estate has no value?  Have you tried to exchange stock certificates for groceries either?  Uhhm. No.  Yet they have value. 

The argument that gold isn't currency is totally irrelevant in terms of its value.

Try again.

Tue, 02/08/2011 - 10:31 | Link to Comment william the bastard
william the bastard's picture

Gold isn't currency. It is not.

Tue, 02/08/2011 - 10:40 | Link to Comment ColonelCooper
ColonelCooper's picture

Nobody is claiming it is.  So what do you want to call it, a commodity?  Call it whatever you want, but no "goldbug" here is trying to advance the argument that gold is CURRENCY!  Not one.  If you want to speak to it's value, fine, but you're arguing with yourself. 

The way you make your argument that it isn't currency implies that it is worthless.  I can convert gold to currency at any time; for a lot more of it than I bought it for too.  The only real argument is whether it's going up or down.  Address that without pasting a bunch of shit, and we have a conversation; otherwise it's like talking to fucking Rainman.

Tue, 02/08/2011 - 10:51 | Link to Comment william the bastard
william the bastard's picture

You always have to have the last word and your last words are always homophobic. Creep

Tue, 02/08/2011 - 10:56 | Link to Comment ColonelCooper
ColonelCooper's picture

Homophobic = fear of autism? 

You really are too stupid to post here.

Tue, 02/08/2011 - 11:13 | Link to Comment Richard Head
Richard Head's picture

+1

Tue, 02/08/2011 - 11:06 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

try to pay chump items at a market in europe with a 500 euro note. you get laughs too. your point is irrelevant

did you ever try to buy something expensive in gold? it works. your argument is garbage in garbage out.

gold is no currency and will never be again. but it is a wealth reserve and it will become the dominant wealth reserve soon

but because i see from your understanding you are a wealth person too, you know how important it is for my wealth reserve to buy a dorito, i would never use the first for the latter. i use chump change

Tue, 02/08/2011 - 13:19 | Link to Comment Boxed Merlot
Boxed Merlot's picture

gold is no currency and will never be again...

 

I won't pretend to know all the nuances between individual definitions of various monetary terms but in a recent 24hGold column "Bearish on Gold, For the Wrong Reasons", Robert Blumen draws fine distinctions between commodities and assets. 

While profit taking / making occurs with both classes of goods, it happens at the point of trade.  The distinction being that after the trade, assets have lingering shelf life as opposed to commodities being consumptive in nature. Gold’s value is it’s the longest shelf life of the trade even between various assets.

  Another article, Opening the Mint to Gold and Silver By Antal E. Fekete could portend what the future holds as BIS secret handshake members may find locks actually exist on their casino doors.

Tue, 02/08/2011 - 15:11 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

dont get me wrong. if i say wealth reserve i mean one function of currency, the store of value. but it wont be in circulation because of the known restraints.

i know the fetke article.

http://www.24hgold.com/english/news-gold-silver-silver-money-for-america...

if the mints are open to gold and silver the price of both will be to high, to be used as currency in circulation. its use will be, minted or not, as wealth reserve.

 

 

 

Tue, 02/08/2011 - 16:02 | Link to Comment Boxed Merlot
Boxed Merlot's picture

if the mints are open to gold and silver the price of both will be to high...

 

This is the funny thing with this argument though, don't you think? 

 

When you say "price", you're still thinking of coinage as a collectible.  It's only a "collectible" when fiat is in play.  When one leaves the casino and you cash out, you return to the real world, intrinsically valuable coinage that transcends individual geopolitical borders.

 

"Price" reverts back to what a willing seller is willing to accept from a willing buyer in exchange for whatever amount of weight / denomination of PM in hand.  There will aqlways be enough PMs because that's Mr. Market at work.  So what if that means a proportionately smaller weight / size of coin.  All the easier to carry, actually.

