China Silver Exchange Update

Last week, I reached out to our friend, Ned Naylor-Leyland for a progress report and status update on what we call The NASE (Ned & Andy's Silver Emporium). 

First of all, we call it "Ned & Andy's" but that's only because they sometimes act as unpaid consultants on the project. Neither of them have direct involvement and, thus, full status updates can be challenging to acquire. However, last week Ned was able to track down some new information for us.

The gist of this is that the exchange is still being planned and constructed. It has not been permanently shelved like the PAGE (Pan Asia Gold Exchange). The delays have been primarily bureaucratic and, with the Chinese Politburo elections now well behind us, things should begin to move forward again...though likely still not at the pace any of us would prefer.

Anyway, below is a C&P of the email I received from Ned. At this point, I'm just glad that this exchange is still being built and I hope that it becomes a reality sometime later this year.

TF

Firstly I want to reiterate that although Andy (Maguire) and I were invited to
observe the opening ceremony for the Pan Asia Gold Exchange (with flags,
pomp, ceremony and Chinese Politburo members in attendance) neither of
us have any direct involvement day to day - I wish I did, but we are
both dependent on what we are told and although we have input into the
western perspective on an eastern entity, that is about it.  'NASE' is
still due to happen (thankfully) and my Chinese contact was very
apologetic for the amount of time things have taken.  My feeling is that
the wealthy Chinese backers of the new exchange rather dropped the ball
last year, although as I pointed out before, the Politburo reshuffle of
last autumn had to pass before any more regional/state confirmation of
licenses could take place.  Without being on the ground in China and
privy to the apparently very long legal and technical discussions there
is a limit to what I can sensibly add at the moment.

My contact told me that things are however progressing now, with
substantial domestic interest, especially from the Beijing Gold Exchange
who want to tie into the 'Silver Paper' - he says that the new exchange
is moving ahead with building a new vault in a special economic zone but
are flirting with custody elsewhere initially in order to get the
contract moving - I am against this and have told them so.  Either way,
I have said to them that there will be rather limited international
interest if the aforementioned differences to what is already available
in the marketplace aren't clearly obvious, and I have reiterated again
the need for total transparency on the custody/bar numbers etc.  I know
the new exchange has a website ready to be filled with the requisite
information, but the details of the contract need to be clearly defined
and posted in there with a timeline to launch laid out before I would be
happy to make any more 'noise' on their behalf.  We all look forward to
a fully allocated spot silver exchange, and I hope that this Chinese
group can deliver on it - but like much of Turdville I am currently
forced to wait and see it delivered before getting too excited.  I hope
that the natives take this holding pattern update for what it is -
meanwhile I know there are other countries that have similar projects up
and running in the formative stages (no, I now know better than to jump
the gun!) so either way I believe that the idea of full spot allocation
is closer than we may think.

Best as always,
Ned

253 Comments

Nick Elway's picture

USGS Silver

http://minerals.usgs.gov/minerals/pubs/commodity/silver/mcs-2013-silve.pdf

Quote:

In 2012, the estimated uses were electrical and electronics, 35%; coins and medals, 25%; photography, 10%; jewelry and silverware, 8%; and other, 22%.
Salient Statistics—United States:2010 2011 2012e
Production:
Mine 1,280 1,120 1,050
Refinery:
Primary 819 790 750
Secondary (new and old scrap) 1,330 1,710 1,500
Imports for consumption2 5,370 6,410 5,300
Exports2 709 904 1,200
Consumption, apparent 7,540 7,910 5,900
Stocks, yearend:
Treasury Department 220 220 220
COMEX 3,250 3,650 4,400
Exchange Traded Funds 18,400 17,600 19,000
Recycling: In 2012, approximately 1,500 tons of silver was recovered from new and old scrap.
Import Sources (2008–11):2 Mexico, 51%; Canada, 23%; Peru, 6%; Poland, 6%; and other, 14%.

A little discrepancy USGS reports 220 tonnes of Treasury silver held at the US Mint. The US Mint Annual Report has 19 tonnes of Treasury silver.

