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The CME On Gold As Collateral And Its Unsurprising London-Based Custodian
While the increasing use of gold as accepted explicit (not implied) collateral has long been known, especially with an increasing push by Germany to receive gold as the ultimate guarantee backstop of the only viable Eurozone extension scheme, the Redemption Fund, the other side's perspective, that of the exchanges has been missing. Now, courtesy of a report by Harriet Hunnable from the CME, titled "Some Insights into Changes in the Gold OTC market", we can see just how the status quo views gold's rising role in a world increasingly short of good collateral (even if, as the Chairman says, it is anything but money). And yes: that the CME has its gold custodian facilities with JPM London, where it is subsequently infinitely rehypothecatable and where it serves to restock the occasiona physical shortage here and there, does not surprise us at all.
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Now if we could get 5% to take delivery..
Take back the money supply!
Buy Gold!
Buy Silver!
GOLD To $50 Grand, Bitchies ...
Fox guarding the hen house?
long needles & thread... short billionaires...
So..JPM is the custodian for GLD, JPM is the custodian for COMEX, and both of these along with the BOE's gold, and whatever allocated/unallocated (no difference) gold is lying around is all stored in one big happy vault in London.
Thats handy for when JPM needs to take the allocated gold from customers at Brokerages like MFG and PFG.
JPM obviously recognizes the value of a good gold bar, as they realize most of the vaule in the quadrillion in derivative prices are simply made up by their prop desk anyway.
HSBC is the custodian of GLD.
Thanks, whoops. SLV...
ANY futures brokerage with JPMorgan as the custodian is a scarey risk!
These aren't foxes guarding the henhouse - they're velociraptors.
There's a reason the 'regulators' aren't doing their jobs. They're hiding and running - afraid of being devoured a la Jurassic Park.
DOLLAR to $0.03, Bitches
I think you mean the USD is going to Au 0.0005 gm,
Something like that!
You are both right!
OLD NEWS... $ 0.03???? That's already happened.
http://www.bls.gov/data/inflation_calculator.htm/
Enter the $1.00 today and the price adjusted back to 1913. $ 0.04 is the answer. Then consider how horribly rigged CPI has been for the last 30-years.
For those not initiated to the ways of politicized / corrupted "official" statistics, this is a great primer:
www.shadowstats.com/pdf/779-626538446.pdf
Ding! Ding! Ding! We have a WINNER!!!!!
The sad thing is that 99,.99% of the peopel don't have aclue on how much less their money is worth, how much less their buying power it, how much their savings (if they have any) have lost in value.....
My best in degree starting salary for engineering in the late 70's won't hire a bubbleheaded receptioninst today. The car I would have paid $#500 for on graduation now costs $35,000. The crap house my grandparents paid $12,000 for in 1948 sold for well over a half million a couple years back.
And the Silver Eagle I bought to give to my kid when he got out of HS costs twice as much (even with the slamdowns on PM's) for college graduation four years later.
...And TAKE DELIVERY!!!
they would never receive it
And the system would collapse..
If people didn't recieve it then some, maybe even most, would go out with the cash payment from their contract and buy bullion. And yes, if that happened it certainly could wipe the shelves clean. We are already close now.
Think if dimes carried a massive premium because the supply was low. Think if silver demand continues to soar? There are plenty of people out there that are talking about investing in gold and silver who haven't done it yet.
Right now 1% of investors hold some form of exposure to "precious metal" if by mining shares, ETFs, or bullion. Think if we increased that to 5%. It could mean a five fold move.
Now think if we got that whole move to happen in bullion. It would wipe the shelves clean. People have been investing in silver at a furios pace for years now. The real question is not if, but when.
Buy silver
If contracts were forced to settle in cash, I would assume it would be because there would already be no physical on the "shelves".
At the COMEX, maybe. At Ft Knox and the Citidel, probably. At the NYFRB, most likely. But there will be bullion on the shelves of coin shops until once second to midnight. Thus why everyone should go meet their coin dealers if they haven't, and at least start buying silver coins. If you can afford gold, by all means, by that.
