The Attack of The Apologists
The Bullion Bank Shills and Apologists have begun a coordinated and orchestrated attack against anyone drawing attention to the scam and charade of their fractional reserve system. Rather than let their half-truths and distortions stand unanswered, we thought it best to turn the tables back on them, instead.
Here's the timeline of these latest events. In July and August, this site and others diligently chronicled the daily machinations of the delivery fraud of the Comex. The most recent article detailing the recent shenanigans can be found here:
Then, last Tuesday, the daily CME "Gold Stocks" report showed a significant decline in total Comex registered gold. Before we could post anything at TFMR, our pal Dave Kranzler had written a tremendous and detailed explanation. To save time, we simply posted Dave's excellent work as a guest post and you can find it along with some additional TFMR commentary here:
Other sites such as Jesse's Cafe Americain and ZeroHedge also chimed in...drawing attention to the ongoing charade of so-called registered and eligible gold:
And here's the thing....
As we've discussed here at TFMR for the past week, NONE OF THIS CME/COMEX DATA MATTERS! Heck, the CME itself began in 2013 to include this disclaimer on it's Gold Stocks reports:
"The information in this report is taken from sources believed to be reliable: however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only."
It simply doesn't matter what the Gold Stocks reports state, first and foremost because the party responsible for the reports disavows any claim of accuracy. But more importantly, even if the reports are accurate, it doesn't matter! As noted in the first post linked above, come the delivery month of October, JPMorgan and the other Bullion Banks will simply journal around some "gold" and reclassify a few ounces from eligible to registered. This will be done to create the appearance of "deliverable supply". And that won't matter either because, in the end, the vast majority of what gets "delivered" will be nothing but a handful of warehouse receipts and other paper claims to "gold". Barely any actual physical gold will change hands!
So, you must understand that isn't about "imminent Comex collapse". It never was. This is about public, market and media awareness, leading to a growing recognition of the level of fraud necessary to prop up and maintain the fractional reserve and paper derivative pricing scheme.
By drawing attention to the FACT that the current ratio of paper ounces to readily-deliverable registered physical is at historical extremes, it is hoped that even "mainstream" analysts will begin to question this "system". The questions we hope to inspire are:
- How can 229:1 paper leverage create a legitimate physical price?
- If 229:1 is deemed appropriate and fair, then at what level of leverage does the current system become unfair? 500:1? 1000:1? Does it even matter?
- And if 229:1 seems grotesquely high, what is an appropriate level of leverage for a paper derivative market? 5:1? 10:1?
So, can you see what we're attempting to accomplish by drawing attention to the current extreme leverage as shown on the chart below?
The price of gold (and silver) has been artificially managed on exchanges like the Comex for over 40 years. These exchanges grant to the Bullion Banks the ability to create limitless paper metal. The only thing that gives this paper derivative price its legitimacy is the illusion of physical delivery. Therefore, any attempt to pull back the curtain and expose the delivery sham for what it is...a charade...must be met with full frontal attacks by The Bullion Bank Apologists. They will defend their beloved current system without regard to truth or accuracy, up to and including personal attacks and disparagement of motive.
Consider the events of the past few hours.
Earlier today, Bron Suchecki of The Perth Mint tweeted this:
The chart they don't want you to see: world didn't end in 1998 when TOTAL (not just reg) stocks v OI was this high pic.twitter.com/fkwEHbKdwT
— Bron Suchecki (@bronsuchecki) September 10, 2015
Note the clever use of the word "they". This is typical of all Apologists and anyone arguing from a position of weakness. "They" (apparently meaning TFMR, Jesse, Dave and ZeroHedge) want to confuse you. Clearly "they" have an agenda. "They" want to scare and frighten you to the point of buying something from them.
Bron goes on to link his latest piece of "analysis" where he attempts to protect the fractional reserve bullion banking system by showing how total "leverage" vs total gold stock was even higher back in 1998. Take another look at his chart below (click to enlarge):
Again, as pointed out in the first link, it's utterly meaningless what the CME claims that the Comex vaults hold. Why?
- The Banks will simply journal "gold" back and forth from category to category as necessary
- The CME itself disclaims any accuracy in the reporting
Once more, who cares what the total stocks were versus open interest in 1998? It doesn't matter!! What does matter is the growing recognition that it's all a fraud and a charade and that this recognition presents a serious threat to the system that The Apologists strive to defend.
