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The Gold "Rehypothecation" Unwind Begins: HSBC Sues MF Global Over Disputed Ownership Of Physical Gold
That paper gold, in the form of electronic ones and zeros, typically used by various gold ETFs, or anything really that is a stock certificate owned by the ubiquitous Cede & Co (read about the DTCC here), is in a worst case scenario immediately null and void as it is, as noted, nothing but ones and zeros on some hard disk that can be formatted with a keystroke, has long been known, and has been the reason why the so called gold bugs have always advocated keeping ultimate wealth safeguards away from any form of counterparty risk. Which in our day and age of infinite monetary interconnections, means virtually every financial entity. After all, just ask Gerald Celente what happened to his so-called gold held at MF Global, or as it is better known now: "General Unsecured Claim", which may or may not receive a pennies on the dollar equitable treatment post liquidation. What, however, was less known is that physical gold in the hands of the very same insolvent financial syndicate of daisy-chained underfunded organizations, where the premature (or overdue) end of one now means the end of all, is also just as unsafe, if not more. Which is why we read with great distress a just broken story by Bloomberg according to which HSBC, that other great gold "depository" after JP Morgan (and the custodian of none other than GLD) is suing MG Global "to establish whether he or another person is the rightful owner of gold worth about $850,000 and silver bars underlying contracts between the brokerage and a client." The notional amount is irrelevant: it could have been $0.01 or $1 trillion: what is very much relevant however, is whether or not MF Global was rehypothecating (there is that word again), or lending, or repoing, or whatever you want to call it, that one physical asset that it should not have been transferring ownership rights to under any circumstances. Essentially, this is at the heart of the whole commingling situation: was MF Global using rehypothecated client gold to satisfy liabilities? The thought alone should send shivers up the spine of all those gold "bugs" who have been warning about precisely this for years. Because the implications could be staggering.
Probably the core primary consequence of this discovery, which obviously has a factual basis, or else it would not lead to an actual lawsuit between two "reputable" firms (aka ponzi participants), is whether gold in the GLD warehouse, supervised by HSBC, is truly theirs, or has it all been hypothecated from some other broker who never really had the asset or the liquidity, and so on in what effectively can be an infinite chain of repledging one asset to countless counterparties. Because if there is on cockroach...
Suffice to say, expect either a prompt settlement in this lawsuit, or a fervent denial by all parties involved that any gold was misplaced. Because here is the punchline: each physical gold or silver bar has a unique deisgnator that should never be replicated, yet this is precisely what happened to lead to the lawsuit! In a non-banana world, there should never be any debate over who owns a given physical asset, as replicated ownership (note - not liens) effectively means someone stole the gold (or there was counterfeiting involved) and was never caught... until MF Global finally expired of course.
So in other words, is this the eureka moment when everyone realizes that any gold, be it paper or physical, is either a irrelevant electronic binary claim held in some semiconductor, or at best an asset in some vault, that the brokerage next door suddenly also has claims over?
The end result is that the biggest loser is Joe Sixpack who bought the gold, and decided to keep it in a bank warehouse for "safekeeping" only to realize said gold will never be seen or heard of again.
From Bloomberg:
Five gold bars and 15 silver bars underlie eight Comex contracts between the brokerage and client Jason Fane of Ithaca, New York, London-based HSBC said in a court filing yesterday. Both parties have asserted claims to the bars, creating difficulties for HSBC, which is storing them, the bank said, asking a judge to decide who the rightful owner is.
“HSBC has received conflicting instructions regarding ownership and disposition of the property,” it said. “Accordingly, HSBC is exposed to multiple liabilities with respect to the disposition of the properties.”
According to Fane’s letter, the five Comex gold contracts are for an average of 99 ounces of gold each.
Giddens, who is liquidating the brokerage, has transferred about 38,000 commodity accounts to other firms. Three transfers of collateral made and pending will give commodity customers more than $4 billion of their assets, according to court filings.
The punchline:
The judge handling the bankruptcy said today he would deal in January with issues about distributing physical goods, such as gold and silver bars, after lawyers for some customers said they couldn’t get their share of the payouts because bars can’t be broken into pieces.
...indeed there is a reason why people say gold can not be diluted.
As for our advice: move any gold out of the LBMA or CME warehouse system immediately. And only treat any GLD investment as a day trading vehicle that can and will be lost the second there is a global liquidity or solvency freeze, because that particular asset will be wiped out as easily as "C:\format C:"
The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Update: as reader D points out, none of this should come as a surprise: after all the UK financial regulator, the FSA, already warned about each step of this unwind back in March 2010.
3.1 In this chapter we consider restricting two practices we believe pose an unacceptable risk to protecting client money and assets, and financial stability.
a) Restricting the placement of client money deposits within a group
Scope
3.2 Please note that our policy proposals in this section apply to UK authorised firms that place client money in client bank accounts held with a group bank, credit institution or qualifying money market fund. These requirements will not apply to incoming EEA firms conducting investment business, as under MiFID regulating client assets is a home state responsibility. We will consider extending these proposals to general insurance intermediaries when we begin reviewing CASS 5 – Insurance Mediation Activity in the first quarter of 2011.
