Gone...For Good?

346
Tue, Jun 19, 2012 - 11:44am

For weeks, I and others have been telling you about massive sovereign and central bank demand for physical metal at the current paper price. From this demand alone, we can infer quite a few things. Today, I can take it one step further.

First, some background. Members of "Turd's Army" become subscribers to Andrew Maguire's "DayTrades" and "MetalsTrades" service. This service allows traders to follow Andy's actions, thereby learning how and when Andy affects trades in the gold and silver markets. In it's own right, the service is very effective at producing consistent, monthly returns for his clients and the "Army". However, subscribers also have access to Andy's weekly "Market Commentary", which he posts every weekend. This commentary is always informative and provides subscribers with a sort "insider's perspective" which simply cannot be found anywhere else on the internet. No one has more experience, more wisdom and more contacts than Andy and, without question, subscribers benefit from the access he provides.

Similarly, I like to think that everyone here in Turdville benefits from the access that I am able to provide. I receive a lot of on-the-record and off-the-record information and I try to pass along as much of it as I can. Some of it is just speculation and some of it is the sort of "inside baseball" stuff that I attempt to further refine into nuggets that can help you plan for the future.

All of that said, what we now know is this. Beginning some time ago, but continuing today at an accelerating pace, physical metal is being purchased in London and then delivered out of the system. Under "normal" circumstances, this is not necessarily unusual. The bullion banks simply expect this metal to return to them at some point, where it can be re-leased, re-hypothecated and re-delivered in the future. This is how it has worked for decades. However, this time it's different.

What I have learned and have since been able to confirm via a second source is this: London Good Delivery bars are being delivered to Eastern buyers. Instead of being vaulted inside the LBMA system, these bars are being sent directly to refiners. The bars are then being melted and recast in 1 kilogram sizes. The new bars are then being stamped with official, government insignia and sent on to vaults outside of the LBMA system and points east, never to return again.

​What does this mean and why is this important? Quite clearly this information, if accurate, has several significant ramifications:

  • The Chinese and others are preparing for a new system. Whether it's simply a new gold pricing and delivery system to replace the LBMA/Comex or whether it's a new global trade settlement system that is guaranteed with gold is impossible to say, at this point.
  • The physical gold supply of the LBMA and secondarily the Comex, much of which has been acquired/supplied through leasing, is being rapidly depleted and will not be coming back.
  • The bullion banks, which have profited for years from leasing, trading, vaulting and the like, are about to feel the rather dramatic effects of this supply depletion.

As this pertains to the banks, last week I wrote this ( https://www.tfmetalsreport.com/blog/3893/still-pounding-away) and I think the auto dealer analogy is still a good one here. IF China and others are buying gold in London and IF the bullion banks are delivering to them leased and rehypothecated gold and IF the Chinese are taking this gold and melting it and IF they are then recasting it into non-LBMA, 1-kg bars, then the bullion banks have a serious problem on their hands. The delivered gold isn't coming back into "the system". It is no longer in "London Good Delivery" form. It's gone. For good.

My advice to you today is to ponder this information and its implications. Ask yourself these questions:

  • If you vault gold within the current system, do you really own it?
  • If the banks begin to scramble for physical metal, will paper price trade higher or lower?
  • If the Chinese and others are planning for a new, international trade settlement system to supplant the U.S. dollar as reserve currency, what does that mean for the future value of the dollar? What would that mean for the future value of all fiat currency? What would that mean for the future value of gold and silver?

Perhaps now would be a good time to go back and review this post, too. (https://www.tfmetalsreport.com/blog/3885/last-desperate-acts) At 34,000+ views, most of you have already read it. Maybe it's time to read it again.

Think. Look around. Trust your instincts. Prepare accordingly.

TF

About the Author

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

  346 Comments

yabs
Jun 19, 2012 - 10:40pm

gear  head I hear and feel

gear head

I hear and feel your pain

I feel the same way.

This could go on forever well until the public reduce their debt load and

consumption can begin again but I don't think this will happen as we approach

the exponential/parabolic part of the debt curve. Its just taking too much new debt to keep the beast alive

Mind you i said this years ago...

Be Prepared
Jun 19, 2012 - 10:45pm

@bam - Private Vault Problem

Like you, I have no crystal ball that will accurately tell me the best direction with regards to holding pms. However, I want to throw out some considerations before anyone thinks that a PRIVATE vault doesn't have a more than real risk of being inaccessible during a time of crisis.

(1) The Federal or State governments know exactly where these vaults are located and could easily confiscate any centrally located pms as a matter of national security, economic emergency, or the fact that Obummer needs a new toilet seat. The vaults provide a great and easy target because it is a faceless entity.... even if it represents 1000s of customers.

