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Comex On The Edge? Paper Gold "Dilution" Hits A Record 124 For Every Ounce Of Physical
Over the few days, we got what was merely the latest confirmation that when it comes to sliding gold prices, consumers of physical gold just can't get enough.
As the Times of India reported over the weekend, India's gold imports shot up by 61% to 155 tonnes in the first two months of the current fiscal year "due to weak prices globally and the easing of restrictions by the Reserve Bank. In April-May of the last fiscal, gold imports had aggregated about 96 tonnes, an official said."
This follows confirmations previously that with the price of gold sliding, physical demand has been through the roof, case in point: "US Mint Sells Most Physical Gold In Two Years On Same Day Gold Price Hits Five Year Low", "Gold Bullion Demand Surges - Perth Mint and U.S. Mint Cannot Meet Demand", "Gold Tumbles Despite UK Mint Seeing Europeans Rush To Buy Bullion" and so on. Indicatively, as of Friday, the US Mint had sold 170,000 ounces of gold bullion in July: the fifth highest on record, and we expect today's month-end update to push that number even higher.
But while the dislocation between demand for physical and the price of paper gold has been extensively discussed here over the years, most recently in "Gold And The Silver Stand-Off: Is The Selling Of Paper Gold And Silver Finally Ending?", something unexpected happened at the CME on Friday afternoon which may be the most important observation yet.
Recall that in the middle of 2013, in an extensive series of articles, we covered what was then a complete collapse in Comex vaulted holding of registered (i.e., deliverable) gold. At the time the culprit was JPM, where for some still unexplained reason, the gold held in the newest Comex' vault plunged by nearly 2 million ounces in just six short months.
More importantly, the collapse in registered Comex gold sent the gold coverage ratio (the number of ounces of "paper" gold open interest to the ounces of "physical" registered gold) soaring from under 20 where, or roughly in line with its long-term average, to a whopping 112x. This means that there were a total of 112 ounces of claims for every ounces of physical gold that could be delivered at any given moment.
Gradually, the Comex raid was relegated to the backburner when starting in 2014 the amount of registered gold tripled from the upper 300k range to 1.15 million ounces one year ago, at which point the slide in Comex registered gold started anew.
Which brings us to Friday afternoon, also known as month end position squaring, when in the latest daily Comex gold vault depository update we found that while some 270K in Eligible gold had been withdrawn mostly from JPM vaults, what caught our attention was the 25,386 ounces of Registered gold that had been "adjusted" out of registered and into eligible. As a reminder, eligible gold is "gold" that can not be used to satisfy inbound delivery requests without it being converted back to registered gold first, which makes it mostly inert for delivery satisfaction purposes.
Most importantly, this 25,386 oz reduction in deliverable Comex gold from 376,906 on Thursday pushed the amount of registered Comex gold to an all time low: at 351,519 ounces, or just barely over 10 tons, registered Comex gold has never been lower!
Incidentally, as part of the month-end redemption requests, we saw a whopping 22% of the eligible gold in Kilo-bar format (where there is no registered, just eligible) be quietly whisked away from Brink's vaults: unlike traditional ounce-based contracts, the kilo format traditionally serves as an indication of Chinese demand, and if withdrawals on par with those seen on July 31 persist, it will soon become clear that Chinese buyers are once again scrambling for the safety of gold now that their stock market bubble has blown up.
This covers the sudden surge in demand for physical gold as manifested by CME data.
Meanwhile, over in "paper gold" land, things remained unchanged: as shown in the chart below, the aggregate gold open interest rose modestly to 43.5 million ounces up from 42.9 million the day before.
While on its own, gold open interest - which merely represents the total potential claims on gold if exercised - is hardly exciting, as we have shown previously it has to be observed in conjunction with the physical gold that "backs" such potential delivery requests, also known as the "coverage ratio" of deliverable gold.
It is here that things get a little out of hand, because as the chart below shows, all else equal, the 43.5 million ounces of gold open interest and the record low 351,519 ounces of registered gold imply that as of Friday's close there was a whopping 123.8 ounces in potential paper claims to every ounces of physical gold.
This is an all time record high, and surpasses the previous period record seen in January 2014 following the JPM gold vault liquidation.
Another way of stating this unprecedented ratio is that the dilution ratio between physical gold and paper gold has hit a record low 0.8%.
Indicatively, the average paper-to-physical coverage ratio since January 1, 2000 is a "modest" 19.1x. As of Friday it had soared to more than 6 times greater.
Which brings us to the usual concluding observations:
First: as we have said previously, at a time when all the gold selling (and naked shorting) is in the paper markets and when demand for physical gold is once again off the charts, with soaring purchases not only in India but also in the US, where is this gold going? Clearly not into CME gold vaults, which are once again a source of physical gold, and as the above shows, have never had less deliverable gold.
Second, total Comex gold has dropped to such precarious levels in the past and while on many occasions market observers have asked if the Comex is close to a failure to deliver, aka a default of the CME's gold warehouse, it has always avoided such a fate. Still, one wonders: the 10+ tons of deliverable gold at the Comex are now worth a paltry $383 million. It would not be very complicated for a next generation "Hunt Brother" to buy some $400 million in Comex gold, and promptly demand delivery: after all the gold crash of two weeks ago saw some $2.7 billion in paper gold dumped in the most illiquid market - why can't it be done in reverse. What would happen next is unknown, but unless somehow the Comex found a way of converting millions of ounces of Eligible gold into Registered, the CME would simply be unable to satisfy such a delivery request.
Third: while there are still over 7 million ounces of Eligible gold, why the recent spike in "adjustments" of eligible to registered gold (i.e., missing a warehouse receipt)?
Finally, we assume the mainstream press will once again start paying close attention to the total, and especially registered, gold held at the Comex: at a pace of 25K a day, the gold vaults that make up the CME's vaulting system would be depleted in just under two weeks of daily withdrawals.
In any case, we are very curious to see how this latest dramatic face off in the long-running war between paper and physical gold, concludes.
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as prices rose, many holders would dishoard in exchange for cash to buy stuff, thereby increasing supply.
I have to respectfully disagree with you there, BigJim. The herd mentality that is today's Merica says that when prices are rising people buy more, and when prices are dropping people sell. See housing for examples.
Not to mention that this new found "supply" would be slightly higher than the price the gold was sold at. Who the fuck could afford 135K gold ounces?