Intra-group client money deposits
3.3 CASS contains guidance requiring firms to conduct an appropriate level of due diligence on institutions with which client money is held and to ensure deposits are appropriately diversified. We currently allow firms to hold client money with a deposit taker within the same group as the firm subject to appropriate due diligence and diversification.
3.4 There is no standard market practice for depositing client money within a group structure. For example, a number of investment firms take an explicit decision to hold client money deposits outside of the group, while other firms deposit significant amounts intra-group. Existing handbook provisions seek policy outcomes that ensure an appropriate level of diversification is achieved to protect clients’ money.
3.5 CASS contains provisions regarding a firm’s selection of a bank, credit institution or qualifying money market fund. A firm must exercise all due skill, care and diligence in selecting, appointing and periodically reviewing the institution where the client money is deposited and arrangements for holding this money. Handbook guidance also provides a list of matters a firm should consider in the process.
3.6 The money deposited at a group bank is held on trust by the firm for the firm’s clients, but it is treated as an ordinary banking deposit at the bank. Put another way, all client money at the end of a chain will eventually be held as a deposit. There is always a risk that a bank with which the deposit is held will enter insolvency proceedings and at this point it becomes possible that not all money deposited in client bank accounts as client money will be available for return to the underlying clients. Accordingly, the regime does not envisage a 100% return to clients in the event that client money is lost due to a bank’s insolvency, with CASS providing that clients will generally share rateably in the loss.
3.7 The issue under consideration is not that the funds are held as a deposit, but that when held within a group, there is an increased contagion risk that both the investment firm and the group bank or affiliate will fail simultaneously (or one will fail shortly after the other).
3.8 The resulting risk is that a firm will place an inappropriate amount of client money intra-group, usually as a source of liquidity, which has a lower cost of capital than external sources. Furthermore, as a group’s financial position deteriorates, there is a risk that firms within the group will deposit more client money intra-group to fund operations. This may give clients an inappropriate level of exposure to the bank’s credit risk. It also may lead to clients unfairly bearing the risk of the group as a whole, rather than just the individual firm. The existing sourcebook provisions which address this mismatch of firms’ and their clients’ incentives can be strengthened so the risk to clients is mitigated in the event of a firm’s default.
3.9 Imposing a hard limit on the proportion of client money which can be held intra-group is attractive and will mitigate concentration risk. However, limiting the level of client monies held within a group may increase overall credit risk where outside options are less highly rated. We have considered consulting on the basis of a 20% limit in order to fully identify stakeholders’ concerns, particularly if there is a knock-on effect on liquidity.
3.10 We have worked with firms during 2009 to reduce the concentration of client money held intra-group. During pre-consultation firms estimated that the proposals would result in an increase of approximately 10–25 basis points for additional costs, together with removing stable funding and increasing compliance and operational overheads.
3.11 Accordingly, we propose limiting the amount of client money held by a firm which can be deposited in intra-group client bank accounts to 20%. We understand firms may require some flexibility in holding money intra-group (for example, where a firm’s client specifically requests their money is held with that specific institution) and propose to address this on a case by case basis. We also propose changing existing guidance into a rule to provide a clear basis for our expectations.
3.12 We take this opportunity to highlight that our proposal to re-introduce a client money and asset return to the FSA (see below) which includes content regarding intra-group client money deposits.
b) Prohibiting the use of general liens in custodian agreements
Scope
3.13 Our proposals apply to all UK authorised investment firms and overseas branches of these UK firms. These requirements will not apply to incoming EEA fiirms conducting investment business as under MiFID regulating client assets is a home state responsibility.
3.14 Some firms in the UK appear to have inappropriately allowed custodians and subcustodians to include general liens covering, for example, group indebtedness to the custodian or sub-custodian in contractual agreements, or they have failed to pay due regard to this issue. As we have observed from LBIE’s insolvency, liens have contributed to significant delays or obstacles in an IP’s ability to recover assets from depots not under their direct control.
3.15 CASS 6.3.3G requires a firm to consider the terms of its agreements with third parties with which it will deposit a client’s safe custody assets. As part of this guidance, the firm should consider restrictions over the third party’s right to claim a lien, right of retention or sale over any safe custody asset in the account, as well as identifying client assets separately from assets belonging to the firm.
3.16 We believe the sourcebook can be enhanced with hard rules rather than guidance in this regard. This would enable us to effectively monitor compliance and take enforcement action where appropriate.
3.17 Accordingly, we are consulting on the basis of changing the existing guidance into a rule. We propose creating a rule that prohibits using general liens over client assets which are held under custodian agreements, except to cover the situation when a firm (or if the client has a direct relationship with the custodian, the client) does not pay custodian fees and charges to the third party holding the custody assets.
