To me, the evidence is conclusive. Let's see if you agree.
In college, I had a physics professor who, every time he demonstrated a mathematical formula, would conclude his work with "QED". There's a reason for this and I'll let wikipedia sum it up for you:
"Q.E.D. is an initialism of the Latin phrase quod erat demonstrandum, originating from the Greek analogous hóper édei deîxai (ὅπερ ἔδει δεῖξαι), meaning "which had to be demonstrated". The phrase is traditionally placed in its abbreviated form at the end of a mathematical proof or philosophical argument when what was specified in the enunciation — and in the setting-out—has been exactly restated as the conclusion of the demonstration. The abbreviation thus signals the completion of the proof."
Well, after Wednesday night's Comex delivery reports, QED is also how I feel regarding the JPM NET LONG position I've been harping on for months.
As first noted in the July Bank Participation Report, a "U.S. Bank" is now massive long Comex gold futures. Experience told us that a position of this size...generally around 75,000 contracts...HAD TO BE JPM. However, this experience was just conjecture and we needed demonstrable proof. The first four days of December delivery provide the proof.
If you've been following along, I've estimated that, in a NET LONG position averaging 75,000 contracts, it was likely that at least half the position was in the front-month Dec13. That position was then rolled into Feb14 and April14 but not without causing some extreme volatility, which JPM used to their selfish price advantage. Additionally, because JPM issued almost 3,000,000 ounces of gold to the other banks through the Comex delivery process of Feb13, Apr13 and June13, it was to be expected that they (JPM House) would use their long position to stand for delivery this month. Not wanting to "break" The Comex...YET...JPM will eventually stand for 7,000-8,000 in December. If the entire system doesn't collapse first, look for them to stand for the same amount in February and April of next year.
Given all of that listed in the paragraph above, "proof" of JPM's NET LONG position will lie in just how much gold they actually take in delivery during December. If the total had turned out to be miniscule...like earlier this year....my entire analysis and conclusion could be justifiably called into question. If, however, JPM ends up stopping 90%+ of the Dec gold contract deliveries...
And what do we have so far? Wednesday alone was breathtaking. There were 2,472 deliveries announced. Of the 2,472, the JPM House account stopped (took delivery) of 2,389 or 96.6%. This brings the total for the first five days of the month to:
Total Deliveries: 3,558
Total Stopped by JPM: 3,400 or 95.6%
Total Issued (thus far) by HSBC: 2,216
Total Issued (thus far) by Scotia: 787
Now consider this. Back in the first half of this year, when JPM was desperately converting a 75,000 NET SHORT position into a 75,000 NET LONG position, it got stuck "holding the bag" and deliveries were made against it by the other banks. For the delivery months of Feb13, Apr13 and June13, it looked like this:
Total Deliveries: 34,571
Total Stopped by HSBC: 13,768
Total Stopped by Scotia (including March and May): 2,257
Total Stopped by Deutsche Bank: 5,918
Total Stopped by Barclays: 3,596
Total Stopped by JPMorgan House: 547
Total ISSUED by JPMorgan (House and Customer): 31,939
Guess what world? THEY WANT THEIR FREAKING GOLD BACK!! And they have cornered The Comex gold market in order to make this happen.
Ultimately, what does this mean to you, my dear Turdite? Let me again put it this way...
JPM is NET LONG something like 65,000-70,000 Comex gold contracts right this minute. (My best estimate based upon yesterday's Bank Participation Report.) What you have to decide is this: Just whom do you expect to win in the end?
- The brainless Specs and the non-U.S. banks?
- The ruthless JPMorgan?
Assuming no changes of position, a drop of $175 from here, toward the vaunted and much-hyped $1050 level, would "cost" JPMorgan about $1.5BILLION. Do you really think that JPM, holding a market-dominating and cornering position, is going to ALLOW that to happen? Seriously?? Well, we'll see, I guess.
Now some would suggest that JPM's Comex position is simply a hedge, offset by an equally large net short position held OTC. (As Westley said: "It's possible, pig".) But if that's the case, how do you explain JPM's sudden desire to take delivery? Again, 95%+ of the December deliveries are being stopped to the JPM House Account. Look, I'm not claiming to be some kind of Comex depository and delivery expert, remember I'm just a guy from Kansas...BUT...if JPM was simply "net neutral" and "non-directional", why would they take delivery in the first place...AND...why would all of the deliveries be ending up in their own, proprietary account?
Finally, there is always the possibility (some would same likelihood) that all of this CFTC and CME-generated data upon which I am relying is nothing but lies and fabrications, intentionally falsified in order to deceive. Of course that's a possibility and, frankly, a somewhat logical deduction given the layers of fraud and deception prevalent throughout not just the metals markets, but seemingly everywhere. However, note the consistency of the data. The NET LONG position was first shown in the BPR of July and it is playing out now, in real time, in December. That's a long time to manage and maintain a charade.
Instead, I actually believe the data is (mostly) accurate. Look, where else do you see the type of analysis I just gave you? It's not as if it's being trumpeted by CNBS. Very, very few people take the time to figure this stuff out and put two-and-two together. And I can promise you, JPM doesn't give a rat's ass that you and I know this stuff. By the time everybody else catches on, price will have already moved and everyone will only look back with hindsight. JPM just wants their gold back before the current fractional reserve bullion banking system breaks, prices skyrocket again and a new global currency regime takes hold. And now, for the first time ever, they've cornered the Comex gold futures market in order to ensure that it happens.