FIRST!

Road_Scholar's picture

Silver

bring on the exchange, but totally agree that it must be 100% allocated with bar numbers, etc clearly stated and in the clear.  Really show that the LBMA & COMEX are re-hypothicated ponzi schemes.  Otherwise, the sheeple won't know the difference...

olympic-silver-medal-profile.jpg

The Springbok's picture

second?

second?

Bollocks's picture

furth

It's not first though, is it?

Total disaster sad.

Swift Boat Vet's picture

Excellent News --- Thanks Ned and Turd

To quote another Turdite, "Top 10-ish?"

Swifty

s1lverbullet's picture

6th

Nice

Mr. Fix's picture

Seventh

smiley

Orange's picture

FUBM

Somehow I think this video depicts how Blythe will feel when she covers her shorts.

http://news.yahoo.com/blogs/sideshow/mountain-climber-fall-video-123506418.html

¤'s picture

Slow boat from China

Thanks for the thread update and thanks to Ned Naylor for providing the update regarding China and the slow but sure pace of things over there.

Nana's picture

10th Amendment

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Texas Sandman's picture

silver bar numbers

Not so easy.  The more late day Johnson Mathey bars have no serial numbers on them!  They don't make engelhards any more (they had serial numbers).  RCM bars are stamped with year & serial numbers (one reason I'm buying these now).

ancientmoney's picture

Here's a rare public article from . . .

Ted Butler . . .

http://www.silverseek.com/commentary/moment-clarity-10196

He is a master of the silver COTs.

buzlightening's picture

Fiat tower of babble!

Keynesians now throwing everything possible at the tower of babble to keep it from collapsing.  From the 1.2 trillion USDinker dollar swap to the EU in Jan to our 85 billion in known monthly QE by goon platooning dead head feds.  The freak show can CONtinue to throw as much fiat at the imploding situation.  Why?  The vermin rat bastards know it's worthless paper money.  Debt attached to it is worthless.  There is no intrinsic value in fiat or debt based currency.  The risk is all spread among the lambs.  Time to silence the lambs!  Last dow high in Oct 2007 ended one year later in disaster.  This is not 2007.  This will not last until 1st of June before the masters of fiat disaster slam the financial iron curtain down upon the sheeple.  It's my premise the last fragments of any size of silver bullion have been already swept up in the echoing empty bullion vaults globally.  Now in the strongest of hands!  The ameriCON'd sheeple will not know until all the coinage dries up how acute the silver shortage is.  END game on! A few last moves! Checkmate to the sheeple!  Too bad! I'm so sad!

Bongo Jim's picture

Rumble

Just had a nice little shaker here in SoCal. Johnny tells what it was on the Richter scale. O.K. Bob, it was......

bucktooth's picture

A day in the life of bucktooth

Ding dong

Coming ….

You have a package, please sign here.  It’s heavy.

It is from a bearing company.  Thank you.

Rip Rip Rip … oh boy, oh boy, oh boy

Texas Sandman's picture

I feel your pleasure, bucktooth

Just paid for my latest RCM100 this morning.  And I'm already in anticipation of receipt.  Nice & shiny with year & serial number.

Real eye candy & worth every penny!

boatman's picture

MMT

believes that fiat printing governments can presciently spend money in hard times to boost the economy then cut back  and  repay it when the good times roll.

tho they differ on some things.....Keynes also had the same idea..............even he would be aghast at what is going on NOW.

problem is, nobody is going to pullback and repay debts when money is pouring in.

but i look forward to reading everything Ivars can glean from his studies.

he has the patience of a scholar.......more than i do.  

buzlightening's picture

Adding to the acute silver shortages on tap ameriCON'd wise,

these very planned lows, before the neoCONzi blow, to assist all available insider skunk works factory wonks to gobble up the remaining coinage.  It's all moving so very fast now, it's evident the coast to roast; fiat turning to toast event, rapidly masticating into ashes.   Good luck and don't look back on your stacking conviction or be among the destitute paper fiat currency bag holders.  Yours truly,

buz

ivars's picture

This is why the USA debt has

This is why the USA debt has been the best indictor for the Gold price-so at least here, MMT ( Modern Monetary Theory) makes a lot of sense:

Quote:

The 'national debt' is nothing more than a bunch of dollars balances in savings accounts' at the Federal Reserve Bank better known as 'Treasury securities.' These 'securities accounts,' as insiders call them, along with checking accounts at the same Federal Bank (called 'reserve accounts') and the actual cash in circulation constitute the total net dollar savings of the global economy, to the very penny. When the U.S. government spends more than it taxes, those extra dollars it spent first go into our checking accounts, and then some gets exchanged for actual cash as needed, and some goes into those savings accounts at the Fed called Treasury securities.

Its quite natural that the price of gold is proportional to the net USD savings in the whole world as , the more savings there are, the more price of gold will rise EVEN if the same proportion of saved USD is turned into gold. No panic at all. Same proportion of savings all the time.

I know many dismiss MMT as Keyneysian, but , one should not throw out the baby with water, and should be open to things that explain the "mystical". 

Instead, I am going to study MMT as next step to understand what is going on.

ancientmoney's picture

A snippet from Butler's article . . .

linked above . . .

"Attorney General Eric Holder said: “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” A senator admitted to being stunned by the frankness of the response. While Mr. Holder’s no-nonsense answer got the widespread attention it deserved, it should have resonated most loudly with silver investors, or at least with readers of this service.

In a blinding moment of clarity, the answer to the whole “why isn’t the CFTC doing anything about the silver manipulation and JPMorgan’s stranglehold on the price” question flashed for all to see. Mr. Holder’s words couldn’t be any clearer and fit perfectly with the now-consensus view held by those who know that JPMorgan is manipulating the price of silver. The reason the CFTC is allowing JPMorgan to continue with their illegal behavior in silver is because the bank is too damn big and powerful to rein in for fear of the unintended consequences."

old tradesman's picture

jim willie with greg hunter

Bongo Jim's picture

A number of shakers

Well Bob, it was a 5.2 followed about 50 seconds later by a 5.1 with several "after shocks." Thanks Johnny, and thank all you contestants for playing.

Bongo Jim's picture

Sorry Bob, but it was two

Sorry Bob, but it was two 5.2s followed by a 5.1 all happening in about a minute.

SilverSurfers's picture

kwn

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2013/3/7_John_Embry.html

Sprott Money Ltd. ‏@SprottMoney

John Embry: Massive #Silver Shorts to Force #COMEX Default & More – King World News. Listen to the interview here: http://ow.ly/iKFnD

interview was a few days ago, yet the tweet today, must be bandwagoning turdville

=== edit, just in another tweet

King World News ‏@KingWorldNews

John Embry - I Believe Global Silver Stockpiles Are Now Exhausted http://tinyurl.com/aby4adm
 

ivars's picture

@boatman

See, I have no ideology to follow. The one I was taught in SU was an obvious scam, the one behind current financial oligarchy capitalism is as well. Debt deflation can only make bankers happy, no one else. Money and usury has become too important . Democracy has become a prostitute as Greeks knew long ago it will always do. . Inequality of guns owned by governments vs. those by population point to revival of serious autocratic  governing aimed at protection of status quo at home and worldwide.

I am not religious either in a sense I see no answers in any religion to the economic/political questions. Management of emotional distress- yes-but  by replacing uncertainty with historically and locally developed dogmas. More of status quo. Not by explanation.

So ideological space is absolutely open to find the ground, the one that explains current facts without dogmas. Hopefully. 

Long time to go, in circles may be.

Mudsharkbytes's picture

I hate carrying over topics from previous threads, however…

…it somewhat irks me when misinformation is passed off as facts and then left to dangle.

It is not lying or committing perjury to claim more dependents on a W4 form than the number of children you have.  There is a way to calculate the number of claims you can make, and it's independent of this simple number.  

The reason for this is so you don't have the IRS deduct more from your paycheck than is necessary.  If they are withdrawing too much, then you aren't claiming enough dependents.  Simple as that.  It's not lying, it's not committing perjury.

