Sprott Update: "Central Banks, Bullion Banks and the Physical Gold Market Conundrum"

Released earlier today, the latest from Eric Sprott and Etienne Bordeleau at Sprott Asset Management is required reading.

This latest piece from Sprott is extraordinarily important. It details gold demand as well as Western central bank supply, leasing and manipulation. All the while, it puts into simple and understandable terms the current conundrum of mismatched leases that experts like Andrew Maguire are closely monitoring.

Please take the time to read this article today. Then, take the time to read it again. Maybe even print it out and keep it for posterity.

TF

Central Banks, Bullion Banks and the Physical Gold Market Conundrum,

by Eric Sprott and Etienne Bordeleau

The recent decline in gold prices and the drain from physical ETFs have been interpreted by the media as signaling the end of the gold bull market. However, our analysis of the supply and demand dynamics underlying the gold market does not support this thesis.

For example, Non-Western Central Banks have been increasing their holdings of gold at a very rapid pace, going from 6,300 tonnes in Q1 2009 to more than 8,200 tonnes at the end of Q1 2013 (Figure 1a) while physical inventories are declining (Figure 1b) (or being raided, as we argued in the May 2013 Markets at a Glance)1 and physical demand from large (Figure 1c) and small (Figure 1d) scale buyers remains solid.

Source: World Gold Council, Bloomberg, Hong Kong Census and Statistics Department
Average premium calculated as the average premium for the following 1oz. coins, as reported by the Certified Coin Exchange (CCEX): American Eagle, Maple Leaf, Krugerrand, Philharmonic, Panda, Isle of Man and Kangaroo.

In previous articles we have argued that Western Central Banks have been filling the supply gap to satisfy the demand for physical gold.2 As shown in Figure 1a above, the official amount of gold held in the Western Central Banks and international institutions like the IMF has been steadily declining since 2000, only to stabilize at around 23,500 tonnes since 2008. Officially, this gold has primarily been sold by continental European Central Banks under what is known as the “Central Bank Gold Agreements” (CBGA) (also known as the Washington Agreement on Gold).3 Under this agreement (which expires after five years and has been repeatedly renewed since 1999), the “undersigned institutions will not enter the market as sellers, with the exception of “already decided sales” and “The signatories to this agreement have agreed not to expand their gold leasings and their use of gold futures and options over this period”. Sales under the CBGA are shown in Figure 2 below.


Source: World Gold Council4

The two points referenced above are particularly interesting because gold leasing (or swaps) has been the primary instrument used by central banks and bullion dealers to suppress the price of gold over time (Alan Greenspan testified, on 24 July 1998, to the House of Representatives that “central banks stand ready to lease gold in increasing quantities should the price rise”).5

It is important to remember that bullion banks (members of the London Bullion Market Association, or LBMA) hold gold in their vaults for their clients.6 Most of those clients, according to the LBMA, deposit their gold (or purchase gold) through an LBMA bank, for example ScotiaMocatta, in what is called an unallocated account. “This is an account where specific bars are not set aside and the customer has a general entitlement to the metal. It is the most convenient, cheapest and most commonly used method of holding metal.”7 However, what the LBMA doesn’t say is that, just like regular fractional banking, the bullion bank does not need to keep the whole value of the gold deposit in gold, but only keeps a fraction of it in its vaults, hoping that not all depositors will request their gold at once. This creates a potential shortage of physical (and an increasing supply of paper) gold and is one reason why bullion banks sometimes need to lease gold from central banks. Leasing gold is analogous to a swap or a collateralized loan, where a Central Bank gets cash in exchange for gold as collateral, and pays an interest rate on the cash loan.

The gold leasing mechanism works in the following way (also shown in Schema 1 below):8

A Central Bank leases its gold to a bullion bank for a pre-specified period (say 1 month). In exchange, the Central Bank receives cash for the value of the gold and has to pay the Gold Forward Offered Rates (GOFO) to the bullion bank. Then, the Central Bank lends the cash on the market and receives LIBOR for 1 month, with net proceeds of LIBOR minus the GOFO, which is called the lease rate. If the lease rate is positive (and it usually is), then it is profitable for the Central Bank to lease its gold. A high lease rate increases the incentive for Central Banks to lease their gold.