Tue, 02/08/2011 - 19:41 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

you dont want to live in a world where bullion lost its fiat tag. fekete wrote about this in "Dress rehearsal for the last contango" if i remember correct. higher prices in bullion force bullion into hiding until the point no bullion is available at any fiat price. i agree fiat accounting of worth is dead at this point. but you cant barter anything for your bullion (yes its barter) because at this point its a sellers market only. (the guys with the food) they name the price and you pay the price. you can lament later with your belly full "but it was worth a house". your priority is staying alive for a few more days. in weimar the farmers wound up with all the precious things. they had their cowsheds full of expensive persian carpets. the cities were wiped clean of all things precious. and that was no mad max scenario.

even if you could convince all central banks to dishoard all gold, divide the oz available by the people available to realize there is not enough bullion for all the wealth transfers happening every day.  if you price tag bullion high enough for all the transactions all bullion will go into hiding and the one trying to barter (yes its barter) has a big target painted on his six. no viable option.

the only option is to seperate the "store of wealth" function of fiat from its other functions. then use the physical bullion for independent store of wealth. and let both roam free. so bullion can sustain a high price without going into hiding. you wouldnt carry a 100k$ oz around, let me assure you. you would cement it into your house out of fear. your premise is no going back into fiat at any price ;-) you remember

if for one random event we go back to gold backed currency the economic activity will come to a grinding halt and resettle to a level sustainable for the gold basis available. no plasma, no i-anything, no electricity most of the day. 90% of the people will struggle to keep 100% of the population alive.  (at the moment 3% keep 100% alive) not enough surplus energy and surplus wealth to care about bullion. as you say its wealth is intrinsic. and you cant free the stored wealth without a different unit of account. in a sellers market the seller frees as much intrinsic value as he sees fit. and nothing you will say will change a thing. you definitively dont want to see this mr market at work. he is one ugly mfer.

Tue, 02/08/2011 - 11:05 | Link to Comment tmosley
tmosley's picture

Morons don't know the difference between currency and money.  Moron.

Tue, 02/08/2011 - 11:09 | Link to Comment ColonelCooper
ColonelCooper's picture

I thought his "homophobe" comment was funny as Hell.  When I said Rainman I was referring to an autistic character played by Dustin Hoffman.  APPARENTLY, Rainman is also some sort of gay icon who William is familiar with.  Not only is he a moron, he's hypersensitive about his sexual orientation.

Tue, 02/08/2011 - 11:51 | Link to Comment woolly mammoth
woolly mammoth's picture

As I salute you Colonel, I would like to say I do enjoy your posts.

Tue, 02/08/2011 - 11:56 | Link to Comment ColonelCooper
ColonelCooper's picture

Thank you.  Sadly, the fact that I am able to repeatedly throttle William in debate is more a comment on his stupidity than my wit.

Tue, 02/08/2011 - 22:59 | Link to Comment StychoKiller
StychoKiller's picture

One should never have a battle of wits with an un-armed person! :>D

Tue, 02/08/2011 - 12:17 | Link to Comment tmosley
tmosley's picture

That might be why he doesn't like gold.  He got a golden shower from a bum in a public restroom one time, and has never been able to tell the difference.

Tue, 02/08/2011 - 12:24 | Link to Comment ColonelCooper
ColonelCooper's picture

He probably actually paid the bum to piss all over him, therefore equates it with buying gold. Since the bum was suffering from an enlarged prostate, William felt it to be a poor performer.

OR

He asked the bum to piss on him, and the bum beat the shit out of him.  Now he figures buying gold to be a bad proposition.

Tue, 02/08/2011 - 09:58 | Link to Comment philgramm
philgramm's picture

I tried to pay for my gold with doritos and mountain dew and the dealer said "but you can't eat doritos and mountain dew.................uh......uh."

Tue, 02/08/2011 - 10:07 | Link to Comment Ricky Bobby
Ricky Bobby's picture

+1 LOL

Tue, 02/08/2011 - 09:56 | Link to Comment Arch Duke Ferdinand
Arch Duke Ferdinand's picture

""Imagine their surprise at the market last evening when I proffered payment for my 2 liter Mountain Dew and Doritios with a gold plated rabbit!""

U.N. Food Agency Issues Warning on China Drought...

http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/02/un-food-agency-issues-warning-on-china.html

Tue, 02/08/2011 - 09:44 | Link to Comment youngman
youngman's picture

And it just went verticle at the NY open.....

Tue, 02/08/2011 - 09:45 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

But....but.....but I thought Gold was just a barbarous relic of no intrinsicvalue as money or even as a store of value or wealth. Just suitable as pretty baubles for the brain dead.

