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JPM Eligible Vault Gold Drops To Fresh Record

Tyler Durden's picture





 

Two weeks ago we reported about one of the biggest daily withdrawals of eligible gold from the JPM gold vault, it not on an absolute basis, then certainly on a relative, when in one day over 260k ounces of gold were withdrawn, leaving a record low 141.6k ounces, or just over 4 tons of gold in the vault. Subsequently, we tracked the daily additions and withdrawals of gold from the vault to see if any other major withdrawal request would come, instead discovering instance after instance of JPM reclassifying Registered gold into Eligible, which is how the vault saw its eligible inventory rish back to 195K ounces as of yesterday, without any actual net additions or more importantly withdrawals. It seems the pause of withdrawals has ended, and as of yesterday, another delivery led to a withdrawal of 53,658 ounces, or 28.5% of the total, leaving a fresh record low inventory of only 137,377 eligible ounces in the vault.

As a result, total Eligible in the Comex system is now at a level of 6.13 million oz, or roughly the lowest since since 2009.

And since much of the Eligible gold "additions" have come as a result of the reclassification of Registered gold into Eligible, the combined total of Eligible and Registered has also declined to levels last seen in 2008, at just under 8 million total ounces.

But here's the real punchline: if JPM had not been allowed to arbitrarily convert registered gold into eligible in the past two weeks, the firm's current inventory of eligible gold would be just 83,718 troy oz, or a little over one and a half metric tons: an amount that is laughable and is about 3% of the maximum eligible gold (2.8 million oz) held at the JPM vault, shortly after its commercial reopening in October 2010.

Earlier today, when reporting about the insatiable demand for physical out of China, following the report that "The jump in Chinese physical demand also prompted some banks to ship in more supplies from London and Swiss vaults, traders said." we asked "What about New York vaults? And specifically the biggest gold vault in the world, located 90 feet below 1 Chase Manhattan Plaza?" It appears the Chinese may have gotten just a little more gold out of New York today after all.

Finally with gold at record low levels, pay attention to how much more registered gold is converted into eligible in the coming days. Because if one day the registered gold holders realize the "run on the vault" that is going on, and they too ask to have their gold moved elsewhere, then things will really get entertaining.

Source: COMEX

 


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Wed, 05/08/2013 - 19:18 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Ruh roh, Ramie!

Wed, 05/08/2013 - 19:23 | Link to Comment AllThatGlitters
AllThatGlitters's picture

trending higher

Wed, 05/08/2013 - 19:26 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

"Following Withdrawal Of 28% Of Holdings"....yeah, that would be the JPM Executive Life Boats departing.

Wed, 05/08/2013 - 19:28 | Link to Comment AllThatGlitters
AllThatGlitters's picture

Someone knew. Today's move suggests it.

It looks like it is getting ready to start another leg higher on the daily too:

Live: http://www.pmbull.com/gold-price/

If it does continue to jump, it puts it back into the channel on the daily.

This whole recent episode over the last month was nothing more than a big fat head-fake, and despite some early demand for retail physical, I think new potential retail buyers were scared away. Strong hand stackers that stuck to their guns and added will be rewarded soon enough.

 

Wed, 05/08/2013 - 20:19 | Link to Comment fourchan
fourchan's picture

cnbc headline

 

"MASSIVE BUYING DRIVES GOLD PRICES LOWER"

 

This "market" is a joke

 

Wed, 05/08/2013 - 20:41 | Link to Comment Manthong
Manthong's picture

137K ounces ???

who knew how impotent they were/are  ?

Wed, 05/08/2013 - 21:51 | Link to Comment strannick
strannick's picture

GLD inventories are at an all time low

COMEX inventories are at an all time low.

Therefore everyone's dumping gold? Or everyone's dumping paper...

"Gold doesnt generate interest'', amoungst buffoons...

Wed, 05/08/2013 - 23:10 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

Ya know, with above ground Gold supply now predominantly in strong hands (sell to buy reversal confirms this notion), annual mining production already spoken for at 2,200Tons/yr, and the possibility that the Muppet masters (JPM, GS, HSBC executives, not necessarily their clients) are offloading their shorts to run their newly acquired asset to the high side, we could be fast approaching a time where Institutional Money comes in, followed by Mum & Dad.

We may well see a day, not too far away, where ZH thread posts are back slapping JPM and GS for driving Gold and Silver up.

Did they buy the[ir] dip???

Thu, 05/09/2013 - 07:14 | Link to Comment imaginalis
imaginalis's picture

Registered to Eligible

=

MFGlobal to JPM

Wed, 05/08/2013 - 19:40 | Link to Comment CheapBastard
CheapBastard's picture

<< Someone knew>>

 

Yeah, about 1.3 billin Chinese and 1.3 bill Indians crowding the gold stores in the PRC, HK and Bombay know.

Wed, 05/08/2013 - 19:52 | Link to Comment Rustysilver
Rustysilver's picture

CheapBastard,

Please help me with the math. Of 1.3 B Chinese and Indians how many live on $1 per day.

