Q.E.D. II

To me, the evidence is conclusive. Let's see if you agree.

In college, I had a physics professor who, every time he demonstrated a mathematical formula, would conclude his work with "QED". There's a reason for this and I'll let wikipedia sum it up for you:

"Q.E.D. is an initialism of the Latin phrase quod erat demonstrandum, originating from the Greek analogous hóper édei deîxai (ὅπερ ἔδει δεῖξαι), meaning "which had to be demonstrated". The phrase is traditionally placed in its abbreviated form at the end of a mathematical proof or philosophical argument when what was specified in the enunciation — and in the setting-out—has been exactly restated as the conclusion of the demonstration.[1] The abbreviation thus signals the completion of the proof."

Well, after Wednesday night's Comex delivery reports, QED is also how I feel regarding the JPM NET LONG position I've been harping on for months.

As first noted in the July Bank Participation Report, a "U.S. Bank" is now massive long Comex gold futures. Experience told us that a position of this size...generally around 75,000 contracts...HAD TO BE JPM. However, this experience was just conjecture and we needed demonstrable proof. The first four days of December delivery provide the proof.

If you've been following along, I've estimated that, in a NET LONG position averaging 75,000 contracts, it was likely that at least half the position was in the front-month Dec13. That position was then rolled into Feb14 and April14 but not without causing some extreme volatility, which JPM used to their selfish price advantage. Additionally, because JPM issued almost 3,000,000 ounces of gold to the other banks through the Comex delivery process of Feb13, Apr13 and June13, it was to be expected that they (JPM House) would use their long position to stand for delivery this month. Not wanting to "break" The Comex...YET...JPM will eventually stand for 7,000-8,000 in December. If the entire system doesn't collapse first, look for them to stand for the same amount in February and April of next year.

Given all of that listed in the paragraph above, "proof" of JPM's NET LONG position will lie in just how much gold they actually take in delivery during December. If the total had turned out to be miniscule...like earlier this year....my entire analysis and conclusion could be justifiably called into question. If, however, JPM ends up stopping 90%+ of the Dec gold contract deliveries...

And what do we have so far? Wednesday alone was breathtaking. There were 2,472 deliveries announced. Of the 2,472, the JPM House account stopped (took delivery) of 2,389 or 96.6%. This brings the total for the first five days of the month to:

Total Deliveries: 3,558

Total Stopped by JPM: 3,400 or 95.6%

Total Issued (thus far) by HSBC: 2,216

Total Issued (thus far) by Scotia: 787

Now consider this. Back in the first half of this year, when JPM was desperately converting a 75,000 NET SHORT position into a 75,000 NET LONG position, it got stuck "holding the bag" and deliveries were made against it by the other banks. For the delivery months of Feb13, Apr13 and June13, it looked like this:

Total Deliveries: 34,571

Total Stopped by HSBC: 13,768

Total Stopped by Scotia (including March and May): 2,257

Total Stopped by Deutsche Bank: 5,918

Total Stopped by Barclays: 3,596

Total Stopped by JPMorgan House: 547

Total ISSUED by JPMorgan (House and Customer): 31,939

Guess what world? THEY WANT THEIR FREAKING GOLD BACK!! And they have cornered The Comex gold market in order to make this happen.

Ultimately, what does this mean to you, my dear Turdite? Let me again put it this way...

JPM is NET LONG something like 65,000-70,000 Comex gold contracts right this minute. (My best estimate based upon yesterday's Bank Participation Report.) What you have to decide is this: Just whom do you expect to win in the end?

  • The brainless Specs and the non-U.S. banks?
  • The ruthless JPMorgan?

Assuming no changes of position, a drop of $175 from here, toward the vaunted and much-hyped $1050 level, would "cost" JPMorgan about $1.5BILLION. Do you really think that JPM, holding a market-dominating and cornering position, is going to ALLOW that to happen? Seriously?? Well, we'll see, I guess.

