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Paper Gold Dilution Hits 294x As Comex Registered Gold Drops To New All-Time Low
One week ago, gold market observers were surprised when in the span of four days, gold held in the JPM Comex vault declined by nearly 50%, starting on November 16 when the 668,498 ounces held in the vault below 1 Chase Manhattan Plaza declined precipitously to just 347,899 ounces, a new all time low.
Furthermore, as of the latest Comex activity update, on Friday the Registered gold held by JPM dropped another 2,802 ounces to a record low and virtually negligible 7,975 ounces, essentially equivalent to zero as shown in the chart below, even as JPM's eligible gold has also been seeing a substantial decline in recent months.
But while the decline of JPM gold has long been noted, it was the latest drop in total Comex registered gold which has again raised eyebrows, and which contrary to expectations it would be replenished either from external inflows or by conversion from Eligible both of which have not happened, has instead continued to decline. According to the latest data, total Registered gold dropped by another 11% overnight to just 134,877 ounces, just over 4 tonnes and another all time low...
... and since the gold open interest remains largely unchanged, the physical gold coverage ratio, or the ratio of gold claims to Registered gold, has just hit an all time high of 294 ounces of paper for every ounces of physical.
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What could possibly go wrong?
The Gold is long gone. All that's left are some Gold dust wisps here and there.
FFS give us a chance, we're still melting down the stuff from Libya.
quick, somebody launch a nuke, or sink a submarine, or something!
A mere 3,478 100 oz gold bars supports the whole fradulent gold complex! Amazing!
Since your pea-sized brains are only big enough to own one thing at one time, we want you to sell all your g0ldcoin and buh Bitcoin!
https://localbitcoins.com
I can't wait for you to starve to death when all of your "assets" are deleted with a single button press.
I would rather he hung himself with his block chain.
Fakest hipster dip shit I ever saw trolling, ever.
Like he is wired on Captagon, steroids, and Cheetos.
hipster wha? You doofus...
k everyone, 134k oz at $1065 means we only need $144 million to clean out the comex and kill the kraaken
pass the hat around and put your seatbelts on
Nah, best you SLA and Gold Liberation Army guys stand back like teh n00bs you are and let a virtual man handle this...
Just like your virtual boyfriend and virtual wealth.
You're such a shitty troll.
coinhead stars in "UnconTrololololable"
It really isn't a lot.... the lower it gets the bigger the rush to get it before it is GONE.
"k everyone, 134k oz at $1065 means we only need $144 million to clean out the comex and kill the kraaken"
If it was that simple, many would have done it...including the billionaire gold pusher Eric Sprott.
This isn't gonna end unless there is a class action lawsuit against COMEX. It's not so much about winning the case, but to shine spotlight on the situation.
So why are gold coins still trading at about the same premium over paper as they were years ago?
Slow down cowboy...there is still 654 tonnes in the GLD. The slow drip will continue until it stops.
BEWARE...THIS ECONOMY MAKES SUDDEN STOPS!!
Slow down cowboy...there is still 654 tonnes in the GLD. The slow drip will continue until it stops.
BEWARE...THIS ECONOMY MAKES SUDDEN STOPS!!
update, another withdrawal - only need $130 million
Not gonna happen. Teh we lives off Satoshi white light.
Do you enjoy crying yourself to sleep at night knowing tomorrow will be the same shitty routine of trolling the internet for enough fiat so you can get a blow job from the guy on the corner with the pretty mouth?
Find a better hobby.
Just by way of perspective, the SGE (Shanghai Gold Exchange) delivers 10 Tonnes of physical Gold EVERY business day. The Comex and LBMA have become complete shams, manipulated at will and existing ONLY for the nefarious purposes of the CB/BIS/BB Complex.
PS. There is no Gold left in the West, it's long gone. But you can have as much paper as you want...
Registered BTC at Comex must be like 1 vs. 1000. Reckon so....
"Since your pea-sized brains are only big enough to own one thing at one time"
Actually, I don't see a single comment advocating an all-Gold portfolio, so your comment reflects back upon you. Gold is insurance and should comprise a PART of an investment protfolio. At present, that proprtion should probably be higher than usual.
no, no, no.... just ask anyone here. You can only own A or you can own B. You cannot own both (it would be waaay too complicated).