Someone is way off the reservation on this one. Is LCH declaring the emperor naked?

Tue, 02/08/2011 - 09:54 | Link to Comment umop episdn
umop episdn's picture

The emperor isn't naked this time...but the people who bought his gently-used 'fiat' clothing sure look cold.

Tue, 02/08/2011 - 23:03 | Link to Comment StychoKiller
StychoKiller's picture

This follows an announcement by J.P. Morgan that it will become “ ... the only tri-party collateral manager to accept physical gold as collateral to satisfy securities lending and repo obligations with counterparties.”

In other news, Br'er Rabbit was heard to say:  "You can do anything you want, just DON'T throw me in that briar patch!"

If I give you some FRN's, please feel "free" to hand me Gold and Silver coins for the change!  (What a maroon!)

Tue, 02/08/2011 - 09:45 | Link to Comment sudzee
sudzee's picture

Soon gold only. No FX need apply.

Tue, 02/08/2011 - 09:48 | Link to Comment tmosley
tmosley's picture

It SOUNDS like a good idea, as it gives you the ability to short in terms of gold.  The conspiracy theorist in me says this is a trap.  They get as many people as possible to get into the market, shorting in terms of gold, then they spike the markets while suppressing gold, and then seize the collateral, and the prices reverse and they have themselves a bunch of gold, even though the investors were "right".

It's thoughts like that that keep me away from any form of participation in the paper markets.

Tue, 02/08/2011 - 09:59 | Link to Comment Pladizow
Pladizow's picture

I have to assume people who are using gold as collateral are doing so not as their only alternative and will always be able to substitute the collateral with another asset if they wish.

Tue, 02/08/2011 - 09:59 | Link to Comment Twindrives
Twindrives's picture

Lindsey Williams said as much a year ago.  "Stay clear of paper assets".  He  said the dollar would meet it's demise toward the end of 2011.  Good riddance to the inked ass wipes and the ass wipes that impose this fraud upon the American people. 

May they hang from the trees and lamp posts that line Pennsylvania Avenue with the rest of the traitors in D.C.    

Tue, 02/08/2011 - 10:02 | Link to Comment Pladizow
Pladizow's picture

It literally takes Lindsey Williams 3 hrs to give 3 minutes of questionable information!

Tue, 02/08/2011 - 10:40 | Link to Comment Hephasteus
Hephasteus's picture

Oh yes i really want to thank god for that comment. It's a wonderful blessing to be able blah blah blah, blah blah blah blah blah.

questionable information insertion here.

Tue, 02/08/2011 - 10:07 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Agreed...Sounds like a play for suckers. Pledge real money (PMs) as margin on a paper play?

Get real.

Tue, 02/08/2011 - 10:42 | Link to Comment Confucious 222
Confucious 222's picture

Amazing how many "participants" have been "right" about a major move in the markets, yet have lost money in the process. It's almost as if the whole idea should be to "make money" instead of being "right".

Such a dilemma; perhaps this is why mostly diodes, capacitors, silicon chips and electrons dominate the equity market trading these days.

 

Tue, 02/08/2011 - 11:25 | Link to Comment Sean7k
Sean7k's picture

I am really suspicious as well. Especially after reading FOFOA on the what is happening with the big players and their bullion vaults. They may need as much as possible to extend the game- this may not end well for the small fish.

Tue, 02/08/2011 - 12:44 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Agreed. All small fish should hide in the coral until the barracuda has past. I for one, have a symbiotic relationship with a special urchin friend I call...'nominee'.

Tue, 02/08/2011 - 09:51 | Link to Comment hugovanderbubble
hugovanderbubble's picture

IM LONG SAVING DEPOSIT BOXES,

Bankruns coming

Bring back the wheelbarrow¡

Tue, 02/08/2011 - 09:52 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

looks like sarkozy wants to kill the dollar.

 

http://nakedempire.wordpress.com/

Tue, 02/08/2011 - 09:55 | Link to Comment Quinvarius
Quinvarius's picture

Does anyone have the Bloomberg clip where Pento is saying JPM probably can't service GLD redemptions for metal?