(2) As nice as the owners of these services may seem.... there is very little stopping them from offering you merely the cash equivalent of the gold and keeping the gold for themselves. They could tie you up in court for years. Possession is a powerful thing when the world starts to fall apart and, if you store with another entity, they could forget their ethics and obligations.

I realize that if the government outlaws metal ownership for private individuals.... we will all have difficulty utilizing our store of value as a bridge into the new system. I would recommend diversifying your pm holdings if you think it is important to not have your pms in your possession. Each step you take needs to be weighed carefully about how each storage decision would be executed for retrieval and/or conversion.... Personally, I lost all mine in a boating accident.

Punk-Assets
Jun 19, 2012 - 10:46pm

The only thing more I'd be

The only thing more I'd be impressed with regarding Santas forecasts is if he included that SE got hit by a fucking bus. And fucking soon. And just so you don't think I'm a complete dickhead, I mean it from the bottom of my, you guessed it, fucking heart.

Nothing pisses me off more than wanna be shit heads dissing real gurus.

You shit on my doorstep, I'll shit on yours.

Fair enough?

Some people wouldn't appreciate an oracle unless it was shoved down their throats.

Fritz
Jun 19, 2012 - 11:01pm

THE Main Event (if true)

Debt crisis: Spain and Italy to be bailed out in £600bn deal European leaders are poised to announce a £600 billion deal to bail out Spain and Italy, it emerged at the G20 summit on Tuesday night. https://www.telegraph.co.uk/finance/financialcrisis/9343049/Debt-crisis-...

Be Prepared
Jun 19, 2012 - 11:06pm

Your Frustrations are Real..

To all of My Fellow Turdites ----

First, I am glad that you are all here and I invite anyone just lurking.... to know they should register and participate. This community needs all of us contributing our thoughts and perspectives to help each other prepare and understand the road ahead.

Next, we are in a period of extreme frustration because the underlying mechanisms are still functioning, albeit very wobbly, and it's hard to see just how much TPTB can play this game to their benefit and to our detriment. That is not to say that we wish to see the crushing weight of collapse come all around us, but we don't wish to maintain a system that deprives of us of our freedom with an ever increasing vigor. If you are holding pms, you should realize that the time period of holding them may easily exceed 10 years or more... even from today. There are NO slam dunks here and no quick flipping between asset classes anymore. We are all seeking a safe harbor during this storm.... and this storm may rage for a great while. Fellow turdite, SE, has provided us good counsel... silver and gold may not even start to move again for another year or two.... Can you maintain the foresight needed to hold fast? Don't overextend yourselves to where you will have to puke up your pms at the wrong time. That's exactly what they want... to push extreme pain on all holders at the absolute worse time for you, so they get your storage of sound money at a great discount. You need to develop a mantra..... "I bought to hold and will hold until the reset or the storm passes!" We each must walk our own path, but together we can gather strength and insight to hopefully be in a little better position than we would have otherwise been in.... :-)

yabs
Jun 19, 2012 - 11:08pm

Be prepared thats why BV

Be prepared

thats why BV and golmoney are good in that you can store it OUTSIDE your own country

to be safe though as you say a diversified approach to stacking is the best option

some in your possession, some with BV, some with Goldmoney

Do you think a safe deposit box at a bank is ok?

I'm thinking if the bank went bust would you have access to your box?

Fritz Fritz
Jun 19, 2012 - 11:15pm

THE main Event

. . . And buried at the bottom of the article: The Prime Minister will today travel to Mexico City for talks with the outgoing Mexican president. He may also meet Carlos Slim, the Mexican tycoon who is the world’s richest man. Hmmm mm. What on earth would a British PM have to meet with Mr. slim about?

Gramp QE to infinity
Jun 19, 2012 - 11:19pm

@ QE to infinity....

You are right about youth having the ability to adjust to the coming times.

I did a poor job at relating the interaction, I guess because i had several topics swirling around my head! But the most important line this fellow said was,

" I wish I had saved and Invested more earlier on!"

Ok then, I am on the right track!

But it just torqued me, as I have seen an age and income turn into class warfare, between friends even! Add a dash of desperation or hunger and it's a bad scene.

It is crazy that decent jobs are so scarce. Employers want to pay workers less than a decade ago, with the cost of fuel/ food ect. at multiples of what it was...