Now some would suggest that JPM's Comex position is simply a hedge, offset by an equally large net short position held OTC. (As Westley said: "It's possible, pig".) But if that's the case, how do you explain JPM's sudden desire to take delivery? Again, 95%+ of the December deliveries are being stopped to the JPM House Account. Look, I'm not claiming to be some kind of Comex depository and delivery expert, remember I'm just a guy from Kansas...BUT...if JPM was simply "net neutral" and "non-directional", why would they take delivery in the first place...AND...why would all of the deliveries be ending up in their own, proprietary account?

Finally, there is always the possibility (some would same likelihood) that all of this CFTC and CME-generated data upon which I am relying is nothing but lies and fabrications, intentionally falsified in order to deceive. Of course that's a possibility and, frankly, a somewhat logical deduction given the layers of fraud and deception prevalent throughout not just the metals markets, but seemingly everywhere. However, note the consistency of the data. The NET LONG position was first shown in the BPR of July and it is playing out now, in real time, in December. That's a long time to manage and maintain a charade.

Instead, I actually believe the data is (mostly) accurate. Look, where else do you see the type of analysis I just gave you? It's not as if it's being trumpeted by CNBS. Very, very few people take the time to figure this stuff out and put two-and-two together. And I can promise you, JPM doesn't give a rat's ass that you and I know this stuff. By the time everybody else catches on, price will have already moved and everyone will only look back with hindsight. JPM just wants their gold back before the current fractional reserve bullion banking system breaks, prices skyrocket again and a new global currency regime takes hold. And now, for the first time ever, they've cornered the Comex gold futures market in order to ensure that it happens.

Q.E.D.

TF

137 Comments

Turd Ferguson's picture

Updated December delivery totals

MODERATOR

92 total Dec gold deliveries for Friday. 90 went into the JPM House account. 85 were issued by Scotia.

For the month, there have now been 3,849 total deliveries and JPM House has stopped 3,683 of them or 95.7%.

Silver hoarding continues, too. Just 32 Dec silver deliveries Friday. 23 into JPM House.

For the month, 1,798 total silver deliveries now with JPM House stopping 1,020 and JPM Customer stopping another 184 for a total of 1,204 or 66.96%.

Mr. Fix's picture

1st,

Well, if your analysis is correct, we may finally have our  historic explosion soon, but after the vaults have been emptied, they still need to draw as much off the open market as possible, in the meantime, I think the price continues to meander downward.

They have no fear of losing money, they clearly have access to a printing press, and  are already fully committed to destroying the dollar. How much Fiat they lose in the meantime is completely irrelevant to them.

I agree they're going after all the gold, in the end, it's the only thing that will be worth anything.

(But I still hold out hope for silver too).wink

benque's picture

Hello?

2

Klaasisbaas's picture

Twee

Twee

kn33bar's picture

Thanks Turd

Great work. 

Deaglán's picture

Thanks TF, excellent

Thanks TF, excellent stuff.

Big crowd in the Mexican mint Thursday and Friday. The Centenario coins were being bought by many I saw there. Silver OZ´s were available but sold out in the usual sources.

Couple of friends who usually stick to stocks have picked up a few gold oz´s lately.

Enjoy the weekend folks.

GuerrillaCapitalist's picture

JPM Learned Their Tricks Well

Turd:

I agree with your analysis and conclusions. JPM is simply following our lead and stacking metal. Of course, I think their methods are deplorable since they manipulate the markets to their advantage.

Strange times indeed, my friends.

BTW, I still consider metal to be on sale and am grateful for each ounce taken from the thieves and stashed away for the benefit of real people.

GC

dgstage's picture

DHS GALVESTON

ivars's picture

We will only see true JPM in

We will only see true JPM in numbers when printing press will be stopped. FED does not want to do it, but USG has created stats that makes politically difficult for FED to continue QE at all. So, if QE is stopped in December or late January , JPM should know it , and then it will for sure take gold not lose FRN. I think that will happen with Feb 2014 deliveries, December deliveries is just a small show of force, a threat to FED and USG.

R man J's picture

Where else?

Indeed, Turd. I'm not a trader but it is worth the price of admission just to see everyone's knowledge grow.

So when someone forsakes thei PMs to sell out to "BitCoin" or "Specs Control" or "Surplus Supply" or "China is not accumulating" we will ultimately be able to prove them wrong.   