Yes, this only applies to people who don't have liquidity issue, i.e. they have 100% cash for the investment. You forgot a lot of investment in margins, derivatives, housing, carry trades which are based on loans, i.e. no their cash, one big casino. When the stock and bond markets go south, they have no choice but to firesale anything they got to get cash to pay off the debts.
If you look at the chart, gold price dropped during the 2008. I think it's the big players who have gold in their portfolio were forced to dump gold to get cash to increase liquidity.
I didn't think of it that way. Thank you.
I think you have to divide the number of claims by the average margin ratio. If you figure that everyone playing at the table is levered out 20:1, then when everything is settled for cash, the $134,459 woulld end up closer to $6,700
That's the most logical analysis of the precious metals market that I've seen so far.
The thing that truly confuses me is why the miners would ever do business with the Comex or the LBMA. Why do business with exchanges that artificially suppress the prices of your products?
Becuse the NSA sends them pictures of their families and ads for nail guns as a reminder to play ball?
If we go back to Manors in England, where king granted title, lands, and workers to a lord. And we go back to Colonial days and the land rush for a lot at the business model. And include Cecil Rhodes in Rhodesia.
If you get free land, produce at slave wages or by family work... that was the business model for much of history.
Exploit Resources for almost free or use impressment to find a crew to sail your ship to trade ports.
Take a hotel today, the model often doesn't work, you have to work the front desk, hire illegals or pay maids under the table, and manage the books yourself.
I'm guessing South African Mines were just about free after the monarchy gave your soldiers for protection and for dominating the people. Today people think they can compete with older established corporations who have many advantages... but you really have to take on big time loans/debt to enter the market.
- Free Land is disappaering
- Mineral Rights don't come with the land normally
- Rain Forests are hard to protect, hold, and exploit if you can get them
- Mining takes capital and technology, market timing, and low margins apparently
But I am just a couch surfer.
If Dollars cannot buy Gold then the world will find Dollars to be worth a lot less then they are today.
I bet those fuckers back in the day wish they knew about paper gold alchemy
Paper alchemy is not a new invention. Ever wonder what happened to all the hedgemonies and world powers whose debt loads and printing presses ran amock? They are no longer world powers (Spain / england) and in some cases no longer exist (Roman Empire).
Tell me who's not in trouble, and i'll show you a liar.
... and France, with their John Law assignats. Fascinating history to read to take your mind off the carnage to your account. "Popular Delusions and the Madness of Crowds ..." is an excellent and witty source, one of the great non-fiction books ever.
AND you want to know how the John Law scheme broke? One of the nobles finally said enough is enough and took a carriage to the B of F and turned in his assignats for physical. That was enough to create a panic and heads literally started rolling. Law beat feet back to his native UK.
Doesn't matter. If a giant "hedger" short, (read: "JPM"), gets in a pinch, they'll default and end the comex gold and silver contracts, just like Simplot did with those tater futures back in the day.
JP is way more systemically important than Simplot was. Will get the red carpet treatment. They know it, thus, they keep a paperweight resting on the sell button.
120:1 And gold is in the shitter with no manipulation. Hillary is going to make a great president.
you just make me hurl, huge
Is it unreasonable to figure that eventually one ounce of physical will be worth 124X the price of paper...viz., 124 X 1085= approx $134,000?
Small print says they can settle in dollars/dinars so their price is exactly what they say it is.
"Third: while there are still over 7 million ounces of Eligible gold, why the recent spike in "adjustments" of eligible to registered gold (i.e., missing a warehouse receipt)?"
Willing chumps have been found with eligible gold at COMEX?
"silver is money.
gold is like bitcoin ... useless."
No, bitcoin is like bitcoin ... useless.
The Comex never sleeps, so neither shall I! Boy are my eyes tired.
You've heard of blackmail and greenmail, so I'm sure you'll soon hear about "goldmail" as well. Simply put, the exchange won't technically default as it has the right to settle contracts in cash (i.e., USDs). Of course privately this is all good and well but if gold delivery defaults go public, then some large players short gold are going to get burned badly (financially, politically, etc.). So how does this all playout in the short-term, here's what I'm expecting:
- Another round of brutal selling in paper gold to pound the price lower and lower. Why settle in cash today at $1,090 when you can settle in cash next week at $1,050? All with the blessing and support of the FED.
- Some smart and very well financed players will go long and demand delivery. Their goal will not be to actually take delivery of the gold but rather "goldmail" them in forcing a cash settlement with 50+% premiums over spot to avoid having to disclose that COMEX actually defaulted. Of course this will all be executed behind the scenes with non-disclosure agreements, etc. all with the blessing and support of the FED (again).
- If COMEX does come close to a technical default, look for the FED (there's that name again, strange?) to work some magic and actually find physical supply, most likely from the US stock pile (assuming there's still some available) in Fort Knox or elsewhere.
This cat and mouse game will continue for a while longer, forcing paper prices lower, watching the miners get hammered (and curtail production further), driving the claims ratio to all-time highs, while two very important trends continue. First, MSM will step-up their negative assessment of gold and declare all gold bulls, bugs, etc. are officially dead. Second, the FED and it's proxies (e.g., JPM, Citi, etc.) will do whatever it takes to hammer the price down and go all in and try to defeat gold, yet again. This will lead to one final capitulation in the price of gold somewhere south of $1,000 USD at which point the imbalances in the market will become so great and distorted that even the slightest of events will result in wild action in all PM markets and force an eventually rebalancing. Remember the same concept holds as the higher the leverage or more extreme the positions taken (to one side or the other), the more violent the price moves should be expected/anticipated.
Jim Willie has similar thoughts. BIG premiums for cash.
www.goldenjackass.com
That happened with a huge silver contract in 2011. They settled for 3X the actual paper value of the silver.
The reference is somewhere on ZH from that time.
delivered, I believe you have truly delivered the likely scenario here. This really hurts amateur holders of positions in metals and miners, such as myself. I have for me a large GDX position and GDX is the largest mines but what happens to the GDX unit price as mines shutter and lay off like AU did? It gets fucking killed some more is what happens.
The only thing good I can say lately is, that I stayed my hand at considerable effort the last two weeks and did not average down in this hated sector. So I got that going for me ... but I am really starting to develop self-confidence issues!
China could fuck the whole thing by telling its populace to buy buy buy gold. It would instantly dry up the physical in that country, that very afternoon. China seems not to want to fuck the U.S. like that, so I gather they are in some clusterfuck together ... maybe mutual fellatio. It's an unpleasant metaphor but the situation is so ugly that it is fitting. They're not human anyway.