The bullion bank, once it receives the gold from the Central Bank, sells it on the gold spot market and collects the cash (depressing the price in the process by increasing supply in the market). For the bullion bank, this transaction is cash flow neutral and pays a carry (the GOFO rate) (the bullion bank can also buy the gold forward one month to make this a risk free transaction, or hope the price of gold stays constant or declines when it’s time to buy it back). Thus, the GOFO rate is a measure of “how much the bullion bank desires physical gold”. If it is small (relative to LIBOR, which implies a large lease rate), the bullion bank wants gold. If it becomes negative, then it means the bullion bank is ready to pay (negative carry) the Central Bank for the privilege to lease its gold (presumably to deliver physical gold to clients that redeem physical gold from their unallocated accounts).

In theory, at the end of the month, the bullion bank buys the gold back from the market and gives it back to the Central Bank. If the bullion bank repurchases the gold from the market, there is no net effect on overall gold supply. We say in theory because, as highlighted above, the language used in the CBGA hints at something else.

It is our hypothesis that, in practice, the bullion banks do not purchase the gold back in the market at the end of the lease to give it back to the Central Banks. Instead, they only roll the transaction over with the Central Bank, resulting in gold IOUs (paper gold, referred to as “gold swapped or on loan” under Central Bank accounting jargon, in other words, a claim on gold that someone else holds) instead of real bullion in the Central Bank’s vaults. This can be seen in Figure 3 below. There is a clear negative relationship between the amount of gold leaving the vaults of the New York Federal Reserve Bank (other Central Bank’s official gold reserves) and the lease rate (how much carry a Central Bank owns by leasing out its gold). To us, this is a clear indication that Central Banks have been leasing out their physical gold against IOUs from their bullion bank partners.

Source: Federal Reserve Bulletin, Foreign Official Assets Held at Federal Reserve Banks, Earmarked Gold & LBMA. The 1-month lease rate is shown as an annual average.

Also, oddly enough, it seems from Figure 3 that the gold bull market started at about the same time (mid-2001/early 2002) as Central Banks and Bullion Banks stopped flooding the market with leased gold.

Another interesting observation is that the timing of official sales by European Central Banks and the International Monetary Fund (IMF) (Figure 2) do not really correspond with the outflows from the NY Fed’s vault (where most of the world’s Central Banks’ gold ex-US is stored; about 30% by our calculations). This is where the “already decided sales” concept referred to earlier comes into play.9

According to the IMF, they disposed of 403.3 tonnes of gold between 2009 and December 2010.10 However, the net outflows of gold out of the NY Fed’s vault were zero for those two years (and the NY Fed is the main vault for the IMF).11 If this rather large quantity of gold did not come from another vault, then it is plausible that it came out of the NY Fed’s vault, which experienced a net drawdown of 408 tonnes in 2007-2008, a full two years ahead of “official schedule”. Given this inconsistency, it is reasonable to believe that the IMF leased its gold reserves (in the manner explained above) to tame the gold market and rescue the bullion dealers, which probably got a lot of physical gold redemption requests they couldn’t meet during the financial crisis. Then, later on, they “sold” their paper gold to the dealers to net the IOUs and settled in cash.

A similar observation can be made of the European Central Banks’ CGBAs, which all happened well after all the gold outflows from the NY Fed’s vaults.

We are of the opinion that this is what an “already decided” sale is: a Central Bank leases gold to a bullion dealer, that dealer sells the gold (or delivers it to a client) but never pays back the Central Bank its physical gold. Then later on, to balance things out, the Central Banks declare official “sales” of gold, but all that changes hands at that point is paper gold and cash, the real gold is long gone.

Lessons for the current market

It is important to remember that the bullion dealers are the same banks that are deemed too big to fail by their respective governments. Thus, it is very unlikely that Central Banks would abstain from intervening à la Greenspan in order to save their bullion bank partners from a “bullion run” (analogous to a bank run). On the contrary, if the bullion dealers get in trouble because their reserves of physical gold are too small to match redemptions of physical (anecdotes) and risk a bullion run, Central Banks will use their firepower and “stand ready to lease gold in increasing quantities should the price rise” (Greenspan, 1998).