You should take a poll re:  "Silver or Bitcoin" and find out who the sell out are. Max Kaiser?

ReachWest's picture

Great Analysis

Hands down - best analysis in the PM blogosphere! And - very well presented.
Q.E.D. indeed.

It's interesting that the normal group-think is blindly taking the "Gold to sub $1000" meme with little to no questioning and analysis. But - those of us in Turdville (and certainly those of us in the Vault) have the benefit of riding along on Turd's analysis and the insight he gains from his wide network of PM pundits. Makes me feel like a special little turd.

I'm sure JPM is quite pleased that the MSM continues down the bearish argument path for the metals - it only serves to make their work easier as the mindless specs fall in line for the ultimate spiritual awakening they have coming.

Turd Ferguson's picture

Thanks, Reach!

MODERATOR

And to think....All of this for just $10/month, which you "get back" if you simply do what you're supposed to be doing anyway...stack 20 ounces of silver every month.

I've tried to make this as affordable and reasonable as possible. If I was some greedy bastard, I could be charging $75 or $100 per month but that's never been the goal of this endeavor, nor will it ever be.

Response to: Great Analysis
boomer sooner's picture

Futures charts made easy.

Futures charts made easy.  Auto refresh to boot.

http://futures.tradingcharts.com/marketquotes/GC_.html

Sorry if old news.

Urban Roman's picture

Still, if JPM (or PBOC for

Still, if JPM (or PBOC for that matter) have enough phyzz to corner the paper market, why would they not want to drive the price even lower so they can buy MOAR?

Pete's picture

Technicals confirm TF's fundamentals

Weekly chart review of gold, confirming significant short-covering last week that needs to continue in order to turn the tide at last.  First link is largest Babson perspective.  Second link shows additional Babson support angle, with commentary.

http://i42.tinypic.com/312igcl.png

http://i42.tinypic.com/zwnwxd.png

Click on the charts to enlarge them.

Mammoth's picture

dgstage - DHS GALVESTON

dgstage - Thank you for shining the light on yet another infringement on America's constitution.  This brought back an experience my father recently had with the TSA:

Papa Mammoth is an 87-year old WWII veteran.

While enduring airport security last month, he forgot to remove his money - belt before walking through the X-ray body-scanner.  Of course this triggered an alarm.

The TSA goons made him take off his shirt in front of everybody else who was waiting in line, and subjected him to an extensive pat-down.  Made him stand there in the cold for 5-10 minutes before they allowed him to put his own shirt back on.

It is simply unforgivable to subject an 87-year old person...and a World War II veteran...to such degrading treatment.  America is no longer the same country that he risked his life - and my existence - for.

-Mammoth

Dagney Taggart's picture

Turd, Please comment.....

on the amount of open interest on the Feb14 contract for 1900 and higher calls. Is this normal for the next delivery month?

http://www.cmegroup.com/trading/metals/precious/gold_quotes_volume_voi.html#FEB_14_Calls

PS. How do you know when a contract is settled for physical or fiat?

Maximillion's picture

LBMA programme

Maybe I missed a post about the LBMA 2013 PM conference but there were quite a few  presentations which may provide a few more clues such as the forthcoming legislation changes re position margins, CBs' and banks, and other speeches presented including slide shows. Gives an interesting insight into how the big players see things panning out.     

http://www.lbma.org.uk/pages/index.cfm?page_id=159&title=programme

alan2102's picture

Garsh, do I ever LOVE Catholic intellectuals!

Take this as a continuation of our discussion from a few days ago.

This is a few snippets from a longer article, by a fantastic author, whose name you can google for more and still better.  frontporchrepublic.com is generally good, too, if you're interested in authentic conservatism.

PS: I'm with FDR. Pius XI's Quadragesimo Anno was one of my faves, too.

http://www.frontporchrepublic.com/2013/11/the-triumph-of-the-liberal-state/

The Triumph of the Liberal State

by John Médaille on November 12, 2013

It was sometime back in the Dark Ages—by which I mean the 1960’s—that I watched a television program in which two English comedians (I think it was Flanders and Swann of the “Hippopotamus Song” fame) explained British politics to an American audience.  As I remember it, one of them said, “We have two major parties in Great Britain. One of them is the Liberal Party, which you Americans call ‘the Socialists,’ and the other is the Tory Party, which you Americans call ‘the Socialists.’”  F&S certainly captured the American view of Europe at that time. But in fact, the differences between “us and them” in those days were not as great as we imagined.