So I personally maintain Jim Sinclair's parting advice, before he stopped giving advice on his web site a few years ago. He said, "Do nothing."
Sorry I know I'm dim, but how does selling paper IOUs on stuff affect the price of stuff.
I just don't get it ...... which I guess is just great for the bankers.
Unfortunately, I think the vast majority don't get it either........ which is even better for the bankers.
It is like a naked short.
I offer you something I have some of, but not a lot of. I sell you more than I have, give you a paper claim on it, and say I am storing it for you. If I have real gall, I charge you a storage fee too.
If you come to collect, and I have enough to give you, I don't get caught.
If everyone I have sold to comes in to collect at the same time, I am caught.
That is the basics. Fractional reserve golding (though I am supposed to have it all, or a way to get it quick to cover if everyone wanted theirs).
Now the paper price issue. If the supply of those paper tickets is big, the price goes down because there is plenty. I can keep issuing them and as long as a large number do not try to collect, I can keep up the scam.
When they sell, they often sell all at once. It is so obvious they want the price down. If you really want to sell gold you have, you want the max for it, you would sell gradually so as to not spook the price down. They don't, they dump it all at once.
That is a very short version to get the point across quick, quite a bit is missing.
Thanks
Can't wait for CME to break.... hope it's a large buyer like China or Russia who is offered worthless dollars for the undeliverable gold...Nyet thanks...
Or Treasuries......
No one is willing to bust the comex because it is a criminal enterprise, just like breaking up a mafia racketeering operation.
China imports more gold In a week than these crooks say they have.
They are laughing, I dare you to take the last bar!
That is why they never default.
Fug et about it. ..
Gold will be for wealth preservation, Silver will be for bartering, and Jacketed Lead will be for crowd control.
Gold slump tempts local buyers
http://www.bangkokpost.com/business/news/633764/gold-slump-tempts-local-...
Asian gold demand hardly perked up this week even as the price of the precious metal languished near its lowest since 2010 with many would-be buyers predicting further price declines...
http://www.reuters.com/article/2015/07/31/asia-gold-physicals-idUSKCN0Q5...
It's time to buy nasdaq. One day correction is over. Buy equities and stuff
There is a simple way to profit: short paper gold, buy physical from the profits
...we have a winner!!
I agree completely...or one could hold physical and 'protect it' against further drops in price with an ETF that moves inversely to the POG.
Well yes..., but all paper is dangerous.
Buy physical gold and build up CA$H to protect the precious is my preference.
So they simply rehipothicate with paper and stole $43 million? And no crime is commited?
Funny how that works for some people...
If I wrote checks at $123 to 1 in my account, Methinks someone would be coming for me...
does this mean the physical ounce should be 124xthe price of paper gold? a bit above $124.000?
ultimately - the issue is Price Discovery.
what keeps prices honest in any commodities market? It's the fact that contracts on real physical commodities must be settled at the delivery date. If you are LONG on corn, and you hold this contract though to delivery, then congratulations. You are now the proud owner of a corn contract. And somewhere, there is a pile of real corn that you just bought - at the final settlement price.
LIKEWISE, if a person is LONG on a gold contract, they will take physical possession of that gold ... if they keep the position open when the price finally settles.
Therefore, the real question is this. Are PROPER and FAIR proedures happening for the settling of gold contracts ... the matching of supply and demand.
GIVEN WHAT happened with the fixing of Libor rates, I have NO CONFIDENCE that any of these markets are operating in a fair and honest way. The burden is on the COMEX and the London Metals Exchange to PROVE that price discovery is a free and fair mechanism.
We are waiting.
I would think the miner stock orices would reflect discovery better than any other prices.
Margin ties most people's hands in these cases. If you are levered 20:1, you cannot take posession. You can pretend to manipulate the ownership of something 20x your economic weight - but when it comes time to take delivery, you are forced to pass/roll-over the contract. This makes 5% downward movement a goal of price smashers. They know that margin calls are made at that time, and the charade continues.
Strong positions are cash positions, not bound by margin.
Selling paper gold can cause the POG to fall. There seems to be no amount of physical gold movement that could take the price higher.
We know demand for gold has never been higher...that's right! China wants another 8000 Tons!Q!@
China cannot have 8000 tons of course because to bid for it would destroy the entire 'gold' market. China has not been willing to do this. First it would cause ill will and secondly they may get a few tons at the current price but those last 7000 tons would be priced 30 to 50 times higher (depending upon how fast they tried to get it.)
In view of the current situation it seems to me that a closure of the current gold market (the paper stuff) is coming. I see GLD going out of business and have no clue what the Comex might do. GLD has lost over half it's inventory since January 2013. It took a pause in 2014 but has now resumed reporting less and less each week. When the fun ends...who knows. One thing that can be predicted is that when the paper markets close those who hold shares will get a check...but no gold....It seems to be in short supply.
^^^^^^^^^^^^^^^^^^^^^^
Re and re-read lasvegaspersona...
typical zio trick...
"your gold is worthless, nobody wants it... didn't you see the news? I will offer you $5 for it..better sell now.... too late, price is now $4...... silly goy... still won't sell it?? I will short the price to zero... then you will sell it!! Look that useless gold - is costing you money to store it.... pay me $5 to take it away"
wow... just think what the derivatives must be worth.
I'm a bit weary of anticipating anything real happening in the metals market.
None of this really matters until that day that it does.
I stopped stressing over it months ago (though it should have been years).
Yep, me too. +1
if US dollars goes the way of some other fiat in history... it could be trillions of USD per ounce...but I will shall only trade my gold for hard assets...
Hahaaaa....we are all so fucked!
Did y'all read about the one lonely trader sentenced today for Libor fraud? Really, as if he could do that all by himself....People, the bankers have EVERYBODY in their pockets. No place to run, no place to hide.
It's becoming more and more like THE MATRIX every day.
when the time comes, we will only need guns.
How mich ammo do I
Need before my home qualifies as for EPA SuperFund status?
You can never have enough ammo. Look at the price curve, beats most markets!
And yet, gold miners are at a 15 year low and still bleeding.
I bought gdx and gdxj last wednesday and it's down over 8% since.
And the comex is between a rock and a hard place.
If prices goes up, more people will buy.
If prices go down, more people will buy.
If it remains where it is, more people will buy.
Rumor today is sure to open a new market in Gold.