Tue, 02/08/2011 - 09:56 | Link to Comment william the bastard
william the bastard's picture

Who pays the transactional costs of that?

Tue, 02/08/2011 - 10:02 | Link to Comment Quinvarius
Quinvarius's picture

It is like $2,000 to do a basket redemption or creation.  If GLD is getting squeezed on delivery requests for metal it doesn't have, today could be the big day.

Tue, 02/08/2011 - 10:04 | Link to Comment william the bastard
william the bastard's picture

Like they didn't insert a force majure clause? in other words go fuck yourself.

Tue, 02/08/2011 - 10:10 | Link to Comment Quinvarius
Quinvarius's picture

Heh.  If you own GLD you would be screwed for sure.  But the sudden loss of 1200 tons of paper gold from the system would surely cause a tremor in the force.

Tue, 02/08/2011 - 10:28 | Link to Comment william the bastard
william the bastard's picture

I trade AGQ (X2 silver). Low 40s to 140s. Good luck with your illiquid doomer fetish.

Tue, 02/08/2011 - 14:07 | Link to Comment akak
akak's picture

In the game of gold poker, a doomer fetish beats a permanent rectal-cranial insertion every time.

Tue, 02/08/2011 - 14:34 | Link to Comment tmosley
tmosley's picture

You can't get cash from your trade in less than five business days.  If the banks delay it, you could be forced to wait WEEKS to get your cash.

Meanwhile, I can buy dollars with my gold or silver in 15 minutes, at any of 50 places around town.

You don't even know what "liquidity" means.

Might I suggest you calm down with a nice golden shower? lol

Tue, 02/08/2011 - 11:29 | Link to Comment Sean7k
Sean7k's picture

It would be nice if the gold trolls had either brains or manners.

Tue, 02/08/2011 - 10:28 | Link to Comment Pladizow
Pladizow's picture

If some big shareholders go to redeenm and the GLD says piss off, this may play out quite negatively for the GLD.

Tue, 02/08/2011 - 10:15 | Link to Comment gwar5
gwar5's picture

Did you see the recent GATA?  Speculated China is buying GLD and then redeeming the physical. Keeps them anonymous, and the price down while they accumulate, and also them around Comex limits.

Tue, 02/08/2011 - 12:52 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

This door of Chinese opportunity is being kept open by the elite for a purpose, perhaps temporarily placating the Chinese as a hedge against immediate war.

Tue, 02/08/2011 - 10:01 | Link to Comment Pladizow
Pladizow's picture

How large of a GLD shareholder must you be to redeem in physical?

I think Sprott is $250K but I don't think that will happen there.

Tue, 02/08/2011 - 10:08 | Link to Comment ColonelCooper
ColonelCooper's picture

Would that maybe be because Sprott actually HAS the metal he claims?

Tue, 02/08/2011 - 10:25 | Link to Comment william the bastard
william the bastard's picture

In other news: The Easter Bunny is coming to town!

Tue, 02/08/2011 - 14:09 | Link to Comment akak
akak's picture

Do they make you wear seat belts on the short bus?

Tue, 02/08/2011 - 10:09 | Link to Comment Xibalba
Xibalba's picture

$13million

Tue, 02/08/2011 - 10:12 | Link to Comment living on the edge
living on the edge's picture

Minimum of 10,000 ounces. (100,000 shares)

Tue, 02/08/2011 - 10:23 | Link to Comment Pladizow
Pladizow's picture

Should be no problem for China.

As discussed on KWN yesterday - they can now get gold easy and avoid all the "Cry"mex BS.

Tue, 02/08/2011 - 10:12 | Link to Comment pvzh
pvzh's picture

GLD is redeemed in increments of 100,000 shares, so I heard.

Tue, 02/08/2011 - 10:17 | Link to Comment philgramm
Tue, 02/08/2011 - 10:10 | Link to Comment gwar5
gwar5's picture

Gold has become a vagina. Everybody wants it. It's officially the life of the party again. 

Good. The more it's used as collateral, the harder it would ever be for Gov.Com to confiscate it. 

 

Tue, 02/08/2011 - 10:53 | Link to Comment KidDynamite
KidDynamite's picture

delete

Tue, 02/08/2011 - 10:11 | Link to Comment CH1
CH1's picture

I wonder who it was that needed this rule to exist.

