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Something Just Snapped At The Comex (Updated)
Update: Earlier today, we said that we would "keep a close eye on today's Comex update to see if JPM reverses this "adjustment" and adds at least a few more tons of deliverable gold to its vault." Moments ago we got the daily update form the Comex and not only did JPM not reverse its registered to eligible adjustment, but more curiously, the second largest vault, that of Scotia Mocatta (behind only HSBC) saw a comparable adjustment, whereby 16,644 ounces of gold, or about half a ton, and 14% of its vault total, were adjusted away from "registered" and into the "eliglble" category.
This means that the already record low total registered holding across the Comex system, declined once again this time by 8.3% and hit a new all time low of 185,315, or less than 6 tons.
This means that what was already a record dilution factor, with over 200 ounces of paper gold claims for every ounce of deliverable gold, just soared even more, and following today's 8% drop, there is now a unprecedented 228 ounces of paper claims for every ounce of deliverable "registered" gold.
For those who missed the full story from earlier today, please read on.
* * *
Just over one month ago, when looking at the latest changes in registered gold held at the Comex ,we were stunned not only by the collapse in this series to a record low of just over 350k ounces or barely over 10 tons, but also by the surge in "gold coverage", or the amount of paper gold claims on physical gold, which exploded to a record high 124 per ounce.
This is what we said on August 3:
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.
One month ago we showed this record surge in gold claims as follows:
But if last month was shocking, then what the COMEX revealed yesterday was absolutely jaw-dropping.
Here is the most recent update provided by the CME on eligible and registered gold.
What it reveals is that while JPM saw another 90,000 ounces of gold once again withdrawn from its vault, this time in the eligible category, for some reason a whopping 121,124 ounces of registered gold were reclassified as eligible. In doing so, JPM's registered gold (red line in chart below) tumbled to a record low of just 19,718 ounces - an 86% collapse in just one day - and well under 1 ton of gold, some 600 kilos of physical gold available to meet delivery requests to be specific!
JPM's dramatic adjustment also meant that total Comex registered gold has likewise tumbled to the lowest in history of just 202,054 ounces - just over 6 tons - available for delivery.
Zooming in only on the registered gold since 2014:
Not surprisingly, the latest collapse in registered gold took place while the gold open interest remained flat, and in fact has been modestly rising in the past year as seen below:
Which brings us to the punchline chart: the Comex gold "coverage" ratio, or the amount of paper claims for every ounce of physical. As of Friday this number was literally off the chart (it would not have fit on the previous chart shown up top), soaring to a mindblowing 207 ounces of paper gold claims for every ounce of deliverable gold. This also means that the dilution ratio between physical gold and paper gold has hit a new all-time low of just 0.48%!
And while we know what caused this epic surge in potential claims on gold - namely the relentless outflow in registered gold - what we don't know is whether this is a systemic event, one which threatens the next Comex gold delivery request with an "insufficient product" response, and a potential default, or simply a one day abnormality.
What we do know is that, if only for one day, something at the Comex has snapped.
We will keep a close eye on today's Comex update to see if JPM reverses this "adjustment" and adds at least a few more tons of deliverable gold to its vault, and if not, perhaps a phone call or two may be in order.
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Here is something i found online some time ago, called Lessons from Argentina,s economic collapse. It probably wont play out the same way but it is an interesting look at how a collapse does play out
http://www.silverbearcafe.com/private/10.08/tshtf1.html
I live in Canada not many of us have guns , at least i dont . I have food and pms and it turns out if the magicians that run the economic system can keep it going for a long time that pms were the best way for me to save money even though i am down i continue to collect , jewellery coins bullions as i have never ever been able to save money any other way . I dont know what the future holds , common sense tells me we are in deep shit but who knows i would have figured we would have collapsed by now .
Interestingly enough there was a book written in 1994 called the
The Great Reckoning: Protecting Yourself in the Coming Depressionand those guys are probably still waiting for the collapse
Marty Armstong says there is no manipulation going on and anyone who believes in gold is a sucker and gold is going lower.
didn't marty go to prison, because he wouldn't give up the gold?
Sounds like a comment from a Marketwatch shill-why don't you pull your head out of your ass for a moment and get with the program-oh sorry I forgot, you're one of those pricks I can't wait to cold cock first chance I get in some Georgetown dive bar-FUCK OFF DB
This must be why they call it 'paper' gold.
they must be planning on shorting gold so hard it goes to $500 per troy ounce.. no one will want the pet rock... but me.
Comex is a paper trail to remonetize a pet rock. I was fortunate to have a retired person tells me 15 years ago. This thing is going is going tit's up.
As yourself why! The nuclear deal. It has nothing to do with nuclear bomb development. The Jews are snaking how they cannot steal a intellectual property to sell nuclear electricity development.
There is bomb attack to create nuclear bombs apposed to creating nuclear power to create electricity.
Jimmy Carter on Nuclear Power 1976 - YouTube
Look..Miners produce 3000 tons a year. They paper ,forward sells their production to lock in price. The Comex inventory ratio is meaningless.
