Making The LBMA Obsolete

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We all know that the current, LBMA system is broken, arcane and in need of modernization. Into this void steps a company called Bullion Capital with a new, wholesale metals exchange designed to rival and, ultimately, circumvent the LBMA. In this interview, the CEO of Bullion Capital, Tom Coughlin, addresses how this new exchange will operate and why it has the potential to be such a game-changer.

After years of development, this new wholesale exchange will finally be ready for rollout in April. In his first public interview, Tom Coughlin addresses many of the questions surrounding this project and sheds light upon how the exchange will function and what makes it such a threat to the Bullion Bank status quo. Among the topics covered:

  • How will this exchange differ from the existing LBMA structure?
  • The ability of the exchange to provide a disruptive technology that allows users to entirely circumvent the LBMA.
  • In stark contrast to the LBMA, the anonymity that this new exchange gives market participants, thereby eliminating the possibility of bullion bank front-running of orders.
  • The global network of vaulting and settlement facilities, in place from day one, which allow the exchange to function on a 100%, fully allocated framework.

It was a great pleasure to visit with Tom and a real honor that he would utilize TFMR to begin spreading the word about this new exchange. Once the exchange goes "live" next month, I hope to have Tom back on for an update and status report. Until then, please give this interview a thorough listen and recognize that great strides are being made in our fight against the existing, highly-leveraged and unallocated system of price discovery.

TF

159 Comments

Turd Ferguson's picture

Global telecommunications

MODERATOR

With Tom in Cyprus and I in the middle of the USA, I still think it's somewhat astonishing that we can talk over Skype and record an interview in the first place. That said, there is some background noise and static as the call begins but the audio quality improves over the course of the discussion.

Thanks for understanding.

Marchas45's picture

Lucky Me

Again. Keep Stacking

Flying Wombat's picture

I'm first since TF posted the follow-up?

Oh well.... my first and last claim to fame :-)

Flying Wombat's picture

Theif ;-)

:-)

waxybilldupp's picture

Thanks Turd ...

Now, to check this out.  

Biggest question I have right now ... Are Madonna and Putin back together again?

wax off

Pseudozero's picture

great news

keep the hits coming!
 

CPE's picture

:D

What if?

Great work getting the interview Turd!  I'm very glad to have more information on this important new topic.

Late edit:  Just realized this is a public thread, so I've redacted a couple items.

59LesPaul's picture

Re: Bullion Capital Interview

hi Turd,

Are you making this interview available to the general public ?

realitybiter's picture

experts???

Found this and thought it was worthy of sharing.  This is Jim Cramer's company.  What got me looking for it was an interview he did recently with Tim Cook.  I thought, "what was Cramer thinking about Apple in 2001"

oh, google.

http://www.thestreet.com/story/10002957/1/apples-scraping-the-bottom-of-the-barrel.html

summary:  yes you can buy the stock for the cash in the bank, but you should own dell instead.  Retail stores are a stupid idea.  MP3 players are cool but they don't make money.  It is a dead company walk away.

My point is that seldom do the geniuses get it right.  So what asset is being given away today?  Scraping the bottom of the proverbial bottom?  Pretty sure it is NOT Apple stock, even though they have scads of cash and a great business today, a tillion dollar market cap is busting the barrel not scraping the bottom....  In Oct 2001,  a mere $10,000 invested in Apple would be worth $100,000.   And at the time, the stock was trading at a value supported by 75% cash...your worst case was dead money, not money on fire.

So what asset is worth far more than the geniuses suggest?  stocks?  bonds? junk bonds?  foreign stocks?  stocks which own real assets not valued fairly due to their distorted currency?

Orange's picture

LesPaul

It is already public.

realitybiter's picture

missed a 0

100k should be a million on AAPL

Pseudozero's picture

For the win.

Is it gold bullion?

DeaconBenjamin's picture

I hope they have good life insurance

and that they avoid nail guns.  If the TBTFs eat their own, how will they treat a serious competitor?