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Or....a cheaper substitute that does the same job.
Good point. Graphene will one day replace much of the demand for silver.
But that will start a golden age so bright that any material wealth accumulated before its start will be moot. We're talking "Star Trek" bright here.
Nothing crashes faster than paper. Demand destruction is the tortoise and financial collapse is the hair. One that collapse occurs, there won't be a banking conspiracy around to keep silver prices low, and nobody will be willing to part with silver or gold. Anybody requiring it for industrial use will have to pay up or go without. That counters your demand destruction.
Pay up with what? Gold?
after the fingers out spelling of turtle one might expect HARE, but no.
delete..... lebalance was a pedantic ass for me
Looks like the tempest is leaking out the teacup.
ice9
Investment demand for silver overtook industrial demand in 2010 - while industrial demand was still rising. If the paper markets implode, I would expect investment demand for physical silver to explode.
Well....it will...but not yet according to these folks. - Demand 200 million ounces for investment industrial 500 million.
http://www.silverinstitute.org/supply_demand.php
I find it interesting that the graph in your link is from the same source (GFMS) as the graph in my link. Fucking statistics - how do they work?
Silver will flow into the vacuum created by Gold. Gold up, silver up. Gold and silver are money. On a side note, I saw copper bars being sold in my local coin shop. I knew seeing that show up that someone is expecting PMs to moon shot.
Silver will flow into the vacuum created by Gold. Gold up, silver up. Gold and silver are money. On a side note, I saw copper bars being sold in my local coin shop. I knew after seeing that show up, someone is expecting PMs to moon shot.
I smell a ZSL bag. How come none of you ever do any research...on anything?
Industrial demand will fade completely when human beings are extinct.
As for the price during a recession; much silver is mined as byproduct of copper mining. When there's less copper mining, the supply, and therefore paradoxally the price, will go up, even if industrial demand is less.
:-)
the term bank in chinese is depicted by two symbols, the first of which means silver
dup.
When the only kind of power generation remaining will be electrical? Not real likely.
Wonder if the manipulation of the Indian rupee versus the USD has anything to do with gold price suppression..
Of course it does. Especially in high Demand, marriage season. Powerful lever.
The way Silver has tracked the rupee is even more stunning as it turns out.
ORI
http://youtu.be/kBYNmTx_p84
Chase is t rubbing it in your faces!!!!!!!!!!!!
The cutain is indeed being pulled back just a tad bit more.
Bernanke has no clothes! Perhaps his biggest mistake so far was not papering-over MF Global's puny billion dollar shortfall.
Yup. Trillions for banks and not even a measly billion for MF Global. Huge mistake.
I think this is more Barry Maguire than Andy...
http://www.youtube.com/watch?v=eCrnpJTJiuU
How many times over has that LBMA gold been sold again, hmmm wasn't it Jeff Christian who admitted 100x leverage. Imagine when they all want their physical. They might be a little pissed.
The 100x figure accounts only to the first rung in the re-hypo. That 100x has been pledged and repledged all off balance sheet... 1 phizz> 100 paper > 10 x X23rd rehypo'd collateral
To infinity, and beyond!
Unaccustomed as I am to correcting references to Avogadro's Number, the number of molecules in a gram-mole being some 6.022 times ten raised to the 23rd power,....
I owned GLD, read the prospectus and sold, sold, sold after a decent paper gain. They fully disclose the 10,000 ways you are so totally screwed if you hold their paper, including that they don't audit their "holder's inventory". You can't make this up.
The silver vs. gold skyrocket completely ignores Gresham's Law which implies gold will always out rank silver in price. 1) it always has except for Vykings who knew there wasn't enough gold to satisfy their lust and 2) from the dawn of civilization, gold has always outranked silver because it is inert, won't tarnish and turn black, etc. etc.
I worked for a film company, so all silver theories are old news to me. Regarding the shortage of industrial silver, as if there is some other classification, let's look at the price of Kodak stock, the old silver emulsion film manufacturer. do they have a shortage of silver on their hands? Fools can say yes now. What about all that silver used in Xray films for medical purposes? I guess MRI, CAT scans, etc etc have sucked all the silver right out of the warehouses!
Should we look at the facts of price? Silver is just scratching the old high of $50 an ounce while gold is double the old high of $800 and has been long and strong for quite a while.
The Lone Ranger depended on his steed Silver, we modern humans should be placing bets on gold, the money that is the only AAA asset left in finance and not be betting, except for fun-filled and likely profitable specualtions, on silver, an industrial metal. If this were an industrial crisis, silver would be tops over gold; however, this is a monetary crisis and gold is the money with silver being the towel-boy of second choice.
Keep it simple and see the way to survival. Junk silver coins are still a great hedge and insurance, but new currencies will be defined in relation to gold. Stay diversified and don't go all Jonestown Kool Aid over some position you think is right when you haven't thought about big-picture, international currency conferences / Bretton Woods of tomorrow.