Wed, 05/08/2013 - 20:23 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

RustyBraincells.........

 

 

 

I guess "the Chinese" does not include the Chinese government, which is most likely holding more $$$$ thAN (NOT THEN) the FED!

Thu, 05/09/2013 - 01:20 | Link to Comment Manthong
Manthong's picture

um.. try something a little closer to to 3B Indians and Chinese.. 

but how much real metal could be held by BILLIONS of simple people with a traditional mindset, anyway?

Wed, 05/08/2013 - 20:38 | Link to Comment Bullionaire
Bullionaire's picture

Ohhhhhh, I'm sorry, Rusty.  The correct question was, "Which Chinese and Indians are not buying gold?"

You're consolation prize is a fat sack of post-1964 US dimes, and thanks for playing.

Wed, 05/08/2013 - 21:07 | Link to Comment Midas
Midas's picture

I was led to believe "price will solve everything".

Wed, 05/08/2013 - 21:18 | Link to Comment Antifederalist
Antifederalist's picture

Yeah, and markets are continuous and "Gaussian " in their distribution.

NOT

Dumb fuckers running the show

Wed, 05/08/2013 - 21:43 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

Yeah, I had a "Gaussian Distribution" all over the house.  There was nothing Normal about it....

Wed, 05/08/2013 - 20:45 | Link to Comment BidnessMan
BidnessMan's picture

My math says that 50% would still leave 650,000,000 potential gold buyers.

Wed, 05/08/2013 - 21:20 | Link to Comment Croesus
Croesus's picture

You boys think you're seeing heavy demand? You ain't seen nothin' yet: 

As the "bail-in model" goes dancing from country to country, just wait until the "potential buyers" in the West start trying to crash the party, while demand in the East continues to climb.

This party is just getting started. Guests are still showing up, but the food and drink is going quick.

 

 

Wed, 05/08/2013 - 21:38 | Link to Comment Blano
Blano's picture

More like 2 billion between the two.

And even if 75% live on a buck a day, that still leaves 500 million potential buyers.

Wed, 05/08/2013 - 23:38 | Link to Comment whatsinaname
whatsinaname's picture

Dear Rusty - You are getting crusty !!

Thu, 05/09/2013 - 00:21 | Link to Comment Libertarian777
Libertarian777's picture

1m Chinese are (USD) millionaires. That's $1 trn in wealth right there of people who traditionally know about gold. Sure its smaller than the 9 million millionaires in the USA, but the 'tradition' here in the US is long gone.

Indians buy gold/silver in grams (not entire oz) at a time, making it accessible to those who are poor.

Wonder why gold and silver is flowing from west to east?

Thu, 05/09/2013 - 07:53 | Link to Comment americhinaman
americhinaman's picture

i can speak for chinese (don't know about indians).  while a very large proportion lives on <$5 per day (all inclusive rent, food, clothing, etc.  $1 doesn't happen anymore; anyone that poor will have family who supports them).  but even those  in poverty save at least half their earnings.   virtually all their savings are in cash and gold.  when gold prices dip, they buy what they can... bullion units can be as small as a gram, and jewelry can be fractions of a gram.  the markup is high for small units, but it is a price they are willing to pay.

keep in mind that there are also more people in china who live on $1000+ per day than in the USA.  these people typically save well over 80% of their net earnings (unlike the typical American who lives on $1000+ per day, probably does so by taking out credit card loans / mortgages / car loans / student loans / etc. and has a negative savings rate).  these people put a smaller proportion of wealth into gold, "only" around 10-25%.

Wed, 05/08/2013 - 20:12 | Link to Comment fourchan
fourchan's picture

the creation of the federal reserve was to confisgate we the peoples gold and enslave us to debt.

 

their system is treason.

Wed, 05/08/2013 - 20:25 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

Downe arroe four pour spellin!

Wed, 05/08/2013 - 20:40 | Link to Comment Bullionaire
Bullionaire's picture

NO, WAIT!  HE MAY BE ONTO SUMPTIN HERE!

 

The perfect meme for the largest wealth transfer in history:

 

ConfisGate!

 

;-)

Thu, 05/09/2013 - 09:26 | Link to Comment Carmagnole
Carmagnole's picture

AWESOME !

Tue, 05/14/2013 - 09:50 | Link to Comment Ctrl_P
Ctrl_P's picture

Dibs on "ConfisGate" for my troll handle.

Wed, 05/08/2013 - 20:17 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

Everyone knew, with the exception of those who listen to the Obowel Movement.

Wed, 05/08/2013 - 20:48 | Link to Comment asteroids
asteroids's picture

What happens when the Chinese dump all their US bonds on the market eh? Think gold might skyrocket?

Wed, 05/08/2013 - 22:02 | Link to Comment philipat
philipat's picture

Incidentally, the combined population of China and India is 2.5 Billion, or about 40% of the total world population. The US has about 4%. Of the population that is, although it might very well now apply to the Gold as well!!

