Just What Is Going On With The Gold In JPMorgan's Vault?

Tyler Durden's picture

We know that back in early October 2010, when gold closed at a then record high of $1,320, JPM decided to reopen its previously mothballed precious metal vault due to soaring demand for metal vaulting, thus becoming only the fifth official Comex private gold depository in New York in addition to HSBC, Bank of Nova Scotia, Brinks and MTB (and of course the New York Fed).

We also know, courtesy of a Zero Hedge exclusive, that the JPM vault - the largest private gold vault in the world - is located at 1 Chase Manhattan Plaza, and is literally adjacent to the vault of the New York Fed 80 feet, and 5 sublevels, below street level.

We know that for a long time the vault held around 2.5 million ounces of eligible (commercial) gold, a number which declined only gradually until very recently.

We know that the total amount of registered (investment) gold has been steady for the past 4 years (after peaking in early 2006).

Finally, everyone knows that in the past month gold has experienced a very severe move lower which is still largely unexplained.

What many may not know, is that while registered Comex gold has been flat, the amount of eligible gold in Comex warehouses (the distinction between eligible and registered gold can be found here) in the past several weeks has plunged from nearly 9 million ounces, to just 6.1 million ounces as of today- the lowest since mid-2009.

What nobody knows, is why virtually the entire move in warehoused eligible gold is driven exclusively by one firm: JPMorgan, whose eligible gold has collapse from just under 2 million ounces as of the end of 2012 to a nearly record low 402,374 ounces as of today, a drop of 20% in one day, though slightly higher compared to the recent record low hit on April 5 when JPM warehoused commercial gold touched a post-vault reopening low of just over 4 tons, or 142,700 ounces.

This happened just days ahead of the biggest ever one-day gold slam down in history.

Some questions we would like answers to:

  1. What happened to the commercial gold vaulted with JPM, and what was the reason for the historic drawdown?
  2. Gold, unlike fiat, is not created out of thin air, nor can it be shred or deleted. Where did the gold leaving the JPM warehouse end up (especially since registered JPM and total Comex gold has been relatively flat over the same period)?
  3. Did any of this gold make its way across the street, and end up at the vault of the building located at 33 Liberty street?
  4. What happens if and/or when the JPM vault is empty of commercial gold, and JPM receives a delivery notice?

Inquiring minds want to know...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Scro's picture

I think Blythe Danner is sexy.

StychoKiller's picture

Could be worse, could be Alexander Haig.

Silver Bug's picture

More than likely another empty "Gold" vault. Gold is leaving the West and going to the East.

 

http://ericsprott.blogspot.ca/

Blame Crash's picture

That's correct, There is no "there" there.

That means its been stolen. It doesn't matter if you Gold Bugs stole it or not. The fact is that the possesion of stolen property is a crime, so you criminals had better give it back willingly and maybe, just maybe you'll only be given 5 to 10 years cracking rock in a re-education gulag.

Laugh now, but it's a coming.

DeadFred's picture

They've never come for silver... yet.

Fred Hayek's picture

Actually, there was an official order to confiscate silver back in 1934 from the sit down tyrant. But it only applied to parties known to have a full comex contract's worth, 5,000 ounces. I don't remember all the details I read. But there *was* a silver confiscation of sorts.

Dr. Sandi's picture

If they want my silver, they'll have to pry it out of my cold, dead Patriot missiles.

GetZeeGold's picture

 

 

 

Jim Carrey is gonna throw a bitch fit over that comment.

akak's picture

+1000 for "the sit-down tyrant"!

LOL!

ToNYC's picture

Sovereign Gold is about as visible as QE2's balls; might as well be boxes of neutrinos for all the good that sh*t does.

Yamaha's picture

It was part of the London whales activities - Jamie again says it is a "tempest in a tea pot"

Dr. Sandi's picture

Just be glad it wasn't a "tempest in a pressure cooker."

ayanni's picture

https://www.tiaa-cref.org/public/pdf/High_Yield_White_Paper.pdf

wasn't sure where to put this - but found it interesting that this month TIAA CREF publishes a white paper that:

Conclusion

Despite cyclical price and yield fluctuations, high-yield bonds—especially those of mid- to high-credit quality—have demonstrated their ability to diversify portfolios by providing the following long-term benefits: Attractive risk-adjusted returns Negative or low correlations to Treasuries, high-grade corporate bonds and equities Lower sensitivity to interest rates than Treasuries and high-grade bonds Significantly higher yields compared to high-grade corporate bonds and Treasuries A predominant income component that in the long run has outweighed short-term price fluctuations These characteristics represent an appealing risk/return profile and make an enduring case for diversifying portfolios through a strategic allocation to high-yield bonds.
Silver Bug's picture

Physical gold and silver purchases have occured since the price plunge at an almost panic level. Gold vaults worldwide are being gorged.