They wouldn't just make it because it was reasonable, after all!

Tue, 02/08/2011 - 10:11 | Link to Comment Mr. Poon
Mr. Poon's picture

What is the world coming to when gold is being taken for collateral rather than good-old-fashioned commercial paper issued by an asset-backed conduit full of credit card receivables denominated in fiat currency?

Tue, 02/08/2011 - 10:33 | Link to Comment disabledvet
disabledvet's picture

ahh, the good old days.  i suddenly feel like celebrating with a bottle of the bubbly.

Tue, 02/08/2011 - 10:12 | Link to Comment apberusdisvet
apberusdisvet's picture

Hmmm.  The vaults must be empty.  They're looking for new suckers to play the 100:l game.  How many will bite?  Harvey is spot on; default may be in the wind at CRIMEX; Gensler might find his off shore retirement fund frozen by the Morgue.

Tue, 02/08/2011 - 10:17 | Link to Comment topcallingtroll
topcallingtroll's picture

Ok you gold buggers...I may have to acknowledge your win this round. I sold my gold averaged low 1300s and silver low 25s If the fed and china have any credibility in the next few months you better have a parachute.

Tue, 02/08/2011 - 10:25 | Link to Comment philgramm
philgramm's picture

http://www.youtube.com/watch?v=XmtU2T8ICjA

It became clear the credibility was lost right here.  Raising rates in the early 80's was tough..........unwinding QE  and raising rates now is nearly impossible. 

Tue, 02/08/2011 - 10:31 | Link to Comment Pladizow
Pladizow's picture

TopCallingTroll - Admitting your stupidity makes you no less of an idiot and no more of a man.

Go away!

Tue, 02/08/2011 - 10:32 | Link to Comment ColonelCooper
ColonelCooper's picture

Hey Topcaller,

Are you seriously entertaining the idea that the Fed. has credibility?

Tue, 02/08/2011 - 10:53 | Link to Comment william the bastard
william the bastard's picture

QE is THE major prop under gold.

 

Tue, 02/08/2011 - 10:56 | Link to Comment Pladizow
Pladizow's picture

Really - Where was QE 10, 9, 8, 7, 6, 5, 4 years ago?

 

Tue, 02/08/2011 - 11:59 | Link to Comment william the bastard
william the bastard's picture

You mean when gold was $200?

Tue, 02/08/2011 - 14:37 | Link to Comment tmosley
tmosley's picture

$200, 300, 400, 500, 600, 700, 800, 900, and 1000.

I know you have a hard time with "the maths", but that is a five fold increase.  With not one speck of QE.  Just bad economic policy.  Bad economic policy that makes QE a necessity.

But hey, you go ahead and bet your life on the end of QE.  But you won't, because you are a coward with no conviction.

Tue, 02/08/2011 - 11:17 | Link to Comment tmosley
tmosley's picture

I have previously explained why Chinese rate policy has no net impact on the gold market.

The Yuan is pegged to the dollar, and thus to the Fed's IRP.  Raising interest rates in China has the effect of reducing inflation from lending, but it increases inflation from foreign money flooding into their markets through exporters and from foreign investment.  This means that raising interest rates will either not have any effect at all (at negative real rates), or actually accelerate inflation (once real rates go significantly positive).

The price action in the gold and silver pits today, and the last time they raised rates are evidence of this dynamic.

Now, if China raises rates AND abandons the dollar peg, then the Yuan will appreciate.  Some might say this would be bearish for gold, but in reality, Chinese people would see a decreasing gold price and think of it as a sale.  Not only on gold, but on everything.  At that point, you can say buh-bye to cheap Chinese everything and say hello to crappy, expensive US/Mexican everything.  Our factories are gone, and it will take a long time to rebuild the capital that we destroyed with our excessive taxes and regulation.  Even that slow process won't start with the current regulatory regime in place.  As such, being cut off by the Chinese will effectively starve the US of consumer goods.

Of course, those holding gold and silver should be able to keep pace pretty easily, especially as panicked foreigners flood into those markets for protection when they see their own consumer prices rising by 300+% per year.

