Bullion Bank Leverage Soars to Near 300:1
Just when you thought that the perversion of the paper "markets" couldn't get any worse...
The disgustingly-leveraged JOKE that is Comex reached another dubious milestone yesterday as Scotia Mocatta reclassified over 79,000 ounces (2.5 mts) of "gold" from their registered category. By journaling this "gold" into the eligible category, The Scoshe dropped the TOTAL registered stock of the Comex vaults down to a new record low of 151,384 troy ounces or just under five metric tonnes. That's all! Just five metric tonnes!
More significantly, the unlimited and seemingly infinite ability of The Bullion Banks to lever this "gold" reached a new all-time high yesterday. Monday's total open interest was 450,584 contracts. At 100 ounces of paper gold per contract, this total OI represents an obligation of 45,058,400 ounces of gold. However, as noted above, on Monday the total registered and readily-deliverable "gold" held in Comex vaults was just 151,384 ounces. Dividing the registered stock into the paper obligations yields a total leverage ratio of 298:1. Again, I ask: How is this legal? How is this NOT fraud? Please see here: http://www.tfmetalsreport.com/blog/7241/futures-market-fraud
Additionally, please be sure to note the total amount of gold allegedly held by The Scoshe in their Comex vault. In what can only be explained as a withdrawal of a perfect and precise, no-need-to-measure 100 individual kilogram bars, The Scoshe saw it's total vault decline yesterday to just 1,183,314 troy ounces. Recall that we've been monitoring this as a slow motion "bank run" since earlier this year when The Scoshe reportedly held over 3,000,000 ounces in their vault: http://www.tfmetalsreport.com/blog/7170/comex-bank-run-scotia-mocatta
Here's a CME Gold Stocks report from early March. Compare it to the one from yesterday shown above:
So where the heck did all of this "gold" go? The Scoshe vault is down almost 1,900,000 ounces or nearly 60 metric tonnes. Where did it go? Maybe 25% went to HSBC as their vault is up about 480,000 ounces over the same time period? But even if that's the case, where's the rest? And how about the total registered vault? In early March it was near it's "typical" amount of 700,000 ounces. Again, as of Monday, it was at an alltime low of just 151,384 and it's been near these levels for nearly two months: http://www.tfmetalsreport.com/blog/7131/guest-post-comex-facing-gold-crisis-dave-kranzler
Not to be cynical but clearly none of this matters to anyone. The Banks could lever the available gold to 500:1 or 1000:1 and it's doubtful anyone outside of TFMR would care to notice. Instead, The Specs and Banks will just keep buying and selling their paper gold while the media will keep reporting the paper derivative price. You and I know that this fraudulent scheme will one day fail...as all fraudulent schemes ultimately do...and when that day arrives, the true price of physical gold will be recognized. Until then, be sure to use the current pricing scheme to your advantage by continuing to acquire physical metal at these deeply discounted prices.