 

http://sprottmoneyblog.com/

kliguy38's picture

What gold?

 

What happens if and/or when the JPM vault is empty of commercial gold, and JPM receives a delivery notice?

Answer........Tough shit......you were told to own phyzzz

Ahmeexnal's picture

Those holding paper gold will be settled in buttcoin.

Double whammo.

Zero Debt's picture

Sorry, Mt Gox is closed. Here's a free spiderman towel, enjoy the banking holidays on the beach.

Prometheus418's picture

What do you figure is a fair settlement in FRNs from Gainesville?

Bought a small amount near the bottom, and they missed the delivery date- first time for everything, but they got caught with their pants down, I think.

As far as I am concerned, they exposed themselves as naked shorts- you know what happens to those fiolks when the tide goes out, right? 

DirkDiggler11's picture

That would make 2 of us. I placed solid order with them on April 15 for Gold and Silver Eagles that was supposed to have shipped today, and it appears they have not shipped. I wired Gainsville Coin my funds, so they have my money, that is not the issue.
I have ordered from them numerous times in the past and have always had prompt service and not a single issue. I will call them tomorrow and get an update. If a dealer that size is having trouble getting inventory on basic gold and silver bullion eagle's, what does that tell you ?

Things that go bump's picture

They have your money, but you don't have your purchase. A lot of people were in that same position in 1931 when Creditanstalt failed causing a cascade of bank failures from Europe to the US and people who had paid for purchases that were not yet delivered found out their money just went poof -- "aaand its gone."  I forget the exact details because I read about it several years ago, but it scared me enough that I stopped ordering PMs on line. I hope you put that purchase on a credit card. If your going to buy like that, at least use someone else's money.  

GetZeeGold's picture

 

 

 

Force majeure amigos.....really sorry about that.

zorba THE GREEK's picture

Rehypothicating is what is going on.

Kirk2NCC1701's picture

Glad to see that the Chinese and Canucks value gold, judging by the HSBC and Scotia holdings.

Urban Redneck's picture

DEhypothicating is what is going on.


GLD baskets being removed from "availability" at the same time

JPM Comex "gold" is being made unavailable

 

aka DELEVERAGRING

Zero Debt's picture

Check out this quote from Dr G Gono in Zimbabwe (Jan 2013):

"Some, particularly local banking institutions continue to show total disregard for sound corporate governance practices resulting in some founding directors "dipping their fingers" into depositors' funds."

Sounds a lot like the Eurozone to me.

http://www.rbz.co.zw/pdfs/2013%20MPS/Jan%202013%20MPS.pdf

The most funny thing is, he spells "brain-drain" as "bran-drain" in point y) page 67.

Dr. Richard Head's picture

What happens? Dimon gets a pony.....head placed in his bed?

knukles's picture

An Educational Moment Between Warren Buffet and Jamie Dimon's little Girl

Uncle Warren:  Hi Sally.  Today we're gonna talk a little about investments.
Sally:  You mean like I can get a pony?
W:  No Sally, investments, how to save money for things like ponies
S:  But my daddy said you'd get me a pony.
W:  He said what?  Nobody told me anything about getting you a pony
S:  Daddy said you were stinking rich and would get me a pony
W:  Sally honey, harrumph...  Your daddy has more money than Christ, so let's talk about investments, OK?
S:  OK.  Can I have some money for candy?
W:  No you cannot have money for candy.  We're gonna talk about how to save money so we can buy the candy cane company and have all the candy you want
S:  So you can give me a candy cane?  I want a candy cane.
W:  I don't have a candy cane
S: You said you'd give me a candy cane.  Indian Giver.  I want a pony.  A nice Palomino Indian Pony with a nice Navaho rug.  A real antique collectable Navaho rug
W:  Shut Up! 
S: I wanna pony, I want some candy, I wanna Palomino
W:  SHUT THE FUCK UP YOU BRAT
S:  Daddy said that if you yelled at me he'd take all your allocated unencumbered gold out of segregated storage and I could tell you to stuff it up your ass.
W:  What?
S:  I want my pony
W:  What did your daddy say?
S: He said for you to stuff it up your ass, Uncle Warren.