Wed, 05/08/2013 - 19:48 | Link to Comment Room 101
Room 101's picture

Naaah.  One thing that strikes me about the Ides of April is that  the price of Au and Ag has not yet returned to where it was on April 11th.  Not even close.  Notwithstanding lots of stories about phyzz purchase rushes early on. In my view it was a successful smackdown.  No reason to believe the next one won't be as successful. 

Wed, 05/08/2013 - 20:32 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

Up arrow to ya, and megga shittoes if you listen to ex-Treasury Sec Paul Craig Roberts!

 

 

He was the first to call the gold/silver shakedown for what it was, and the first to say there would be a GS/SD Par Deux!

Wed, 05/08/2013 - 19:45 | Link to Comment seek
seek's picture

I seriously believe this is part -- perhaps a major part -- of what's going on. Especially with Scotia, if you saw their moves in the CME report a week ago, they were putting (new) hundreds of thousands of ounces on the books one day and it was going out the door the next.

All this happens after the mystery white house meeting: the gold takedown, and then shortly thereafter not smart money, but insider money, is walking out the door with the real stuff.

Thu, 05/09/2013 - 04:34 | Link to Comment anonum
Wed, 05/08/2013 - 23:28 | Link to Comment Futures trader
Futures trader's picture

Totally agree.  There are a ton of shorts, and everyone is calling for gold to drop to 1400, or even 1250.  This thing is looking and acting bullish.  Plus, there's short fuel above... COT report shows specs are very short.  Am long GCM13 (June futures) -- will look to add as we move higher.  If the bottom is in this will be an amazing trade over the next few years into the final, parabolic move.

Wed, 05/08/2013 - 19:23 | Link to Comment kliguy38
kliguy38's picture

It is truly amazing that so called "the best and brightest" would allow their physical to be held by these criminals......just goes to show you.....

Wed, 05/08/2013 - 19:31 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

Intelligence and Common Sense are two totally unrelated things...just ask any Jew still alive from the 1930's.

In affluent times the bias is towards intelligence, in austere times common sense prevails.

We’ve just had 20-30 years of affluence and postponed austerity for a while….but it’s coming.

Wed, 05/08/2013 - 19:47 | Link to Comment Sudden Debt
Sudden Debt's picture

9 billion dollars in gold left.... about the interest of the chinese holdings for about 1 month....

Wed, 05/08/2013 - 20:19 | Link to Comment ziggy59
ziggy59's picture

I got approx 205 million from rate of 1500/oz x 138000

Wed, 05/08/2013 - 19:39 | Link to Comment Aeternus
Aeternus's picture

Hope Jamie Dimon has a big enough safe to put all of that phyzz in.

 

http://www.youtube.com/watch?v=deuC8GPr31A

Wed, 05/08/2013 - 21:11 | Link to Comment Luxy
Luxy's picture

Warch for yatchs pulling low draft heading south out of NY harbor. Likely headed to a valley in Pategonia. 

Wed, 05/08/2013 - 19:19 | Link to Comment Yellowhoard
Yellowhoard's picture

Aaaaaand it's gone.

Wed, 05/08/2013 - 19:33 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

Banking at JPM: http://vimeo.com/60134728

Wed, 05/08/2013 - 20:11 | Link to Comment I think I need ...
I think I need to buy a gun's picture

while you people are worried about pirates taking some treasure my 401k is wayyyyyy up in the last 6 months i will be retired sooooon,,,,,,,,,,,,,

Wed, 05/08/2013 - 20:58 | Link to Comment espirit
espirit's picture

Heh heh.  The more you play, the more you pay.

Wed, 05/08/2013 - 22:48 | Link to Comment GoldForCash
GoldForCash's picture

Feds are getting ready to sell you their worthless bonds for all 401 k plans. Even if you don't want to buy them. Best to cash out for a loss and buy silver....

Wed, 05/08/2013 - 20:53 | Link to Comment jcpicks
jcpicks's picture

<poof>

Wed, 05/08/2013 - 19:20 | Link to Comment fonzannoon
fonzannoon's picture

Can someone explain this "registered to eligible" thing to me like I am a 4 year old please?

Wed, 05/08/2013 - 19:24 | Link to Comment Tyler Durden
Tyler Durden's picture

 

From Chapter 7A in the NYMEX Rulebook (source):

  • (p) "Eligible" shall mean, with respect to any Commodity, that such Commodity is acceptable for delivery against the applicable Commodity Contract.
  • (ee) "Warrant" shall mean a document of title issued by a Licensed Facility, meeting the requirements of Article 7 of the UCC, and demonstrating that the referenced quantity of the covered Commodity, stored in the Licensed Facility referenced thereon, meets the specifications of the applicable Commodity Futures Contract.

Warrant, in this case referring to registered gold, which simply means it is "warranted."