The thing is, it might not be that simple anymore… Since the beginning of the financial crisis, we have seen unprecedented demand for physical gold (see Figure 1a-d above) while at the same time, gold miners are shutting down mines and Central Banks have been relatively quiet in terms of official gold sales (Figure 2) (depressing supply). In fact, the announcement by the German Bundesbank (the second largest gold reserve in the world according to IMF data) that they would repatriate their gold from the NY Fed’s vaults can be seen as a sign that European banks are no longer as keen to lease (or swap) out their gold.12 Other very detailed documents released at the same time show that since 2008, the Bundesbank has not made use of gold leases or swaps.13 To us, this signals that Central Banks are less and less willing to participate in the gold leasing scheme.

Still, the price of gold has experienced a large decline over the past few months, only slightly recovering over the past 2 weeks or so. Given the strong physical demand, we think that this decline was engineered by a bullion bank that flooded the COMEX (paper market), only to then redeem physical gold from the various available sources at depressed prices (i.e. ETFs, see our discussion of this topic in the May 2013 Markets at a Glance). To further support our price manipulation hypothesis, we overlay the 1-month GOFO rate with days where the gold price suffered significant declines (more than 3%) in Figure 4. Unless it is the actual price drop that sparks all this increased demand, it seems counterintuitive that the gold price would decline precipitously before large declines in the GOFO rate, which implies increased demand for physical gold from bullion dealers.

It now seems that bullion banks are in desperate need of bullion, as evidenced by the increasingly negative GOFO rates we are seeing (Figure 4 below). Remember that a negative GOFO rate signifies that the bullion banks are ready to pay holders of physical to lease their gold, in this case for a month. Historically, negative GOFO rates have happened in very few occurrences. The last one was in November 2008 at the height of the financial crisis and after which gold rose 156% from through to peak. Before that, we saw negative GOFO rates in March of 2001 (about the start of the bull market) and September of 1999 (announcement of the first CBGA).

In our view, the bullion banks’ fractional gold deposit system is testing its limits. Too much paper gold exists for the amount of physical gold available. Demand from emerging markets, who do not settle for paper gold, has perturbed the status quo. Thus, our recommendation to investors is the following: empty unallocated gold accounts and redeem your gold in physical form (while you still can), invest in allocated, physically backed products (like the Sprott Physical Bullion Trusts) or in those that have access to physical gold in the ground (gold miners).

1    http://www.sprott.com/markets-at-a-glance/redemptions-in-the-gld-are,-oddly-enough,-bullish-for-gold/
2    http://www.sprott.com/markets-at-a-glance/do-western-central-banks-have-any-gold-left/
http://www.sprott.com/markets-at-a-glance/do-western-central-banks-have-any-gold-left-part-ii/
3    See https://www.gold.org/government_affairs/reserve_asset_management/central_bank_gold_agreements/ for a discussion of the history of the Central Bank Gold Agreements (CBGA).
4    Signatories to the third Central Bank Gold Agreement which commenced in September 2009. The signatories include: ECB, Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland. Estonia became a signatory upon joining the Euro in January 2011.
5    http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
6    The bullion dealers are: Bank of Nova Scotia–ScotiaMocatta, Barclays Bank Plc, Deutsche Bank AG, HSBC Bank USA, NA and Société Générale
7    http://www.lbma.org.uk/pages/index.cfm?page_id=19&title=bullion_accounts
8    For more on this topic, see “On the Lease Rate, Convenience Yield and Speculative Effects in the Gold Futures Market”, Swiss Finance Institute Research Paper Series 09-07. ,http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1365180
9    We would like to acknowledge the use of this blog as a source of inspiration: http://victorthecleaner.wordpress.com/
10    http://www.imf.org/external/about/gold.htm
11    http://info.goldavenue.com/info_site/in_mark/in_offgold_frny.htm
12    http://www.bloomberg.com/news/2013-01-16/bundesbank-to-repatriate-674-tons-of-gold-to-germany-by-2020.html
13    http://www.bundesbank.de/Redaktion/DE/Downloads/Bundesbank/Wissenswert/gold_entwicklung.pdf?__blob=publicationFile
 

110 Comments

Turd Ferguson's picture

Please ignore the Sprott bashers

MODERATOR

Whenever I feature a post from Eric Sprott, certain folks come out of the woodwork to cast aspersions on his character in order to distract you from his message. Do not allow that to happen here. This piece is extremely well-written and it is extraordinarily important that you understand the message.

