More on PAGE

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Sat, Sep 10, 2011 - 11:50am

Market action this week only further demonstrated the need for a new, global pricing mechanism for physical gold and silver. As stated by Ned Naylor-Leyland, the current system allows the "futures tail to wag the spot dog". I believe this collusive, manipulative nonsense will soon come to an end with the introduction of the Pan Asia Gold Exchange later this year. If you haven't already, please go back and read this before you continue:

https://www.tfmetalsreport.com/blog/2256/page-turning

After writing the note above, I was placed in contact with a very important gentleman through the serendipitous intervention of an internationally-connected Turdite. He asked if I'd "like to speak with one of the guys responsible for setting up the PAGE". I, of course, said "YES!".

Graham Newall of Power Capital Global was recently appointed Senior Vice President of the PAGE. Below is the complete text of the questions I submitted to him last week. Graham's responses are printed in capital letters, directly below each question. I hope that all Turdites find this information helpful in developing an understanding and appreciation of the impact the PAGE will have on the global precious metals markets in the years to come.

Hello, Graham. I hope you've had a nice weekend. I am looking for some fireworks when trading resumes on the Globex this evening at 6:00 NY time. It certainly appears that this will be another interesting week.
Thanks again for allowing me the opportunity to visit with you. I am very much looking forward to seeing the impact the PAGE will have on the international spot metals markets. I firmly believe that the LBMA/Comex/BullionBank system is outdated and that the PAGE is going to usher in a new era of transparency in price discovery.
I have a short list of questions below. Would it be OK to present to my readers the list of my questions with your answers? My hope is to continue to draw international attention to the PAGE and present it as a viable alternative to the LBMA status quo.


1) Graham, can you please describe your role and the role of PCG in building and/or managing the PAGE?

I HAVE BEEN APPOINTED SENIOR VICE PRESIDENT OF THE PAN ASIA GOLD EXCHANGE RESPONSIBLE FOR STRATEGY AND REPRESENTING THE EXCHANGE INTERNATIONALLY . POWER CAPITAL WILL BE THE FIRST MARKET MAKER IN THIS CONTRACT



2) PAGE is already trading a 10-ounce gold contract. Are there plans to issue a silver contract, as well?

THE 10OZ DEFERRED SETTLEMENT WILL START TRADING SHORTLY OF THE MOON FESTIVAL THIS MONTH. THE SILVER CONTRACT IS PLANNED FOR LATE 4TH QUARTER 2011


3) I understand that Chinese citizens can buy the 10-ounce contract through the Agricultural Bank of China. Do global retail and/or institutional investors have the same access to this contract? If not, will this access be allowed in the future?

CHINESE CITIZENS ARE REQUIRED TO LODGE MARGIN IN AN ACCOUNT WITH AGRICULTURAL BANK OF CHINA AND TRADE DIRECTLY WITH THE MARKET MAKER ONLINE. GLOBAL RETAIL/INSTITUTIONAL INVESTORS MAY TRADE THROUGH THE MARKET MAKERS APPROVED BROKER IN HONG KONG DETAILS OF WHICH WILL BE RELEASED SHORTLY



4) Many are anxiously awaiting the PAGE to begin trading their 90-day, rolling spot gold contract. Several questions here:
a) What are the key differences between the 10-ounce contract and the spot contract?

THE 10OZ CONTRACT ROLLS EVERYDAY AND IS A MARGINED TRADE. THE 90 DAY CONTRACT IS A RECEIPT FOR A PHYSICAL BAR OF GOLD WHICH WILL BE FULLY FUNDED AND ON MATURITY CAN BE "ROLLED" AND ANOTHER RECEIPT ISSUED OR EXCHANGED FOR THE PHYSICAL GOLD.

b) What is your best estimate for the date trading will begin?

I BELIEVE THAT THE CONTRACT WILL BEGIN TRADING IN EARLY DECEMBER

c) What regulations are in place to ensure 1:1 allocation of the gold behind the contract? Is the Chinese government the supplier of the physical inventory behind the exchange?

THE GOLD WILL BE HELD IN TRUST BY AN EXTERNAL ADMINISTRATOR WITH A CHINESE BANK REGULATED BY THE PEOPLES BANK OF CHINA ACTING AS TRUSTEE ENSURING THAT THE REQUIRED 1:1 ALLOCATION IS MET AT ALL TIMES

d) I imagine that global, institutional investors will be allowed to buy the contract. Will global retail be available?

AS THE PRICE OF GOLD APPRECIATES THE CASH REQUIREMENT WILL PROVE PROHIBITIVE FOR MOST RETAIL INVESTORS MAKING A MICRO CONTRACT TRADING ALONG SIDE THE MAIN CONTRACT A PRACTICAL NECESSITY IN MUCH THE SAME WAY AS THE COMEX MICRO CONTRACT.

e) Can a global investor take physical delivery or must the gold be stored in China?

THE TRUST WILL HOLD GOLD STORED IN APPROVED VAULTS WORLDWIDE

f) Are there plans to issue a similar silver contract?

