CME Chairman On Gold: “People Don’t Want Gold Certificates, They Want the Real Product”

Tyler Durden's picture

Submitted by Mike Krieger of Liberty BlitzKrieg

What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real  gold.  That’s going to show you, people don’t want certificates, they don’t want anything else.  They want the real product .

Terrence Duffy, President and Executive Chairman of CME Group Inc,. on Bloomberg TV

I’m actually still in a state of shock that the head of the CME Group would make such an observation and in such blunt terms.  I mean the guy admits that volume on his exchanges suck, yet basically claims paper gold (one of their marquee products) is becoming irrelevant.  In my mind there are two likely explanations for this.  1) This is how he has started to feel personally and he is loading up on physical gold rather than his company’s paper products and would like some cover if that is ever unearthed. 2) This is what people close to the gold market are telling him and he’d rather make it clear he understands that paper is paper and gold is gold and that there is a big difference.  So “caveat emptor” if you are hanging around the COMEX.

His comments on gold come in at the 0:40 mark.  Simply stunning.

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JLee2027's picture

OMG, the CME has gone rogue. Call in the drones.

tmosley's picture

Better nuke it from orbit.  It's the only way to be sure.

JLee2027's picture

I'll take the Under on a retraction from Duffy Alex.

Pinto Currency's picture


Self-Dieselling can be fun.

Duffy is a stacker anyways.

TheFourthStooge-ing's picture

What's wrong with people? You'd think they were losing trust in the system.

I can't imagine why.

toys for tits's picture

They'll probably start making the certificates out of gold.

nope-1004's picture

He said:  What’s interesting about gold ....... that did not trade down, was gold coins, tangible real gold  People want the real stuff.

LOL.  What I say is:  What’s interesting about gold ....... is that anyone would be interested in buying a promissory note for the real thing from an exchange that is known for outright theft and lying.


NotApplicable's picture

3) Force Majure is coming soon to a Comex near you.

French Frog's picture

You wouldn't have the CME chairman saying that if there wasn't a hidden agenda behind it. Come on, do you really expect one of the main guy in the middle of this Bernanke-induced fairytale story that "everything is getting better because stocks are up" to actually tell you something that would be in your interest ???

Rather than being bullish for Gold, I think this is the first step in the next orchastrated take down of Gold. Get more & more people to go Long on the 'Gold is on sale now' bandwagon before a huge takedown that will make the recent drop look like a picnic.

I suspect that next time we will break some big round number (like well below $1000) & that will get even some of the most committed persons to question the link between currency devaluation & Gold going up.

And this time the stories coming out of all the MSM will be exactly the opposite of what were hearing now: next time everybody and their dog will be reporting that people are getting rid of their physical Gold.

I think that then, and only then, Gold really will be 'on sale' for the opportunity of a lifetime.

fonzannoon's picture

French you are missing one big aspect. Look at PMI today. The economy is in shambles. This is a depression. Look at the stock market today. CNBS could not even fake it. Even they hit the wall at trying to reconcile the economy and the market. Everyone knows this is one gigantic lie. Now many people will keep playing and getting hands dealt to them, trying to play this bubble and exit just in time. Some will win and some will get decapitated. But the point is everyone has sniffed out that the gold takedowns are all rigged. Every takedown will be met with more and more buying. By taking it down they will only be speeding up the timetable on their demise.

French Frog's picture

"they will only be speeding up the timetable on their demise."

Look, I first laid eyes on ZH more than 3 years ago and I don't think that anyone then could or would even have contemplated that 3 years down the road the Dow would be 50% higher than where it was on that famous flash-crash takedown day (sub-10000), but here we are with the Dow knocking at the 15000 door.

I agree with you that it will all end in tears eventually but if the last 3 years have taught us anything, it's that they have the means to keep the game going for a lot longer than any rational mind would think possible. So when one of the muppets involved in that scam is happy to go on TV to agree with one of our most-cherished long-term view here @ZH, that raises one hell of a big big red contrarian flag to me and I think that the opposite is more likely to happen (ie Gold will be taken down much further first and the long-term parabolic move up in Gold is further away than even ZH thinks).