Question: What Central Banks have announced they recently bought tonnes of silver to increase their holdings for the base of their currency reserves?
Some of us should read more widely.
Well said.
In particular:
and:
There is a very popular quote which I see regularly around here:
“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” - Norm Franz (”Money and Wealth in the New Millennium”, 2001, Whitestonepress, page 154).
It is remakably accurate. Note that gold and silver and not in the same category as each other. How many people who have read this quote and nodded their heads in agreement have stopped to consider why gold and silver are not categorised the same?
There is a clear difference between kings and gentlemen, and this difference is demonstrated in the differring uses they apply to their respective "monies".
If the pro-silver commenters on this thread were paying attention to the clearly stated motivations of their comrades, they would note that they are generally expecting their silver to perform a particular task for them, one which the biggest gold owners (those whom hold almost all the stock of gold) are not expecting their gold to perform for them. This differing purpose of the gold owners is the reason that gold can and will rise in comparative value against everything else, whilst the purposes of the silver owners (both industrial and speculative) are why silver cannot and will not match this rise.
I do not dispute that silver is quite possibly undervalued industrially; the silver market has clearly not been free from intervention.
Silver does not however share the same function as gold, and therefore will not match gold (or outperform) when gold's function is utilised. The fact that gold can perform this function means that there is no place in it for silver. The function requires only one, and we all know gold is the one. Silver is subservient to gold in the collective mind. As MrSteve observed:
Second choice.
I'm personally happy that I continued evaluating the differences between gold and silver, and came to the conclusion that despite all the noise to the affirmative silver is not a leveraged play on gold. There is no leveraged play on gold. Physical in your possession is it. But that's just me. I urge others to come to their own conclusions, and to always be wary of confirmation bias.
There is a lot of comment up thread on the reasons silver will go to the moon, and it all misses the point.
The point is stocks and flows.
When physical gold ceases to flow, it's game over, and gold finds its function at a much higher value. That's the reset. Gold moves to the value at which its flow is restarted, wherever this value is found.
In contrast, silver will never cease to flow.
And there is the fundamental difference. "Gentlemen" cannot afford to be without the flow.
The single reason gold is misunderstood by the majority is that gold's utility only makes sense to the very wealthy. Until comparatively recently, only "kings" had that sort of wealth.
If your premise is off, then your findings will be also. The accurate premise is gold and silver are money. Silver for profit and gold for yield. It has been this way for thousands of years. The fact of the matter is silver has been depleted and gold has been hoarded. Of course the end game at the moment is to acquire physical gold at paper prices, and the same with silver: This is a gift! All indicators point to the fact that there is more gold above ground than there is silver. But who is to say that when the paper markets crash, who will be holding more gold than silver and vice versa and in which parts of the world? Regardless, go to any country in the world and gold and silver will be accepted as "payment in full".
What if you could purchase gold at $400 per ounce today? Would you do it? 53 to 1; silver to gold. Historically it has been 16 (some say 12) to 1. Silver for profit. Will it return? Nobody knows the future: That is God's country.
Is the end result a currency backed by gold or a currency backed by gold and silver? Also, who will trust currencies again? There will be a reset, and there will be the largest transfer of wealth in the history of mankind. The people and institutions who hold physical precious metals will profit greatly. The purchasing power of one metal will moonshot and the other will more than likely pluto shot. If you can only afford $600 in precious metals, it would be more prudent to get 16 ounces of silver (ie. 16 transactions) than a quarter of an ounce of gold. However,George Soros types, having 43 tons of gold makes more sense for physical storage and store of wealth purposes: Gold for yield. These people more than likely have a few tons of silver tucked away somewhere as well.
In the end, holding silver and/or gold is wise and prudent.
I know what he would say Turd, "hey, watch your driving!!"
As opposed to paper erections? hehe
More great news for physical!
Credit card war.
Whoever can finance the biggest war machine in the least amount of time.
'Let me just add that the GATA boys are watering/foaming at the mouth whilst having raging erections...'
If it lasts longer than 4 hours, it is time to seek medical attention.
Hell no, after they get done with a celebratory 4 hour sword fight, they're gonna pry open the doors to the COMEX warehouse with their raging pecker woods, only to be greeted by cobwebs and crickets.
What I was thinking of is the scene in Casino where gangster Tommy wants his cash from the banker.
I like Chinese:
http://youtu.be/04QoA44c23A
CHICKS
http://hedge.ly/gFWVSm
CFTC hearing Mar 2008
Christian: "the “gold market” (re-hypothicated by the bullion-banks) was “one hundred times” the size/amount of all the world's physical” bullion.
The question is: Where's your "physical" gold?
at the bottom of the ocean; it fell out while i was kayaking
Trav doesn't own much gold. He's mainly in physical silver. He shouts down anyone talking about silver because he doesn't want anyone else to get rich because they might use those riches to use up some of his precious oil. He really want's 97% of people to be totally impoverished and ground into dust/murdered/sterilized so that he can use his magical IQ to rule the world or some such egomaniacal thing.
you just equated murder with sterilization? Wow you are fucking stupid. Not a day goes by that you don't amaze me with how stupid you are.
