Anyone Who Believes The COMEX Numbers Is Very Naive (They Are Much Worse!)

Tyler Durden's picture

Via Investment Research Dynamics,

“The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.”

– disclaimer now posted on the Comex gold and silver daily warehouse stock report as of Monday, June 3, 2013 – Investment Research Dynamics – June 4, 2013

Yesterday we published an article detailing the Comex gold futures to deliverable physical gold ratio that is now north of 200:1.  But an erudite colleague of mine, John Titus of “Best Evidence,” correctly pointed out that:  “They are probably bluffing.  In other words, the real number is significantly higher than 200:1.

 

For the record, John does more thorough research on the economic numbers and reports that he studies than anyone I’ve ever come across.  And he does it with the trained analytic eye of a seasoned patent litigation attorney.

Let’s put everything in perspective.  The numerical reports from which fancy graphs and and dry detailed data presentations are created originate from the Too Big To Fail Banks. I’ve said for quite some time that IF the bullion banks who control the Comex and the LBMA are submitting honest data reports for the Comex and LBMA, it would be the only business line in which they do not hide the truth and report fraudulent numbers.  What is the probability of that?

JP Morgan was recently caught stuffing proprietary Comex futures short-sell trades into the “Managed Money” account category of the COT report.  The CFTC scolded JPM and slapped them with a whopping $650,000 – LINK.    Does anyone really believe that the CFTC wrist-slapping corrected any fraudulent data reporting by the likes of JP Morgan?  Really?

Put your “think like a criminal hat” on for a moment.  You know that the people who care about this sort of thing already know that the there’s a paper vs. physical problem in the market.  So just show them a number that they’ll buy into and that will be “the number.” Most analysts will accept that number at face value and use that in their articles and blog posts.  That number then becomes accepted in goldbug circles as the “real” number.

But the truth of the matter is that they are more than likely reporting numbers they want us to see, not the real numbers.  For instance, the silver market is now seizing up from lack of supply.  Please see this report from Greg Hunter and David Morgan if you are still skeptical:   Retail Silver Has Seized Up.

Yet, the Comex bank custodians are reporting over 51 million ounces of silver available fore delivery – LINK.  In fact, CNT – an official supplier to the U.S. mint – is showing 13.3 million ounces of deliverable silver.   So why is there’s a shortage of silver at the U.S. mint? IF that silver were actually in the vault, the U.S. mint could buy a spot contract – September has a silver contract open – and take immediate delivery.  

Also, why did the CME, unannounced, start slipping that little accuracy disclaimer into its daily gold and silver inventory reports in 2013?   I’ll let you draw your own conclusion about the truth.

The silver market is seizing up which means that there’s a severe shortage of silver available.  It is also showing up in the LBMA wholesale market based on the backwardation in gold and silver forward contracts that have been observed for several weeks.  It means that any visible inventories reports from ETFs and Comex/LBMA banks custodial vaults are fraudulent.  That includes SLV reports.

It also means that the recent discovery that the LBMA altered its gold refining flow statistics, revising what was originally reported to be 6,601 tonnes of gold cleared by the LBMA in 2013 down by 2,000 tonnes to 4600 tonnes, are likely off the mark.  That’s a big miss, given that the total global mine production annually is around 2500 tonnes.

The significance of this is that it’s easier to explain how 4600 tonnes of gold was refined into bars and sent to Asia than 6600 tonnes, given that the total global supply of gold from mine production + scrap production was reported to be slightly more than 3000 tonnes.

From where did that extra 1600 tonnes come?  The REAL question is, from where did the extra 2600 tonnes come if we use the original number?  And is the 6600 tonne number a good number?  Was the real number even higher?

The obvious conclusion is that the supply deficits in gold and silver are being remedied by hypothecating gold and silver bars from allocated accounts held at bullion banks, including the accounts held in behalf of the gold/silver ETFs,  like GLD and SLV.  This is why ABN Amro and Rabobank stopped allowing their physical gold account investors to take physical delivery of the gold they thought they have invested in – the gold was not there to deliver.  This also occurred in 2013.

Now for the final blow to any skeptics.  You’ll note that the LBMA revised down the amount of gold it cleared from refineries in 2013.   But you’ll also note that the Comex inventory report disclaimer at the top of this post was first inserted into the daily Comex inventory reports in June 2013.  See any coincidences?  Bueller…

Bill Murphy and GATA have maintained for years that the fraud and corruption in the precious metals market would eventually be revealed as the biggest financial fraud scheme in history.  It would seem that the cracks in the wall of this scheme are growing wider and it’s becoming easier to see rays of truth.

History tells us that all Ponzi schemes and market interventions fail.   I believe we are on the cusp of a massive failure in the scheme to cover up the truth about the precious metals market.