CPE's picture

@DeaconBenjamin

you are correct, but this is bigger than one guy now...they've been running in Australia for a couple years now, the global aspect is an extension of what already exists there.

DeaconBenjamin's picture

When Dubai opened its gold exchange

The TBTFs pulled all lines of credit, and Dubai had to be bailed out.

H8Fiat's picture

Maybe I'm just jaded

I sure wish this to be successful and put a world of hurt on BB's, but I just can't see how this isn't anything more that a bunch of "large international coin stores" with a common informational platform.  If buyers of size were out there, why are so many contracts cash settled or rolled on the CME and not stood for physical delivery.

Actual demand needs to happen more so than transparency IMO.  Demand will hopefully lead to further disconnect between paper / physical and delivery default.  Then all bets are off.

H8

Turd Ferguson's picture

I'll try to explain this...

MODERATOR

...but recognize that I'm no expert in this.

This isn't a "coin store" platform, though I suppose it can be used by small wholesale and retail customers. Instead, this is designed for BIG buyers...even tonnage size...as a way to bypass the BBs, not be front run by them and anonymously acquire actual physical and fully-allocated metal.

The Comex/CME traders never stand because it's simply a paper derivative shuffle. This platform is for fully-allocated physical purchase.

I hope that helps explain the difference.

H8Fiat's picture

Re: I'll try and explain this

Understand and I agree, maybe the "coin store" reference was a little confusing.  Probably what is better to say is "off key exchanges" to purchase physical.

My point is that if there are "BIG buyers" out there of physical metals, why don't we see their foot prints.  Until "BIG buyers" overwhelm "broke producers" or suppliers of physical metals, the BB's still will maintain control.  

Bigger implication for price may be China gaining seat in new fix.

Thanks for response.

H8 

SS121's picture

So...

an australian visionary heads out to bring justice to an unjust world and after traveling the globe, (and coincidentally meeting up with internet gold story legend Agent Andy) ...they worked night and day and against all odds and risk of life and limb from the "real bad guys" winkwink they finally did it!!! 

They built the WOPR 2.0!!  

Never mind the exact details of how 2.0 supposedly works, since apparently there aren't any.  And never mind when it's next, next, next rollout date will be since it's already been rolled out and is working.  huh? No. never mind that stuff!!   no no no... all you have to do is BELIEVE!!!

Just BELIEVE that the old crooked secretive system apparatus that supposedly generates the data that feeds the chart that controls the price of all the world's physical Gold transactions...

-is going to be "DISRUPTED"!!! TAKEN DOWN!!! REPLACED!!!

Homer Simpson succeeds at email campaign planning (yeah right)

by a NEW ambiguous anonymous (system) APPARATUS!!!  ...that will still generate ...,  data , . .  feed . . .charts. . . .prices , . . . ->control<-  phyzz transaction prices...

As Homer Simpson Says: 'D'oh'

Just keep stackin' that Silver Homies

TomMack's picture

flight to safety

they love the dollar (aka POSX) and they love the PMs  lets see what next week brings.

stack on

AIJ's picture

Great stuff from Stockman

An excerpt below:

"What’s happening is that the relentless central bank money blitz of recent years has finally pushed financial markets hard onto the shoals. Like in 2007-2008, the system is coming unhinged; there are coiled springs of price distortion everywhere and breakaway chips and shards are beginning to fly."

"In short, we are entering a new era of spectacular financial disorder. Not only is the credit fueled global boom of the last two decades turning into unprecedented deflationary bust, but the central banks which generated it are now plunging into desperate and destructive policy spasms that will only compound the dislocations. So black swans will soon be appearing—–whole flocks of them.

Yes, by all means—duck this dip. And the next and the next."

http://davidstockmanscontracorner.com/duck-this-dip-theres-more-crazy-stuff-coming/

Verus nemo's picture

This may be a critical piece but

I'm inclined to be skeptical. We've heard of so many of these big developments over four years but still little changes. I guess that I am jaded, H8Fiat! Just as I have now since late 2011, I'll continue stacking each month as best I can.