Still waiting for $60 by next week. The SCOREBOARD is laughing at you, cliff.
All you have is your get rich quick schemes- fucking listen to you. GET RICH OFF SILVER. You fucking pumper shill
Boy are you defensive. Got something to hide?
You know as well as I do that you own siver, you hypocrite.
no, it all went overboard as well.
I love how you cretins with your binary world brains can't seem to grasp that "silver is not going to infinity" does NOT imply that "silver is going to 0."
I have said fifty times that when silver peaks, it will receive the same price tailwind as gold has enjoyed. However, stockpiling the stuff to try to get rich when TSHTF which is what most of you idiots are doing, is RETARDED.
Right, so we should all sit back and do nothing, right? Be nice and unprepared?
I love how you can't see a simple trend. It doesn't matter that production is rising when we are headed for a wall in terms of used up stockpiles. It's like bragging about your raise as you spend 25% more than you take in and you are a few hundred bucks from your credit limit.
But I wouldn't expect you to be able to make simple observations or use simple logic when you are in the grips of the blood rage that your life has become.
I suffer from hippopotomonstrosesquipedaliophobia so I really don’t like words like rehypothecation being plastered all over Zero Hedge when I come to visit.
Thanks in advance
Cash is a lot cheaper than war and has virtually no production costs with the added benefits of both infinite supply and infinite demand.
So ... GLD is underlain with gold liens? Is NATO using the pilfered Libyan Gold to give the COMEX 30 days breathing room?
Saw this coming way back when and jumped into tungsten futures, Yep - that's what be done by-cracky. The tell was the manufactured mass hyped false flag hysteria used to create the demand for non-candescent lighting (like LED, florescent fixtures). Knew right away the game was to horde tungsten. Wasn't until charts became available showing a hockey stick-ish demand for tungsten that matched, to da troy oz, the overstated physical gold!
Ya got to get in early when these opportunities come up.
I be sitting back and all that and be waiting for my male and female tungsten futures to hypothecate and make little bitty baby tungsten fractals that will grow into full size tungsten thinga-ma-bob-what-evers so they can rehypothecate and make little baby tungsten fractals of their own, thus continuing the great cycle of animated nothingness!
Thinking about a game - it's like SIMS City - but the game characters are tungsten bars - let ya know ...
It was always going to come to this. Now the tide is outgoing and the paper pushers are seen to be swimming naked.
Got physical?
Ruh ROh!
One more fuckin' time for the dummies:
If you ain't holdin', you ain't ownin'!!!!!!
Any questions?
and I placed a GLD March call spread right before I read this on ZH....
Why not just buy physical and play with FAZ?
Well congratulations. Now go ahead and get yourself some physical because by March you'll be probably where Celente is today.
Nothing quite like the thrill of correctly speculating the market, only to have the makers steal both your initial investment along with its gains.
Reminds me of the time I bet $120 at a dog track boxing a trifecta, which I hit. Thing is, the damn dogs crossed the line in order of the odds, 1..2..3. Payout was $20 bucks, which I promptly spent on beer and a cigar to enjoy while contemplating the genius of my gamble.
"IT'S FUNNY BECAUSE IT'S TRUE."
Geniuses don't gamble. Duh.
haha
he got more greens than u
haha
The end result is that the biggest loser is Joe Sixpack who bought the gold, and decided to keep it in a bank warehouse for "safekeeping" only to realize said gold will never be seen or heard of again.
Got that part ALL WRONG..............................
Joe 6 Packs cannot afford to store it.
They are too poor,and far to smart to trust the paper Junkies with their lives earnings.
Your point is perfect.
Your new avatar .... a bit gay....
http://www.kitco.com/ind/kitcoradio/index.html
Al Korlein, and Rick Ackerman, put their spin on this, and Rick reference ZH several times.
He puts it in PLAIN English exactly what's happened, and if so, the numbers, like TD said are MIND boggling.
Esp if it's not there, and ever was.
Worth 120 seconds.
Ill hedge my bets on war ;)
After all they do unite a divided people (America, Eurozone, China, Russia, etc. ,etc.) and help the economies... Lolz history is a bitch and she loves to repeat herself.
I remember one time at band camp I owned paper gold -then I woke the fuck up. Thanks, zerohedge and Tyler!
Pass the popcorn paper bitchez.
Ruh Roh!
Can people smell desperation in the air. Black swan events are poping up all over the place.
I think one of the reasons corzine crashed MF into the ground is because there was NO GOLD to deliver on the futures contracts. so rather than awaken the world to the paper ponzi gold market, he crashed that fucker to buy more time
To all you idiots in GLD and SLV, pay attention to this. you dont have much time before those ETFs collapse
Bingo. This IS the comex default, just in Corzine drag.