Well, they say what doesn't kill you makes you stronger... I have had several health issues set me back financially and professionally. There have been (and may be more) times of little to no income for me, as I am self employed. I have lived several years of personal austerity, while my friends were living "The American Dream" . As painful as it was, I now feel very fortunate to have learned those tough lessons during times of plenty. Now as jobs and money dry up, it is not such a lifestyle shock to me.

Thanks to all the folks here who inspire me to SAVE, and think about where you SPEND.

foggyroad
Jun 19, 2012 - 11:30pm

Dave Nails it!

Click on 'Someone Is'..Below to read more,..

FRIDAY, JUNE 15, 2012

Someone Is Lying: How Can Greece Bring Down The Global Economy?

It was noteworthy that George Soros, the world's most successful currency speculator, was revealed this week to have tripled his position in gold in the first quarter of this year. That he is a man who knows his currencies is without question. That he chooses gold speaks volumes. - David Galland, Casey
Research
I'm confused. I'm not really sure why the world should be in fear of a Greek systemic collapse and exit from the EU/euro LINK . So, while most of the world's hoi polloi chooses to accept news that is fed to them like hungry ducklings with their beaks open waiting to be fed by momma duck (the elitists), I prefer to look under the "hood" of a proposition that, prima facie, seems absurd. Furthermore, unless I'm missing something, the world is being willingly fed a gigantic lie by the elitists.

The proposition is that if the Syriza party wins Sunday's elections, the Greek austerity programs required for and EU bailout of Greece would be abandoned, Greece would exit the EU and reinstate the drachma as its currency. The sum of these events would cause global systemic chaos.

Let's examince the situation. According to wikipedia, Greece is the 32nd largest economy in the world based on GDP and the 37th largest based on purchasing power. Seems somewhat insignificant so far. Greece's nominal GDP is $312 billion. As a percent of total EU economic output - $12.6 trillion in 2011 - Greece represents a miniscule 2.4%. As a percent of total EU+US economic output, Greece represents 1%. 80% of Greece's economy is service based, the rest is agriculture, fishing and industry. Greek sovereign debt is around $450 billion. The U.S. stated Treasury debt outstanding is close to $16 trillion. The U.S. Government issues an additional $450 billion in debt every 3 1/2 months.

Now I'm even more confused. How could the collapse of such a seemingly economically insignifant country in comparison to the rest of the world cause global systemic/financial turmoil? Before you read on, please see this report regarding Greek derivatives: LINK

The Truth of the matter is that the situation with Greece is being used as the cover-job to mask the truth about the catastrophic derivatives exposure of the world's biggest banks. I demonstrated a couple days ago how looking at just Greece in isolation could lead to tens of billions in losses for the biggest banks - primarily JP Morgan - if Greece leaves the EU and reinstates the drachma as its currency.
bam yabs
Jun 19, 2012 - 11:46pm

@yabs

>This could go on forever well until the public reduce their debt load and

That's funny thing about unsustainable systems. By definition, they end.
SilverLeaf
Jun 19, 2012 - 11:47pm

Why are they melting and repouring the bars?

Fred's theory that they're doing it to sidestep claims on bars with specific serial numbers is absolutely brilliant and spot on. An additional benefit is that melting the London good delivery bars at temperatures below say 1500° C will ensure that any salted tungsten can be separated from the gold. This way, the Chinese can have absolute confidence that the bars they re-pour are pure gold, and that they got exactly what they paid for when they took delivery from the Western banks.

- Melting point of tungsten: 3,422° C (6,191° F)

- Melting point of gold: 1,064° C (1,948° F)

Of course, if I were the Chinese, knowing that the original bars salted by Western refineries in the first place, I'd be making sure I have my trusted people on site at the refinery to monitor the process from start to finish.

kingboo
Jun 19, 2012 - 11:54pm

TPTB will stick to the plan....

TPTB USER'S MANUAL

a)confuse the sheep.

b)mislead the sheep.

c)make empty promises to sheep.

d)smother the sheep.

e)starve the sheep.

At this point it is important to give sheep glimmer of hope, in order to maintain compliance.

Once "glimmer of hope" is administered..............REPEAT STEPS A through E.

(note: if for any reason there is a deviation from USER MANUAL GUIDELINES....DENY, DENY, DENY. For examples refer to sections on R. Nixon, William Clinton, Enron, J Corzine(private and public sector) Countrywide, AIG, Goldman.

For questions relating to the implementation of this manual, please call 1(800)-QUI-SUCK.

bam yabs
Jun 19, 2012 - 11:59pm

@yabs

>Do you think a safe deposit box at a bank is ok?

>I'm thinking if the bank went bust would you have access to your box?