So, by extension, that also refers to you then? Stick to your BTC, it will be fine until it starts to threaten Fiat, at which time Gubmin will step in and end the party, including all necessary internet controls. Gubmin is a thief and doesn't like competition...Jamie Dimon already warned that will happen and, whilst a complete cunt, he is a well-connected cunt who is close enough to Gubmin to understand the thinking. It won't end well....
If teh we has learned one tihgn on Zerohedge it is tish... if a person owned $20,000 worth of g0ldcoin and $1 worth of Bitcoin, tehy would be considered a "Bitcoin owner". So it is simpler if they only own $20,001 worth of g0ldcoin.
It sounds like you think those gubmin guys are pretty tough eh?
was an early adopter in bitcoin. did read satoshi papers. do enjoy andreas antonopoulos. yes bitcoin is fundamentally sound. but, to quote antonopoulos "bitcoin is the currency of the internet"
he is correct. therein is the flaw. (and i do understand paper wallets;) as a practical matter, net goes down, bitcoin goes down. also, of course, ALL transactions are eternally logged.
mr coinhead sir, gold and bitcoin are not mutually exclusive. one thing they have in common, is, existing outside the iron grip of the deep state.
might i suggest there be an effort to build on the shared positives of bitcoin and gold.
((also sir, there is an essay by marcuse called "the one dimensional man". i see bitcoin leaders getting sucked in to that trap))
12 weeks and 6 days explains a lot. What a fucking moron.
He might get 15 weeks out of this nick before the Tylers ban his trolling ass again.
Sockpuppet du jour.
Got a problem with we you dumb shill?
Coinhead, you repeatedly sabotage your own arguments time and time again. You are a man attempting to sell a bottle of Clive Christian 1872 while dressed in a Raiders hoodie covered in dog crap. But surely, you must already know this. (And no, I did not call you Shirley.)
Pretty sure the Libyan stuff was already used to cover something, like the German gold repatriation.
I bet we see a 500X dilution within six months. Shit, at this rate, probably three months or less.
No wonder there's so much downward pressure on the gold price. There's a whole lot of force majeure waiting in the wings here.
I bought 6 one toz bars from Perth Mint, via a seller in Texas about 10 days ago. I'm already in green after the premium.
I love those little buggars... I was going to do rounds, but one ounce bars made more sense. :-)
You probably didn't. You are probably just a major liar.
Says the village idiot! lol. You want some, and I don't take USB sticks full off cyber shit for payment!
I just arbitrarily made up the name made up the name of the Mint, and amount of my purchase.
Then I went as far as to say I was in the green, after the premium over spot.
You need to lay off the Kanukistan Kook-Aid.
Yeah see, you did arbitrarily make up those names and now you are feeling guilty about being such a liar. Trying to pretend you are really well off and stuff? It was actually six war nickels you ordered off eBay wasn't it?
We hope it feels better now that you have that off your chest. We don't think much less of you because you are really poor.
You're such a fucking hack... Phoney Star.
ad homimems, and make believe bullshit, are all you have.
How many times have you changed your handle? You're like a beggar looking for crumbs.
Like your make believe "1 oz bars" lol? They were really halloween candy chocolate coins weren't they? Sorry we don't sell BTC for your chocolate coins.
How's your internet connection in that Coffee Shop in Kanukistan? [free refills, and I'll bet they take BTC.]
Did you get your new VPN set up yet? lol.
I love messing with you... You're too easy :-D
At least Tyler provides charts , and structural ideas for BTC [virtual currency]future. You just blabber on like rabbid squirrel, looking for a few nuts.
I've been waffling, I have quite a bit of dry powder ready, but I can't shake the feeling we go into the 900s (actually I think 800s, but I have doubts about availability at that point). At this point it's just adding to the already substantial losses from falling overboard, so I'm not too stressed.
We both know one day we're going to wake up and they're going to have to invent a new name for the ultra-green we see on the USD exchange rate v. AU. That spring is getting wound very, very tight.
I have butt-load of silver, along with some platinum and palladium.. I needed to add a little more gold to my holdings.
I don't have any interest in selling,my metals inside of 3 years,
I just find some of the dynamics in gold favorable, over the next year.