Salisbury House's picture

Uno

First, Yes!

SilverTree's picture

2nd! $20 Silver!

Silver%20Medal.jpg

treefrog's picture

thurd!

second thurd today! 

Turd Ferguson's picture

You should also be sure to

MODERATOR

You should also be sure to watch this from Turdite Brent at Santiago Capital. Always worth the time.

http://play.pointacross.com/bdn07oal2cs4

wildstylechef's picture

QUATRO

Wishing for more Bernankie blunders positive for gold

tyberious's picture

fif

fif

achmachat's picture

I really need to go back...

... and check on previous Sprott posts who those bashers are!
it is always interesting to see who has an agenda and then figure out why.

tyberious's picture

Russia Amasses ‘Full Combat

Russia Amasses ‘Full Combat Readiness’ Strategic Bombers

Straight out of Russian news, Vladimir Putin has called for the nation’s strategic bombers to enter a state of ‘full combat readiness’ following the ‘snap drills’ that were initiated after Israel bombed Russian-made missiles within Syria.

by Anthony Gucciardi, Story Leak:

russia-strategic-bombers-israel-300x145. As I reported on Sunday, Russia’s large scale amassing of over 160,000 troops, naval ships, fighter planes, and strategic bombers has been virtually ignored by the mainstream media — with only Russian-based news services really reporting on the entire event. From the Israeli bombing of the Russian missiles to the ‘snap drills’ calling upon Russian forces to enter this period of ‘full combat readiness’, it appears that only RT has been analyzing the situation and looking at what’s going on based on military sources.

Tabloid Media to Busy to Cover Brewing World Conflict

Originally being revealed by an anonymous intelligence individuals within the US military and shared with CNN as reported by the Israeli National News, the revelation that Israel was behind the strike on the Russian-made missiles in Syria may be behind the reason for the combat drill — assuming the Russians found out before the general public. Unfortunately, the US mainstream media is too busy covering the minor intricacies of what George Zimmerman ate for breakfast today to discuss the potential brewing of mega conflict.

Read More @ StoryLeak.com

tyberious's picture

And the government kills people to hide the truth!

Michael Hastings Cremated, Family Never Requested; Wife Hires Private Investigator

 

from LeakSourceNews:

New details shed light into the June 18 death of journalist Michael Hastings. Hastings’ friend and confidant SSgt. Joe Biggs disclosed a macabre twist in the award-winning journalist’s death in a suspicious single-car accident. According to SSgt. Biggs, “Michael Hastings’ body was returned to Vermont in an urn.” He further alleged, “Family members did not want Michael’s body cremated.”

This revelation provides another wrinkle in the Los Angeles Police Department’s (LAPD) handling of a case they labeled “no foul play” only hours after the writer’s death. Nevertheless LA County assistant corner, Ed Winter, said it took two days to identify the burned-beyond recognition body of Hastings. Officials also confirmed that an autopsy has been performed, but the cause of death is still pending. Unfortunately the family will have to wait for cause of death answers as LAPD media spokesperson Lieutenant Andrew Neiman indicated, “It will take several weeks to get the toxicology results.”

SSgt. Biggs also emphatically stated that liquor was not a factor in the accident, as Hastings hadn’t consumed alcoholic beverages in five years.

tyberious's picture

look away!!!

2 years after nuclear disaster, Japan spawns freaky fruits and veggies

Mutated tomatoes next to a normal one < (tangomango13 via Reddit)

now.msn.com / 22 hrs ago

It might be wise to steer clear of vegetables from Japan’s Fukushima area for, oh, say a few hundred years. A Korean website assembled this image collection of produce from towns and villages surrounding the Fukushima Daiichi nuclear power plant. And they are NOT pretty pictures. From Siamese-twinned corn cobs to what can only be called peaches with elephantiasis, the region’s agriculture appears to have taken a heavy radiation hit from the nuclear disaster in 2011. It’s not clear yet what effect eating the produce might have on the population, but you never know. It could be pretty dangerous, but you never know — in an ideal world, maybe it could give you superpowers. [Source] [Source]

SOURCE

Exbroker's picture

Turd,

The banksters probably will eventually pull out the wild card called : Govt confiscation. Not like it never happened before.