You had it right at the top of the comments: Buy GOLD. Buy SILVER. And only buy as much as you UNDERSTAND, or you are liable to panic when the wild price fluctuations start to happen.
I recommend holding 10 ounces Ag to every ounce of Au, but I was a speculator, and likely held too much silver.
I say was a speculator, because I owned both... Until that unfortunate boating accident. Learn from my fail!
FYI, I gave you an up arrow.
Based on the present GOLD:SILVER ratio, (& depending on your timeframe)... You are 'discounting' your gold purchase by buying Ag at the moment...
Agree if you are speculating that silver looks undervalued relative to gold at the moment.
The issue with silver is that if the Central Banks make a last-ditch attempt to maintain relevancy by putting a high bid under gold (they offer to buy all gold at say, $50k per ounce, instantly revaluing all gold upwards to that price point), doing so in order to recapitalize their balance sheets, even though silver will do well in that scenario (in a knee jerk fashion), it is very likely it will not appreciate in the same percentage terms as gold.
So, silver is more speculative than gold. Purchase accordingly.
Only buy as much gold and silver as you understand, otherwise you will likely sell out, be disappointed, or both.
Settling out int cash already happened a long while back in the London markets. They had to freeze the payout at a specified mark and hold, dislocating that cash settlement from the ongoing market price, which continued to shoot up. This will happen again.
The whole point of owning gold is specifically to protect you from assets that are bullshit / deflating against real $$.
When you say GOLD:SILVER ratio, You are speaking of the price ratio? If you had to guess about the physical ratio what would you say that is. Comments from anyone on this subject are appreciated.
Keep in mind, the USA took a LOT of gold out of the ground when they were trying to meet their obligations under Bretton Woods (which was basically impossible for them to do). It is also important to note that the People of the USA could not own any real quantity of gold during this time period of about 35+ years. They were mining the crap out of it though. By the end of Bretton Woods, we had gold at $35.00 an ounce but it was trading everywhere else in the world for like $70.00 an ounce in terms of FRN's. (These figures are out of my ass BTW).
Mining operations like this - engineering on the scale of the pyramids.
http://en.wikipedia.org/wiki/Homestake_Mine_%28South_Dakota%29
Honestly, I have no idea what the actual, above ground physical ratio is, given what you point to, the fact we haven't done an actual audit of Ft. Knox since the 50's, rumors of Japanese gold in the Philippines, amount of silver consumed through industry, etc. etc. etc.
I only know that people with power will try and hold onto as much of it as possible, and in the case of the Central Banks, one way they can avoid losing ALL their power would be to put a bid under gold before the entire world stops using their multicolored toilet paper entirely.
Don't want to rub it in, but were you the only one here with a boating accident?
No, he was the shill pissing all over Silver just 3 days ago.
Lol, shill. Brilliant.
your 180 on a dime was better.
Try writing something someone might actually understand for a change.
He's saying your posts reek of a practiced internet advertiser with the specific goal of making silver a speculative asset.
If people didn't recieve it then some, maybe even most, would go out with the cash payment from their contract and buy bullion. And yes, if that happened it certainly could wipe the shelves clean. We are already close now.
Mr. Hendrix, problem with that, is the price would be so damned high, they are screwed.
People like animals, when they see a short supply of ANYTHIN they need or use, get the herd menatlity as you know.
No delivery, I think your SOL.
CME COCKSUCKERS!!
Just ordered 10oz of NZ silver coin. Feels like my first bang.
Cold and heartless?
No, sticky pants, he woke up 2mins later
no no, it was the real deal ... it was ... physical
Love you man!
Welcome to the party, pal
http://www.youtube.com/watch?v=vD94dVu8lqQ
+1+1+1+1+1.....fuckn hilarious!
http://www.youtube.com/watch?v=vWz9VN40nCA
And Fuck the Loopy Cunts, playing the paper game.
Will be one hell of a day when all that gold gets 'vaporized'.