Things you have to consider:

1. When a bank goes bankrupt, they lock the doors (for how long, don't know). Who's to say when/if they let you back in.

2. Gold in a safe deposit box is not insured (unless you purchase it, thereby revealing its existance). If the bank is robbed, you are out of luck.

3. When a bank goes bankrupt, sometimes creditors take first and ask questions later (see MF G). You may or may not get your gold back, at a time that is or is not convenient for you.

bam Be Prepared
Jun 20, 2012 - 12:00am

@be prepared

Yep, I'm on board with all of that. I've got a small amount of PMs here in the States, but am planning on weathering the storm overseas (have multiple passports), so I'd personally be more concerned about getting PM out than getting it in. Don't own a home to store in either.

I'm hedging my bets by using different countries and different storage companies. Got 5 countries and 3 companies at the moment. Will be adding another of each soon.

Irene
Jun 20, 2012 - 12:13am

@yabs

and 4.) the feds can declare a bank holiday and then what?

bullclip achmachat
Jun 20, 2012 - 12:17am

silver

check out silver doctors.com Doc has good articles and fair prices on metals. usually has a special each days for small orders

GoldenTurds
Jun 20, 2012 - 12:21am
stealthbear
Jun 20, 2012 - 12:35am

I'm with you Punk Assets

It bothers the h*ll out of me too, when people bad-mouth and dis bloggers like Santa. I have been trading in the metals futures markets since 1979. I knew who Jim Sinclair was from way back. I was astounded when I found out he was giving his thoughts on the metals markets at a website--for FREE, no less. I know that he predicted $1650 gold when it was trading in the low $300 range. I began buying physical gold and silver soon after finding his blog. I did not buy at the bottom, but have done quite well. A couple of years ago Jim added a date by which he predicted the $1650 would be attained. He was a few months early. People began ragging on him for that, which I found utterly incredible.

Here is my advice to those of you who continue to bad mouth Mr. Sinclair...... I am sorry if you just began reading his missives in the last couple of years---you were late to the party. From now on do not, I repeat DO NOT go to his website to read anything he posts. It is not meant for you. You obviously don't understand the importance of it nor do you appreciate the spirit in which it is intended. You will learn nothing from it. Stay away and spare the rest of us your bitching about it. Same goes for those of you who complain about interviews on King World News. They are free--nothing out of your pocket. If you believe your time is wasted there, then for God's sake, don't listen to them. No one, and I mean no one, can tell you the exact date that the metals will go up and by how much. If you expect that you just don't get it.

Charles S. Hamlin ¤
Jun 20, 2012 - 12:36am

IndigoStart - Head East

Indigo, Boy that brings back some good memories. I remember when I was in college my fraternity hired Head East to play at a party...needless to say, it was a goooood party!

allyn Katie Rose
Jun 20, 2012 - 12:41am

Barter

Your silver will be worth a lot, don't sell unless you need to. My cousins owns a mint and I have been talking to him over the last year about starting a Barter company like our fathers had in the 70's. The trade credits will be backed by Gold, Silver and maybe Copper. It will be great and people will be able to still use their coins or trade though the exchange.

Just waiting for the cards to fall.

Allyn

PS if you are looking for more silver, let me know I can get it for $1.02 over spot if you buy over 1020 oz. That includes shipping and insurance, but only in the lower 48.

Lanikai
Jun 20, 2012 - 12:41am

A year ago when kitco

commentators were full of warnings that Au had peaked, 1450, 1550, annual summer weakness would prevail... James Turk and Jim Sinclair were the two who said it would rise. Short memories for many frustrated on this site. If you want to know where the price is going, look to the five year chart. Slow and steady wins the race. In the meantime do something productive and grow some tomatoes.

yabs
Jun 20, 2012 - 1:37am

Who IS SE?

Who IS SE?

vivekmert5
Jun 20, 2012 - 1:47am

gold may hit new low of 2012

today gold is likely to see some selling pressure in world commodity market

If gold and silver trade weaker during this week then we may see gold coming down $1428 and silver $26.21/19.50

Fritz vivekmert5
Jun 20, 2012 - 2:06am

Flags

Let me get this straight . . . A bear flag will send silver to new lows . . . While at the same time you will ignore a bull flag in gold? Come on fella . . . At least be consistent!

Magpie
Jun 20, 2012 - 2:13am

Watching the San Francisco evening news

and people dressed up in Robin Hood costumes were protesting in support of a tax on the "one percent". They're calling for a 50 cent tax on every $100 of stock & bond transactions. The Robin Hood Tax...and they actually think they're gonna be sticking it to the banks!! I'm guessing none of those idiots have a 401K, or know anyone that does.