I look at charts all day, and even as heavily leveraged as gold is, it seems to be searching for a base. Additionally, some of the gold miner equities are starting to go bid.
Everyone has their own risk tolerance levels, and I respect that.
You have a "butt-load" of dicks in your ass and that's about it.
Are you feeling "butt~hurt" because you used your monthly dole to buy more BTC during the first week of November?
Bitcoin Charts / Charts
The day one can't get physical may be near. That has been true for years. Even so I don't regret holding for years and buying at a higher price. It is just the cost of insurance. To complain would be like wishing you bought insurance the day before your house burned.
Those without will never out live their regret...especially those who were going to buy 'tomorrow'.
The Italian Job
Ponzi
Quick, someone educate me!
If a situation should develop (like say a month ago) where the leverage is such that only 1/3% of contracts can get their gold in a month where 10 to 40 tons of gold is historically delivered, what would it take to stop that from happening?
Like hypothetically, if the price was jammed down, down down, until every long was substantially "out of the money" and could only take possession by ponying up much more cash than the gold was now worth. Could that person be said to be acting out of spite or malice if he tried to take delivery anyway? Maybe even branded a manipulator?
I enjoy Turds site and cannot help but notice that each time he or someone else starts writing about "almost no available gold heading into a delivery month", the price is annihilated before anyone has a chance to take delivery. Not most times either. Every time.
If Goldman had a sense of humor they would introduce an ETF allowing us to bet on the comex leverage each month.
price annihalation incentivises people to take delivery, for those who understand it is undervalued and the manipulation only works until the barrel is scraped empty. its only those buying on leverage that are subject to your theory, and the chinese can use the capital from their balance of trade surplusses
when you understand that a breakout of the gold price in such a tight phyz market, with an impending recession globally and the inevitable additional swing of momo chasers, you know gold has the propensity to rise well more than 200%, 500% even. The late 70's spike 3000% in a decade after the london pool manipulation broke.
That kind of metric means you can get rich without the use - and jepoardy - of leveraging yourself. Buy outright, take delivery. keep it away from the system.
I do recall, I think 2 years ago, the longs were staying in the silver market despite an absolute mauling.
Ive watched Comex scrape through tight Decembers before, so I fear we will be talking again at 600:1 leverage with gold under $1000, but whatever will be will be I suppose.
I don't understand your question. COMEX can settle in FRNs whenever they want. You can not force their hand by standing for delivery. They will just give you more paper and as you note, the FRN ratio they have to settle in, coveniently drops at the right time so they can settle on the cheap. COMEX is a bad joke. It is not a real physical market.
Things will probably stay as they are until the Chinese want a change.
This is long off the front page, but as I understand it they can only settle in cash in uhhh,, "extreme" circumstances and doing so counts as a "delivery failure". That there are measures in place spelling out what will happen in a delivery failure is duly noted, but it should still be a big deal and as far as I know its not being done now or in the recent past.
Now I believe they also can settle in GLD shares and just for giggles if you try to redeem your GLD shares the custodian over there can give you comex receipts. You cant make this shit up. Agreed about the Chineese
I'd like to introduce myself as the poster child for those silver maulings. Hi.
-Argenta
removed double post
I don't see how a rapid nominal rise in the price of metals constitutes "getting rich." Thinking practically, it just means that holders of physical have taken an extra step to protect the wealth they have already. When the central bank ponzi breaks, EVERYthing goes up in price, not just metals.
In a real SHTF, the wealthiest of all are those with food on the table and the means to defend it.
If the manipulated price of gold is undervalued now in real purchasing power, then when the manipulation ends, people who bought at the undervalued price will see a corresponding gain in purchasing power as gold's true value is established.
Taking delivery will be criminalized to a terrorist action. The feds can then just arrest anyone attempting delivery.
Delivery via Comex is a pipe dream
Comex is just another way to do a leveraged bet on the POG.
Apmex and the LCS is the place to get physical for us shrimps.
I'd love to know how the big shots actually get gold by the ton. Guys like Rob Kirby are always evasive when they talk about arranging big physical sales.
Wonder if Mike Maloney could confirm the difficulty of getting gold IN SIZE!.