For anyone who might have missed this, here's Jim Willie's take.
http://silverdoctors.blogspot.com/2011/12/jim-willie-jp-morgan-crashed-m...
hard to believe a former Goldman / Politician would do something so dishonest. Cut every budget except Corrections
Only fraudster banksters make money and stay out of prison in this crazy world. Everyone else loses.......for now.
When the justice system protects the criminals it is time for the alternative justice system to clean both criminals and corrupt lawyers/ judges
" When the justice system protects the criminals it is time for the alternative justice system to clean both criminals and corrupt lawyers/ judges "
AMEN to that. Where do I sign up. No pay necessary. Will work for free.
This is just the sort of spark-that-lights-the-prarie-fire that the criminals desire, as it clears the way for their implementation of martial law.
IOW, were fucked either way..
'To all you idiots in GLD and SLV, pay attention to this.'
Poor Paulson, oh well... that's what you get.
Ironic if this lawsuit crashes the system that the crash of MF was supposed to protect.
Conspiracy Hat Time...
Just seems so... planned is all I can say. Not the right word, but best I can do. Orchestrated?
Look, if the fact is that there's only .001% real gold behind all the paper, it Has To Fail At Some Point.
By definition.
So when would it be the best time if the central banks want to show that gold is a bad investment to keep the price down?
Like maybe right now when they want to keep it down and are going to the Max to Do So. Like I mean I understand the BoE and Fed selling, but the BIS?
Where does the BIS fit into the picture?
Something's Very Fucking Wrong.
But bugger the tune out of it to show the world that in the midst of a financial crisis, Gold Is Not The Safe Haven them Pesky Bugs Think.
So make some pain for the longs, Big Time Charlie.
(Right Blythe? I been to this rodeo before, too.)
And why the intervention big time, right now?
Because the world's falling apart.
Check.
Remember the last big official comment about this/intervention was when Volcker said after the Plaza Accord announcement (You young'n's'll just have to look that up.) when currencies went all bonkers, that they should have intervened in the gold market.
Why?
To show a sense of calm, allay panic.
So, What's Gonna Happen This Weekend or Soon?
What Announcement?
What's in the Pipeline?
This was IMHO not done to get Sarkozy and company off the hook.
In fact, the Anglo-American Banking Elite stuck the Matterhorn of All Screw Jobs to Him, et al, when Cameron said no deal.
And that was no deal of Cameron's was directed by the City of London.
NWO wins Europe, Bank Technocrats get control while the City of London remains a free as a bird (vulture) entity in a world smothered with regulations.
Bingo!
And so in the interim, grab all the physical at the lower prices... by the boys in the LBMA... cover them paper shorts, courtesy of the Fed, BoE and surprise, surprise, BIS.
Go figure.
I trying to determine how the physical gold market would be affected if this discovery cascades into a full blown panic run on GLD? Does it drag the price of physical down with it? Or does the premium for physical suddenly go from 4% to 10%? Or both?
Paper goes bidless, while physical goes into hiding (offerless). Once it is obvious to all that the price discovery mechanism has been broken beyond repair, no one will sell until the dust settles and valuations start relating to reality again.
It's a wound that will take some time to heal.
Offerless. I closed that window the day I bought it. At this point, it's one way traffic.
I second that emotion.
http://www.youtube.com/watch?v=Kw7iTMuVSdU
i just don't see the physical offerless situation arising. after all, not everybody holding physical gold have the 'hold forever' approach that some on here have. there would be a market for it because speculators will want to trade it.
consider if the paper market was completely discredited and the price for physical was moving up or rumored to move up....look there are several closet freegold-ers on this forum...you KNOW what I mean..who would sell?...the desperate only
Both. That's the fundamentals.
The same force will be what outs GLD and Co as frauds, as physical disappears off the markets, and desperate wholesalers stand for delivery, knowing the likely outcome.
I think you're right and this in turn will likely crash every stock market.
He was forced to do it by JP Morgue. The Morgue would rather take down MFG than see the CME default on delivery. The Comex lives to fight another day. Corzine will probably not even by prosecuted.
You got it. Now the western bankstering crooks have so many bodies floating to the surface of the bullshit, the vampire squids can't get'em weighted down under. It all there to see from mortgage fraud, commingling funds, to leverage of physical metals to the stratosphere. One nation under fraud not much longer. For all the corpsezines. Simply lose citizens money & simply lose your head. A vote for real change I can believe in.
if it's not in your hand. . . it's all in your mind.
Well that's quite a theory.
Lets see how it plays out.
Mine! Mine! Mine!
lets flip a gold coin...........i call eagle..............
You called deflation.
"Bye bye gold the deflation monster cometh"
i need it for my teeth.............
No! I had dibs on it first.
Gerald Celente is standing in line
Celente can deny it all he likes, but he didn't follow his own advice. He's pretending like his Dec. contract was as good as gold in hand. He's always told people to buy physical. He should admit his mistake in trusting the paper markets. That's not to say he wasn't scewed, but isn't what happened to him exactly what he's warned the rest of us about>?