Western Europe was (and to a great extent still is) a collection of Social Democracies, with high levels of government services, a commensurate level of taxation, and a high degree of social equity and mobility. But the same was true of the United States. Indeed, in between the Second World War and the late 1970’s, American had built, in its way, a social democracy that resembled the vision of the good society outlined in Pope Pius XI’s encyclical Quadragesimo Anno, which Franklin Roosevelt had proclaimed “one of the greatest documents of modern times.”[1] America seemed to have fulfilled the Pope’s vision of a third-way between laissez-faire capitalism and socialism. This was the time of the “great compression,” when differences in income between rich and poor shrank to their lowest level. The portion of national income going to the top 10% fell from its pre-war high of nearly 50% in 1928 to a low of about 33%, and stayed there from 1947 to 1982.[2] America had created, arguably, the most egalitarian society on the face of the Earth and quite possibly in the history of mankind. And this is even more true if you exclude the condition of the States of the Old South and the condition of the African-Americans in those states. The two conditions, by the way, are related to each other; economically, it is just not a good idea to spend so much energy suppressing 40% of your population. But race and history weighed more heavily on the South than did economic loss.

During this period, the CEO of a great company might make 20 times what his line workers made. That is enough to make one comfortable, but it falls far short of the 300-500 multiple that a CEO makes today. And the CEO and his workers shared a common life; the CEO just shared a bit more of it. They may not have been equals, but they were certainly neighbors.  The worker might drive a Ford while the boss drove a Cadillac, but they drove them to similar places. The wife of a CEO would shop at the same stores, even if she purchased higher quality goods. They had similar houses, even if one were larger.  The rich and the middle class were tied together in a common life by a common experience of war, depression, and the great struggle against communism.

Even on health care, the issue that currently proves so fractious in American politics, the difference was less than meets the eye. The European social democracies had socialized the costs and often the delivery of health care. But America had also socialized these costs, through employment rather than through the government. Almost every worker had insurance paid for, in whole or part, by their employer. And as this system began to break down for the elderly and the very poor, we established Medicare and Medicaid in the early 1960’s to address the problem, and it was generally assumed that these systems would expand to include the whole population.  Even Ayn Rand, who despised anyone who took government aid, ended up taking Medicare. Add to this the extensive network of veterans’ hospitals, at a time when a large portion of the population was composed of veterans, and the differences between Europe and the United States were diminishingly small. My parents were poor, but they never worried about medical costs; they had a “Blue Cross” card, which admitted them to any hospital, and a “Blue Shield” card which took care of the doctors.

The system was amazingly successful on the economic level. It was a period of rapid economic growth with the benefits spread equally from the highest to the lowest. America was prosperous, powerful, and united. Granted that a good deal of that “unity” came from a precarious world situation, which forced the parties to put aside their differences to join in the Great Anti-Communist Crusade. It is easy to forget now that throughout most of the Cold War, the Communists seemed to be winning. Communism spread from the Soviet Union, to Eastern Europe, China, North Korea, Vietnam, Laos, Cambodia, and  Cuba. Marxist ideas were growing in popularity in South Asia, South America, and Africa. The very real threat led to a very real unity, even when the methods and tactics that we used were morally dubious at best; nevertheless, they allowed Europe and the Far East to develop their own systems while under protection of the American “nuclear umbrella.”

This post war period of unity was actually a combination of two strains of thought, strains which displayed a relative similarity within an absolute difference. These strains are liberal collectivism rooted in individualism and Christian communalism rooted in personalism. That is to say, they are two very different views of what it is to be a human being.