Tue, 02/08/2011 - 10:33 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Janet Tavakoli has an interesting article out on JPM and gold...

"I don't recall the G-20 declaring gold a new currency. Yet JPMorgan Chase and a couple of financial market exchanges have effectively declared that gold is an alternative currency.

In other words, gold is money."

Gold Game Changer: J.P. Morgan Accepts Bullion as Money
Tue, 02/08/2011 - 11:01 | Link to Comment DosZap
DosZap's picture

Janet Tavakoli

The G-20 declaring Gold as MONEY means shit.(I guess she forgot about the last 3000yrs of History?).

Dimwit.

Gold IS money, the only real money, not currency, not frns, not cattle,sheep, chickens or cars.

Always has been always will be.

Tue, 02/08/2011 - 14:54 | Link to Comment trav7777
trav7777's picture

this is just not correct.  Athens used copper coins as money.  Silver has been used as money.  Paper has been used as money.  All kinds of things are money, not just gold.

Gold is a commodity that people desire, no less and no more.

Tue, 02/08/2011 - 10:36 | Link to Comment Tinsu
Tinsu's picture

"However, the man in the street remains completely unaware of this trend as it continues to be ignored by mainstream media and its implications not realised."

 

So, what are the implications?  I realize there are many implications, just curious as the to the ones to which you are referring?

Tue, 02/08/2011 - 10:50 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

The article is a quick read. Tavakoli points out that one interesting implication is...

"Destruction of the Volcker Bubble Deflator

In 1979/1980 the Hunt brothers tried to corner the silver market. In March 1980, Paul Volcker (who was then Chairman of the Federal Reserve) went to DEFCON 5 and directed banks to cut off funding to precious metals speculators. That directive included billionaires like the Hunt brothers. The Hunts couldn't borrow money against their long silver positions to meet their margin calls. Volcker popped the silver bubble and the Hunt brothers were bankrupted.

Since gold is now accepted collateral, there will always be a way to borrow against one's gold position, so speculators that create leveraged long gold positions can always find a way to fund margin calls. The Volcker bubble deflator is no longer relevant."

Tue, 02/08/2011 - 12:05 | Link to Comment GoinFawr
GoinFawr's picture

++

Tue, 02/08/2011 - 10:45 | Link to Comment simon says
simon says's picture

Be smart people.  This is one more way for the bankstas to get your physical gold (and silver, I am sure shortly), of which there is an acute shortage.  They will take the collateral and crash the PMs through the paper market - and collect the collateral as you are forced to close out your positions.  The F%#kers don't skip a beat.

Tue, 02/08/2011 - 10:51 | Link to Comment Spigot
Spigot's picture

Gold is money that is being re-introduced as a supported factional basis for financial transactions in the fiat denominated system.

At what point does this change from being an option to being a requirement??

1 gram of gold+$100 lets you play, or $3200 if you have no gold on deposit...

you do the math, my friends.

If anyone remembers the original postings by FOA, they very explicitly described such a system...

Tue, 02/08/2011 - 11:07 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"At what point does this change from being an option to being a requirement??"

As Asia piles into gold and other PMs, especially in the ETFs where they are buying and taking physical delivery, PMs will create a new free market that, initally, will defy manipulation of the current varities.

How long these 'free range PMs' can last and avoid central bank manipulation is another matter. Probably at least until the collective memory of a couple of generations pass.

Tue, 02/08/2011 - 12:07 | Link to Comment PaperWillBurn
Tue, 02/08/2011 - 10:52 | Link to Comment gookempucky
gookempucky's picture

Clearnet is the GLOBAL SHADOW BANK and is the recycling plant for the wasteland- all based on theoretics. For you quants out there.

http://www.lchclearnet.com/Images/III.4-2_tcm6-48686.pdf

http://www.lchclearnet.com/risk_management/

Tue, 02/08/2011 - 10:52 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

GOLD! The one money that doesn't have a central bank printing it!!!

Also, other PMs in the same catagory.

Tue, 02/08/2011 - 19:57 | Link to Comment Buck Johnson
Buck Johnson's picture

Gold and silver are going to skyrocket real soon.  The Western economies have been doing everything they can to keep the resource down because it would show how much weaker the fiat currency is in relation to the gold and silver. 

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