LONDON -- Due to unprcedented demand, custodians from JP Morgan and HSBC accessed their London vaults today and found nothing but dusty shelves, reports a mid-level JPM employee that has requested anonymity. "Completely empty. They are running around like headless chickens right now trying to explain where the allocated gold went," said the employee.
Officials from JP Morgan and HSBC said in a joint statement that there is no reason for panic. "The full resources of the banks are available to make good any gold deposits that may have been misplaced. We are sure this is simply an accounting problem and will resolve it as soon as possible."
Outside the locked doors of HSBC's London office, a small mob of men in suits and bowler hats were demanding entrance and to know the location of their allocated gold. "It may be over a trillion £ missing. Me own deposit of 4,900 ounces is nowhere to be seen," said Mr. Gordon Tutwiller.
Gold and silver prices have skyrocketed on the news. Trading has been halted on all major exchanges. Coin shops and bullion dealers are refusing to sell any bullion until the crisis is resolved. "My stock is locked in the safe. Who knows what the prices will be like in one or two days," said the owner of Clarkson's Coins and Bullion, "but I'm sure it will be much higher."
(Is there employment writing future news?)
WTF is a bowler hat?
http://en.wikipedia.org/wiki/The_Son_of_Man
"The bowler once defined British civil servants and bankers, ..." http://en.wikipedia.org/wiki/Bowler_hat
...and now Bolivian women wear it while pounding out empanadas for their husbands in the copper mines. Amazing.
" who the fuck ordered Tungsten?"
Goldman Banker # 1 to Goldman Banker # 2 - "Well, we blew through all the paper collateral. Time to demand the good stuff from the Muppets clients."
Gold.......it's what's for dinner.
Buy physical assets of real value, sleep well. You are going to need your rest for the coming reset.
these fucks need a roll of quarters wrapped around my fist to their teeth for some collateral.
Preferably silver quarters.
What was the Peckinpah western where there was a shotgun loaded with dimes? ..... slow motion shot as it was fired...... think it was Billy the Kid - 9 dimes in each barrel of a double barreled 12 ga.
There is a russian assian show where he reloads the shells with washers. ouch.
Bernanke, Geithner and Dimon make up the 3-headed monster that is ruining the US financial system, and that of the world at large!
All of their dealings and manipulations are fraudulent with the sole intent of protecting the bankster cartel, while the administration and the doj is sound asleep.
As the man says: time to bring Mr Guillotine out of retirement.
Buy physical gold and silver.
You left out the Bill Dudley at the NY FED
http://www.newyorkfed.org/aboutthefed/orgchart/dudley.html
All those men are following orders!
So are the TSA.
Soon to be just "SA", short for Sturmabteilung.
....overmore, I also forgot the most corrupt and broker-owned regulator of all times: cftc's Gensler! I'd be quite sure that he's probably still drawing a salary from Goldman for all of god's work that he's doing.
I'm calling Mr. Holder right now....he's gonna want to know about this.
As the man says: time to bring Mr Guillotine out of retirement.
I have come up with a way to speed the process up, use a circular rotating blade.
The old way is too quick.
Amazing. The same place and same custodian for GLD.
And why is the CME storing anything in London? That simply makes no sense.
probably because they were told if they didn't they'd commit suicide by shooting themselves in the back 4 times.
And why is the CME storing anything in London? That simply makes no sense.
Think about it.
Cause the BOE will cover your ass with $200 gold if you're caught short............. could also be because there's nothing left in Ft. Knox or the NYFed or West Point All the gold that USED to be there - paid to Arab oil sheiks under the table whey they wouldn't take paper $ anymore - is stored in London. And they think they actually OWN it?!?!? bwahaaaaaaaaaaaaaa They're in for a rude shock when they find out the buillion banks 'borrowed' it and sold it all to China - all they own now are paper GLD receipts.