It seems the only way to kill lobbyist, lawyers, and ranking congressmen is with Gold Bullets.
I'm just delivering the message here...
Paper gold isn't gold.
Obvious, but someone has to say it.
A Euro bill is asswipe. It does not even say anywhere on the bill what it is supposed to be. No legal tender, nothing. At least we have a "In God We Trust" ;-)
Just had to be said also.
In God We Trust, soon to be replaced by God Help Us
True, but the financial experts all say, only old timers want to actually own physical gold/silver.
The smart boys all want to trade it using leverage and margin.
Trade it in dollars?
Smart?
No.
I remember the silver rush of Spring 2013 when provident and apmex got wiped clean of ASE's and Libertads. Back when Silver was $25.
I've read the comments, and I don't think anyone has mentioned the 800 pound gorilla in the room yet. These reports, the inventories, the eligible and registered and even the COT reports can be and probably are total fabrications, policy tools if you will.
This turkey could have blown up last week and our overlords are concealing the blood and guts all over the floor. So, cheer up!
We're closing in....
Snicker Snicker
"to buy some $400 million in Comex gold, and promptly demand delivery"
That idea could be seen as treasonous
Why wouldn't you invest in gold when you can no longer honestly believe in all their paper "shit!?"
It occurs to me that the COMEX invented the Rock (pet), Paper, Scissors game. If Paper didn't beat Rock, everyone would use Rock ALL THE TIME and you wouldn't have a game.
What you're witnessing is the last days of the US petro dollar and the greatest transfer of wealth in human history. Every major oil producer is flooding the market with oil in exchange for US dollars which are then exchanged for real assets like gold. It's not because oil isn't useful or valuable but the wealthy understand their window of opportunity to accumulate physical gold is shortened the more the equity/property markets are bubbled around the world. Any sane person knows that the US won't pay back their debt without inflating the US dollar so they are buying time propping up those markets with the paper money supply via various QE initiatives. You've already seen price inflation enter the markets for REAL goods like food/property/physical bullion yet be undereported by the various agencies consistently. The large accumulators of gold short the comex gold contracts to keep the price surpressed while they accumulate physical stores. They will change the definition of the US dollar when credit markets reset and only then will you see what this barbaric relic is really worth as the only true STORE of value to survive history... besides a stable of bitchez
I'm more interested in this, update is due.
http://www.federalreserve.gov/econresdata/releases/intlsumm/intlsumm2015...
What Comex is really saying,is that 123 ounces of paper,is now worth 1 ounce of pure gold..
"What would happen next is unknown, but unless somehow the Comex found a way of converting millions of ounces of Eligible gold into Registered, the CME would simply be unable to satisfy such a delivery request"
Isn't this what happened between the Comex and Gerald Celente??
And if I recall correctly Celente got paper, and the Comex went on with its business.
Such basic 100 to 1 ratios apply pretty well to everything being dominated by fundamentally fraudulent financial accounting systems, that are based upon being able to make the public "money" supply out of nothing, as debts, which can then also disappear back to nothing, when those debts disappear.
The existing accounting systems are based upon governments ENFORCING FRAUDS by privately controlled banks. Those systems have an inherent structure which drives that debt slavery towards becoming debt insanities. At the present time, there are no realistic resolutions of those problems other than provoking death insanities, since the ratios of roughly 100 to 1 fictional to physical are otherwise still automatically headed towards becoming 1,000 to 1.
At the present time, it is practically impossible to imagine whatever could be an adequate market "correction" after the runaway triumphs of ENFORCING FRAUDS have already driven the imbalances between the virtual versus the real to go beyond 100 to 1. Ideally, such "corrections" would be based upon understanding human beings and civilization actually existing as general energy systems within their environment, engaged in the entropic pumping of energy flows. HOWEVER, when one does that, one discovers how and why the existing political economy is based upon the principles and methods of organized crime, which now primarily take the form that civilization operates through accounting systems that are based upon governments ENFORCING FRAUDS by privately controlled banks.
That there now appears to be MORE than 100 times as much paper & electronic gold than there is physical gold is a pattern which repeats fractally throughout every other aspect of the political economy based upon runaway triumphant ENFORCED FRAUDS. Furthermore, that is now headed as fast as it can towards attempting to achieve ratios of 1 to 1,000, because the BASIC SYSTEMS are now globalized electronic monkey money frauds, backed by the threat of force from apes with atomic bombs. Since those systems have become billions of times BIGGER than the flesh and blood people who originally made and maintained those systems, the public "money" supply, and everything that fundamental fraudulence pretends to account for, have left behind human beings in the dust ...
The public "money" supply that people use to buy food and fuel, etc., and substances like gold, as an illustrative example, has generally exceeded the physical to the fraudulent to ratios of 1 to 100, and those are automatically headed towards 1 to 1,000 ... and beyond, as long as it continues to be possible to back up electronic frauds with atomic bombs, in ways which are becoming orders of magnitude greater than human beings. It inside of that overall context that we are watching and wondering about "this latest dramatic face off in the long-running war between paper and physical gold ..."
What I would like to know, and have asked before without receiving a fact based answer is...since paper and derrivative gold are ostensibly worthless compared to bullion, and since all the manipulation of the price of "gold " is due to the monstrous pile of worthless gold being treated with the same value as bullion, why..... has not the many gold exchanges not started a separate trading value of Gold Bullion vs. Paper gold?
It seems this would be an easy fix, since most on this forum agree with this premise. Can anyone explain why bullion gold remains at the mercy of worthless paper gold.It seems high time to change this.Thanks to all who respond.
The paper gold holders would simply not allow it, too much easy money to be made selling promises and unicorns...they are in control....yours is a solid premise in a fair and sane reasoning World, but alas, as you know...we are way beyond that and well into skittle land...basically, its like a Life insurance Company who has no intention of fulfilling the contract...easy stolen money..
Lasvegaspersona addresses this quite eloquently on page one of the comments..
The answer is that it takes some time to break a stranglehold on corruption but yes it is already happening. Just go compare spot prices to SALES prices on ebay.
"According to the Wall Street Journal, the 10 banks under investigation are: The Bank of Nova Scotia, Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Société Générale SA, Standard Bank Group Ltd., UBS AG and HSBC."
“This study finds a 10-12 (basis point) downward bias in the intraday price of silver around the time of the fixing. This represents three times the average daily return on silver over the same period,” Caminschi wrote in his paper as one of his five key findings.