Using the IRS's own calculator at:

http://apps.irs.gov/app/withholdingcalculator/

and entering just myself and my wife it told me I was eligible for THREE dependents!  I didn't even bother entering all the other information about my children and expenses.

There's such a thing as being cautious, and I'm all for that, but there's also such a thing as going overboard.  Being afraid to list enough dependents on your W4 form to offset your withholdings is too cautious.  You're not going to end up in jail over it.  The absolutely worst case scenario is the IRS tells you to change the number because you're owing too much at the end of the year.  Basically, if you end up owing the IRS more than $1000 you're not having enough taken out.  Any less than that and they're perfectly okay with it.

ancientmoney's picture

Bevan and Petch both came out with . . .

bearish, short-term outlooks for gold and silver, in their TA.  Petch does Elliot Wave, which I think may have use in stable, unmanipulated markets, but not those of todays PMs.

Bevan is bullish overall, but fears a drop is straight ahead for both Au and Ag, and Pt, too.  He says he's looking to short gold at $1550 and silver at $27.50--he says he hopes it don't go there, but he's ready to go double-short if they do.

Here's Bevan's link, if you are interested to see his view.  He may be right, but I don't care.  This, too shall pass.  I can't bring myself to play in their manipulated, paper playground.

http://www.kitco.com/ind/Bevan/20130311.html

Strongsidejedi's picture

Silver exchange ain't gonna happen under these circumstances

The Silver Exchange in china won't happen under the current circumstances.

After seeing the fingerprints last night of petroGold, the Chinese would need to convince the Iranians to accept silver in a PetroSilver barter.  Are the Iranians interested?  How about DPRK?  I doubt it.

It's too much mass to haul and too long a distance.

China stated a goal of 1 million barrels of crude import per day by 2015.

China is claiming that they're importing 300,000 bpd.  Japan says they're also down to 200,000 bpd.  That's a decrease of 500,000 bpd of Iranian crude exports.

At USD$80 per barrel and USD$1500 per ounce of gold, how many ounces of gold equates to 500,000 bpd?

Here's my math:  1500/80 = 20-22 barrels per ounce of gold.

500,000 barrels per day / 20 barrels per ounce = 25,000 ounces per day.

It was already reported that China imported 90 metric tons of gold in November alone.  That's enough to barter with Iran in gold the missing crude shipments for gold in China.

If say 250,000 bpd were going to be bartered for silver instead, the calculation might run something like:

$30 per ounce of silver / $80 per barrel = 2.5 ounces of silver for every barrel of crude.  This means you would need to ship 600,000 ounces of silver or 60 metric tons of silver PER DAY to handle that load. 
 

I suppose you could load those empty COSCO freight containers in Long Beach for Shanghai with US Silver, but man where are you going to find that number of bars?

Sprott can't do it.  Why would the Chinese?  And, more to the point, why would the DPRK or Iranians accept silver instead of gold?  They wouldn't want to pay for the shipping of all that silver.  They would need an army to move the silver trade for a week.  But, in gold, they can move it in a truck load.

ivars's picture

I have a feeling that once

I have a feeling that once FED feels stocks has reached stage of autopilot increase, they will address Treasury rates again, bringing them down, moving bond prices up as QE will not be needed so much anymore to support stock prices . Might be very very soon.

It will be good to the holders of Treasuries not because of yields, but because of capital gains. 

FED wants anything people hold to increase in fictitious financial value of assets by QE, and then use them as collateral to go back in debt again, as only moving private sector into debt more will carry QE over to increased consumption, fueling another bubble, and bankers will be happy as well as interest continues to flow. Housing is gone for good. Stocks come next. Bonds last. Then, if that does not work - something will have to be done that finally will kick inflation in. 

So there are still some options, perhaps the time is shrinking- speeding up, but there is at least 1-2 years before sharp increase in fiscal spending will be needed ( except in case of  war earlier, of course).  Politically they can may be hang in even till 2016 elections with asset bubbles.

Patrancus's picture

The American Revolution

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