But just to make things more confusing, it appears that contrary to what the rules say, there is effectively no difference between the registered and eligible designations when it matters, such as when reclassifying one into the other, especially if one is about to run out. This is the response the CME sent when asked about this phenomenon: 

"the adjustment column does reflect the issuance and cancellation of warrants, but it can be used for other purposes as well. Anything that is not received or withdrawn would be reported in the adjustment."

Got that? Essentially Elig. can be converted into Reg. for traditional purposes,  and "for other purposes as well."

What those are nobody knows.

Wed, 05/08/2013 - 19:26 | Link to Comment fonzannoon
fonzannoon's picture

Thanks Tyler, much appreciated.

Wed, 05/08/2013 - 20:05 | Link to Comment logicalman
logicalman's picture

can you hold it?

Wed, 05/08/2013 - 20:14 | Link to Comment I think I need ...
I think I need to buy a gun's picture

'traditional purposes" i've heard that before Tradition,,,,,,its all about tradition

Wed, 05/08/2013 - 20:29 | Link to Comment Bay of Pigs
Bay of Pigs's picture

I wonder if Uncle Shalom slipped that in there when nobody was looking?

Wed, 05/08/2013 - 20:49 | Link to Comment THX 1178
THX 1178's picture

The Federal Reserve holds gold bullion for the same reason that registered gold is equal to eligible gold. If it doesn't make sense that just means you are pulling the cord out of the back of your head.

Wed, 05/08/2013 - 20:11 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

I hate how the Tylers pops their [collective] heads up unexpectedly....fucking unnerving.

Feel like I’m being watched.

“We are the Tylers, you will be assimilated, resistance is futile!

Wed, 05/08/2013 - 20:56 | Link to Comment Conax
Conax's picture

Once assimilated, you achieve the nirvana of utter emptiness.  You become one of us....one of us...one of us.. 

Wed, 05/08/2013 - 23:04 | Link to Comment lesamourai
lesamourai's picture

You are not a beautiful and unique snowflake.

Wed, 05/08/2013 - 19:34 | Link to Comment max2205
max2205's picture

Goldslauger sales through the roof

Wed, 05/08/2013 - 19:41 | Link to Comment IMACOINNUT
IMACOINNUT's picture

Okay, so registered gold is reclassed as eligible and out it goes, but no one says who is receiving? Could be the registered owner? and they are taking possession? only it HAS to be released as eligible gold? The most I'm getting from this is the jp morgue is low on precious.

Wed, 05/08/2013 - 19:51 | Link to Comment Sudden Debt
Sudden Debt's picture

C _ I _ _ S E

Wed, 05/08/2013 - 19:59 | Link to Comment Bastiat
Bastiat's picture

It could be that they just bought out some warrants, I suppose.

I would think that the conversion of registered ("warranted")to eligible otherwise impairs their ability to deliver against the warrants.  If this is perceived, and the holders of the warrants are arm's length parties, you'd expect the run tol accelerate.

Wed, 05/08/2013 - 20:31 | Link to Comment rubearish10
rubearish10's picture

Anyone have a theory (if applicable) that all the German Gold held in NYK, is somewhat the backstop for such depletion? Wouldn't that explain the 7 year hold-up so the geniuses could "work this all out"?

Wed, 05/08/2013 - 20:50 | Link to Comment Chaffinch
Chaffinch's picture

Thanks Tyler. Harvey Organ converts these confusing terms to 'customer' and 'dealer', which is an approach which is full of good intentions, but trying to get our heads around the Rulebook has to be the way to go.
Even just looking at the total of 8 million ounces they are still getting low. That would be 20,000 LGD 400 oz bars, which would make a stack 4 metres by 4 metres by 0.9 metres high. It would fit into a normal room in a normal house (and I sure would like it to!)

Wed, 05/08/2013 - 20:58 | Link to Comment WelfareFTW
WelfareFTW's picture

LOL who the eff downvoted Tyler... crazy ass keynesian bitches

Wed, 05/08/2013 - 22:08 | Link to Comment PlasmoMatic76
PlasmoMatic76's picture

Registered is gold owned by the house (either the COMEX or the bullion bank in question).  This gold is available for purchase by shorts.  When they buy it they get a warehouse receipt that can be used to satisfy their obligation to deliver.  This effectively converts the Registered to Eligible.

Eligible is gold being held for a customer.  The customer is paying storage fees.  This gold meets the standards of the exchange and can be sold short easily by its owner (no need for in/out or re-assaying) but it can also be physically removed from the warehouse upon demand by its owner.

It is quite natural for Registered gold to be converted into Eligible as shorts satisfy their obligation to deliver. It would seem that the outflow of Eligible are the longs that took delivery removing their property from the bullion bank.

The overall drawdown from JPM (decline in the sum of Registered and Eligible) may come to nothing at all, as long as JPM has not issued warrants in excess of its physical holdings.  If they have, then we might get to see their naughty bits all exposed once the water recedes completely.