Switzerland’s competition commission WEKO investigating. FINMA, Switzerland’s financial watchdog, said in November it had found a “clear attempt” to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS. The Swiss Watchdog involved that brought part of this forward and cited UBS... DOJ & CFTC are involved with 10 Banks.
http://www.kitco.com/news/2015-03-04/Regulators-Investigating-Precious-M...
http://www.reuters.com/article/2015/02/24/us-swiss-banks-probe-idUSKBN0L...
http://www.livetradingnews.com/swiss-watchdog-looking-gold-market-manipu...
"Zürich Gold Pool was founded in 1968 by the largest banks in Switzerland. The establishment was triggered by the temporary closing of the London bullion market which marked the collapse of the London Gold Pool, a system of maintaining the Bretton Woods System of fixed-rate convertible currencies and defending a gold price of US$35 per troy ounce by interventions in the London market."
History Repeats itself.
Edit: add from Peter Schiff:
"The US Justice Department has begun to investigate whether 10 of the world’s largest banks have manipulated gold and silver prices. The Justice Department is just the latest in a series of financial regulators to investigate possibilities of precious metals manipulation, including the UK Financial Conduct Authority, Germany’s BaFin, and Switzerland’s competition commission WEKO. On top of that, there are a number of pending civil lawsuits in New York against some of these same banks for gold price rigging. "
The US Dept o JUSTICE? Oh. quiver, quiver!! I'm sure they are already deciding on a nice small fine, to be paid in"gold!".
The US Dept o JUSTICE? Oh. quiver, quiver!! I'm sure they are already deciding on a nice small fine, to be paid in"gold!".
I count 4 Regulators or Agencies don't you?
DOJ, UK Financial Conduct Authority, Germany’s BaFin, and Switzerland’s competition commission WEKO.
But Max Kaiser doesn't think much of UK Financial Police either.
If Swiss have staked out this gold market since 1968, they have an interest in setting it straight. But the only Swiss I can remember meeting was an asshole, so...
Live-on-scene, you may be underestimating the degree to which the existing situation is due to a long history of being able to ENFORCE FRAUDS?
The public "money" supply being created out of nothing as debts is backed up by governments defining that "money" as legal tender, that people must use to pay their taxes with. Therefore, the power of governments to kill those who resist paying taxes using that form of legal tender is what gives that kind of "money" its value. (Otherwise, such "money" made out of nothing would become nothing more than an absurd joke.)
However, for a long, long time, civilization was based upon being able to back up lies with violence, which gradually became the current systems of legalized lies, backed by legalized violence. THAT IS THE EXISTING SYSTEM OF ENFORCED FRAUDS, which then enables paper & electronic gold to have more political power than physical gold, because of the history of how the public "money" supply could be more and more created out of nothing by privately controlled banks, because governments would require everyone else to respect that.
Since the police and armed forces are being "paid" with that form of "money" (as well as were promised pensions to be "paid" with the same form of "money") those continue to be the actual powers that drive everyone else to have to accept that "money" too. Inside of that context, the paper and electronic gold gains its apparent value from the same source as the fiat "money" made out of nothing as debts by privately controlled banks already did, for a long time, during which time generation after generation adapted to living inside of those systems, whereby that monetary system became a sort of state religion. Such faith-based "money" is actually based on the history of that being ENFORCED FRAUDS.
That history of ENFORCING FRAUDS is what gradually enabled there to become more and more paper & electronic gold created out of nothing, with less and less regard to the amount of existing physical gold. Therefore, "bullion gold remains at the mercy of worthless paper gold," because "paper gold" is still able to pay soldiers and police, to force everyone else to accept those frauds.
The basics are that money is measurement backed by murder. Gold backed money is the measurement of gold, backed by murder. The "paper gold" is treated with undue respect within the overall context of the faith-based monetary system as a state religion, due to the long history of established, deeply entrenched, habits. There are combined money/murder systems. In the case of America, that is the American Dollar, backed by the American Military, which has become globalized electronic frauds, backed by the threat of the force of atomic bombs.
While I agree that it appears that it should be "high time to change this" ... that could not actually be done without developing different combined money/murder systems. To seriously endeavour to change the political economy would require as much of a real, radical revolution as possible, which ideally would mean that "We the People" recaptured more control over the public money supply. However, that appears to be a preposterous political impossibility at the present time, due to the deep-seated paradoxes that the existing systems of ENFORCED FRAUDS were based upon a much longer history of backing up deceits with destruction.
To change the monetary system requires changing the murder system, because it is murder system that backs up that monetary system, in ways whereby enough "money" can be created out of nothing, while those are ENFORCED FRAUDS, to the degree where the fictional "paper & electronic gold" exceeds the physical gold by a ratio of more than 100 to 1. As my other comment here already outlined, EVERYTHING is now operating inside of the context of fundamentally fraudulent accounting systems, inside of which gold is merely one relatively easy to understand special case.
By and large, the only genuine solutions to those problems would require developing better organized systems of organized crime, as the only ways that there could realistically exist better governments. However, the tragic trajectory we are most probably on instead is for the degrees to which "money" made out of nothing is able to control everything (such as control physical gold) is going to automatically continue to get worse, faster ... After all, the point that people make that gold does not pay dividends should include consideration of to what degree could physical gold pay for mercenaries, as it used to do in the past. At the present time, the American Dollar, being made out of nothing as debts, is still more able to pay for the American Military and Police, than physical gold could pay for alternative mercenaries. Therefore, "bullion gold remains at the mercy of worthless paper gold," due to "worthless" paper and electronic money still being able to command the armed forces to act. Thus, there is enormous social inertia present in the social habits that represent the "full faith and credit of the United States." That is what has made it possible for the public "money" supply being made out of nothing as debts by privately controlled banks to also overwhelmingly dominate the physical gold with paper and electronic gold.
If you don't mind me asking, what was your education in?
The link under my Zero Hedge name would give you a more complete answer.
I have a Bachelor of General Studies, from Simon Fraser University, that took me about 12 years to complete, since I took a couple years of introductory courses in most of the available subjects, from mathematical physics, to futurology. I then pursued many different kinds of political experiments, which became the basis for various court cases, mostly related to the laws governing the funding of political parties. I currently run a fringe political party that is registered in Canada, in order to continue my political experiments.
As far as the background for my comment above goes, most of my education has been by reading articles published on Web sites like Zero Hedge for several years. Furthermore, I have watched all of these which I collected the links to here: Excellent Videos on Money Systems
I feel you Rad - Is it too much to expect of humanity to have an honest (albeit murderous) money system enforced by the rule of law vs. a dishonest system enforced by fraud? I suspect it is.... sad, isn't it...
