Q.E.D. II

136
Sat, Dec 7, 2013 - 12:10pm

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.[1] 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.

    Q.E.D.

    TF

    About the Author

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    turd [at] tfmetalsreport [dot] com ()

      136 Comments

    Dec 7, 2013 - 12:12pm

    Updated December delivery totals

    92 total Dec gold deliveries for Friday. 90 went into the JPM House account. 85 were issued by Scotia.

    For the month, there have now been 3,849 total deliveries and JPM House has stopped 3,683 of them or 95.7%.

    Silver hoarding continues, too. Just 32 Dec silver deliveries Friday. 23 into JPM House.

    For the month, 1,798 total silver deliveries now with JPM House stopping 1,020 and JPM Customer stopping another 184 for a total of 1,204 or 66.96%.

    benque
    Dec 7, 2013 - 12:22pm
    Klaasisbaas
    Dec 7, 2013 - 12:27pm

    Twee

    Twee

    kn33bar
    Dec 7, 2013 - 12:27pm

    Thanks Turd

    Great work.

    Mr. Fix
    Dec 7, 2013 - 12:28pm

    1st,

    Well, if your analysis is correct, we may finally have our historic explosion soon, but after the vaults have been emptied, they still need to draw as much off the open market as possible, in the meantime, I think the price continues to meander downward.

    They have no fear of losing money, they clearly have access to a printing press, and are already fully committed to destroying the dollar. How much Fiat they lose in the meantime is completely irrelevant to them.

    I agree they're going after all the gold, in the end, it's the only thing that will be worth anything.

    (But I still hold out hope for silver too).

    Deaglán
    Dec 7, 2013 - 12:29pm

    Thanks TF, excellent

    Thanks TF, excellent stuff.

    Big crowd in the Mexican mint Thursday and Friday. The Centenario coins were being bought by many I saw there. Silver OZ´s were available but sold out in the usual sources.

    Couple of friends who usually stick to stocks have picked up a few gold oz´s lately.

    Enjoy the weekend folks.

    dgstage
    Dec 7, 2013 - 12:41pm
    ivars
    Dec 7, 2013 - 12:46pm

    We will only see true JPM in

    We will only see true JPM in numbers when printing press will be stopped. FED does not want to do it, but USG has created stats that makes politically difficult for FED to continue QE at all. So, if QE is stopped in December or late January , JPM should know it , and then it will for sure take gold not lose FRN. I think that will happen with Feb 2014 deliveries, December deliveries is just a small show of force, a threat to FED and USG.

    R man J
    Dec 7, 2013 - 12:47pm

    Where else?

    Indeed, Turd. I'm not a trader but it is worth the price of admission just to see everyone's knowledge grow.

    So when someone forsakes thei PMs to sell out to "BitCoin" or "Specs Control" or "Surplus Supply" or "China is not accumulating" we will ultimately be able to prove them wrong.

    You should take a poll re: "Silver or Bitcoin" and find out who the sell out are. Max Kaiser?

    ReachWest
    Dec 7, 2013 - 12:55pm

    Great Analysis

    Hands down - best analysis in the PM blogosphere! And - very well presented.
    Q.E.D. indeed.

    It's interesting that the normal group-think is blindly taking the "Gold to sub $1000" meme with little to no questioning and analysis. But - those of us in Turdville (and certainly those of us in the Vault) have the benefit of riding along on Turd's analysis and the insight he gains from his wide network of PM pundits. Makes me feel like a special little turd.

    I'm sure JPM is quite pleased that the MSM continues down the bearish argument path for the metals - it only serves to make their work easier as the mindless specs fall in line for the ultimate spiritual awakening they have coming.

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