The Watchman's picture

GLD Continues to be DRAINED-1.5 Tonnes Gone

Tonnes937.57

Ounces30,143,884.76

Value US$38,920,769,924.73

The Watchman's picture

More Silver Demand

China lifts PV installation target to 35 GW by 2015

16. July 2013 | Markets & Trends, Industry & Suppliers, Global PV markets | By:  Wenjing Feng

In order to stimulate PV consumption and control industrial overcapacity in the domestic market, China has increased its PV energy target to 35 GW by 2015.

Read more: http://www.pv-magazine.com/news/details/beitrag/china-lifts-pv-installation-target-to-35-gw-by-2015_100012056/#ixzz2ZFBVesGA

Just one year after announcing an increase in its cumulative 2015 PV target from 15 GW to 21 GW, the Chinese government said it was now raising the goal to 35 GW.

 

JY896's picture

Gold from Western Central Banks bought, melted & resold?

BorisG posted this on the other thread -- very much worth the listen.

Lars Schall interviews William Kaye of the Pacific Alliance Group, to clarify his earlier comments on KWN, which seemed to suggest that gold bars with sovereign markings (such as, I dunno, Bundesbank insignia) are being imported into Hong Kong/Shanghai.

In the current interview, Kaye confirms that large refiners (such as Heraeus) use gold from ALL sources, INCLUDING CB stockpiles. There is NO DIRECT STATEMENT saying that the refiner specifically used German (or any other SPECIFIC country) bars... he only says the refiners are using 'all available sources'. Read between the lines.

Kaye does go on to elaborate quite a bit about his beliefs on the SOURCE of the massive amounts of physical being used to satisfy current demand. Primarily, GLD primary dealers/'preferred participants' drawing down from the ETF stockpile. Further, FRB & BIS are at least tacitly (through non-enforcement), but more likely directly facilitating this process by backstopping the bullion banks.

Extend & pretend is the name of the game, apparently -- fiat currency system must be maintained at all costs.

PS: Well done, Turdville! Big thanks to whoever emailed Lars -- I remember the suggestion, but not the person.

"I received a couple of e-mails asking me if I might be motivated to undertake an investigation concerning this question."

Howard Roark's picture

Excellent article

Turd,

Thanks for another profound essay on what´s going on. Besides the ad hominem arguments it doesn´t seem the bashers use the same quality in argumentation. So...

It´s a great way to end a good day for the metals.

Salut to the Community,

HR

(edit): thanks JY896 (I hope I´m right on the name) for the interview with Kaye.

Great efforts from the Community payoff! 

(edit2) - I guess it´s BorisG that should take the credit for the Kaye interview. 

This Community rocks! powerful and critical information! Right on!

Magpie's picture

@tyberious

Wow.  A blue frog?  People in Japan are sooo screwed.

Larry's picture

Thanks TF. Sprott putting all the pieces together

This article ties together so much of what most here have read, understood and talked about but in scattered pieces and varied places without the overlapping context, history, modus operandi that Sprott provides. A keeper for sure.

One thing this article brings home, to me anyway, is why these Central planners and bullion banks hate gold and silver. They can't play their games with it as they can with fiat, fractional, digital, printable at a whim fake money. It truly is a barbarous relic to them and, due to the value placed upon it throughout history, they have to deal with it. Would be so much easier to just tell their serfs that paper and ink were the only store of value. But for those pesky pm's.

The article may be a bit complex for the newbies, and meaningless to the entitled sleepwalking ones or the many distracted and uninitiated, but for those of us that have been seeking answers to the who, how, why's of gold leasing and manipulation tactics, this goes a long way to put cause, effect and dots together. 