I suspect that nothing is going to end the fraudulent Comex/LBMA paper system until the miners can acquire their operating capital from somebody other than the Bullion Banks (BBs). It is the BBs that have such a stranglehold on the miners and essentially force them to sell forward their production. I mean, isn't that the genesis of this problem, the initial creation of derivative futures contracts? No doubt later naked short contracts exacerbate the problem but it starts with the miner's need for massive, periodic infusions of capital…doesn't it?

Since the BBs are so large and powerful, it seems to me that it'd take somebody the size of a sovereign (China?) to step forward and supplant the current BB's role here but that likely would be viewed as an "invasion" of sorts and lead to outright hostilities. Moreover, as long as China themselves can continue playing this game in obtaining cheap bullion in quantity, they're unlikely to disrupt the applecart.

I'm more interested in seeing what effect this rollover in the gold fix starting next Friday (or is it April 1?) will have and I'm still anticipating that China will unpeg their Yuan from our $USD and/or make a new, formal declaration of their allegedly vast gold holdings sometime prior to the IMF meeting in July.

Alternatively, maybe Mr. Fix's analysis is correct and this whole shebang will have to come crashing down before we witness any marked improvement in bullion prices.

Whatever. I wish Tom and Andy all the best. In the meantime, I'll just continue stacking while getting my popcorn handy.

SS121's picture

Verus - next Friday is the new China Gold Fix

I remember because it's March 20th

Same day as the spring equinox and beginning of the year on the solar calendar.

Verus nemo's picture

Thanks, SS121

but I thought I read elsewhere earlier this week (Alistair's article, maybe?) that while the fix formally changes hands on the 20th that operationally nothing changes until April 1st.

cyclemadman's picture

I wish them the best

I would really like to see this exchange platform take off. This along with alternatives to the SWIFT system, and the breakdown of the petrodollar are all putting pressure on the current systems.

When will it break? Who knows? Will it break? Yes.

Fred Hayek's picture

Good luck and godspeed Tom Coughlin!

Wonderful stuff. 

There's a service that's neeeded.  Let's provide it. 

And, congratulations Turd on being the first public announcement of this.

Verus nemo's picture

Posted a couple hours ago in our DOTS forum

by Buzlightening:

Все сотрудники российского посольства в Лондоне из числа офицеров и различных атташе за последние несколько дней покинули Великобританию

Translated:

All employees of the Russian Embassy in London from the various officers and attaches the last few days have left the UK

Twitter feed if you're into russian: https://twitter.com/adept_istiny/status/576069261615042560

I too ran the Russian through Google translate and got the same translation. Interesting, huh? Didn't someone earlier suggest that Putin allegedly will make some announcement this weekend? Anyone have a link to that report?

Hammer's picture

Growth is on a tear, hiring

Growth is on a tear, hiring is the strongest in decades and households are the most upbeat since 2011. Yet banks such as Bank of America Corp. keep plowing their burgeoning deposits into U.S. government and related debt — pushing the industry’s holdings past $2 trillion — instead of lending it all out.

Those two sentences are sublimely at odds with each other, or were in the context of Janet Yellen’s version of the economy. But even that $2 trillion figure is a little bit off, as just shy of 70% is allocated to agency MBS securities which are not highly liquid. The latest H.8 from the Federal Reserve reports $1.44 trillion in such securities as a subcomponent of the $2.09 trillion that Bloomberg was referring. The remainder, $653 billion, includes both pure UST and non-MBS agency debt, and that is where the massive growth has taken place. Those figures are not far off what the FDIC reported in its Quarterly Banking Profile.

http://www.alhambrapartners.com/2015/03/13/bank-hoarding-in-the-mainstream/

mel's picture

Bullion bank funding?

Can someone provide the names of 5 producing  gold or silver mines which have received funding from Bullion Banks the past 5 years?

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