Why? even less regulation and oversight than in the former colonies. can you imagine that? or is it that the Fed actually answers to the BOE? The City of London is the epicenter of worldwide (criminal) finance. Witness the recent revisiting of the scandalous sale of UK gold By Gordon Brown to bail out Goldman's overweight derivatives position. With the gold carry trade unwinding, Brown telegraphed the sale of all UK gold at auction,an unprecedented step and succeeded in driving down the price of Au even further from what was to become presently a nearly 20 year low. While everyone crows about Liborgate being the greatest financial scandal in history, it will pale when the truth about the decades long gold and silver manipulation comes out.
http://blogs.telegraph.co.uk/finance/thomaspascoe/100018574/the-price-of...
It is perfectly legal to rehypothecate any asset class, stocks or bonds in London. Make sense now?
They used "Haircut" in an official news release?! Nope, no low-life goombahs at the CME, nosiree.
They hold all the gold in London so that if any one in the US calls for redemption, they have to ship it via the White Star Line (cue Titanic theme).
+100 rl LOL
And let's not forget that the Chinese just bought the London Metals Exchange. Could that be significant. Ah - by the way - that massive sucking sound from across the Pacific is caused by tons of Western physical gold being inhaled by hundreds of millions of Chinse, one gram at a time.
So if the Fu shits, wear it.
They didn't get the part that controls silver and gold sales. Just the more blase metals.
Just in case you are buying the real stuff (physical) make sure you store it in the right place
-> ex the countries that might ask you to give them your lovely coins in case they need it... and there will be an awful lot of them when the gold case finally turns out to be for real!
please list those outside the banking system who will not.
nothing's completely remote so I wouldn't go only for one country but what about Norway (huge oil fund backs lots of liabilities there) or Singapore (liberal place with little financing need), not sure whether I like Canada so much as they are quite close to the US and the US has definitely the better arms...
Other ideas / criticism welcome!
Burried around your real estate. Dont forget to bury many MANY beer cans too so that it is impractical to use a metal detector.
Good idea... if you have to dig em out again you'll first always be surprised wether it's a coin or a can. But in case it's a can you have something to drink while diggin for the next coin.
Instead of kickn the can down the road you're diggin the can from down below ;-)
to paraphrase a gangster on the totally racist "Parking Wars" show,
"You cain't tow my car, I'm Sovereign".
I think holders will be ultimately given shares in "Yet to be Mined " gold.
The paper will have O's and Ben's faces on it.
"The paper will have O's and Ben's feces on it."
made the obvious correction for ya.
London, a city where stuff just vaporizes...
It's a shame Bojo, most of Westminster and the traffic won't vapourise. But with the armaments they're sticking around the Olympic village I wouldn't be surprised if there's not a whole lotta vapourising in the next couple of months.
they're not guarding the Olympics, they're showcasing how they would guard their gold. It's a show of force.
Now that is reaching a bit far.
I need to vaporize some redbud. Ahhh, feel better already!
Here's a conspiracy theory. Put your tin foil hats on.
The petrodollar has literally died already, not just metaphorically or figuratively but literally, and all the Mrken gun boats sent to the gulf etc. are simply escorting bullion like glorified brinks trucks to pay for the nations' would-be oil.
All the stuff about like three or four main repositories of storage has me thinking that countries don't like moving masses of gold over seas because of ... pirates ... no really. The risk of interception is too high and you certainly can't airfreight the stuff. You have to float it. So if you are going to float it, and be secure, you float it with a ... flotilla armed to the teeth.
truth...is stranger than fiction!
Interesting theory...
I suspect that Ft. Knox was emptied years ago - that the Saudis and others stopped taking $US in payment after the oil crisis so we paid them under the table in gold. Hence the tungsten cored bar stories.... need SOmething to show when questions get asked.
The reason the US military is out in full force in the ME is because we're now trying to take by force what we can't pay for anymore...... and that approach worked SO well with Iraq - though it seems like Libya 's oil is flowing (and THEIR gold is now safely stored elsewhere).
Hugo Chavez flew his stash of oro back to Venezuela. So while your theory about the Petrodollar could hold, a huge sum of gold can be air-freighted in a single flight.