4 dislikes. I hit a nerve did I
It's not dislikes.....it's disagrees.....The disagrees think you're an idiot and not only don't know what you're talking about but think you believe your own bullshit so you can ignore the truth.
Do you finally see the fucked up bullshit?
Recycling Russian Nukes into US Electricity - Stewart Brand ...
Here is why gold prices are so low:
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/
The Comex is broken. This paper gold scam will see the light of day soon followed by an announcement of a new "physical" market. It has to break sometime. Pretty sure all gold bugs will be vindicated. My only concern is that the bastards running the scheme are getting desperate. And they have friends in high places. They won't go easily.
Does anyone recommend storing bullion in a vault in a foreign country outside the US? If so where and which ones...
Yes, JP morgan and Goldman sacks. They have a cool setup where it's ....... Gone
Gold is history. The play tomorrow is Crude Oil for a 10% up BaZooKa, well at least 5%
The last act for BRICS decoupling petrodollar recycling.
But that's what Obama wants. We have it on record.
Shoosh... Listen, the printing continues... This means nothing... Zombies waiting for the football to crank up in less than 24... Nothing to see here...
When is it going to make a difference???
When the Red Queen say's it makes a difference, haven't you read the script yet? Meanwhile eat your fiat and be a good little pleb.
Rhythm is a dancer
http://www.youtube.com/watch?v=WMPM1q_Uyxc (3:48)
there is no phys owned, " finanicially unimcumbered" or stored at the comex,
when they stated they did'nt have to settle in phys. gold, i was out the next day.
this will end up in the history books under corzined #2, clerical misplacements of assets.
more bad news, all the red ink is a tbtf.
you'll get your settlement in 30 yr. trsy's., myra's, after a 10 yr. court battle.
i figured i'm in the matrix, i'm buying trsy's, if they default on these, i'll have lots of company.
all other investments lead back to tbtf origins, and when they trashed the constitition on contracts with gm bond holders, and 90% of corp. bonds will lead back to gm settlement case, tbtf, corp's.
ca'nt buy stocks, where i read it's a consensices their horibly over valued, theres going to be 90% of the people responsible for the gdp in america, above the staple catagory, very angry after the crash.
This just inspired me to buy 80 Canadian silver maples to be stored on the joego silver train buried in parts unknown.
80 Oz's? You shouldn't bother with the joego Lionel. Buy some more Ag!
When I'm Warren I'll buy my real gold train, but for now I have to be happy with what God provided me.
you idiots, theres no more gold at JPM vaults, because they figured out that selling all the gold was the best way to make $$$$, instead of holding it until it goes to 0....
Hmm... 1.5 grams of gold for each COMEX claim? I only hold physical.
I believe the COMEX must deliver physical or its cash equivalent. I know at the CME this was the case. Cash is valid for settlements instead of physical.
But it won't matter if all producers boycott. Price will again be set in REAL markets and price discovery will take place. Oil is already de-humanizing...
I have my two Monopoly Bags of Junk Silver; apparently, you can't get that, anymore.
GOLD CANNOT ENTER A BULL MARKET YET.
IT MUST MAKE POST 2011 LOWS IN "ALL" CURRENCIES DENOMINATIONS, simply because gold is the ultimate currency. It ust be HATED
world wide by all currencies before a bull resumes.
So far gold is no where near any lows in AUD, EUR CAD denominations.
So...any of you math gurus know what this SHOULD have done to the price??
you idiots, theres no more gold at JPM vaults, because they figured out that selling all the gold was the best way to make $$$$, instead of holding it until it goes to 0....
Old news. Anyone could see this happening already. What would be news is if the holders of the futures contracts actually demanded delivery of the physical. Thats when the system would collapse.
Hmm, tomorrow is Sep 11....../
I'm curious about something.
Gold's worth is measured in fiat. An oz of gold is worth x dollars or x pesos or x yen
If fiat becomes worthless, how does a person value gold?
For those of you who are storing it. Maybe you bought it for $1,000 an oz.
Let us assume your car's transmission will cost $1,000 to repair.
Assume fiat becomes worthless. You need to get that transmission fixed, but you need to buy gas first to get to the shop. The tranny lost reverse gear.
You have 2 oz of gold. You fill up with gas and go to pay with gold, preparing to shave off the required amount for the gas. They tell you it will cost an oz for the fill.
You're pissed but can't do a damned thing as there is a mean looking armed guard there and his hand was resting on his gun.
You go to the repair shop. They fix the transmission. They only want 1/4 oz.
No one knows how to value goods or services in a consistant manner versus the respective weight in gold.
The money is like a barometer.
If a loaf of bread costs 10$
and an oz of gold costs 100$
You should expect 1 oz of gold to buy you 10 loafs of bread.
People will always spend more FIAT than gold, because FIAT is by its nature already worthless and only represent a claim on labor hours that were expended by the holder.
That being said you should expect to be able to charge rich people more for that bread than a poor person.