It may seem futile to us to expect the seemingly all-powerful, untouchable cartel of money masters or their political puppets to be investigated or tried much less convicted, but awareness begins to identify the problem, discovery delivers understanding of problem. Knowledge of the intricate details of the problem has to be gained before anything substantive can be done to correct it, both in courts of law and the court of public (global) opinion... the latter being the only viable opportunity today. Particularly in the non-Western governments.

Neither law nor political will or public opinion in the cities of London, New York or Washington (along with the peoples, states and nations under their control) will do anything but reject truth and embrace entitlement slavery or corruption in whatever way serves them best.

Thanks to people that do care and are smart and intent on digging for truth, we will find enough of the evidence, discover the many ways and means of these manipulative matters to cause a rejection of the fiat, fractional banking system. 

It would be overly optimistic to expect these criminals to receive justice in a court of law or public opinion, although anything is possible when enough people are awakened to the pandemic of fraud in the system. Some of it is downright scary to consider when chaos and revolution breaks out. I expect there will only be a solution when most of the world rejects the control of the empire and their banking system. This too is horrible to think about because as we've seen time and again, it means widespread, world war. The bankers may never be jailed, but they may just lose the things that they value most, the two things they have sought with reckless, selfish abandon; the things for which they have lied, cheated, usurped, stolen, sickened and killed to gain... money and power.

I'll settle for that and pray that we don't see the destruction that most likely will come when the system is jolted and rejected.

tyberious's picture

William Kaye

Awesome interview!

tyberious's picture

magpie

It the rest of the world that I'm worried about! Radiation is not very localized and I'm in the PNW. I cut out seafood shortly after Fukushima! 

Zoltan's picture

Silver Lease Rates (Same Weirdness)

Source is kitco silver page (as usual)

Silver Lease Rates
Jul 16 2013 Change
1M 0.4800% -0.0100
2M 0.5000% +0.0000
3M 0.5000% +0.0000
6M 0.5300% +0.0000
1Y 0.5400% -0.0100

How is this for a theory.  The SIFO (Silver Forward Offer) is unavailable so this rate is just showing LIBOR?  This has happened a lot lately.  The change doesn't account for the new rate. (Yesterday's rates below)

Silver Lease Rates
Jul 15 2013 Change
1M -0.4900% +0.0000
2M -0.2670% +0.0000
3M -0.2324% -0.5000
6M -0.1265% +0.0015
1Y 0.1399% +0.0040

If the rate is "unavailable" or maybe just doing crazy things (like spiking to -15% again) and they don't want it public knowledge they just don't include it in the calculation. 

S Roche? Anyone?

Z

Magpie's picture

@tyberious

Me too (fish & global contamination).  But at least I'm not getting any deformed veggies in my garden....yet.  Considering the fact that there's been a recent massive spike in radiation, and that they allegedly don't know where it's coming from, I have a feeling it will only take a few more years before we start to see mutations across the northern hemisphere.

letey petey's picture

Whats up with US @ IMF???

BOTH US positions have been vacant at the IMF since April. Anyone have a clue what that means?

http://www.imf.org/external/np/sec/memdir/members.aspx#U

Larry's picture

Putting the PM back in JPM

Getting it all out of the system this afternoon. Uh, my system… sorry.

Since they are (currently) too big to fail, bail or jail, maybe I should just refer to them with a deserved acronym, TBTJPM. Is the Morgue getting out of the warehousing business to bring the goods closer to home? Are they loading up to cover their remaining naked shorts (ha!) or building inventory to deliver to their few and favored friends (and powerful clients) standing for delivery?

Are they stockpiling (looting) to distribute hard-currency bonuses to themselves? Gold and silver parachutes when it all stalls and goes down? Or are they just doing the business as usual bidding of their “clients” Uncle Sam and the few dangerous, significant others?

Could this action we’re seeing play out have been the plan all along or are we seeing an end of fourth quarter broken play razzle-dazzle desperate measure after they discovered they couldn’t outrun the perfect storm of strong buying of physical heading their way. Are they trapped despite their efforts to fool the world with paper smashes? These are of course questions which we will never have certain answers.

Only the shadow knows and it isn’t saying. National security, you know. None of it really makes any sense unless you enter the Bizarro World realm of down is really up. It does seem that the TBTJ sharks are circling closer to the chairs sensing the music is about to stop. The Jaws soundtrack comes to mind.