The Christian view of man, like the Aristotelian version which preceded it, saw man as basically a political animal, whose development and self-realization was tied to communities of family, neighborhood, city, Church, profession, and, ultimately, one’s nation, which was not ordinarily a nation-state. The human person only reaches his full potential within this dense network of relationships. These relationships were further characterized by a mutuality of rights and duties; one had rights only in and through these communities, and hence one had serious obligations to these communities.  “Rights” arose from one’s membership in communities, and were dependent on fulfilling one’s duties to the communities.

Liberalism takes the opposite view: the whole point of “liberation” is to free the individual from this network of obligations so that he might truly attain his liberty. This is not the “positive liberty” of traditional Christianity, directed towards the good of the person, but a purely “negative liberty” which merely means freedom from any external coercion. “Liberty” is this view means simply that a person may do whatever he chooses to do without hindrance from any other person, and most particularly without hindrance from any public authority. In this view, a negative “liberty” is the greatest good; hence “coercion” is the greatest evil.

At this point an aggrieved liberal might object that I should not connect individualism and collectivism, since they are opposites. But they are not opposites; rather, individualism is the prerequisite of collectivism. It is difficult, or perhaps impossible, to collectivize a person whose loyalties are tied up with a dense network of communities.

[snip]

“Conservative” candidates now vie with each other over who has the deepest hatred of government, and which one will do more to destroy it. They worship the accumulation of wealth and proclaim that taxation is theft; they enumerate the functions of government they will “privatize” and compete with each other in denouncing the poor. Even the constitutionally-mandated post office has been laden by a conservative congress with accounting regulations that apply to no other business in America, indeed to no other business on the planet, regulations that are specifically designed to show that a very profitable business is actually unprofitable, and therefore needs to be privatized.

The joke that these erstwhile conservatives do not get is that the old name for capitalism is “liberalism”; the term “capitalism” itself was the Marxist epithet for the liberalism which Marx despised. But as liberalism came into ill-repute during decades of economic turbulence at the end of the 19th and beginning of the 20th centuries, “liberalism” rebranded itself as “capitalism” and was sold as the content of a new “conservatism.” This may have been the greatest marketing trick since Tetzel’s sale of indulgences; certainly liberalism obtained an indulgence along with a new lease on life and a new home in politics.

The nominally “conservative” Republican Party has therefore internalized the individualist-communitarian dichotomy; in this ideological schizophrenia, collectivism must always win. Capitalism, despite the disingenuous defense given by its supporters, is neither pro-market nor anti-state. It always seeks to replace free completion in the market with the rule of monopolies and oligopolies. And it is always in the self-interest of the monopolists to have a large and pliant government that can serve their interests. The higher the piles of capital, the thicker the walls of law and government necessary to protect them.

[snip]

menotcrimex's picture

Unreal Bullion Prediction Correct To The Dollar With Proof

Thanks buddy, I've been right below VERY often http://forums.silverstackers.com/topic-47523-gold-prediction-to-top-all-othersto-the-dollar.html Let's see what happens Cheers Vern

chucka's picture

Dear turd, Great analysis as

Dear turd,
Great analysis as always. I do subscribe to some other services as well and all these folks who were gold bulls are now looking for the price to bottom around the 1050 to 1150 range and for GDX to bottom around 16-17 range before embarking on a multiyear upleg and they are expecting a bottom within the next 4 weeks.Some of them use elliot waves and charts to further their price projections. However i have to tell you no one, NOT ONE ofthem have presented a case
for their price projection based on what is going on at the comex( JPM being net long). Kudos to your detailed research and please continue to present your case as you see it. I continue to hope your findings are accurate and that we are at a bottom because another hit below june lows will set of yet another wave of panic in the miners and the metal. Great Job!

dgstage's picture

Mammoth

It seems to many veterans are being targeted more than most. I know a couple and there medical care has been delayed and denied. I also read this shrinks being paid $3000 to take vets guns. http://www.mrconservative.com/2013/04/12024-gov-shrinks-getting-paid-3k-take-vets-guns/

Galearis's picture

And JPM got the gold

On the cheap.

G.

ag1969's picture

Mammoth

I am so sorry to hear about the way your Father was treated.  It is inexcusable that .gov treats veterans or any other human in this manner.  Such is the nature of traitors and fascists.  Although, I will say, I would probably rather see Papa Mammoth with his shirt off than Hillary Clinton or Dianne Feinstein!