Yes, so sad! Too bad!
Thank you for taking the time to author a detailed reply. Much food for thought here and I do agree.
You are welcome!
It'll be a case of first come first served, when enforcing your claim to the ounce of gold that you "own".
This a variant on the hypocathion game.
I would think that "better connected, better served" will more likely be the case.
registered Comex gold has never been lower! It also means that as of Friday's close there was a whopping 123.8 ounces in potential paper claims to every ounces of physical gold.
The Mises Monks who believe "sound" money means backing in gold (in spite of the fact that there is only 1oz of the stuff per person on Earth) claim to know how to work this issue. See if you can get them on the phone.
Are you familiar with the monetary metal called silver or just willfully ignorant?
Are you familiar with the monetary metal called silver or just willfully ignorant?
Yes, I am familiar with the element labeled Ag and called silver. I used to buy a gallon of gasoline with tokens called a quarter when I was in high school. I have many of those quarters now. I have to convert them into 13 or so of today's tokens going by the same name to buy a gallon of gas. If I don't do that I am a fool.
As far as a "monetary" metal ... that's been shown to be fiction and unworkable. That's why quarters today are purposely worthless. A metal backed (or any commodity backed) Medium of Exchange cannot work. There's not enough of any commodity to do it and there's no way to maintain the absolutely necessary balance between supply and demand for the commodity to guarantee zero inflation of the exchange media itself ... all the time everywhere.
If you see something I'm "ignoring" here, I'm all ears.
I think you largely have it. Plus there is little chance that silver or gold would be distributed to everyone (7 Billion people and growing).
- Depletion of Resources?
- Silver oxidizes and is depleted, gold doesn't really deplete
- Fungus as a resource seems to regenerate well, but we don't place much value on it
- Petroleum, Gasoline, LNG, Propane, Butane, Bitumen... they deplete as far as we know and we don't know yet how to affordable regenerate them
- The Ocean and Rainforests seem to be in danger of not producing as much in the future, but we don't place much value on Oxygen
- Living and Working Space, sheltered, environmentally comfortable is very valuable to Americans, but maybe at a higher premium in other countries or has value based on City and Local Markets, housing Bubble Collapse depletes different types of housing
Your ignoring 2 things and maybe more.
1. Thes US constitution explicitly states that only gold and silver coins are money
"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts"
2. In light of the above the US treasury issued gold and silver coins which were in circulation until 1932 for gold and 1964 for silver.
There is absolutely no reason that these can not continue to be used as money once properly valued against the bubble in paper promises. Unless of course you are willfully ignorant. You are all ears all right, in one ear and out the other.
1. The US constitution explicitly states that only gold and silver coins are money
And of course you know that the Constitution has more to say about coins than it does about commerce. But the commerce clause let the entire federal camel into the tent ... and the words about coins became obviously anachronistic and of no substance whatever. I think we can pretty much say that the constitution, like history, is in the hands of the winners.
And in spite of all that, there is absolutely nothing in the constitution that keeps someone from creating and properly managing a Medium of Exchange. A properly managed MOE in our era has no real need for coins ... or currency for that matter. Let governments pay their bills with gold and silver. Since governments are proven perpetual deadbeats, they wouldn't even be allowed to trade in a properly managed MOE anyway.
There is absolutely no reason that these can not continue to be used as money once properly valued against the bubble in paper promises.
Speak to me about the proper valuing of these. Show me how they guarantee a free supply of money to responsible traders. Show me how they guarantee perfect balance between supply and demand for the money. Show me how they mitigate defaults. Show me how they determine interest collections. Show me how they guarantee zero inflation.
"Speak to me about the proper valuing of these. Show me how they guarantee a free supply of money to responsible traders. Show me how they guarantee perfect balance between supply and demand for the money. Show me how they mitigate defaults. Show me how they determine interest collections. Show me how they guarantee zero inflation."
The US used gold and silver coinage for nearly 200 years and then of course there are 5000 years of history of its use as money. Truly the burden is on you to show that it can't.
The US used gold and silver coinage for nearly 200 years and then of course there are 5000 years of history of its use as money. Truly the burden is on you to show that it can't.
That's not that hard. I've illustrated the bi-metal wars. That's indicative of the failure. I've read about all the recessions and panics. That's indicative of the failure. I've read about the gold rushes. That's indicative of the failure. I've seen the gold in Ft. Knox hasn't been reported or inventoried for decades. That's indicative of the failure. I've seen return of the German's gold refused. That's indicative of the failure. And of course I've seen those poor people sifting water in Zimbabwe for flakes. That's indicative of the failure.
And way before that, I saw Spain plunder the new world ... and totally screw up their own economy in the process.
Care to show me some case where gold actually worked? Your dodge of my explicit questions did not escape detection.
A monetary system backed by silver or gold collapses for social reasons and nothing to do with demand.
In an ever increasingly efficient system how do you get money to those who do not have it because there is not enough work to go round.
The FED can create 80 billion MOM to prop up a failed economic system it has no way to print the necessary gold or silver to back its actions.
That is the real deceit here and to serve one purpose to maintain the current status quo at all costs and that mean the entitlement of the entitled.
From that perspective the whole economic and real world starts to make sense.
In an ever increasingly efficient system how do you get money to those who do not have it because there is not enough work to go round.
We're a long way from running out of work. If you let the traders (workers) create money ... as only traders can, you unlock the economy and work abounds. But you must monitor closely for defaults and make equal interest collections to guarantee zero inflation. And in doing this, you ostracize deadbeat traders from the marketplace because they don't deliver on their promises ... they just roll them over ... and that's default. And of course, governments are the biggest defaulters of all.
Those 13 tokens you use to buy a gallon of gas today are not the same quarters, when you were a lad. The pre 1964 quarter is worth 13 times it's face value in silver... $3.25 today which is the approx. price of a gallon of gas today.
This is just a little example of the worth of pm to hold wealth, while fiat money becomes worthless.
Those 13 tokens you use to buy a gallon of gas today are not the same quarters, when you were a lad.
Oh really? Well what do you know about that?
This is just a little example of the worth of pm to hold wealth, while fiat money becomes worthless.
No. It's about a mismanaged Medium of Exchange (MOE). If they had quit putting silver in coins but changed to proper MOE management (guaranteeing zero inflation) at the same time, I would also only need one quarter today ... even though it contained zero metal of value.