Thu, 05/09/2013 - 06:24 | Link to Comment resurger
resurger's picture

Thank you all for explaining this, i was getting lost when i was reading the original article between registred and eligiable

Thu, 05/09/2013 - 05:05 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

"Got that? Essentially Elig. can be converted into Reg. for traditional purposes,  and "for other purposes as well."

What those are nobody knows."

Essentially, it means:'"All your gold belongs to us, and we'll use it as ours particularly when circumstances deem your bail-in systemically necessary (or not)."

Wed, 05/08/2013 - 19:26 | Link to Comment Bastiat
Bastiat's picture

Let's say I'm holding your cookies and those of a bunch of other kids.  Lets say I also buy and sell cookies.   When someone wants to take delivery of a cookie I sold, I can only deliver those "eligble" cookies.  The ones I'm holding for you and the other kids, who already bought them and own them, are "registered." 

Wed, 05/08/2013 - 19:31 | Link to Comment Hulk
Hulk's picture

But you can eat cookies...

Wed, 05/08/2013 - 19:34 | Link to Comment Bastiat
Bastiat's picture

I can eat all the gold you're willing to give me, I'll bet.

Wed, 05/08/2013 - 19:36 | Link to Comment Wakanda
Wakanda's picture

Toss cookies, eat gold.

Wed, 05/08/2013 - 20:52 | Link to Comment THX 1178
THX 1178's picture

Drink Goldschlaeger, toss cookies. FIFY.

Wed, 05/08/2013 - 21:02 | Link to Comment Quinvarius
Quinvarius's picture

I imagine an all you can eat gold sale would end a bad cliche.

Wed, 05/08/2013 - 19:35 | Link to Comment Top_Kill
Top_Kill's picture

+100 Eligible cookies, you can't eat those

Wed, 05/08/2013 - 20:06 | Link to Comment Alpo for Granny
Alpo for Granny's picture

I lost all my cookies in an unfortunate boating accident.

Wed, 05/08/2013 - 19:35 | Link to Comment Lets_Eat_Ben
Lets_Eat_Ben's picture

Now I'm confused

 

Wed, 05/08/2013 - 19:39 | Link to Comment Bastiat
Bastiat's picture

Maybe you would be interested in a cookie ETF?  Fat Albert is my subcustodian.

Wed, 05/08/2013 - 23:42 | Link to Comment MeelionDollerBogus
Wed, 05/08/2013 - 19:52 | Link to Comment Sudden Debt
Sudden Debt's picture

Bake new cookies with low grade flower and sugar and hope nobody notices the difference...

Wed, 05/08/2013 - 20:41 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

Down arrow because I don't like cookies!

Wed, 05/08/2013 - 19:27 | Link to Comment Room 101
Room 101's picture

OK all.  Pick a date.  What day does Crimex publicly fail to deliver. 

I'll take June 24th. 

Wed, 05/08/2013 - 19:28 | Link to Comment Bastiat
Bastiat's picture

For gold?  What about Silver?

Wed, 05/08/2013 - 19:39 | Link to Comment Room 101
Room 101's picture

The first one.  Doesn't matter which because I can't imagine the holders of the other PM will sit tight if delivery fails on either.    

Wed, 05/08/2013 - 19:41 | Link to Comment Bastiat
Bastiat's picture

Good point.

Wed, 05/08/2013 - 19:28 | Link to Comment GrinandBearit
GrinandBearit's picture

Sounds about right... maybe even a few weeks sooner.

Wed, 05/08/2013 - 19:34 | Link to Comment Room 101
Room 101's picture

Gold and silver options both expire the 25th.  I reckon lots of folks will want to avoid the last minute rush and any unfortunate "system crashes" that prevent them from being exercised.  So the SHTF on Friday the 21st, Crimex uses the weekend to beg benzelbub for a bailout, and they fail to deliver on Monday the 24th when the morgue et al throws them to the wolves.  

Wed, 05/08/2013 - 19:31 | Link to Comment Yellowhoard
Yellowhoard's picture

The date will fall within the first few days of WWIII.

The story won't even make the front page.

Wed, 05/08/2013 - 19:55 | Link to Comment TeamDepends
TeamDepends's picture

The general sat and the lines on the map

Moved from side to side

Pink Floyd

Wed, 05/08/2013 - 20:20 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

I down arrowed you because you felt compelled to state that it was PF......

 

 

 

 

 

 

I have a hard time believing most ZHers would need to be instructed......

Wed, 05/08/2013 - 21:02 | Link to Comment jcpicks
jcpicks's picture

Come on, my friends

Let's make for the hills.

They say there's gold but I'm looking for thrills.

You can get your hands on whatever we find

Because I'm only coming along for the ride.

Wed, 05/08/2013 - 20:28 | Link to Comment Gene8696
Gene8696's picture

Let the bullets fly...

Wed, 05/08/2013 - 20:54 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

Just don't be the backstop

Wed, 05/08/2013 - 19:40 | Link to Comment Ness.
Ness.'s picture

Sunday night, Sept 22nd.  The Autumnal Equinox.  

Talk about a case of the Monday's?  Good Morning Amurika!