Just my 2 non-fiat cents view of the situation,

fonzannoon's picture

Believe me I am not holding up this guys interview as proof of anything. But everything else I said I stand by. Sure if you throw trillions at these markets you will get nominal growth. But even at 1400, gold has doubled since 2007 and the rest of the markets are only back where they were.

TheProphet's picture

And that is the point. The stock market has moved up 50% in nominal terms, but when measured in anything of stable value (like gold) the market is actually down quite a bit.

akak's picture

As long as madmen and sociopaths are in charge of our financial and monetary system, and increasingly showing signs of desperation as their corrupt systems crash around their (and our) ears, then yes, it IS the right time to buy gold!  Or at least do SOMETHING to shield one's savings from the predators-that-be.

Your frequent and implicit defense of conventional, mainstream, pro-status-quo, head-in-sand thinking never ceases to disgust me.

FEDbuster's picture

I am not buying "paper" food or ammo either.  The closest thing to a silver futures contract in my "investment portfolio" is having to wait 3-4 weeks for my latest online silver order.

TwoShortPlanks's picture

These guys aren't stupid. They never come down on the wrong side of the fence.

When a large company nears the edge of the cliff (think Enron here), you will see CEOs, Directors and Executives siphoning wealth from the company into their own pockets (selling shares etc.). This is Life Boat Economics 101.

The Gold Take Down was to achieve one thing and one thing only; to line the pockets of the CEOs and Director of the Wall Street & Mercantile 'Click Group' using JPM Eligible Gold and buying the fruit which fell when the tree was shaken (physical Gold & Silver off the Allocated and Unallocated COMEX sellers during the Take Down).

Old Duffy-Boy here must have already received his allocation (pay-off) of the JP Morgue 'Eligible Gold'...disappearing act.

Watch how little interference PMs have climbing up past $2,000/oz now the ‘Click’ are on board.

These guys now have their Life Boats in the water, at the ready. All they need is a good push...for Gold and Silver to finally have their run.

Here ya go


This smacks of an impending major disturbance in the 'Force'.

FEDbuster's picture

One of the more interesting things learned from the movie Argo was that when the Shah of Iran fled Iran his 747 almost didn't get off the ground due to the amount of gold loaded on to the plane.  Yeah, they get theirs first, and fuck everyone else. 

TwoShortPlanks's picture

That's right FED-man.

These guys (JPM, Goldman, Hedge Funds etc.) weren't panicking about the Gold price being high, they were panicking because Gold was getting too dry and they hadn't prep'd their Life Boat yet (physical). So they did a hasty ambush on the market to free-up physical and bagged whatever they could. This meant they needed to;
1. Short the market and get others to help
2. Manipulate those skull-fucks in the MSM to tout Gold down
3. Shove physical from JPM out the door just prior to the Take Down (which is what we saw just a few days prior)
4. Get cleints to sell-off long Gold and physical positions
5. Buy up big on physical just after the tree shake

These guys bagged Tons of Gold from the Muppets....TONS!

The next phase will be to switch to the side of the Gold Bugs and attempt to crash futures contracts by creating a panic run  into physical. What's the paper:fiz ratio, 100:1 or so? What a bomb!

You watch, that shit is coming.

This whole thing stinks to high heaven.

But what happens when your enemy becomes your ally?

I'd bet my left testicle that the CME Group, JP Morgue, Goldman (to name a few) have already had a meeting much like this one, and, when you take onboard everythng that's happened over the past month, then, Duffy's comments place us right

Enjoy the coming Fireworks ZH'ers!

Acet's picture

Also "Clique Group" is redundant.

[OMG, I've turned into a grammar nazi!]

TwoShortPlanks's picture

Gee, thanks Mum!

Got any thoughts of your own besides grammar?

StychoKiller's picture

Mmmm, Aurum -- stay hungry my friends! :>D

fonzannoon's picture

You can do better James. I am not telling anyone what to do.