But of course that would have made it impossible for the government to expand to its ridiculous size ... and would have obviated the continuous wars the government has conducted in that period.
With a properly managed MOE, all goverments would be ostracized from markets and properly branded as the deadbeat traders they are. A properly managed MOE would have assured this by charging them exhorbitant interest in the face of their failure to deliver on trades as promised.
Hey bud...you're the one who is reminising about your 1964 quarters and then telling us that currency based on metal value is "unworkable". You said if you were "missing anything, you are all ears".
I just showed you that if you give me a 1964 quarter, I'll give a gallon of gas just like in your high school year. I cannot make it any easier for you.
Before during hyperinflationary events citizens in the stricken country have resorted to gold and other country currencies as a refuge. Today with central bank coordinated money printing there are only TWO places to seek refuge. Gold and Silver. Expect panic into these monetary metals.
the stricken country have resorted to gold and other country currencies as a refuge.
From what I've read, the reset of the Weimar Republic took less than a year. From what I've read, gold played no role in the intervening period at all. Who had any? Stinnis required payment in gold from foreign customers yet bought labor with Marks ... but he was the singular exception. And that was before the reset?
According to Charlie Munger gold is a barbaric relic used by Jews, sewn into their clothing while escaping from Nazi Germany. I guess you don't read what Charlie does or somehow gold mysteriously appeared in Germany when the Jews decided to leave.
I guess you don't read what Charlie does or somehow gold mysteriously appeared in Germany when the Jews decided to leave.
I wasn't there.
I also heard stories about the tribesmen being turned into soap and lampshades. That turned out not to be the case. I also read about all the ovens and zyklon B at Auschwitz ... that turned out not to be the case.
I read "When Money Dies" by Ferguson. I don't recall gold having much to do with that at all ... but it was a long time ago I read it. There's no doubt people were doing everything they could to survive. Some actually did survive.
Really rich people seem to like to invest in barbaric relics ... and weird art that they syndicate to ridiculous prices. I'm still amazed that the first thing looted with our invasion of Iraq was the museums. I suspect some serious tribesmen participation in that initiative.
Whatever works.
I wonder if Peter Schiff has $400 Million to put toward the collapse of COMEX?
It says here Switzerland had no indigenous national gold supplies. What does that tell you about the strength of their banking people.
"Zürich Gold Pool was founded in 1968 by the largest banks in Switzerland. The establishment was triggered by the temporary closing of the London bullion market which marked the collapse of the London Gold Pool, a system of maintaining the Bretton Woods System of fixed-rate convertible currencies and defending a gold price of US$35 per troy ounce by interventions in the London market.
The consequences of the collapse of the London Gold Pool, such as the closing of the London bullion market, caused significant instability in the trading and valuation of gold. Without a market, the South African gold producers sought alternative trading partners. The accompanied weakness of the British pound ended the world dominance of London as the major exchange of gold bullion. Swiss banks acted immediately to minimize effects on the Swiss banking system and its currency. By informal agreements between Union Bank of Switzerland (UBS), Swiss Bank Corporation, and Credit Suisse, these banks established a gold trading arrangement, the Zürich Gold Pool. The pool, especially UBS, immediately became the major financial partner of the South African suppliers.[1] Having no indigenous national gold supplies, the Swiss gold market in Zürich developed and maintained a dominance in gold bullion trading[2] by offering specialized account and banking services based on the country's confidentiality laws for banking.[3] By the 1970s Zürich was established as the major trading location for gold,[4] trading some 70% of the worlds total production of gold.[2]"
How important is it for the U.S. to maintain it's position, vis-a-vis outside interests continuing to roll its debt issuance, and for the mechanism of global trade to continue in $USD? Because what is really being asked here is, how important do you think it is for the U.S. political/financial status quo to maintain itself? Once one comes to grip with those questions and their obvious answers, the picture becomes crystal clear regarding anything that might threaten said positions and status quo.
He who sells what isn't hizzen must cover, pay or go to prison.
Back up the truck... buy all you can .... sell the dog....
buy more . . . . . .
"Incidentally, as part of the month-end redemption requests, we saw a whopping 22% of the eligible gold in Kilo-bar format..."
My Calc is that BRINKS lost 25.551% of their holdings and they are the biggest of the players.
SO China holds $1.4 Trillion US Treasuries with HK, and Kissinger went over there in the 1970s and told them they could join us and we would Invest in them and they could Build China with State owned Banks and they could even buy up all the gold they wanted with their FIAT.
So China is a big player till they crash, but then they will join Brazil, Russia, India, as Big Holders of Gold and Infrastructure.
US Bankers will just move to the next big market outside of the USA and probably Our Congressmen and Lobbyist will join them there.(After US Sovereign Debt Crisis and curtailments on Energy due to aging Nuke Reactors and the $20-$40 Billion dollar & 10 Years Building cost to brink new Nuke Reactors online.
Someone has to start calling the COMEX paper lie and demand delivery of all.
Oh the pain when the COMEX can't deliver. They'll have to close the COMEX gold.
This would cause a loss in faith of the COMEX.
You think there is currently faith in the COMEX????
I call you over subscription !
Ummmmm, hate to break it to everyone, but that first chart is a BAD, not a good, sign. Since 2009 it is showing lower highs and lower lows. Look! Say hello to $750 gold within a year.
King, $750 is BS. $350 is the better call. In fact, I'd not be surprised to see $35 an ounce, or even $20.
Mind you, I'd expect 100 oz. would buy a nice house, 10 oz. would buy a fabulous car and one oz. would land the woman of my dreams in my arms. Alas, not likely as the boys will print, and print, until they get another party going.
I have been sitting on physical gold for the last two years now.
While we have Comex and ETF and they are the influence on the gold price (125 times more than physica goldl) then gold will stay low.
If you read their contract notes, they are able to pay out in money value so the gold doesn't have to, in effect, back it.
On that basis, I have made a mistake buying gold too early and feel sorry for those that bought at US$1,900.
Is the huge disparity because the gold in the vaults has been hypothicated and rehypothicated?
Here is why gold prices are so low: the Fed and Big Banks.
http://michaelekelley.com/2015/07/20/dear-fed-plz-raise-gold-price/
http://www.zerohedge.com/news/2015-07-09/are-big-banks-using-derivatives-suppress-bullion-prices/
Here are some more signs of a coming recession.