Wed, 05/08/2013 - 19:53 | Link to Comment Sudden Debt
Sudden Debt's picture

never. cash settlements.

Wed, 05/08/2013 - 20:33 | Link to Comment BidnessMan
BidnessMan's picture

Jamie and Blythe - "Not our fault - Force Majeure baby!  Where would you like us to send the free Toaster you get with your deposit into your new Chase bank account?" 

Wed, 05/08/2013 - 20:37 | Link to Comment Doubleguns
Doubleguns's picture

Big question is HOW MUCH CASH to settle. I would make it painful, especailly if its JPM then its time to get even and even is a very, very large number. 

Wed, 05/08/2013 - 20:46 | Link to Comment Antifederalist
Antifederalist's picture

Dude, dream on

You are not going to be in a position to demand squat. They will tell you the price and you will take it.

See MF Global.

See Hunt Brothers.

See court cases. If you don't have physical you are fucked.

Any questions?

Wed, 05/08/2013 - 20:55 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

I'll wait until someone sees SiGSauer or S&W.......

Wed, 05/08/2013 - 21:27 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

I am thinking that having calls on 2X or 3X silver paper vehicles might have the same issue?

Wed, 05/08/2013 - 19:57 | Link to Comment seek
seek's picture

That's a pretty good date to pick, the trend up through about a week ago was pointing at about a two month drawdown.

In the past week, though, the rate has slowed a lot, and there have been a lot of strange internal moves on the inventory that make me suspect that we're already scraping the bottom on real stuff (so there's like 6M oz of ledger entries that get you warehouse receipts and not delivery bars, I think.)

That said, I don't think they ever (in public) fail to deliver. They will weasel out of their contracts but not fail to deliver.

So, I think the better question is... who's the next fall guy e.g. MF Global, and/or what date does CME jack margins up five times in a row, have a computer error, or has Osama bin Sixpack crater a warehouse by hitting a building two blocks away?

If I had to take the over/under on your date, I'd take the over, but not by much. Can't wait to see what the next rabbit out of the hat looks like.

Wed, 05/08/2013 - 20:55 | Link to Comment Chaffinch
Chaffinch's picture

I'll take Friday August 30th.

But we won't know about it until the Sunday afterwards.

Thu, 05/09/2013 - 08:50 | Link to Comment americhinaman
americhinaman's picture

Failure to deliver on CME is unlikely to happen, due to position limits.  Last page of this document at: http://www.cmegroup.com/rulebook/NYMEX/1/5.pdf#page=49 shows a link.  If I am reading it correctly, it means that for a single account holder, the max position size for gold futures is 3000.  that's only 300k ounces of gold.

While there are many large institutions or governments that could purchase all the gold in the  vaults in a single shot, the position limit per account prevents any of them from clearing out the entire inventory.  As it stands, it would require a coordinated effort between many buyers who can afford 300k ounces of gold, in order to actually cause a run on the physical gold there.  I would guess there aren't enough account holders who have the capability to securly take delivery of 300k ounces of gold, that a failure could happen the course of a month.  And if it requires more than a month of lead time, the CME can simply arrange to increase shipments in from producers and other exchanges.

While an acute shortage is unlikely,  it seems increasingly likely that a sustained drain of the inventories in exchanges globally continues.  If this happens faster than miners/producers can replenish for a sustained amount of time, then prices should start to rise to a level where existing holders consider selling back their physical gold.  Exactly where that price is depends on a lot of factors, most importantly the speed at which prices rise and secondly depending on the cash liquidity needs of the gold owners.  If prices rise acutely in a panic short covering or due to a true collapse in a major global currency, then the threshold price to sell will be very high.  If prices rise slowly, then the threshold would be lower... perhaps starting at levels just before the gap down, as weak hands and traders start to take profits.

Wed, 05/08/2013 - 19:29 | Link to Comment debtor of last ...
debtor of last resort's picture

On fucking track Tylerz. As usual. Compliments.

Wed, 05/08/2013 - 19:34 | Link to Comment Wakanda
Wakanda's picture

So part of the endgame is to Spring clean the gold vault down in the basement?

Ship that shiny shit to Asia so that all of the corners get vacuumed?

Nothing left but digital fiat and then hit the big ReSeT?

Thu, 05/09/2013 - 00:51 | Link to Comment bunnyswanson
bunnyswanson's picture

Why would they sell now when just a month ago or less, sale would have resulted in much more compensation?  Why sell at 1400 when you could have sold at 1700? 

Thu, 05/09/2013 - 01:24 | Link to Comment bunnyswanson
bunnyswanson's picture

Answer:  They are buying through a 3rd party, transferring ownership to themselves.  (I think)

Wed, 05/08/2013 - 19:33 | Link to Comment Lets_Eat_Ben
Lets_Eat_Ben's picture

what does it all mean???

Wed, 05/08/2013 - 19:39 | Link to Comment Antifederalist
Antifederalist's picture

Music stopping. Many dancers.....limited chairs.