Comex futures participants have been classified as to whether they are hedgers or speculators. If you can't prove commercial use you won't be classified as a hedger. It won't be that disruptive to the exchange to deny specs delivery to protect the principles.
If (when) there is a "run" there will be enough metal for hedgers to take delivery while specs get cash settlement.
Still, when that happens you better already have your specie because I suspect retail material will disappear that very day. You won't want to be in that lineup...... Three hours in line and when your turn arrives.... gold coins are a minimum of six months out and the premiums alone are probably five fold what they were the day before.
Probably much better off taking your cash to a grocery store because if gold goes into shortage, so will a whole bunch of other commodities in short order.
Yes, and even if every contract holder were to demand physical the bankers/financiers would provide a cash settlement. Again, when fraud is the status quo, possession is the law.
"The Gold is long gone. All that's left are some Gold dust wisps here and there."
Which is why I don't understand that the Russians or Chinese don't pull a "Charles de Gaulle", and ask for gold deliveries on Futures orders.
At $1100/Tr. Oz, this translates into $35 Million per ton, $3.5 Billion per 100 ton, or $35 Billion per 1000 Tons. You mean to tell me that Russia can't afford to buy 100 tons in one fell swoop or China can't buy 1000 at once? So what's holding them back from forcing the issue?
To wit: The Comex Eligible Reserves hover around 6,000,000, which is <200 tons. You simply can not argue rationally, that Russia or China could not force the crisis, by demanding a mere 200 tons in one shot (for a mere $6.6 Billion).
p.s. Having just spotted LOP's comment above, re "Cash Settlement", it's a different story if a sovereign country (Russia, China) keep demanding full delivery. Eventually the word gets out, and even with our CIA-controlled MSM, people will lose confidence -- perhaps enough to cause a financial earthquake, triggered by a warning that Russia will back its currency by gold -- gold that Comex cannot provide to them, or anyone else seeking to do the same. Chess, anyone?
Which means they're complicit in the low prices -- which they will continue to be until they're done either acquring gold or dumping USDs.
Whi gives a fuck about today's prices? Wake me when Silver hit's $350/ozt. I'd likely disappear to somewhere else.
The word got out, as you put it, about the Comex in 1980 when the board of directors changed the rules on the Hunt brothers. The Comex is still here and doing daily business as usual.
Re your distinction about taking delivery: LOP is correct and you are wrong - it doesn't matter whether the party taking delivery is a sovereign or an individual like you. The "long" holder is bound by contract as is the "short". But delivery is not up to the seller or the buyer; it all hinges on the by-laws of the exchange. Comex long ago made it known that contracts can go "cash settle" without forewarning.
Not directing this point at you, Kirk, but I'd like to know who wrote this article: Tyler or that mystic Jesse over at his cafe. What's the big deal about registered versus total open interest? Especially when, as we've determined the exchange will declare cash settle if any sort of an apparent squeeze materializes.
Assuming that you and LOP are correct on the weasel-bylaws of the Comex, then it begs the next Q:
What's the point or meaning of the 300:1 ratio, if there will NEVER be a need to 'deliver'? It might as well be 3,000:1 or 3,000,000,000:1.
Which means... we are simply looking at click-baiting porn charts, and wasting our time by reading it and by waxing lyrically.
Solid posts Kirk.
I sniff some JP Morgsn shillness in the posters debating you.
Who is debating Kirk? The point is being made that when it comes to physical PMs, COMEX is a sham. No, no one, not even Russia can force their hand by standing for delivery. There is no debate. Sorry, that's just the way it is.
As to Kirk's next point, he's right. The paper to gold ratio at the CRIMEX, is not too interesting. Something more interesting to me is the drop in registered and available ounces as a ppssible proxy for gold for sale in volume in the West. When that is gone, maybe the Chinese will have an incentive to end the sham.
"What's the point or meaning of the 300:1 ratio, if there will NEVER be a need to 'deliver'? It might as well be 3,000:1 or 3,000,000,000:1."
still waiting for an answer.....
how does it all get 'resolved'?
Kirk answered his own question.
The only conclusion I can come to is that gold is not available in BIG amounts.
If China can only get 600 tons over 6 years then there is a supply issue. None of the major players seem ready to bust the system by demanding physical.