                                     Curtain
                                        Fin

 

Now turn your volume up and close your eyes, 'cause this is the way its supposed to be....

http://www.youtube.com/watch?v=jQpAjgy9pjI

LaoTzu60606's picture

...priceless...like the equity markets...

LT

If you care what people think of you, you become their prisoner...

Pharming's picture

Dude...that song was just what I needed tonight before I went to sleep...  I took my one daughter to the ER last night...strained neck playing chicken in an indoor pool, the other daughter has been a brat...jealous of the attention!  My wife...no comment...hormones.  

Me...I like that ol' country sound.  Here's a radio station that will take you back no matter your age...

AM 540 KWMT...old country, farm reports, etc...close your eyes to that during the day and take a drive on a country dirt road in a 73 Chevy / Ford / Dodge / GMC pickup...take your pick.

Listen here...

http://v5.player.abacast.com/v5.1/player/index.php?uid=6178

DeadFred's picture

1 2, 3 and 4, 5 6, 7 and 8. Classic

Supernova Born's picture

Paper gold needs an honorary spot on the periodic table.

Symbol: Bs (Banksterium), group: ignoble gases

Monedas's picture

Bitcoinium !    Atomic weight:   000111001001111011000100101000110001 

Poor Grogman's picture

WTFUBARIUM

Uses . Used mostly in emergency toilet paper and also used for starting arguments about "payments, wages, and fair value"...

Diogenes's picture

Unobtainium. Right next to Phoolium and Balonium.

Zero Debt's picture

WB7 already created a periodic table of Wall Street Criminal Elements.

http://www.ritholtz.com/blog/wp-content/uploads/2010/08/BANZAI7-PERIODIC-TABLE.jpg

Banksterium would clearly fall under the category of "Bonusoid". Then we of course have all the alloys, such as ETFium, a mix of banksterium, lootium and bailium.

The best paper silver alloys in the market do have a bit of hysterium added, especially the A-rated one which may contain bullshitium and trace amounts of doomium.

Chaffinch's picture

+1 Supernova.
We've all seen figures for supposed world gold supply - say 170,000 tonnes - say a cube 23 metres each side - whatever...
And out of that total the CBs have got 30,000 tonnes plus, plus whatever adjustments need to be made because China hasn't had time to count it all yet, minus adjustments for possible Tungsten implants in Fort Knox, again, whatever...
What my enquiring mind would like to know is how massive is the 'virtual cube' - in other words how much paper gold (which will, in the main, turn to ashes like a losing betting slip) is out there? That ex-Goldman bastard Jeff Christian said that on the London market there is only one ounce fizz for every hundred traded - but there is no accurate data for the volume of London trade. We get COT reports which give some data, but how much paper gold is there worldwide? 3 million tonnes? 17 million tonnes? What the hell is gonna happen when all (or even half!) those holders of paper gold realise they need the real thing? How many days / weeks will the markets be closed whilst they try to work out a solution? What's gonna happen when sovereign states are told they will have to take 90% - or 99% haircuts on forward contracts? Blood on the streets? East / West war?

BigInJapan's picture

I've never read anything to this effect but I believe that before the physical price truly separates from the paper price, both will go to near zero before physical gets its moonshot.

Just a question of who's got balls enough to believe in the snapback.

Vint Slugs's picture

@BIJ

That's what all the Freegold people think.  And they worry about whether or not they've got the brass to withstand the paper slaughter.

Dieselclam's picture

BiginJapan- your question is answered in considerable detail here:
http://fofoa.blogspot.com/?m=0

Long_Xau's picture

If you count key insiders in fractional reserved gold scams "withdrawing" physical for themselves in JUST the right time as "market transactions", then yes, that could be a price of physical near zero. Are you one of those handful of key insiders? If so, do you think you are well positioned to pull that off, i.e. have you considered for example other insiders betraying first, just ahead of you?

Prisoner's dilemma, BITCH!

knukles's picture

Million Up Stars

That is one of the best of all times!
Kudos!