More Reader Comments On "Get Out Of Gold Now While It's High" Part 5 of 5
Earlier Post Part 1 Part 2 Part 3
FlatShoeLance: “Interest rates may increase sooner than expected. This will put more downward pressure on gold.”
Oh brother, where do I begin? Did you think maybe this will put downward pressure on bonds? On leveraged loans? On collateral chains?
Where is all the money? It’s in the bond market. After 7 years of ZIRP nearly all the bond stock out there has rolled over at all time high prices/ low yields. And, and…these bonds are often used as collateral for more leverage.
Besides, 25 bps has been long factored into the markets. It’s the trajectory if any that is hazy and it’s been made abundantly clear that real rates will be less than CPI for as far as the eye can see.
JC Collins: First it was “interest can never increase or the whole system will collapse”. Now its “well, the interest rate increase has already been priced into the market”. I love how stories continuously change so people can continue their absurd scripts. My story stays the same, and is continuously proven accurate.
And by the way Cramley, changing your display name doesn’t make your position here anymore logical or reasonable. The reason I stopped posting your comments before is because you lie and attempt to change facts to fit whatever it is you feel you need to communicate. Clown.
You have been proven wrong on every issue you tried to debate on here. Including trying to convince us that BRICS was going to overthrow the west, and that China would never join up with the IMF and SDR.
You’re a one trick brass parrot with no idea of the complexity of the monetary transition which is taking place. Go back to one of the doom porn sites where you fit in.
Tony Graupp: Greetings JC… Make NO mistake, I respect and treasure your work and opinions BUT at times I must disagree where has all the gold gone ?? Answer me that ??
Did Gresham’s Law Invade JP Morgans Comex Gold Vault?
Posted on November 21, 2015 by The Doc 3 Comments 785 views
It appears that something has “spooked” the entitled owners of 5 million oz of gold previously stored in COMEX depositories…
Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:
Gresham’s Law states that bad money drives good money out of the system. People will use inferior money in their daily “bartering” for goods, services, investments etc and hoard good money.
We are seeing Gresham’s Law work in the gold market, where eastern hemisphere Central Banks, investors and populations are in the process of hoarding all the gold the west will send their way in exchange for the constituent country fiat currencies. “Here, take our currency and convert it to dollars and sell us your gold.”
And the gold seems to disappear from sight. Can anyone hazard a guess how much gold the People’s Bank of China controls or where it’s safekept?
Recently my friend and colleague Craig “Turd Ferguson” Hemke – TFMetals Report – noticed an usual amount of gold was being removed from the “registered”/investor account in JP Morgan’s Comex vault. Last Friday, for instance, 24% of the eligible gold disappeared from JPM’s registered vault account and disappeared to destinations unknown: LINK
Again yesterday another chunky 160,750 ozs of gold fled the questionable custody of JP Morgan’s eligible account (click on image to enlarge):
The amount of gold removed yesterday represented 32% of the amount of gold remaining the eligible account after last Friday. In total, this entity or entities has/have removed 49% of the gold that was sitting in “investor safekeeping” section of JP Morgan’s Comex custodial vault.
We can only speculate what might of “spooked” the entitled owners of that gold to take it away from the Comex.
However, I will say this with confidence: whomever removed that gold decided that they no longer trusted JP Morgan to safekeep it. It’s interesting because the Comex offers storage rates that are a significant discount to market rates to investors who take delivery off the Comex and use the Comex vaults for safekeeping.
Whatever the case may be, nearly 50% of ALL of the gold in Comex vaults has been removed since 2011 (source: 24hgold.com, edits are mine – click to enlarge):
How can gold go down in price if it is being accumulated in largess?/
JC Collins: No links provided.
Tony Graupp: Greetings JC…. Here is another story about ‘Gresham’s Law”
The gold seems to be vanishing at the Comex & London Bullion Market….with some statistics to show.. http://www.safehaven.com/article/39627/londons-lbma-and-new-yorks-comex-gold-markets-in-collapse
London’s LBMA and New York’s COMEX Gold Markets In Collapse
By: David Jensen | Saturday, November 21, 2015
That title is a strong statement to make. Indeed. However, as discussed in 2014 and again in January of this year, with daily gross trading turnover at the LBMA (London Bullion Market Association) in January of ~ 200M oz. of gold per day, it was inevitable the world’s pre-eminent physical gold and silver pricing platform in London would fail due to Gresham’s Law and we can now see from available information that it is collapsing.