It seems the Arabs learned their lesson in 1979. they tried to get a lot of gold, the price went up 24 fold. Unless you have all you want and you are a giant then you buy low and slow. 1979 revealed the real price of gold. Then it was 'much higher'...now it is surely 'mucho much higher'. My guess is that it will clock in at 50 to 100k.
The problem is that bidding up gold would mean eventually paying a very high price and still not getting all you want or need. The price may start at 1000 per ounce but when a relentless buyer never stops bidding the price just rises and rises. The marginal bidder may only get a few thousand tons but the price would be in the millions per ounce. It is just the way markets work. You can't just order 1000 tons. you have to bid and bid. As soon as the market notices how anxious you are to obtain...the harder the sellers will squeeze you.
It is likely those who 'need' tonnes of the stuff find a willing seller who has tonnes of the stuff and work out a price...probably significantly more than spot.
But they are doing a "de Gaulle", they are just not spouting it from the rooftops. And they do it in a slow and smothering way *a la "da ghoul"* to get the maximum amount of ounces from the west. It's a forced mate to paper gold in 12 moves, but the Westerners have either a) not seen it yet (unlikely) b) seen it but just play on to keep a straight countenance and gain some time (likely), OR the West and the East have already made the necessary arrangements for what happens after the end of the game (very likely that ALL "market actions" [e.i. colluding TBTFs, CBs, IMF, BIS, ESF, PPT,... all with unlimited "fiat funds"] and geopolitical "main events" are thoroughly scripted).
Wow... 294 to 1. I have to admit... because this manipulation is so unprecedented in history, it's going to be exciting to watch the explosion. Most of us here at ZH KNOW it's coming. It's inevitable.
Yeah, wish they'd square their rumbers and revalue gold to $294,000 :-)~
What difference does it make?
The only difference it will make for those who hold the physical - is that when the paper assets crash, they'll have something tangible to trade. Wealth preservation is what gold and silver are all about... period. It's not about magnifying an investment beacause it's not an investment at all. It's a solid savings account against criminal financiers.
Bullshit bankster ponzi scheme - You and I? We go to jail, Bankster? goes to Hamptons for Weekend!
But there should be some nice gains when silver gets closer to the natural in ground ratio. I think it's around 1:10?
Gold and silver owners "wealth" might not rise to extreme heights but non owners real wealth will sink. So "standing still" could still be very impressive.
Amen to all of the above. And I think you're right about silver, too. It's ridiculously undervalued in terms of phony fiat.
1:14 - and until the 20th century that was the general historic average price ratio too
It's closer to 15:1, but yeah...
-Argenta
They can settle in endless paper printed out of thin air. For all they care, COMEX could hold Zero physical.
It will only crash if nobody (including no Central Bank) cares to buy....and you know that ain't gonna happen, rite?
yes but the very action of comex having to tell investors demanding delivery that they will have to accept cash instead wakes EVERYONE up to the supply/demand perversion, which leads anyone with half a brain to understand that comex is radically underpricing the asset.
No one with any sensibility will then make their phys available for delivery until the paper price is allowed to climb waaaaay higher. And that will bring its own upward cascading momentum
and by that time shanghai will take the initiative and elect to come out of the shadows and set the price globally, and they have every incentive (desperation , even, when their credit bubbe needs something to plug it) to reprice gold into the stratosphere and reverse the global financial roles of the east and west
got gold is one thing, got Yuan is another
"Hold Your Head Up"
Argent...?
That song was regular rotation on my little AM radio back then. This getting old shit really sucks...
Good catch, in this context.
Was on my KTEL LP
well people love their fiat, backed by the full faith and credit of the united states. So why wouldnt they love paper gold backed by- er... the full faith and... oh nevermind.
in my best angst ridden from the gut charlton heston imitation - "full faith and credit of the United States Government is PEOPLE!"
Yeah, any decade now!
Patience is a virtue.
Virtuous living leads to wealth.
That graph gives hints of an unsustainable path
That graph shows about the weekly mining output of gold.
So in a way... those "futures"... don't buy them more then a week out.
I wonder what will happen when it goes to zero. or 5000 ounces or so, that's the same as zero.