NOT AT THIS STAGE



5) This also seems to be a conduit through which the Chinese government is allowing the global distribution of renminbi. For example, if I buy gold in London for $ and sell it on PAGE, do I receive renminbi for my gold?

THE PROVINCE OF YUNNAN HAS BEEN DESIGNATED AS A FREE TRADE ZONE OF RMB. THE RECEIPT MATURES IN RMB.



Again, Graham, thanks in advance for any assistance you can provide. My readers and I greatly value your input. TF

I HOPE THIS IS USEFUL PLEASE EMAIL ME ANY TIME IF YOU HAVE FURTHER QUESTIONS - I WILL KEEP YOU INFORMED AS THE FINAL DETAILS ARE WORKED OUT.
Best regards
Graham


​Out of respect for Graham's time, I'd tried to keep the list of questions relatively short. However, as you can see, Graham has graciously offered to answer follow-up questions, as well. Again, I will not inundate him but, dear reader, if you have a burning question for Graham, please include it in the comments below and I will pass a few along to Graham early next week.

Thanks again to Graham and all Turdites everywhere for your contributions to TFMR!

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  278 Comments

Canadub
Sep 10, 2011 - 3:19pm

@exiledbear

"There's no real way to query Ebay for the prices that coins settled for."

Please forgive me if your referring to an automated software solution that query's all the results and spits out an average using specified parameters, but there is an easy way to see what price each auction settles for... Simply click on "advanced search", check the "completed listings only" checkbox, then search your subject. All the final sale prices are listed in green, unsold listed in red.

I defiantly think ebay is a legitimate price discovery mechanism for the coin market. It's more or less the only "free market" for price discovery left, because its actually what one individual is willing to pay another for a product, period. No leverage, no futures, no BS. What will you pay me for my product, right now. Just like the good old days (or so i've heard).

Haole
Sep 10, 2011 - 3:19pm

@Much4Him

Being just your average dummy, I'd suspect that they know they can't get their hands on enough physical silver to make a market of it and if they could why would they want to trade it unless they can create a fractional reserve scam out of it like COMEX, SLV, JPM, etc? They'd rather put it into solar, etc... Infrastructure and technology, hoarding in general. I think the Chinese realize what a critical metal silver is to their future prosperity whereas gold is primarily just a monetary metal.

Moral of the story I guess is keep buying metal at whatever the price and welcome the RMB as the new global reserve currency, or a large constituent of it. Nigeria selling oil for RMB, Russia selling oil for RMB... Hmmm. ;)

Great thread, thanks Turd et al!

alpha monkeyaustrian12874
Sep 10, 2011 - 3:23pm

@austrian12874

WTF. What is going on? I really fuckin hope I didn't buy the wrong metal. I have 7100 ounces of silver at 33.

It's not too late to exchange it. I was trying to hold my silver in the hopes of a better G:S ratio, but I kept watching it separate and decided what I read on FOFOA and The Gold Trail had more validity than I thought. So, I went all in on gold and haven't looked back.

Even Max Keiser doesn't sing the praises of silver as much, his tone has changed from "Gold is too Expensive!" to "Gold is going waaay up in price!"

So, yeah.

FogHorn LegHornReachWest
Sep 10, 2011 - 3:39pm

@reachwest 1:1 allocation @Gramp

I think You cut to the chase with that point. The gold will be allocated in 10 ounce bars and be deliverable, according to Richard Poulden the private investor Turk interviews on PAGE. The private investor RP said Q1 2012 his company will allow access to other countries. US investors can invest in nonmargined deliverable within 28 days settlement contacts by law if I recall. If I were a PAGE creator, I would try to make policy to allow US retail investors elligable.

NW VIEW
Sep 10, 2011 - 3:40pm

More On China

What is wrong with just stacking your own as has been written on for decades??? Is the gold that they will pile for you behind the Great Wall more secure than in your hiding place? Will their gold be more valuable than ours? China is slurping up all of the mines from around the world ASAP including rare earths ( we know that - look at RSA). It appears that they keep the P.M. within their country. Has anyone seen a major exporter of gold from China??? I can see that the investment community is really jumping into this new Eastern way of buying P.M.'s. I'll wait and see if Mr. Ponzi and Mr. Madoff are on their board of directors. How quickly we forget the history of nations. It is almost as if they have come to the place where they will help out the investors of the world because of their benevolent change toward mankind. Sorry to be negative, but General Custer should have evaluated the ways and strengths of the Indian Nation before he jumped in so quickly. jmo

Fulgurite
Sep 10, 2011 - 3:47pm

Contrarian

Just to offer a bit of a contrarian point of view here, but what if the Chinese merely want to copy/paste the Western currency manipulation system with PAGE?

I'm frequently in China for work, and so far I am NOT very impressed with Chinese ingenuity with regards to problem solving. As a matter of fact, the Chinese SUCK at problem solving.

They need a textbook, manuals and procedures for just about EVERYTHING. Once they lack the correct textbooks, manuals and procedures, things quickly go array and end up in a huge 'face saving' excercise.