No, they did not airfreight a single oz and they did not ship his total reserve.
http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-o...
Another great line from that Reuters article:
"the market in physical gold is tiny, and largely comprised of nutcases."
Actually they did fly some of it...
http://www.bloomberg.com/news/2012-01-31/venezuela-receives-last-shipment-of-repatriated-gold-bars-1-.html
you need to post that ass more often. +1 even as I stand corrected annd +1 from -1 for toothless... 17 tons of gold is 17 cubic meters, correct? which is 2.57m x 2.57m x 2.57m, or 8.5ft x 8.5ft x 8.5ft, which is what, 8 pallets ... sounds like they will trim up by air when it's more efficient than boat but the big movements are via boat, I must insist.
TIN FOIL HAT: ON
17 tons is only equal to 17 cubic metres if the denisty =1, that of water. As the density of gold is ~20, then you can exect a volume of 0.85 cubic metres (assuming a single block).
They told me if I voted for Sarah Palin they would get my name.
Sincerely,
Nutcase Wannabe
I think Hugo's stash is a relative mole hill. How many C-130s would it take to move the London or NYFRB stash?
The cargo capacity of a 747 is around 148 tons. That's a whole lot of $$ worth of gold.
148 tons ... if metric, that's 148 cubic meters, or 5.3m x 5.3m x 5.3m of gold. 1 metric ton is 35,274oz, 148 tons is 5,220,552oz @ $1600/oz [we'll say May of last year], that's $8.35 billion.
134 metric tons.
$7.6 billion then.
Actually what will happen is that holders of physical will be required to turn in their stash and in return will receive title to an equivalent number of cubic miles of seawater and permission to extract all the gold contained therein. A little inconvenient but after all we're all true patriotic Americans here right?
According to JP Morgan, Orson Welles' character Harry Lime in The Third Man was just harmlessly rehypothecating penecillin in post war Vienna.
You know what's funny?
While the aged, evil imps in the US and UK dream of returning to the 1920s or perhaps the 1890s, before FDR and all this middle class nonsense (and *cough* unions *cough*), the GERMANS also dream....
Did you know that not only were war reparations under the Treaty of Versailles payable in gold, but other assets (cattle, land, railroads, industrial production) that were paid to the Allies were actually valued in terms of gold by a serious Committee.
Germany....wants....it....back.
THAT'S funny.
IMO, the Germans were ruthlessly overpunished after WWI for a war that they didn't actually start.
More of the usual bullshit about gold being collateral for Germany. Greece has about €4 billion in gold reserves. Now how much is Germany exposed to in a potential Greek default?
Greece's gold is a piss in the ocean compared to their liabilities, or is ZH suggesting that Germany can rehypothecate that gold to €1 trillion?
"Greece has about €4 billion in gold reserves. Now how much is Germany exposed to in a potential Greek default?"
Think it through a sec. You're assuming that Germany gives a flying fuck what the Euro price of that gold is. They want it at whatever price results in the gold being theirs.
"Greece's gold is a piss in the ocean compared to their liabilities"
Liabilities expressed in easy to manipulate fiat. Again, Germany wants the gold, period, end of story. Gold = money = power.
I think everyone in the world should max out their credit cards buying gold and silver bullion. Then they should all default on their credit cards.
In 2-3 months, when the card companies decide to extend new credit cards, the same thing should be done.
Meanwhile, the market rallies nearly 2%, and silver and gold miners end the day largely unchanged. I'm so glad what's left of my equity portfolio is in gold and silver miners. I'm just getting crushed. YIPPEE!
Gold-Silver ratio at 58.18 - WHAT A JOKE.
The Big Boys are going GOLD. Silver is the path to serfdom and fail. Bimetallism ended over a century ago.
did sprott start buying more silver today ? did anyone hear how many ounces he is adding ?
Does it matter?
Buying silver/gold is rather easy with the right credit line.
Better hope you can pay the balance off without selling your stash to do so.