I wonder how they'll spin it. I'm pretty sure they'll be creative.
I am pretty sure that they'll be destructive. They are going to WAR.
Europe will be a battlespace and reduced to an ash heap.
Physical Gold will be declared as a Strategic Metal, vital for National Defense, yada, yada, yada
You will be required to surrender it under the War Powers Act.
Where is your patriotism and loyalty comrade. We must fight the enemy... Those (fill in the blank) are the cause of our financial woes...
It does not really matter. We are all dead.
They think that they can survive it. They will not. Neither will you. Neither will I.
They think that they will get order by breeding chaos. But like breeds like. Out of chaos one gets more chaos.
You know? The Law of Entropy? From ordered states to disordered states?
High School Physics is not that damned demanding.
Too bad that they did not learn that nerdy stuff. They do not know it.
BAH! that graph is a unicorn watching barney w/a puppy on a hawaiian beach at sunset compared to this:
https://www.populationeducation.org/sites/default/files/resources/JCurve...
and then overlay it w/this:
https://gailtheactuary.files.wordpress.com/2012/08/world-annual-oil-cons...
You guys do understand that very little physical gold actually goes thru the comex right? Its just a pricing mechanism, not a primary source of exchange. Disclaimer: I have 60% of my wealth in AG/AU and am a permabull.
I think many are befuddled by the notion of offsetting transactions and how a COMEX contract holder wanting physical gold can more inexpensively settle for cash on COMEX while simultaneously buying physical on the spot market.
It was all about creating/capturing/controlling the "pricing" mechanism. COMEX is a fraud. We all know that.
Contract holder can settle for cash..."while simultaneously buying physical on the spot market."
Yes, until he can't.
But while he can...
Unfortunately for us that time is running out.
" Its just a pricing mechanism, "
But why? Weve all seen the graphs showing deliveries from the Shanghai Gold Exchange vs the Comex. Which one should be keying off the other like a bucket shop and which one should set the price of gold? It would be one thing if they had gold to deliver...
I firmly believe that when this thing does blow up an effort will be made, at least politically, to make the short sellers out to be the only legitimate market participants who fought a moral battle against the manipulators who used cash to remove physical supply from the market out of some weird Tea Party like vendetta against "money changers".
I think that if you are a paper long of size, getting a small amount of cash for your position might be the least of your worries.
The good news gold will hit 700 the bad news is you won't be able to find any for sale
LOL....the music is coming to and end and there aren't any chairs!
That's why the agenda has entered warp factor......
http://beforeitsnews.com/conspiracy-theories/2015/11/us-gives-their-prox...
So why are gold coins still trading at about the same premium over paper as they were years ago?
Yes, I guess it won't take long now to see the true state of the market.
I can't wait!
However, as usual, they will pull some sort of rabbit out of their ass, and all will go on just as it has, not even missing a beat. And all the while, the blind sheep will continue to be preoccupied and disillusioned with the world around them. Same as it ever was... this bitch only goes down when enough people wake up!
No, the bullion banks will simply get their subsidiary, the (not really) Federal (with no) Reserve, and their enabling gubbermints to pull any remaining sovereign gold reserves out of their vaults to cover their shorts...until there ain't none left and the fraud is exposed to even the most sheepish of sheeple.
Even when the data looks good for PMs, it's still hard to believe any source at this point.
It's gonna be glorious
.... wonder who will lay claim to the 300 tons of gold on the missing Nazi Gold Train
http://www.newhistorian.com/treasure-hunters-claim-discovery-of-infamous-nazi-gold-train/5355/
Whoever drove that train into hiding has had 70 years of bribeable government officials to help them get it back out. The only things they're going to find are some rusty stahlhelms, leftover blank Swiss and Swedish passports and a nice note from Geraldo Rivera.
Ofcourse Russia. Nazi looted gold from them not Jewish Israelis.
speaking of Ponzi Pumping Bubble Pricks.....this one will be epic
Where can I get me some of this paper gold?
Hear that it floats on lakes and doesn't sink in boating accidents
Time for China to buy all the Comex gold and demand physical delivery? Folks, don't wait for the bottom. You can put gold in an empty vault, but you can't buy gold from an empty vault.
China will first need to empty GLD, then we're talking.