Please tell your Dad, that on behalf of the few patriots that still appreciate Liberty, I thank him for his service.

I was at a diner with my seven year old son today.  My son wanted to sit at the breakfast bar, and there was an elderly veteran, proudly wearing a hat with his ship on it, alone at the bar right next to the cash register.  I gave my son some currency and told him to go pay and to say to the cashier, "I would  like to pay for our distinguished veteran's breakfast as well."  He nailed it, I was so proud of him, and that guy lit up like a Christmas tree and my son was smiling from ear to ear.  It was something to behold and a far better example of the treatment our veterans have earned.

Hammer's picture

ag1969 superb story......a

ag1969 superb story......a million hat tips.

Rik G's picture

More Thoughts re: YTD COMEX Delivery Notices

TF: thanks for the timely interpretations!  I was looking at the COMEX delivery stats for 2013 last night for the first time.  It does look very bullish for gold.  A couple other things were evident:

JPM stopped or took delivery of a lot in December 2012 as well.  Including both JPM's house and customer accounts they stopped 2,240 of 3,253 or 70% of deliveries in Dec 2012.  Dec 2013 is proving to be a much bigger delivery month which is not surprising given that contracts standing on first notice day were 10,157 compared to 6,999 last December.  It is surprising, however that registered inventory is so much lower this year.  Registered COMEX gold inventory at first notice day for December contracts was 590,817 ounces this year compared to 2,534,000 last year.

My brokerage account balance continually reminds me that gold prices were hammered during April and again in June, which happens to be when JPM was selling/issuing gold.  Interesting to note who was on the other side and stopping much of the deliveries in those months: Deutsche Bank and HSBC.   So far this Dec, HSBC is the largest firm on the other side of JPM's stopping.  HSBC has issued delivery for 2,216 contracts month to date.  So if you have more confidence in HSBC than JPM you could read month-to-date deliveries as bearish.

Looking at 2013 as an example, JPM took delivery of gold in Dec 2012 and then issued gold in Q2 2013.  Now in Dec 2013 they are taking delivery of gold.  Could they be planning to use this bullion to smash prices again?  Seems unlikely since they had to issue 31,939 contracts of gold in Feb, April and June to effect the 2013 price smack down.  And JPM is going to stop "only" about 7,000 - 8,000 contracts this December.  So JPM probably does not have nearly as much powder as last year when registered gold inventory was 4+ times higher and inventory at GLD was much higher as well.  Gold inventory at GLD reported by Harvey Organ was 26.9M ounces on Dec. 6, 2013 down 38% from 43.5M ounces at the same date last year.  Even with limited ounces desperate banks may do desperate things, especially if there's no personal risk such as right after bonus season.  Also, it would probably take much more powder/selling to smash prices below $1,200 than it did in Q2 2013 to drop price from $1,600 to $1,200. 

And one more thing, if JPM stops 7,ooo+ contracts this contract month as you and I are forecasting, it will be interesting to see where the 700,00 ounces come from?  Registered inventory at the beginning of the month was 590,817 ounces and is currently sitting at 681,336 ounces.  Note that delivery or stopping contracts does not affect registered inventory since the delivery process simply transfers ownership.  Gold does not leave registered inventory unless and until the owner takes it out to eligible or removes it from the system entirely.  I think this will be the first contract month where total deliveries exceeds the registered inventory at the beginning of the period.

Here's a link to the CME delivery stats if anyone else wants to play along:

http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf

mel's picture

Limit Price on Comex

Turd, do you or anyone else know if there's a MAXIMUM price gold and silver could theoretically go up in one trading day on the Comex?.. Like, is there a limit?...Thanks.

GeoffByra's picture

"If I was some greedy

"If I was some greedy bastard, I could be charging $75 or $100 per month"

you could charge 1,000,000$ if you wanted but people wouldn't pay that either. The price is set in the market and as an astute thinker you know your price range wink

 

mel's picture

Accolades

Forgot to mention it, but you are doing one hell of a good job Sir!!  

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