James_Cole's picture

The gold fever is getting a bit out of hand.. I don't hear people going nuts over Platinum but its recovered decently off its lows. 

I've got the feeling that when the cheerleading gets going people are off running to dump every last $ they have into coins even though it's pretty unlikely this is a bottom & this train moves slower than these articles suggest - it's very unlikely to be a moon shot next week. 

If equities crash you will see a drop in pm price & considering almost everyone on here expects an equity crash, why the gold fever?  

fonzannoon's picture

WTF gold fever are you talking about? This is a fringe blog. Go check out the MSM and ask about gold fever. Go ask Jon stewart about gold fever.

James_Cole's picture

First, the guy (CME no less) says a couple lines about gold coins and there's wild speculation:

"In my mind there are two likely explanations for this.  1) This is how he has started to feel personally and he is loading up on physical gold rather than his company’s paper products and would like some cover if that is ever unearthed. 2) This is what people close to the gold market are telling him and he’d rather make it clear he understands that paper is paper and gold is gold and that there is a big difference."

And second, zh is not a 'fringe' blog - sorry to burst everyone's bubble:

Periodically zh goes into overdrive with the 'buy gold' articles and this is one of those periods. I know people get burned though.

Bay of Pigs's picture

This James Cole is no better than Johnny Bravo or Math Man.

Mish used to have a poster of that name but this dolt seems way too stupid to be the same guy.

fonzannoon's picture

What's your call James? Stocks? Cash? Bonds?

Stop being obsessed with an opressed minority (hopw many people actually own phyz?) and put your balls on the table. Where are you putting your dough?

Better yet go to Huffpo and get after it with them. Do some good.

James_Cole's picture

AAPL bonds lol

Anyway, where I put my money is pretty irrelevant - I'm not Warren Buffett over here - just pointing out that the pm sell-side guys are working their magic fairy dust and people should likely take a step back before swallowing it wholesale and forking over their cash.

Whenever you're buying, someone is that transaction both sides believe they're getting the better deal, do you know more than the person selling to you? 

akak's picture



And why beholdest thou the mote that is in thy goldbug brother's eye, but considerest not the beam that is in thine paperbug's own eye?

fonzannoon's picture

i measure up my risks and take my shots. that is all you can do.

James_Cole's picture

i measure up my risks and take my shots. that is all you can do.

And you probably don't advocate buying on emotion or expectations of a quick ramp, but taking two seconds to look over the comments the two most apparent things are people getting really emotional over the 'story' of gold (little guy against the evil empire, empire is about to be slain) and desperate to buy more asap.  

I'm just trying to throw some cold water around. The likelihood of a ramp from here isn't near high enough to justify all the hyperbole. Personally I still think there's a decent amount of downside to consider. 

And even worse is some people talking about buying the miners... 

akak's picture

James, if anyone here were just as enthusiastically advocating putting part of one's savings into physical platinum, or palladium, or rhodium, I have no doubt that you would be similarly badmouthing and denigrating them for doing so as well.

Your anti-anti-authority bias here is clear.  I am merely undecided yet on whether you are just a good sheep parroting the 'mainstream', pro-establishment line, or are actually a paid disinformation agent.  Either seems quite likely.  Possibly both.

James_Cole's picture

James, if anyone here were just as enthusiastically advocating putting part of one's savings into physical platinum, or palladium, or rhodium

At these prices yes, and particularly if they were claiming the plat futures were being used to manipulate the price down and that there's a secret plot to buy up all the physical creating a disconnect between the 'paper' platinum price and the 'physical' platinum price. But no one makes that case with platinum oddly... but for some reason it makes perfect sense with silver? 

If people want to get into the markets or expand their current holdings I'm not taking issue with it but I just say do it slowly & don't buy the hype.

Salespeople always play to emotion and speed cause it works. 

nmewn's picture

"Sure if you throw trillions at these markets you will get nominal growth. But even at 1400, gold has doubled since 2007 and the rest of the markets are only back where they were."