Just by the sheer numbers and volume, China has been very successful in setting up an export based economy (which is still very poor and primitive by Western standards) by merely copying western ideas and products (either legally or by actively counterfeiting them) so I'm just wondering if we're not giving them too much credit...

Why would the Chinese go through the trouble of setting up a gold, silver, commodity backed RMB, when they might just as well initially copy the Bretton Woods system, which they then later can give up (als Nixon) once they have established the RMB as the reserve currency?

PAGE is IMHO just there so that the Chinese can also join the club of superpowers who can manipulate gold and silver prices for when a (partially?) gold/silver backed RMI is the world's reserve currency.

Bracing for incoming... ;-)

austrian12874
Sep 10, 2011 - 3:49pm

should i change my silver for gold?

I bought into the hype of silver going to 500. But the manipulation in silver has shown the negatives of holding silver in such a thin market like silver. I think i will wait 4 more years or silver 120.....whichever comes first. Any thoughts?

¤
Sep 10, 2011 - 3:54pm

More doors swinging open for TF

Excellent post as usual!

That's a huge coupe' in getting the low down on PAGE right from the source.

I wrote a post a few weeks ago on the subject of TF's industry stature becoming so much larger then he may have ever thought possible. Or maybe even bigger then he ever wanted it to be.

Some thing's are bigger then the person themselves, and destiny takes care of the rest.

More doors are getting ready to swing open for our TF imho.

If TF was a PM stock he would be the "sleeper " junior that already produces large nuggets on a daily basis with the tip of the mother-lode barely exposed. He's about to become the next big thing during this unprecedented PM frenzy that's going to happen. Every man leaves his mark during periods of high drama or action. I'm pretty sure this lead up to the PM's exploding will be one of those periods.

I'm pretty sure at some point that TF is going to give us a thread or post from Tanzania while he is checking out Santa's Tanzanian Royalty Exploration (TRX). That's what I see.

What do you think TF, sound good to you? Having a tall, cool one with Santa in Tanzania while he's showing you a piece of gold ore?

https://seekingalpha.com/article/289154-tanzanian-royalty-commences-dril...

Stormdancer
Sep 10, 2011 - 3:57pm

austrian12874 "should i change my silver for gold?"

You should do whatever allows you to sleep at night. I personally feel holding some of both gold and silver is wise. The two metals are NOT the same. Different end games will have differing effects on both, but in a worst case situation one will rise less than the other. Neither is going to hurt you.

If you think $500 silver is hype sell before you get there. Starting at $33 you're doing pretty well already. I've deeply studied the fundamentals of silver for quite a few years and I don't believe $500 is hype at all. There are scenarios where it won't make that, but many more where it will make or exceed that figure.

But, you have to deal with your comfort level as bounded by your knowledge. Keep increasing that knowledge and comfort levels may change :)

Biochar
Sep 10, 2011 - 4:11pm

By being non-manipulative/corrupt PAGE will

ensure itself a bigger and bigger piece of the action, the go-to exchange. Will need some time to establish a track record and credibility, but the way things seem to be speeding up globally, might not take too long.

@ austrian12874... the USGS sees silver as being one of the first metals to become "extinct" ~ a few of us here at TF think silver will achieve platinum level pricing 15-20 years from now because of its many industrial uses...

Silver has the highest electrical and thermal conductivity of all metals. Every computer, server, monitor, cell phone and switch must have silver. Lasers, satellites, solar panels, high-tech weaponry (tomahawk cruise missiles use 500 oz) and robotics, all require silver. Digital technology and telecommunications need silver. There's silver in every TV, washing machine, wall switch and refrigerator. Conductors, switches, contacts and fuses use silver because it does not corrode or cause overheating and fires. Silver is used heavily in photography and in prints. Batteries are now manufactured with silver alloys. Lead-free silver solder is used heavily for joining materials and producing leak-tight joints. Silver is also widely used in silk-screened circuit paths, membrane switches, electrically heated automobile windows, and adhesives.

Silver achieves the most brilliant polish of any metal and has the highest reflectivity of light of all the metals, allowing it to be used in mirrors and in coatings for glass, cellophane or metals. Double layers of silver on glass reflects away 95% of the hot rays of the sun. Silver has a variety of uses in pharmaceuticals as silver kills bacteria. Hospitals use silver coated devices in surgery to eliminate contamination and infection. Skin care products now use colloidal silver as it has been found to be a healing agent and disinfectant. Silver sulfadiazine is the most powerful compound for burn treatment. Catheters impregnated with silver eliminate bacteria. Silver is increasingly being tapped for water purification, silver ions used in pools and spas. To prevent growth of germs and fungus on surfaces silver ions are used in paints and coatings.

In the face of all these industrial uses there will be less silver available, plus, the unique properties of silver restrict its substitution in most applications. More silver will be used than can be produced. Despite established economies in recession/depression many areas of the earth will continue to modernize. Mining and recycling are falling short of providing the necessary silver and it will get more problematic.

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