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ZomBiEHiGH's picture
ZomBiEHiGH (not verified) Sep 10, 2015 9:01 PM

RIPieces Murican' Dollar. 

Money Counterfeiter's picture
Money Counterfeiter (not verified) ZomBiEHiGH Sep 10, 2015 9:06 PM

Fuck it I am selling my house 200 times.

logicalman's picture

No amount of money could make me put up with RE idiot and Open House 200 times.

Just burn the place down and walk away!

 

coast's picture

I dont think I would give the advice to MC, but I would like the comex to take your advice. :-)   Which they already are planning on doing.....they are going to burn it down and walk away. Think building 7 and all the audit papers that went with it.. hah.

ThaBigPerm's picture

Declare force majeure -> settle "delivery" in FRNs.  Fixed (at least on paper).  On a side note, how can one declare force majeure when the "fm" is simply that you got caught?  Oh, nevermind...

New_Meat's picture

It was an act of God, no one could have foreseen getting caught.

38BWD22's picture

 

 

Jesse has been amping up his rhetoric (in his gentlemanly fashion) re gold shenanigans over the past week or so.  Including tonight:

http://jessescrossroadscafe.blogspot.com/

Save_America1st's picture

Great analysis Dave!  You, Turd, The Doc and Eric Dubin, and so many others out there do us all a tremendous service with all your research and analysis.  Keep kickin' ass with that research and we'll keep right on stackin' phyzz!!!

OrangeJews's picture
OrangeJews (not verified) Save_America1st Sep 11, 2015 12:18 AM

I just feel bad for Fonestar and his samefag gang. (Look it up Tyler's before you ban me again and create a new rule). What I know is at the end of the day I can physically play with my PMs, kiss them, even sleep with them, and feel safe.

JerseyJoe's picture

Oh and BTW, COMEX should have 50,000 1000 oz bars in their various warehouses according to their inventory....so why doesn't APMEX have these bars to sell for weeks!?!  

 

JerseyJoe's picture

Yes they do and I can think of a few commentators who provide great insights as well.

On silver...APMEX has been out of COMEX 1000 oz bars for weeks.   These are sourced directly from COMEX.   So where are they???   One of the largest retailer can't get COMEX source bars for weeks???  'splain that!?!   Many of the other silver weights are also out for weeks - with many product very pricey "rare" items.   

 

http://www.apmex.com/category/25680/1-000-oz-silver-bars

Flying Wombat's picture

Thanks for the kind words, and heck, is this the first time ZeroHedge posted an article by Kranzler?  Good on them.  They should add him to their regular line-up.  SilverDoctors posts a lot of syndicated stuff that I dislike.  But our flagship inhouse podcast is usually very high quality.  Maybe one day ZeroHedge will forgive me for poking fun of their Hello Kitty Vibrator story and post SD Weekly Metals & Markets.  LOL

Last week's interview with Sunshine Minting CEO Tom Power was packed with insight and it was a pleasure speaking with him.   Sunshine suppiles blanks the US Mint for silver eagle production.  Stuff like that interview is certainly ZeroHedge worthy.

Doc and I interviewed David Morgan on Friday and that should be up sometime Saturday on SilverDoctors.

-- Eric Dubin, The News Doctors

CrimsonAvenger's picture

Ah, the Ashley Madison defense.

explosivo's picture

Hence the massive false flag event that is coming soon.

coast's picture

Hey MC...whoever gave you a down vote needs to get a brain transplant......I thought your comment was indeed funny but true. Good one....Maybe I will sell my car 200 times too.  I will collect all the money and promise delivery as soon as the shemitah ends...lol..

NotApplicable's picture

Thing is, MERS and the likes of JPM have already sold his house 200 times, if he has a mortgage in their pool.

Reichstag Fire Dept.'s picture

I sold my house 200 times the legal way...sold the house, took the money and bought physical gold at Cdn$1430ish...so, we wait for the true 200+ times price run in gold...aaaaaaand we wait.

undertow1141's picture

No no no, you see, if you do it, its called fraud.

Bloppy's picture

What happens to the GLD ETF when this hits the fan?

 

 

Jindal: Trump ‘looks like he’s got a squirrel sitting on his head’

http://tinyurl.com/oyndko8

NotApplicable's picture

The author also didn't seem to know that Comex paper is considered physical in regards to SLV\GLD holdings, as you can "stand for delivery."

I would assume that they've since used this to drain all metal out of these vehicles (given only "authorized participants*" can create/redeem 50k baskets of shares).

*JPM and GS being two of these entities, being custodians of said funds holdings (for those keeping score at home).

Bay of Pigs's picture

Actually, its JPM and HSBC as the two custodians, but no sweat, GS is working them for all its worth too.

logicalman's picture

Now, THAT's what you call a disclaimer!!!

I honestly thought she was over the age of consent!!!

WTF?