Rich people will be the first to dump their FIAT, because they have very little labor invested into each dollar they hold (since most of it was probably inherited or stolen from the masses in some ponzi scheme).
The people who actually work for a living (most people without a govt job or job working for a bank) , will be less inclined to spend FIAT because they have more attachment to it (as it represents their labor).
So you can expect to charge rich people more for things than poor people (which holds true).
So, make the rich people pay more for the bread, and cut the poor guy a break is pretty much the model we are using when completing transactions in FIAT.
As for using FIAT to measure the value of gold when FIAT is completely worthless..... well you answered your own question, at that point the price is arbitrary, and only a fool would even consider exchanging gold for worthless FIAT.
What would endup happening is people would form an alternative store of value (bitcoin/silver/gold/diamonds/a more secure less worthless/harder to fake currency standard would arise out of the ashes of the FIAT).
In order for dollars to be worthless, there has to be something "worth-more" that people use as a medium of exchange , 1 bitcoin for example is worth roughly 240$, so if the dollar collapsed tomorrow... I would assume most people ages 20~45 would use bitcoin to complete transactions.
The irony is that paper dollars may endup de-coupling from bank account dollars.
If the banks go under all their deposits vanish into thin air and most of the money supply goes "poof", those still holding paper notes may actually profit (all the value from the book money on bank ledgers would temporarily be shoved into the paper notes)
So one paper dollar may endup being worth 1000$ US dollars on deposit (because no one can withdraw that 1000$).
This may be why the govts and banks are trying to "ban cash" because they know when the great crash happens "cash will be king" unless its already been taken out of circulation.... they cant have a bunch of peasant slaves functioning economically without them... now can they?
I was looking at M1 the other day.
And I noticed something.
All recessions coincide with periods of rapid money expansion.
Everytime the monetary unit gets inflated, you get a recession, then the "answer" to the problem is to "expand the money more".
If you have 4-8 years of monetary expansion, you are going to have a collapse/recession (it has to happen) because of pent up forces.... rising costs, cause rising prices, rising prices cause lower consumption, lower consumption = less demand, less demand = less need for people to work, less people working causes less spending, less spending goes back to position 1 (rising costs, combine with lower spending and employement).
If the money was never expanded in the first place, you would just have steady constant growth.
The money base on average is being expanded over 6-8% a year.
Thats 6-8% money inflation (in raw supply) a year.
That is completely unsustainable, by 2050 you will be almost doubling the money supply (exponentially) every year (adding 100s of trillions to M1 a year).
There is no way any "retirement plan" being invested into today will be able to keep up with inflation over the next 80 years in any meaningful way, people who are like 20 ~ 40 years old dumping money into retirement plans should be pulling that money out and spending it on real assets ASAP because lets say you invested 1,000,000$ into a fund over the next 30 years, by the time you go to pull out a loaf of bread will cost you something like 10,000$USD.
By 2070 I predict (assuming we use the same currency) that a loaf of bread will be equal to roughly one years wages in 2015 +/- a few months.
Why on earth would anyone "save for retirement????"
Pet Rocks
It hasn't had much effect on the Gold price. Matching the ZH chart to the price chart shows that: No changes in the selling in the 2013 spike or now. Pressure is still coming from the sellers. Argue as you might that this is a manipulated market - which it may be - the manipulators are therefore doing a good job of it. Stay Short.
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=3&mn=0&dy=0&id=p30618952...
Yes but how in god's name doesn't this boost the miners?
They're making money and demand is higher then supply.
I know of many miners finding it difficult to raise capital for mining operations.
The answer thus is quite clear. The paper gold will be paid in paper Gold and maybe cash.
When people finally realise the game over, Comex will be over too.
But the key players who are Lords of the World, will have got out of the bogus market by then.
Isn't it illegal to sell something that you don't actually have?
When they run out of fizz 100%, they will settle cash only. Who will be holding the bag then ? And yes, 99.5% of the shorts are naked. This paper bear will burn, and it will be a sight to see how this will be resolved.
if you dont hold the bullion in your hand, your goosed, end of.
www.teamramgold.com/about-us get onboard, get acquiring your PHYSICAL 1g 2.5g and 5g LBMA Bullion right now...
If one gets 1/226 fizzical units for every paper unit *if you are lucky* then I'd call that "expensive". The paper roaches will figure this out sooner rather than later. And this is the main price setting mechanism. What a farce.
See what you're actually buying anymore isnt actually physical gold, its just the 'idea' of gold, and the values and principles that it represents. Buying 'gold' gives you feelings of financial independence and diversification away from fiat, without the messy concerns of how to store it, and keep it out of the hands of ransacking thieves. And really, isnt just the thought of that satisfaction enough when you hit 'buy'?
A week later, on 16th of September, the ratio has increased to 252. Mike Maloney said so, I have not independently verified it. All I want for Christmas is a Comex default.
Update Sept 19, 2015: Open Interest is 4,241,040 ounces, Registered gold is 162,034 ounces. The ratio is 261.7