Possession will be 9/10's.

Wed, 05/08/2013 - 19:50 | Link to Comment Political_Savage
Political_Savage's picture

It's nine tenants of the law, not 9/10th - common mistake.

Sorry to be pendantic.

Wed, 05/08/2013 - 20:22 | Link to Comment Cheesy Bastard
Wed, 05/08/2013 - 20:37 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

lol

Even Kiwis understand English

 

 

 

http://www.youtube.com/watch?v=tzIiMmxZyt4

 

 

Classy chick........and she can spell

Wed, 05/08/2013 - 19:40 | Link to Comment Top_Kill
Top_Kill's picture

It means someone is calling the Comex's bluff. But as was quoted to Kyle Bass by a Comex official, price is NOT fixing demand for Comex gold. So it looks like gold is either going much higher or much lower. Higher looks most likely.

Wed, 05/08/2013 - 19:48 | Link to Comment Political_Savage
Political_Savage's picture

We're fucked - eligible/warrantable/deliverable/whatever- we're fucked.

They are playing accounting games on what's in their inventory, but ultimately they will come up short because in either case it's getting pulled.

If you're holding paper gold, you're double-fucked. You never "owned" it and you're in line behind people that actually did and it's not there anymore.

Ultimately much ado about nothing. It will get papered over like everything else or the gov't will step in, or, or, or... TPTB simply won't let the shit hit the fan... they just keep standing in front of the fan and it hits us the US citizens (legal citizens... the illegal immigrants will waive their hands and go back home)

Wed, 05/08/2013 - 20:02 | Link to Comment ziggy59
ziggy59's picture

Youre right.. Probably hidden in some prospectus somewhere, you agreed to lend them your gold, just like the banks are now saying with deposits...

TPTB are scratching their heads wondering...sheeeit...we are getting away with more and crazy stuff, and still the sheep continue to bleat

Wed, 05/08/2013 - 19:37 | Link to Comment Gringo Viejo
Gringo Viejo's picture

The S is about to HTF.
The US had a nice ride for the past 40 years.
The jig is up.

Wed, 05/08/2013 - 19:55 | Link to Comment Sudden Debt
Sudden Debt's picture

let's ask the Russians how they handle their crash....

everybody lost their pants, sold everything they had to buy food and about 100 people took control of everything that had value and took over power untill this day... only difference now and a decade ago... that 100 got slimmed down to a handfull.

Wed, 05/08/2013 - 20:18 | Link to Comment Rustysilver
Rustysilver's picture

Sudden Debt,

Putin is cleaning the house. Oligarch are either in jail, committing suicide in London and elsewhere. Few smart one are staying very  low.  Time is not on their side.

Wed, 05/08/2013 - 20:50 | Link to Comment alentia
alentia's picture

"Clearing the house???... - removing the competition from marketplace!"

Wed, 05/08/2013 - 19:37 | Link to Comment bugs_
bugs_'s picture

Soon JPM will have a big empty vault and can begin to offer packages to handle the headaches of confiscation.

Store your gold here and we'll handle the confiscation red tape for you.  All the paperwork and tough negotiation for the best price.

When the goons knock on your door just say "JPM has my gold".  They will roll their eyes and head to the next house.  No need to get tasered!

JPM has my gold bro!

Wed, 05/08/2013 - 19:44 | Link to Comment Al Huxley
Al Huxley's picture

They're probably just trying to get rid of it as fast as possible, after reading in Bloomberg and everywhere else that 'gold is in a bear market now'.  LOL - not a problem, I'm sure they don't have obligations for more than 137,000, because selling something you don't have would be dishonest.

Wed, 05/08/2013 - 19:48 | Link to Comment Antifederalist
Antifederalist's picture

This is the morgue we are talking about.

There has to be a last minute stick save coming.

If not, this gets interesting.

Wed, 05/08/2013 - 19:52 | Link to Comment ziggy59
ziggy59's picture

JPMs Paper Gold Cache..WINNING

Wed, 05/08/2013 - 19:55 | Link to Comment newworldorder
newworldorder's picture

The registered gold holders must have an unwavering trust in the full faith and credit of JPM. Consequently, they see no need to impose on the good will of their favorite bankster. No need to move their gold somewhere else. After all, where are you going to take it that is much safer than NY.

Wed, 05/08/2013 - 19:56 | Link to Comment Sudden Debt
Sudden Debt's picture

and with todays renting prices... renting out a empty vault won't cover the costs of the entire con game...
better pack up and leave town before the tar and feather guys show up...

Wed, 05/08/2013 - 19:58 | Link to Comment Crtrvlt
Crtrvlt's picture

Perhaps because of German and other sovereign gold redemptions?

Wed, 05/08/2013 - 19:59 | Link to Comment Peter Pan
Peter Pan's picture

Just for a visual perspective....the one and a half tons JPM would have been left with is the equivalent of about a suitcase.

Yes folks...the cupboard is bare.