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record...
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://www.zerohedge.com/news/2015-07-27/when-will-we-ever-learn/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Key Themes, Pages 2/29, 18/29, Global GOLD Demand Trends, Quarterly & Annual.
1st Quarter Changes:
Gold Tons, 1Qtr 14, 1Qtr 15, 5 Yr AVG, Trend
Tot bar & coin, 281.5, 253.1, 335.1, Down
Jewellery, 620.2, 600.8, 570.3, Down
But that is not all Gold Investments, and global economy slowed.
Supply Gold Tons, 1Qtr 14, 1Qtr 15, 5 Yr AVG, Trend
Total mine supply, 725.8, 734.2, 730.8, UP
Recycled gold, 367.4, 355.1, 371.1, Down
Annual:
Annual Demand & Investment Tons, 2013, 2014
Total bar and coin demand, 1,702, 1,004,
Physical bar demand, 1,336, 726,
Official coin, 266, 205,
Medals/imitation coin, 100, 74,
Jewellery, 2,671, 2,457,
Technology, 354, 347,
Electronics, 248, 278,
Other industrial, 83, 49,
Dentistry, 23, 20,
Total Tons:
Central banks and other inst. 626, 588,
Total:
Gold demand Tons, 4436, 4212,
Supply Tons:
Supply Gold Tons, for 2013, for 2014,
Mine production, 3060, 3135,
Recycled gold, 1255, 1175,
Total:
Total Gold supply, 4282, 4410,
http://www.gold.org/supply-and-demand/gold-demand-trends#full
Looks like a Balance, maybe a year stagger in Supply and Demand. But a Balance where the Demand takes all the Supply for whatever reason.
Would love to sell Jewelery in India or China.
But Table 11 shows some historical data that Coins & Bars, Central Bank Purchases have pushed Global Demand Up by 1000 Tons each year over the last 10 Years.
Historical Annual Demand in GOLD TONS:
Global Demand, Coins/Bars, Central Banks, Total Everything
2005: 418, -663, 3,127,
2006: 430, -365, 3,096,
2007: 438, -484, 3,115,
2008: 918 -235, 3,777,
2009: 832, -34, 3,674,
2010: 1,202 80, 4,213,
2011: 1,493, 481, 4,728,
2012: 1,300, 569, 4,690,
2013: 1,702, 626, 4,436,
2014: 1,004, 588, 4,212,
Coins and Bars are soaring, India, China, Europe, Thailand, Vietnam, Indonesia, Iran, Turkey, USA.
Table 10, page 24/29, shows countries official gold holdings and percent of reserves.
World Gold Coin Demand of 205 tons is approx =
32153 X 211 Tons = 6,784,283 oz Gold Production in the US in 2014.
205 Tons X 32153 OZ = 6,591, 365 OZ of Gold Coins Sold in 2014.
Which was the question I wanted to know this morning or afternoon. Assuming the World Gold Council and the Data is pretty good.
http://www.gold.org/supply-and-demand/gold-demand-trends#full
I'm not gonna tell'em about my two pieces of gold and five pieces of silver...
might come looken to take mine
YES and NO to this article:
1) YES the 124x ratio raises eyebrows. but still, the OI is low on absolute terms. Until now, proof is most of people who are *LONG* Comex futures contract are hedgers or speculators that don't NEED to go to delivery. the Basis (gap between physical market and futures market price) is not troubling at all and doesn't show any signs of tension as of now.
Registered Comex Gold has never been lower, but NO Gold has not become scarcer, the amount of existing gold has NOT changed.
2) the only conclusion is that the physical gold is shifting to China, but with the right price (only a few dollars as indicated by the basis levels), paper vs physical would be exchanged and that 114x ratio would not be any problem *IF* people decide to take more delivery.
in essence, Gold is moving to China where a brand new Futures exchange has been created and (slowly) starting. in the (not so far) future, those interested in physical gold will need to take delivery in Shanghai and ship it to US if necessary... that in inself doesn't justify lets say an 50% increase in the price of Gold.
3) *IF* there is a delivery event on Comex, it remains to see what long term effects on the price would happen. Yes the Hunt Brothers managed to squeeze the price of gold for a few months. however, after their corner, they were forced to sell their position at a massive loss and the price ended lower than when they started buying. No reason to think it would be different this time around if Hunt Bros #2 is coming on gold. Be Careful for what you wish.
Even if it is not 124x the multiple is very high and explains how they find it so easy to suppress the price of gold.
At 124x you can suppress the real value by manipulating the paper value.
It also quite clearly shows, if you are going to hold gold or silver as a hedge bet in this financially manipulated world YOU MUST HOLD REAL.
Paper if they pull the plug is worthless and can be used as a means to fleece you of your worth.
The last noticeable point is on a margin call the value of the paper is? = 0! Or it is now at 124x.
by the way nowadays, you can NOT expect a hunt bros event anymore. traders go to prison for less than that nowadays, and for a long time.
Looks like Fractional Reserve Banking to me. How is paper gold different?
Jim and Tammy Faye Bakker where thrown in jail back in the 1980's for sellling memberships in a club that promised a free 3 night stay in a chain of luxury hotels they were building.
The supply of hotel rooms ended up being a little short ( one 500 room hotel was built), but I am sure theiir coverage ratio was a lot better than 120 to 1.
It does not matter if it is 100 per 1 physical or 10,000 per 1 physical. What matters is how many stand for delivery. 20 people standing for delivery in either scenario has the same impact. The only difference between the two scenarios is the increased risk the more contracts there are that a black or even grey swan event convinces a larger % of the contract holders to stand for delivery.
On a separate point, gold eagle demand is not a proxy for aggregate gold demand. This refrain on ZH articles is stupid or intentional deceit. 2500 tons of gold are mined every year. Something like 1% to 2% of that goes to gold eagles. In addition people buying gold eagles are not a random sampling of gold demand in any way. You have collectors, curency collapse preparers, and the like. Not jewelers, not central banks, not wealth funds or other institutional investors, not industrialists. You cannot use a very small and highly segregated (non-random) subset of data to represent the larger block of data. This claim that gold eagle demand means gold demand in general is high is simple lying with statistics. It also means all claims to knowledge based on this claim are also unfounded.
just more "BUY GOLD NOW!" propaganda
gold = expensive shiny lead
buying gold will NOT liberate you from the regime's control
buying gold will NOT protect you in the mega-crash that is inevitable, but still many years ahead