Silver up a nickel yesterday and today it more than doubled (to a dime-ish). Price has been micro-managed once again, barely moving after a defiant rise above the early takedown. Being flat-lined for a lengthy time has been a harbinger of attacks and drops before, so what does the horizontal pregnant pause mean this time? Tonight or tomorrow up, down, sideways, all of the above… who knows? Maybe time to go long nickel. Or pennies.

Speaking of… is JPM now doing the same thing to copper (with approvals from the usual acronym “regulators”) with their copper ETF? It’s riled some big manufacturers and there have been complaints (screaming bloody murder) to the SEC and litigation. Wonder how that’ll turn out?

With their seemingly untouchable manipulation of all metals, all commodities and all markets by the TBTF and their government enablers along with the private, for-profit Federal Reserve, will JPM wind up being nothing but a big crooked but outplayed victim of the shark killer vampire squid who pretty much calls the shots while entrenched in the global money centers of Central Banks, IMF, Bank of England, US Treasury, Federal Reserve and most of Washington?

That these are interesting  times is an understatement. We see the current lawlessness, greed, theft, chaos, destruction and unbridled corrupted power, where the cartel of mega-bankers own the executive, legislative and judicial system. With that, they own the media and embedded with the military stop and go buttons. Interesting. Maddening. Historic.

The stuff of failing, flailing, falling empires. 

tyberious's picture

letey petey

IMF interesting!

Sad-descent's picture

@letey re IMF

"Anyone have a clue what that means?"

That the US is paying 18% of the freight with no representation, and that our political structures may be just a little disfunctional.

Bollocks's picture

definitely tap water then.

Dyna mo hum's picture

Gold and Guns... Time to circle the wagons?

http://teapartyeconomist.com/2013/04/26/connecticut-no-guns-no-gold/             Non confiscatable gold (sounds sweet) why sure? But  what if the team of government agents kick your door down and have their way with your goods.

Mad5Hatter's picture

Whenever I feature a post

Whenever I feature a post from Eric Sprott, certain folks come out of the woodwork to cast aspersions on his character in order to distract you from his message. ====== LMAO!!!!!

My take, is that he is perplexed by the regime as much as anyone else.

Hey nice graphs on leasing, engineers love graphs, but superimposed on that was the WGA where 500 tons a year, 2000-2008 is supperimposed for a realization of total full court gold cartel press. 

No Guns, No Gold, as the totalitarians tighten the noose. Honoring and defending the Constitution only in their minds of course. Circling the wagons, is that a metaphor for civil war? In this corner we have the Freedom Fighters and in other corner we have the totalitarians. Where's popeye?

JUSTICE ROBERTS,

TEAR DOWN THAT COURT!!!

check this out,

Derrick Michael Reid Wrote: Feb 16, 2013 3:05 PM

http://www.sarahnet.net/sarahnet-news/8767-levin-hannity.html
Here it is. Now go to 6:44 into the video. "WE HAVE TO SLOW HIM DOWN".
That is such a defeatist posture, one that pervades the republican party.

Derrick Michael Reid Wrote: Feb 16, 2013 3:00 PM Mark, we know he is a liar and a committed totalitarian, but what was new as the "SLOW DRAG" comment. THAT IS THE REAL EYE OPENER, because, it tells the people, that even though the president is a lying totalitarian fascists, the big story is the REPUBLICANS are in bed, with cave-in leadership, to where there is no election choice, as we can vote for the ENSLAVERS on one side, and their ENABLERS on the other side of the Isle. MARKs commentary, if you see it all, is more of an indictment of the RNC for what it is, enablers enabling that slow drag.

http://totalcontrol.blogtownhall.com/2013/02/16/loyal_dissent,_just_say_no!!.thtml

So the court, the two parties, and which ever gets the presidency, is of no import, they are all on the same team, with no real voting choice, and hence no feedback control, and then we also have no feedback control on the court, interpreting the rag at they deem fit, so the US Government is operating OPEN LOOP, and that means disaster, as once the shuttle bird started down, there was no heat shield negative feedback, and there was no turning back, until it blew up, for all to see.

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