 

Trucker Glock's picture

"The REAL question is, from where did the extra 2600 tonnes come if we use the original number?"

 

Shouldn't that read 3,600 tonnes?

Bastiat's picture

For those paying attention to numbers:  gold seemed pinned at 1111 for most of the day--still there.  Another signal?

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) Sep 10, 2015 9:10 PM

Blow the fucker sky high and shove it up the central planners ass holes.

Yen Cross's picture

 Took 1/2 ounce Swiss coin. (wafer thin, size of quarter)-AU to local coin shop for appraisal this weekend.

 I walked out of the shop, and the dealer chased me to my car, because he realized the mistake he'd made.

 Trust me, when I say this. Coin shops will pay you over spot.

 I told the guy to fuck off.

 

38BWD22's picture

 

 

Three months ago (I have no more recent info), another guy walked in while I was at my LCS.  He wanted to sell his 1 oz Au Eagle.  They offered him just under spot (very low).  The LCS sells Au Eagles at spot + $90 (or did three months ago).

I was very tempted to make my own offer to the guy.  But, then I would have been forever unwelcome at my LCS.

*   *   *

For Au Eagles now, they indeed might offer more than spot.  If I can, I will go tomorrow (Fri) and report back if I have news.

Yen Cross's picture

Ummm. Just show the paper/physical CME, Comex chart to him/her.

Latitude25's picture

I called GAinesville a couple of weeks ago and they offered me $10 over spot for AGEs.

Mostly Harmless's picture
Mostly Harmless (not verified) Sep 10, 2015 9:14 PM

Of all the financial news/information out there, I can't understand why this is not more widely reported or why there is not absolute outrage at this obvious fraud.  There are literally thousands of "receipts" for a physical thing (gold, silver, etc.) that can't actually be matched up to the physical items, should everyone cash in their receipts all at once.  …and this has been common knowledge for years!

Latitude25's picture

Never mind everyone cashing in their receipts.  If only 5% cashed in the system would explode.  But who holds those receipts?  Could it be Mr. Yellen?

o r c k's picture

Which types of market manipulation are legal?

Which types of robbery are legal?

logicalman's picture

Taxation is legalised robbery, isn't it?

 

TungstenBars's picture

Legal simply means if you have the power to hold onto your claim over something, irrespective of anything else. 

RushRoolz's picture

Which types of market manipulation are legal?

Which types of robbery are legal?

 

Isn't it obvious? It's the types done by certain people/institutions. Happens every day in politics. If you or I have top secret email on a server in a bathroom, we go to jail. Hillary does it and we hear how it may affect her poll numbers a bit. We live in an unjust, manipulated world.

yogibear's picture

The COMEX deserves to be brought down playing games like this. Everyone of those 200x buyers should demand delivery.

A perfect game for those huge dollar owners.

Flood the COMEX with buy orders to take delivery and watch them blow up. Sweet.

 

booboo's picture

They may want to read the fine print on that "delivery" clause.

DirkDiggler11's picture

For the record, I am a self confessed stacker, but I have at least two issues with this article I take strong exception to.

First is the notion that the U.S. mint could just take delivery of open September futures contracts and Sham-Wow, their shortage issues are over pertaining to ASE production. This is total B.S. The U.S. mint purchases silver blanks that are then stamped by the mint. I believe ZH had a recent article on the Sunshine Mint that supplies about 80% of the silver blanks used by the U.S. mint. So, when ASE coin demand exceeds forecasts because us stackers are doing our part, it is not as easy for the mint as driving a few armored cars to the COMEX to solve their supply chain issue.

Secondly, I have a hard time buying into this "shortage" on silver meme.

Yes, I too have been hearing this crap since 2011 and have actually been wondering why we haven't been experiencing GENUINE shortages in the physical markets for silver. With the main byproduct of copper mining being silver and Dr Copper being like Dr Kevorkian as of late I would expect to see signs of strain in the physical markets, but it just doesn't seem to be true.

I have purchased various types of silver on 3 separate occasions in just the past month. My last purchase was a Monster Box of ASE's I purchased on Monday Aug 24th ( yes, the morning of the little 1,000 point dip in the Dow) for $8,915.00 plus shipping and my monster box was delivered via UPS last week. If there true supply issues / constraints with physical silver currently, why can anyone go by a LCS or online and pick up at least 500 ounces of physical silver at a time so easily ? I do believe at some point we will certainly experience supply disruptions with the physical Gold and Silver markets, I just don't buy into the fact for a second that the time is now for shortages. When the Fiat currencies begin to crumble, then you will start to see genuine shortages in the physical markets for PM's. Until then, I will continue to grow my stacks and I will as sure as hell be ready for the day when the Fiat currency manipulators get what is comming to them. Stack long, hard, and deep my friends....

Sudden Debt's picture

I hear you. I was planning to type just the same remarks.