You can't buy all from comex becouse you are not buying from Comex but from mines and banks that trade there.
Nearing dev/0 time, just might need to enlarge the y axis a little bit.
All it will take is for one big player to stand for delivery and the jig is up.
Everyone else gets "settled in cash" and the price of physical goes "bid only".
I'm sure this thought has accurred to more than one of the vipers that infest the COMEX.
It is a game of liar's poker right now, nearing its end.
They can't demand delivery. All the contracts state that they can be settled in cash in lieu of physcial.
If a TRADER wants physical, then they need to play with physical. If they want to trade in paper, they get paper back.
Thats not how it works at all. A Futures contract allows the holder the "right to take delivery" of the underlying commodity at a stated price on a specific future date. That most contracts are settled in cash does not alter this fact.
Contracts state that they "may" be settled in cash (against the will of the holder to take delivery), if "Force Majeure" is declared.
That is a BIG difference from your ignorant statement.
I was wondering if he had shown up here to post his trollish anti gold views when I saw the headline. And right on que...
Hope you are well Bam Man. I havent seen you around in awhile.
I'm fine Bay and still stackin' (but slowly now). Hope you are too.
So? If they have no gold, that's clearly Force Majeure. Bitch.
Pfffffttttt.....
assuming no negligence or malfeasance on the part of the Comex of course...
As has been pointed out many times, the "rules" are changeable. Just ask the Hunts. IMO, waiting for salvation via a comex default is a fool's errand. Time will tell.
All it will take is for one big player to stand for delivery and the jig is up.
No jig would be up. Let’s walk through the mechanics to understand why.
Let's say T. Boone Pickens reads your comment and excitedly decides to take up your challenge to "break" COMEX.
Accordingly T. Boone musters up $1.1B in spare cash lying around to pay for delivery of 10,000 COMEX gold contracts. He rubs his hands together ready to bring the whole COMEX house of cards crashing down. Zero Hedge reported only 4 tonnes of gold in registered stocks so that must be all the gold out there to back those 10,000 contracts, right? COMEX collapse and gold price explosion here we come. T. Boone buys the contracts from paper sellers.
Meanwhile, as the last trading day of the delivery month draws nearer, those paper sellers who intend to settle for cash and cannot settle by delivering physical increasingly move to buy back their contracts.
Since T. Boone is holding out, there are more shorts trying to buy back than longs trying to sell back. Those sellers trying to close will raise their bid one tick and COMEX price will nudge fractionally above spot + carry. Upon which within milliseconds a rush of arbitrageurs will flood into the arbitrage trade to correct the imbalance, assuming the positions of the paper sellers while simultaneously buying from the spot market and warehousing the gold to enable them to lock in the profit via holding the contract beyond the last trading day.
Accordingly at the end of the last trading day, all open sell contracts remaining will be backed by physical and exactly match in number open buy contracts standing for delivery. No meltdown looming here.
Delivery will then proceed uneventfully with a COMEX member charging the arbitrageurs a small fee to move some of its COMEX eligible gold into registered status and exchange that for their privately warehoused LBMA good delivery gold. This spares the arbitrageurs the expense and delay of formal COMEX assaying and registration procedures. If T. Boone physically withdraws the eligible gold, the COMEX member will stifle a yawn and process the privately held gold into the COMEX system to replenish eligible stocks.
But, what about the extra buying arbitrageurs had to do on the spot market to come up with the physical gold to settle the 10,000 COMEX contracts? Should send physical gold prices to the moon, right? That buying equates to 31 tonnes of gold. The LBMA alone sells for physical possession 500 tonnes of physical gold every day. 31 tonnes purchased in small amounts over several weeks would hardly budge spot gold prices. To the extent it did, the cost would be borne by sellers of COMEX contracts paying a smidgen more cash than usual to arbitrageurs to get out of their paper sell positions. Maybe a few ticks. A negligible additional cost.
So there you have it, the great COMEX bust and gold price explosion that wasn't. Even if T. Boone had 10x as much cash to throw at this endeavor, $11B, raising the necessary spot market buy to 310 tonnes, sellers would still only be on the hook for the incremental cash cost to buy the physical, about half of the delta between the spot price before the gold is bought and after it is bought. Not that much, especially if spread across the global market over the course of several weeks.
he who laughs last.........