Gresham’s Law predicts that the introduction of debased (or ‘bad’) money will drive more valuable (or ‘good’) money out of circulation leaving only the debased, and ultimately worthless, money or claims circulating.
Many will chuckle at the proposition of Western gold market failure and note that the price of gold has gone nowhere. If the markets are in collapse due to lack of available of gold, then where is the price action exploding to the upside?
Well, digital gold and silver are still available in copious (infinite) amounts and continue to trade on both the LBMA and COMEX exchanges – you can have as much digital or virtual metal as you want on these digital exchanges. There is no shortage of virtual metal and thus the virtual price that most investors follow won’t move up. The bullion banks have always sold-down this virtual gold price when it has risen.
The telling of the story is instead in physical metal availability and so we look first to the LBMA – the primary global ‘physical’ exchange. The LBMA indicates in it owns market guide that its primary gold trading contracts, unallocated spot market contracts which are claims for spot physical gold (ownership right-here, right-now), give the holder just an unsecured claim for physical gold.
This has allowed the creation and trading of non-existent gold to the point that the London spot physical gold market trades 200% of the global annual gold mine production of gold – each day.
Looking to the availability of vault gold in the physical market in London (with a special acknowledgement to the important research by Ronan Manly and Koos Jansen of BullionStar.com), we can see below that outside of the holdings of the Bank of England (official sector holdings) and ETFs and other funds in London, there are approximately 6 tonnes of privately-held gold potentially available to the spot market.
It may be argued that the official sector holdings held by the BofE or gold from Switzerland can be made available to market by leasing but the 6 tonnes of Privately Vaulted gold in the graphic below tells another story.
The ‘Unaccounted’ Privately Vaulted gold (gold potentially available in size to the spot market) has declined from 1,651 tonnes in 2011 to 6 tonnes this year. During this period, physical gold has been predominantly moving rapidly to the East where it has been bought by Asian buyers.
To meet the market requirements in Asia, Western gold has been refined in Switzerland into 99.99% pure kilo bars from Western ‘London good delivery’ bar format. The gold vaulted in London would be logistically more difficult and costly to move to refineries in Switzerland so we can therefore infer that this gold would be the last available gold to be refined in Switzerland and sent on to Asia.
The consumption of these London stockpiles tells us now that the readily available Western gold is gone. Sure, smaller amounts of leased gold can be made available from central banks or surreptitiously from the ETFs and other funds to the market but the rapid decline of London’s gold vault holdings tells us that there has already been a landslide in the London gold market.
To give a sense of scale of this event we can estimate the open interest of spot claims by using a 2x to 3x multiplier of the daily gross turnover as exists in other physical materials (commodities).
For ease of calculation, if we use the 200M oz daily turnover of January 2015, that translates to an open interest of 400M to 600M oz or ~ 13,000 tonnes to 19,000 tonnes of gold. That’s versus 6 tonnes of Privately Vaulted physical gold in London outside of the BoE and the various gold funds.
Vaulted Gold in London Chart courtesy of ShareLynx
The New York COMEX gold market tells a similar story. The ratio of open interest contract claims on gold vs. registered vaulted physical gold available to settle trades in NY COMEX warehouses has increased now to a 300:1 ratio.
Even on this non-physical exchange with numerous escape clauses in the COMEX Rulebook to allow cash settlement, the gold has virtually disappeared with only 150,000 ounces remaining in the registered accounts available for delivery against the 300x larger open interest claims in this market.
COMEX Wharehouse – Registered Gold Stocks Cover
John Exter, who was a former Federal Reserve official, called gold ‘power money’ or the ultimate form of debt settlement as gold stands alone as nobody else’s promise (compare our debt-based fiat money system where all money starts its life as debt).