Wed, 05/08/2013 - 20:04 | Link to Comment ziggy59
ziggy59's picture

Thats correct if in one lump block.. a ton is a 15" on each side cube..

Wed, 05/08/2013 - 20:22 | Link to Comment Urban Redneck
Urban Redneck's picture

Since we're talking about Good Delivery Bars -

only 344 left.

Get 'Em While You Can. 

 

 

CNBS or Bloomturd could add a shopping channel style inventory countdown ticker, to replace their misguided paper price quotes,

but they won't.

Wed, 05/08/2013 - 21:04 | Link to Comment Bullionaire
Bullionaire's picture

+1 for the HGN (Home Gold Network) ticker idea.

Wed, 05/08/2013 - 21:14 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

I recently got a watch made out of a silver dollar there.  Very timely....

Wed, 05/08/2013 - 20:02 | Link to Comment Bastiat
Bastiat's picture

So just before the delivery crunch, they crush the paper price and deliver cash?

Force majeure:  reality is a force greater than lies.

Wed, 05/08/2013 - 20:05 | Link to Comment jomama
jomama's picture

it's a good thing JPM is totally transparent and honest in their reporting.

Wed, 05/08/2013 - 20:05 | Link to Comment WelfareFTW
WelfareFTW's picture

DIE muppets DIE

Wed, 05/08/2013 - 20:06 | Link to Comment Aquarius
Aquarius's picture

The Trend is The Finacial Banking Sector wants it all and is in a frenzy to get it all - at any cost.

The Central Banking System also wants this - they call it Status Quo (the realm of the Dead).

The "Government" through this regulatory system also wants this. Institutional Economists Scream for More.

All this means is a focussed  pre-meditated intensive increase in Financial Crime and blatant disregard of Law

It also means that if you do not belong to the "elite" then you are the intended Victim of this Fraud.

Call it Mandatory Wealth Transfer (MWT) where the only change in Modus Operandi (MO), is the highly increased acceleration within the normal Policy of Recursive Scamming of the Public.

http://verbewarp.blogspot.com.au/2011/02/recursive-game-is-policy.html

Ho hum

Wed, 05/08/2013 - 20:11 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

Paper beats rock?

 

 

 

Not in my fuckin' lifetime........

 

 

Thu, 05/09/2013 - 06:10 | Link to Comment resurger
resurger's picture

lol

Wed, 05/08/2013 - 20:14 | Link to Comment Bastiat
Bastiat's picture

The hedge funds and HFT algos that likely make up a hug segment of the trading volume will be annoyed at this intrusion of "meat world" into the realm of quantitative purity.

Wed, 05/08/2013 - 21:06 | Link to Comment Bullionaire
Bullionaire's picture

"hug segment" = hippie chicks. Mmmmmmm...delicious hippie chicks.

Wed, 05/08/2013 - 20:39 | Link to Comment PaperBear
PaperBear's picture

I laughed uncontrollable for 10 seconds or so upon seeing JPM's woes.

Wed, 05/08/2013 - 20:40 | Link to Comment NoWayJose
NoWayJose's picture

The only thing that will stop the emptying of the vault is $1700 gold.

Wed, 05/08/2013 - 20:50 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

.

Wed, 05/08/2013 - 20:47 | Link to Comment Whiner
Whiner's picture

Don't worry. don't fret. The Morgue has a tunnel to the Feds gold up the Street. Whasat? No gold there either? Well then just take the Bernanke dollars and go buy you some gold. Same thing. No worries. Spot=phyz. Right? For how long?

Wed, 05/08/2013 - 20:52 | Link to Comment drbill
drbill's picture

Can someone please explain to me why the JP Morgue would honestly report that they are running very low on gold bullion?

Wed, 05/08/2013 - 20:56 | Link to Comment Antifederalist
Antifederalist's picture

Head fake. Another take down coming. Last one worked pretty well.

Wed, 05/08/2013 - 21:22 | Link to Comment espirit
espirit's picture

Lots of dry powder left in my arsenal.  It's all about cost averaging, and I'll add another doorstop if available.

Wed, 05/08/2013 - 20:59 | Link to Comment devo
devo's picture

Doesn't matter, they'll manipulate things to win.

Wed, 05/08/2013 - 21:02 | Link to Comment Bastiat
Bastiat's picture

Jim Sinclair says the end is truly at hand for the Bullion bank paper gold bully game.  He points out that Comex did not wait for cupboard to run dry but the panicked at the RUMOR that the Hunt's were going to take delivery--they still had silver, just not enough to fill that delivery.  Of course he would know because he selected by Volcker to work the mess out.

He's been saying they shot themselves in foot (and head) with the unexpected consequence of the demand stampede in the physcial marktet resulting from the last paper gold smackdown. 

We'll see, maybe Assad's got some gold that the rebels will be willing to "lend" after he's appropriately disposed of?  Then on to Iran's vaults, eh?

But silver, ahh, there's the rub.  No equivalent backup stockpiles there.

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