I hate stupid people.

ivars
Jun 20, 2012 - 2:14am

GSR continues to form right

GSR continues to form right shoulder but it is moving up a little bit high for full comfort in soon silver recovery. However, so far neckline is horizontal. All we can do is wait as with so low volumes its clear that no one is taking any bigger bets about the next movements. Seems that any information from and around FOMC has absolutely insanely amplified effect on investors perceptions. But that is how it is. Shaky sentiment around here as well. Except for stackers, of course, that buyregularly in volumes they can afford.

dziprick
Jun 20, 2012 - 3:13am

"tax"the HFT with a "commission"

I live in Canada. We cannot trade without paying usually at least a $20 commission per trade. I cannot jump in and out of the market to skim pennies on a trade. The commission would kill me. If the HFT had to pay a $20 tax per trade that would put an end to their front-running games.

Why could this not work, other than the banks lobbyists would never allow it to happen?


Jun 20, 2012 - 3:14am

@Magpie re: 'insider source'

I would recommend reading through the entire 'About Us' page of the website on whose pages the insider account is published - including the sidebar. Consider their 'starting point', their stated stance on the nature of the starting point, and think about whether their analysis is trustworthy -- the sources of information, and their purpose in disseminating this information.

Consider the possibility that one possible aim of such a communique is not to inform, but rather to perhaps misdirect as well as paralyze through the intimidation that painting such a picture might generate. I am quite sure that many elements of the story are quite true -- but the best lie is half the truth. Perhaps just a paranoid rambling, perhaps not.

Tabberto
Jun 20, 2012 - 4:14am

Cheers Martin

Martin Armstrong - the man who knows everything......(!)

Am pleased to see the church of MA dilute his brand with that drivel. SO many things in there to pick at I can't be bothered to go into great detail. Obviously we all know he is WAAAY behind the curve but 2 points from me:

1. He makes out that the currency component of PAGE is some great insight of his, well doh that was ALWAYS the central theme of discussions about PAGE - it looked to be a way of releasing Rmb into the intl f/x market using physical allocated gold as a choke on demand. No special insight from you there Martin.

2. 'Title doesn't exist in anything unless you take delivery' - wow you really are making me laugh now. Unless I am mistaken (unlikely) the whole point of PAGE and the new Silver exchange is that they are there to offer a tradeable receipt (ie with title) rather than trading the unallocated pool with no title. AGAIN this is the whole point. Just competition Mr Armstrong. Time will tell what the effects of this competition in price discovery are, but meanwhile, back in your box Armstrong, you are clearly behaving like a moody playground bully looking for people to impose your all-encompassing knowledge upon.

3. As TMosley correctly pointed out, Gold is not a commodity, it is a currency, hence why it trades as XAU and XAG (silver) on CURRENCY platforms.

Wax off

The Green Manalishi
Jun 20, 2012 - 4:15am

Alessio Rastani

Hi Traders,

Today we will be watching closely whether
the central bank is prepared to intervene in
the US economy.

In other words, whether they will hint as to
more printing (or "quantitative easing").


Today's meeting could have important

consequences for stocks, Gold and Silver.

Let's take a look at Silver on this chart:



You will notice that silver is in a tight
triangle pattern.

For Silver, a breakout from this triangle,
whether from the upside or downside, will
be very important.

The bottom of the triangle is around 26.70
and the upper part is at 32.00 (approx).

Now let's focus on Silver's more recent
price action (see below chart):




You will see that Silver is in a "squeeze" -
Bollinger bands (blue lines) are inside the
Keltner Channels (red lines).

I continue to like Silver as a potential trade
to the long side. Here's what I mean:

If Silver breaks 29.10 I am looking for a
potential move to 30.00 as the first target.

If we can get past 30.00 then look for Silver
to challenge 30.50 (where we have resistance
at the 89 Moving Average and R1 pivot).

However, if today's Fed announcement
sinks Silver, look for a re-test of the bottom
part of the triangle.

*IMPORTANT*: If you're day-trading, be
careful about holding positions during the Fed
announcement (from 12:30 ET) as the volatility

could negatively impact your trade.

Hope it helps! Good trading.

Alessio

DISCLAIMER:

This message is confidential and may also be legally

privileged. Leadingtrader.com is neither an investment

advisory service nor an investment advisor.

Data and information provided is solely for educational

and informational purposes. Nothing in this email and

the information provided in it should be construed as a

recommendation to trade any trading instrument.


LeadingTrader.com, 25 Elmcroft Court, Rockville, MD 20850, USA.

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