Because of gold’s integrity as money and as an asset it has always existed as an unappreciated indicator of the unsoundness of central bank monetary profligacy and government fiscal deficit policy. The suppression of the gold price by pricing physical gold with the exchange of virtual gold will reach its limit with lock-up of the London and New York gold (and silver, platinum and palladium) exchanges when the metal completely disappears.
Savers and investors will then move to other real goods to secure their wealth as this age of fractional reserve trading and central bank monetary sophistry ends – a story of fiat money failure that been repeated over the last 300 years in the West. A monetary and bond market crisis will signal citizens calling the government and central bankers’ bluff, once again.
Over the past few days, the London 1-week GOFO rate (LIBOR minus the gold lease rate) has suddenly surged to – 0.30% and the 1-month rate to -0.23% both from positive values signalling physical market stress. We will know whether this is meaningful with time, however the broad story has already been told – the gold is, in broad terms, gone from London and New York.
A final note: We’ve seen NATO, Russia, China and Iran become much more active militarily and geopolitically over the last 24 months. Are they getting ready for the next phase which is a Western financial crisis and then military conflict (as historically favoured by politicians to deflect attention from the crises they’ve created) instead of reforming the system? It looks like it from this vantage point.
It would appear that ‘physical allocated gold’ is in short supply… In a way, I hope you are correct that the price drops as you have forecasted…””BECAUSE””…then I.m 100% sure the last of the gold will go into hibernation, and the price will rise to $5-10,000/oz or more Take Care Tony
Dane: But the “Gresham’s Law” story Tony was most likely originally referring to may be these from over on Jesse’s blog since the one below is “another story”. Got you covered Tony, no worries.
JC Collins: Unfortunately Jesse’s Cross Road Cafe is not an official source of documentation and support. They are only opinion pieces, and a preordained interpretation of the data. The same can be said for the POM thesis, except it is actually being proved correct on a weekly basis, and there is an endless source of official documentation supporting the thesis. Reader and commentator Alan is doing an amazing job of finding and providing these sources.
Daniel-Grig: The sad reality is as you say JC, that man does not change from within.
The other reality is that people do not waiver system, that does not know live free.
People do not renounce to the system that has no ready alternative and most don’t know that they are slaves. We want to be free like humans… but protected by the system.
The owners of the money, the elite, knows this and is aprobecha, putting pressure on the slaves of the system… as it happens now. Modern man wants to be a “free” slave within the framework of the system.
People do not want a world without control system, wants a new system… i.e., want some owners more compassionate, more good, with slaves.
Humans have genetically the condition of being slaves, so thousands of years, explains that we can not get out of slavery, generation after generation.
It is true that the human being, can develop his mind and evolve in his conscience, but it can happen with a percentage very low between 1-5% of the population, according to I think.
The human being starts its genetic manipulation, and continuous with the education, culture, religion, politics, and especially the information.
This blog shows, for as people are manipulated in the area of geopolitics in the alternative media information. How many are here, understanding what happens with finances? Very few.
Are how many in the alternative media, fooled with information handled on the geofinanzas? Many.
Are many deceived with official information from mass media, television, radio etc?
The rest of nearly 80-85% of the population.
In conclusion, the human being, comes with chains of slavery and functional when born, is surrounded by walls, of ballas, of ideological borders that the system has been prepared for the.
Are not born nor free.. .and in a free world. Money is one of those tools of slavery.
The human being is born a slave and it is possible that never will account, to die.
What do here JC, is opening the eyes of readers to understand how works the system of slavery.
This does not mean that JC, likes that the human being is slave, but at least help your neighbor understand the mechanisms of financial slavery, to aprobechar certain advantages of current change.
Wake up the human being both.. .as to change their destiny as humanity?
Personally I cannot see the horizon this possibility, only on a personal level and in case of small groups.
Gold will remain the zanajoria of confidence in a financial system that is manipulated and tailored to enslave generations to come.
The more it awakens human beings, more sophisticated will be the mechanisms of slavery, or more social control there will be, as we see what happens with the Paris bombings.
If we realize our slavery.. .not like that support it.
The problem is to awakening in the alternative media is controlled, as well as controlled dissent.
Is there hope? Hope real, there is very little.
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