So now it's our turn to ask the questions. Why do Bron Suchecki and The Perth Mint care? Why are they such adamant defenders of the current system? If he's so concerned about the motives of TFMR and the rest, why can't we ask what his motive is? Could it be Perth Mint's maintenance of unallocated and/or pooled accounts that perhaps rely upon similar leverage? (https://www.perthmint.com/storage) Central Banks conspired to construct the current fractional reserve system as a way to manage price, therefore, as providers of "Australia’s official bullion coin programme", does The Perth Mint seek or maintain a cozy relationship with the Australian government and/or the Reserve Bank of Australia? These are fair questions and, so long as Bron feels comfortable impugning everyone else's motivation, perhaps he can answer them.
However, the most prominent system apologist is undoubtedly Jeffrey Christian of the CPM Group. A former Goldman Sachs banker, ole Jeff is quick to malign anyone who dares question the fractional reserve system. In what is obviously an attack he coordinated with his pal Bron and others...including bloggers KD and VtC, as well as some analysts previously considered allies of TFMR...Christian yesterday released a "market commentary" where he attempts to smooth over our collective concerns. His article can be found here: http://www.cpmgroup.com/sites/default/files/file_upload/The%20Non-Existe...
The first thing that you should note is the use of the same tactics as Bron. Namely, deligitimize the opposing argument by disparaging your opponent and impugning his motives. From Jeff's piece:
"There are stories circulating among gold mining executives, fund managers, and other gold market participants at present that there is a backwardation the London gold forward market. The rumor is being promulgated by groups that market physical gold to investors based on conspiracy theories and fear..."
Again, the obvious implication is that any analysis from TFMR or Jesse or Dave or ZeroHedge is not be trusted because we are only trying to frighten people into buying gold. As if any of us sell gold. Sure, TFMR has advertisers that sell gold but to advertise here is their business and marketing decision. These companies are displaying their wares to a target audience in the same way Pfizer markets Viagra during broadcasts of golf tournaments but no one claims that CBS only broadcasts The Masters because they're trying to drive Viagra sales. That's ludicrous! However, that's exactly what Jeffrey is attempting to do.
As to the bulk of his "research and commentary", Sandeep Jaitly was quick to completely obliterate it with is own analysis earlier today. You can read it here: http://feketeresearch.com/upload/Substandard-analysis.pdf
Jesse also just posted his own rebuttal and you can read it here: http://jessescrossroadscafe.blogspot.com/2015/09/bullion-bank-apologists...
And isn't it time for someone question to Jeff's motives, too? Why is he so quick to disparage and impugn anyone who argues against the current system. Could one factor be CPM Group's relationship with The Silver Users Association? Perhaps Jeff could be upfront with everyone and explain what, if any, connection there is between his company and this industry group. The name "Silver Users Association" details what the group is...a lobbying/marketing consortium of silver users. You can read more about them here: http://www.silverusersassociation.org/
Is it not logical to assume that "users" of silver would like to have the lowest cost possible for the silver they "use". Lower costs of inputs mean wider margins and greater profits. So a silver "user" would very likely want to see low prices of silver continue indefinitely. And how are prices kept uneconomically low, bankrupting mining companies and impoverishing their employees in the process? Through the fractional reserve bullion banking and paper derivative pricing scheme! Ask yourself, who benefits most from the low prices? The silver "users". And who appears to have a long-standing and cozy relationship with The Silver Users Association? The CPM Group.
Again, just as with Bron and The Perth Mint, these are fair questions to ask and, so long as Jeff feels comfortable questioning everyone else's motivation, perhaps he can answer these questions for all of us.
Personally, I'm sick and tired of having to fight these battles. By writing this column, undoubtedly TFMR will once again become the target of Apologist attacks. We'll be disparaged and marginalized, consigned once again to The Lunatic Fringe of "conspiracy theorists" and "tin-foil hatters". Whatever. This doesn't matter, either. All that DOES MATTER is that we have The Truth on our side and that we are willing to wait as long as necessary for vindication. That day is coming and, if current global demand trends continue unabated, it will be here sooner than you think...regardless of the ongoing efforts of The Apologists and The Shills.