Putin could buy 347,899 ozs with his lunch money if they let him.
Bitchezz
Shut the COMEX down with all contract buyers demanding delivery!
Just print more and sell the paper gold. People holding these paper gold don't seen to care for deliveries anyways. F it, keep printing and keep selling.
It sure looks like JMP is going to just empty the vault and then walk away. What happens then?
What happens then?
Physical gold to 10K, and the GSR back to 25:1
Can you imagine how fast people will hop on the Silver Train when they realize the gold is gone?
Then there will be confiscation.
Dream on.
I agree on all points but one...there won't likely be confiscation. Most people don't even realize that the last time the US gov't confiscated, all they did was order people to turn their gold in. Very few people complied back then, and even fewer would comply next time... probably nobody. Confiscation won't work, which is probably why they're going to try to ban cash (which would include transactions paid for in gold). If they 'do' ban cash, gold would just become even more desirable because people all over the world are catching on to the fact that banks and their toy money are doomed. Gold is the only true money... and silver of course.
So you're quite right, when gold hits $10k and beyond, the gold/silver ratio will indeed fall. Gold gets too expensive for the average Joe but he'll be happy to get his hands on silver instead. So when both metals are rising, silver always outperforms gold. Flip-side of that coin... when both metals are falling, silver falls harder that gold. This has been the case ever since the creation of the Fed in 1913. Prior to that, the gold silver ratio had hovered around 15:1 for the past 5,000 years. With that ratio currently at 75:1, you bet the GSR will take a big dive.
Anopheles tells you to "dream on". I'm not sure what he's smoking but I sure don't want any of that shit. You're bang on.
He may be hittin' the captagon.
Oh man, that's some scary stuff isn't it?
4 tons... could fit that on a pickup truck. One pickup truck of gold for the entire North American Continent.
There is no such thing as a 4 ton pickup truck!!!!!
500 kilo bars in the back and that truck is at capacity!!! :D
HD springs and tires I guess
or could fit on a C-130 out of Ukraine LOL
It's too bad most folks can't tell the difference between an ounce of physical gold and a paper promise to be paid an ounce of gold.
They call them both "money."
One other thing: Could you imagine the sweat pouring from a goldsmith's forehead with 294 people in town thinking the paper they hold entitles them to the gold he's holding for them. So far, so good, they haven't requested delivery; yet!
This shit can only happen in a Govt regulated/rigged/sanctioned business.
As a merchant mariner, can I insist that my employer multiply my day rate 294X's for my next payday?
Someone/a country needs to buy all the contracts and demand delivery. That would be fun to watch.
But then that person would have to PAY for all that gold.
Besides, COMEX would just give them cash. It says so right in the contracts.
And if they want physical? COMEX will take their cheque and goes and buys the gold on the open market and gives it to them. I'm sure there's a nice handling charge built into the contracts for people who want to get physical from them.
The COMEX would have to declare "Force Majeure" first, indicating they are unable to deliver.
Then good luck buying physical on "the open market" at the phony COMEX paper price. The reason the COMEX vaults are practically empty to begin with is that nobody but a handful of idiot shills is willing to sell their ACTUAL GOLD at THESE PHONY PRICES.
So tell us. You think miners actually get a price HIGHER than stated in their contracts?
Why don't you read through the CME rules and regulations. There's thousands of pages for you.
Here you go, http://www.cmegroup.com/market-regulation/rulebook.html
When you go to sell your physical bullion or scrap, do you get a HIGHER price than spot? Why not?
Imagine the situation.........
President (fill in the blank) demands delivery of gold.......
Next day, President fill-in-the-blank has heart attack.......
Replaced by someone more compliant.
It is not so much a high risk strategy, more like suicide.
Don't kid yourselves folks. These wiseguys are shorting the "paper" market and using the profits to buy the real thing (at a very depressed price).
Of course this cannot go on forever. Only until the vaults are empty - ie no one is willing to part with their physical at these totally artificial "paper" prices. We are almost there.
Every MINE in the world sells all their gold. That's 2,400 tonnes of NEW gold every year, or 200 tonnes every MONTH.
There's no shortage, despite your conspiracy theories.