I think so too.
It all depends what percent of his net worth was tied up in the paper gold instruments?
If it's a small percent that he knew was in ultra-high risk bets then he walks away relatively unharmed. If it was a high percent of his net worth then well sux to be him.
But did he not SPECIFICALLY warn against this?
yea, but he may have fallen to the siren song of Leverage,...
someone's got to scout out the dangers. he paid the price, we got the early warning. everyone out of the pool.
Who gives a fuck what he was doing with his trading account? He's been trading commodities for 20+ years... you think a dog's going to stop trying to lick it's ass if you replaced his tongue with sandpaper? Probably not.
He probably has phyzz, but he's not going to stop hobby trading.
"you think a dog's going to stop trying to lick it's ass if you replaced his tongue with sandpaper?"
Consider that stolen +1
When he is giving out advice about staying away from the paper markets, he is speaking to the average schmuck who does'nt have much to begin with. Celente is already rich. Rich people can afford to gamble a little.
The words of the day are rehypothecating and commingling
Because the implications could be staggering.
Not to me, only the IDIOTS we told not to play in a sandbox full of CATSHIT.
If anything, it could/WOULD send the price past da moonshot.
@DosZap: I nearly spit up my Wendy's milkshake on that one. Gave you green for "sandbox full of catshit". ROFL
Saw the same thing and laughed out loud. What, the ponzi collapse will be shortened to 4 years instead of 8.. I know I have thought and wrote it will be years and it will be, but it is damn tiring..
I never learned those words watching Mr. Rogers. Hello neighbor can you say "commingling"?
It reminds me of that flashback scene from V for Vendetta where they talked about all the new words that came into vogue, and how others had their meanings changed.
Scary times we are living in. Hope you got dat physical.
Sabibaby
Me thinks Reguritating is likely among those for some.
... and "cuntiness" by GeoffryT.
OK I'll be first to link:
http://www.youtube.com/watch?v=a8ecXITshe8
No Safety or surprise, the end...
I'll never look into your eyes again.
Desperately in need of some stranger's hand
in some desperate land.
Edit: I am laughing so hard I can't see. You stupid wall street fucks; let's see how that "rule of law" thing works out for you, it's been ass-fucking us for decades. This is fucking beautiful. Happy Friday, ZHers!
I will drink, smoke, and be merry tonight.
yeah, I just tried to explain rehypothication to a co-worker. All we could do is laugh at how the bankers made things so complex, trying to skim a few more pips, that they have destroyed themselves.
That's as funny as the MBS's, where no one knows what they "own".
Of course, its only funny if you are not in the system. I'm not. This is my payday. I'll be making my usual stops at the bank and coin shop, then making my deposit at the Home Bank of S2man.
I own nothing. Divorce has seen to that. Bitch. Now about them bankers....
Freedom's just another word for nothing left to lose. We may need you. Stay loose.
Hundred to one, baby
One in hundred
No one here gets out alive
NOW
You got yours, baby
I got mine
http://www.youtube.com/watch?v=nGHhqV_QhzE
..................................................................................
"The pending economic crisis that now faces America is painfully obvious.
Everyone's savings would be wiped out totally. No one could escape.
"One can only imagine what such conditions would do to the stock market and to industry. Uncertainty over the future would cause the consumer to halt all spending except for the barest necessities. Market for such items as television sets, automobiles, furniture, new homes, and entertainment would dry up almost overnight. With no one buying, firms would have to close down and lay off their employees. Unemployment would further aggravate the buying freeze, and the nation would plunge into a depression that would make the 1930s look like prosperity. At least the dollar was sound in those days. In fact, since it was a firm currency, its value actually went up as related to the amount of goods, which declined through reduced production. Next time around, however, the problems of unemployment and low production will be compounded by a monetary system that will be utterly worthless. All the government controls and so-called guarantees in the world will not be able to prevent it, because every one of them is based on the assumption that the people will continue to honor printing press money. But once the government itself openly refuses to honor it--as it must if foreign demands for gold continue--it is likely that the American people will soon follow suit. This in a nutshell is the so-called 'gold problem."
"Even though American citizens would still be forced by law to honor the same pieces of paper as though they were real money, instinctively they would rush and convert their paper currency into tangible material goods which could be used as barter. As in Germany and other nations that have previously traveled this road, the rush to get rid of dollars and acquire tangibles would rapidly accelerate the visible effects of inflation to where it might cost one hundred dollars or more for a single loaf of bread. Hoarded silver coins would begin to reappear as a separate monetary system which, since they have intrinsic value would remain firm, while printed paper money finally would become worth exactly it's proper value--the paper it is printed on!
If the government can renege on its international monetary promises, what is to prevent it from doing the same on its domestic promises? How really secure would be government guarantees behind Federal Housing Administration loans, Savings and Loan Insurance, government bonds, or even social security?