And all that time...if you hung on through gut wrenching all of it...the time, is now gone. Time has value, one will never get it back, its been stolen. Then one considers, what has one gotten back?

A lower value currency for hanging onto stock for the ride down...eggscellent ;-)

phalfa5's picture

smartest (french)frog across the pond

138's picture

Why would the head of the CME say something like this? I'm sure that he didn’t do it without the permission of his masters. Is it just another set up for a smackdown? it that they have reached the point where their battle against deflation is over and they've lost? It could be that they know they've got only one move drive the price of physical gold so high that it would wipe out all of the debt throughout the system.

olto's picture

There is no 'plan', imo, that TPTB are capable of carrying out.

A  more likely case is that they lose control continually and can only push the buttons in panic-----these dudes are not that bright---they simply have all the money, political power (including security forces and arms), and the judicial system of this broken 'Machine'---under their beck and call to control more than 300 million ignorant and docile trolls/slaves/serfs------


Please, do not ask 'when' because, maybe, in our case that day will never come.

These markets are completely artificial and 'made-up'-------out-of-control and spastic------like TPTB.

And, I don't know a thing about it     

espirit's picture

There are such things called "outcomes", most predictable while some are not, and it doesn't take a wizzard to understand the progression.

Do not underestimate your enemy, as battles can be lost before the first shot (arrow) is fired.

Sun Tzu ref I think.

olto's picture

And then there are 'unintended consequences'--------

I like those guys-----so unprdictable and interesting

flyingpigg's picture

What he said was: "gold products trade down significantly, but one thing that did not trade down, was gold coins"

Bull-shit because the coins traded down significantly. Premiums over paper were higher than usual but the prices I paid for 1 oz Maples were lowest in the last 12 months. So my suspicion is that he just wants the average Joe to believe that coins remained expensive to keep Joe from buying. 

overbet's picture

What the data shows and what I see are totally different. One example, I live in Las Vegas and I went to the outlet mall downtown this past weekend. There are some high mid level priced stores there like several hundred for a pair of jeans and many designer stores to give you an idea (not Walmart priced shit). When i pulled in every outside parking lot was full and dozens of cars were double parked waiting for people to leave so they could park. The 6 or 7 level parking garage was full and a security guard was standing at the entrance no letting anyone. The valet (which charges $6) was full. I had to give the valet a $20 to fucking double park me. There was no special event it was just a Saturday. The stores were packed and people were carrying as many bags as at Christmas time.

Herd Redirection Committee's picture

Credit cards are magical things, aren't they?

Almost Solvent's picture

Plus, it's Vegas. I wouldn't use it as the rule, but the exception.


Lots of $$, drugs and hookers in Vegas. The city that *actually* never sleeps.


Plus lots of underwater mofos who haven't made a  mortgage payment in a year or more.


Vegas, what happens there is crazy shit that has no bearing on the *real* world. Wake me up when Lake Mead is dry and Vegas is back to a 2 stoplight dusty desert town.  

Unpopular Truth's picture

Is "protection" from the government on its way? Like Nixon did: Gold confiscation... to "protect" us from investments that are clearly worthless?

bank guy in Brussels's picture

New laws like in Britain, where even possession of one ounce of gold, gives police and prosecutors the right to arrest you with presumption you are GUILTY of holding the proceeds of crime ... and YOU have the burden of proof to show otherwise.

A dozen or so people already jailed under this 'presumption' ... article re large-scale raids on 'private' safety-deposit boxes:

« Under the Proceeds of Crime Act of 2002 (known as POCA), valuables and cash above £1,000 are presumed by the police to be the proceeds of crime, unless you can prove otherwise, a total reversal of the presumption of innocence. Aside from those three dozen or so people found guilty, the vast majority of the 3,500-plus box owners have turned out to be innocent. Yet their money was confiscated, and in many cases is still being held, by the Metropolitan Police or the Inland Revenue. The owners have spent nearly three years and thousands of pounds in uncompensated legal fees having to justify why they kept their personal belongings in safety deposit boxes and how they came by them in the first place. »