It's just another wouldshouldcould that never happens.

I also keep stacking but not because I believe it suddenly will happen like this.

And I just checked my bullion dealer: 390 monster boxes in stock, a shitload of kilo bars and others, plenty of gold coins and bars.

In my country alone, Belgium, which isn't big, there are 4 million silver coins for sale on Ebay. 

Shortage my ass.

I guess that's the reason why I get so many mailings from silver dealers who offer zero premium silver.

Silver will be worth a shitload when the dollar and the euro become worthless and that's how you keep your money when the system collapses.

 

greenskeeper carl's picture

I'm in agreement with y'all. My LCS(earlier this week) had AGEs for 1193, and a good number of those and buffalos in the display(didn't ask him what he had in the back, but I'm sure the display case isn't all he had. As far as coins go, all he had were eagles, maples, and libertads. which were about 18.50, so a pretty hefty premium as I expected. Not sure about whole monster boxes but he had full tubes of them. He also had big stacks of 1 oz bars up to kilo bars of silver, and a couple 100 oz englehards. The 5 oz silver was 92, the 10 was 180. He usually has a little but better selection of different coins than he has right now, but he definitely had plenty of physical metal if you are like me and don't particularly care what's stamped on it.

undertow1141's picture

only stamping that matters .999 pure silver

KansasCrude's picture

Hey Big DIck wannabee are you freaking ignorant the ariticle sez there is a SHORTAGE.....there is a shortage at the CRIMEX price.  Go listen to Silver Doc's interview with the President of Sunshine minting.  Go look at the Silver Eagle price at APMEX.  Better yet look at what they are PAYING for your Eagles  $16.96  Spot with regular markups would be just over that to buy.....So why is APMEX paying over spot if there is NO SHORTAGE.....DUH!

I bought around the 24th too and got my silver last week too but I only paid $17.87 for a much smaller quantity 25,  You paid $19 for 500.  Nuff said  If I do it now its going to be delayed and the premiums are up $2 over what I bought then.   Look below my quantity would be $20.80....  But no shortage.

 

Oh yeah and the U.S. Mint suspended sales because they had to much inventory......

 

  List View |   Grid View 1 oz Silver American Eagle BU (Random Year) As low as $4.99 per coin over spot! With 1 oz of pure U.S. Silver and a beautiful patriotic design, the Silver American Eagle has become the most popular bullion coin in the United States. Read More (291 reviews)
 QuickShip® Eligible APMEX Buy Price: $16.96 Volume Pricing Quantity Check/Wire CC/PayPal Quantity: Add To Cart 1 - 19 $21.30 $22.15 20 - 99 $20.80 $21.63 100 - 499 $20.30 $21.11 500 or more $19.80 $20.59

 

kingvaclav's picture

It is not a shortage of silver, it is a shortage of silver blanks capacity or machinery to meet the big demand for coins. 

SillySalesmanQuestion's picture

<<<<. One zero added to 200

<<<<. Two zeros added to 200

I may have underestimated the amount of zeros needed to conduct a correct poll...sorta like COMEX.

hongdo's picture

If they initiate a silver shortage panic based on the ratio of sold to available silver and the price spikes, won't the paper holders profit when they settle for cash?

aphlaque_duck's picture

They might receive more US dollars than their basis, but those US dollars won't buy even as many ounces of silver as they could have bought previously on the physical market. Because physical prices will go astronomical when the vaults default on deliveries.

There might be a brief lag between metals rising and the price of everything else, which might allow them to profitably trade their USD into real estate or something. But very quickly the USD would no longer be recognized as legitimate store of value once people see what commodity money is doing. 

"Destroyers seize gold, and leave to its owners a counterfeit pile of paper" -- Ayn Rand

Sudden Debt's picture

We,ll see... but met bet is that this is just another wouldshouldcould post.

 

DontWorry's picture

Don't worry.  Everyone who is a serious trader understands how COMEX works.  If a trader chooses to stand for delivery, they merely get a warehouse receipt.  Usually, they leave the receipt with their broker.  They trade paper for paper.  If the buyer actually wants to take physical delivery and "break" the reciept, it takes time, and COMEX reserves the rigth to settle in the dollar value of the receipt.  A gold bar is 400 troy oz or 27 lbs.  What is a serious trader going to do with a 27 lb piece of metal?  Carry it around in their briefcase? Take it home and put it under the bed? Preposterous!

If you want to buy gold, get your wife or girlfriend some nice jewelery.  At least you'll get something from that!  COMEX will be just fine.  Only gold bugs and conspiracy theorists are worried about physical gold.  Serious reatail investors dollar cost average into a diversified stock portfolio, with professional investment advice.

Monetas's picture
Monetas (not verified) DontWorry Sep 10, 2015 10:11 PM

Million Dollar Bonus ?