Comments of former Secretary of Agriculture, Ezra Taft Benson, back in 1967. His haunting words sound like they could have been penned today:
Young fools....only now, at the end, do you understand.
<incessant cackling>
You have paid the price for your lack of vision! <force lightning>
Control Alt Delete
Only for a Windoze computer. Apple and Linux never need to restart their corrupted system.
Long-John-Silver
Got Windows,have enough horsepower run Ubuntu LINUX on the side.(tip from PM BUG.)
the system or the criminals?
format c: /y
PRINT CHR(4) + "INIT HELLO"
;-)
Hardly.
shred -vz /dev/hda
Sadly this only confirms what we already expected.
Is this why my PM stocks are crashing?
ugh
And tmosley was right AGAIN.
Haters gonna hate.
Bob Dabolina and MathMan called. They want their ripped faces back.
#1 This isn't a default.
#2 Silver and gold are trading exactaly where I said they would be 6 months ago for December. Research the conversation I had with bay of pigs... (I believe it was back in June)
#3 If you take the leverage out of the gold/silver market the price crashes....check what happened to oil in 2008 (it went from $142 to $32 in a matter of months)
Those goalposts have wheels.
Stealing the paper that is a claim on the goods you don't have isn't a default now, apparently. I guess that is one way to get out of this world of shit that these guys have made for themselves. Too bad the effect is exactly the same as a default.
you fucking idiot...you have a SUIT over shit. Not a fucking comex default.
GFD you are stupid and desperate.
You're right, I'm sure it ends there and there is nothing more to this.
lol
Tokyo will be evacuated or dead by next week.
You're going to be reminded of this prediction as well.
You should have learnt by now to stop doing this. You simply AREN'T any good at it.
I like how you keep trotting out things with false context.
It's almost as if I wasn't referring to the lack of municipal or bottled water at all.
But then, you hear only what you want to hear, and know only what you heard, so stupidity of your calibur is to be expected whenever you chisel your messages into rock (no such thing as technological advance, remember).
Bullshit Bob. You said low $20's by the end of the year.
Anyhow, LOL. What a clown you are. You still don't get it do you?.
Dumb shit, if my target was low 20's my order to cover would have gone off in Sepetember as silver hit $25 back in September. Also, I said silver would be mid-upper $20's (so I would have been off by $2.75) Where you said some crazy shit that silver would be over $50 right now (only off by $27)
You're just butthurt because your fundemental thesis is wrong wrong wrong.
Nearsightedness will kill you when you are playing in paper. Can't see the forest fire for the trees and smoke.
"Where you said some crazy shit that silver would be over $50 right now (only off by $27)"
$17 but who's counting.
Come on man, the 1 is next the 2, it was a simple typo.
I was just killing time while I wait for the script to index all the june conversations.
I carefully placed a typo in my last comment.
Guess you missed it.
Bob, do you enjoy being wrong or are you just stupid?
Do you enjoy ad hominem attacks like the rest of the people attacking me tonight or do you have somthing to say?
All these dumb fucks were the same people saying silver would be over 50 (and even 60) by now and gold over 2000 and that the comex would have defaulted.
Guess what?! You were all fucking wrong.
I'm the only one that made a sensible projection 6 months ago and was right (or cunt hairs away from being right) and all people can say is that I'm a dumb fuck.
Not me. I said it would be going to zero. Already has for MF Global clients. The rest of you are just a matter of time.
Enjoy losing all your "money" when your "account" is emptied by your broker.
Do you still fail to see the difference between physical and paper?
I know the difference asshole.
Guess where the University of Texas keeps their Gold? AN HSBC BANK VAULT
Meaning it's not burried under the science building....meaning HSBC holds their physical.
This was a case of MF Global and HSBC fucking up and as of right now it is ONE CASE. This had nothing to do with the comex defaulting or anything else.
Our disagreement was never the difference between physical and paper gold. We have always fought about PRICE.
Pardon, but when did I ever talk about Texas being anything other than stupid for moving their gold from one fox den to another?
And yeah, you keep yapping about the price. You don't believe that there is a difference between physical price and paper price, that they are the same. Well, that is now demonstrably not the case. You really think that this is the sum total extent of the corruption in the financial system?
Talk about naiveté.
Pardon, where are you going to safetly keep A BILLION DOLLARS IN GOLD?
There is no difference between paper and physical in terms of price. When oil went from $142 to $32 the price of gas went to $1 something a gallon at the pump. You could physically feel the difference no?
And you don't think physical can be stolen just as easily?
Here is one article about people stealing PHYSICAL gold.
http://abcnews.go.com/US/price-gold-soaring-jewelry-thefts-rise/story?id=14352413#.TuLRmGPTqW4
There are hundreds of articles of gold theft (to include bullion) if you bother to do any research. Don't think theft is exclusive to the banks.
Bulk buyers of gold have little recourse but to keep it at the bank.
protip>>>>PEOPLE STEAL