A Freebie from Uncle Ted

82
Fri, Jan 3, 2014 - 3:32pm

Ted Butler's "New Year" newsletter was released to subscriber's on Wednesday. He's made it public today through the SilverSeek site.

Here's the link to the full report at SilverSeek: https://www.silverseek.com/commentary/2013-–-year-jpmorgan-12815

You should be sure to read the entire report but I want to C&P and highlight two paragraphs below. As regular know, I've been tracking JPM's hoarding of Comex gold and silver deliveries since July of last year. Ted has, too, and these two paragraphs get to the crux of the matter:

"Here’s something new I’ve been meaning to mention. The CME Group (owner-operator of the COMEX) lists a spot month position limit and monthly limit on actual deliveries of 7.5 million silver oz and 300,000 gold ounces by any one trader. Yet the CME is reporting that JPMorgan in its house account took delivery of more than double the amount of gold allowed in any one month. Since JPMorgan held the 6254 gold contracts from first delivery day forward, it also means that JPM was in violation of CME rules limiting spot month holdings in gold futures of 3000 contracts for the entire month. The violations in silver were less egregious but were violations nonetheless.


I’m sure if pressed the CME could come up with some cockamamie excuse why JPMorgan was allowed to hold and take delivery of so many gold and silver contracts in one month, but the real reason is that JPMorgan is above all rules and law. The CFTC backed down on policing JPMorgan and it would be foolish to think the CME would restrict its most important client in any way. Far from a band of brothers, this is a brotherhood of criminals. Besides, rules are for the little people, not JPMorgan."

If you're looking for something to do this weekend, perhaps you should C&P these two paragraphs yourself and send them off to the CFTC for an answer...

mwetjen[at]cftc[dot]gov

Again, to subscribe to Ted's excellent service, simply click here: https://www.butlerresearch.com/subscribe.asp

TF

About the Author

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

  82 Comments

Excalibur
Jan 4, 2014 - 5:42am

PMs vs bonds vs real estate investing

One guy's story about long term investing:

Video unavailable
Mads Trauson CrimsonAvenger
Jan 4, 2014 - 6:34am

The Chinese - when ?

Posted a few months back that the Chinese are gearing up for a gold backed currency BUT NOT BEFORE 2020.Source Chairman of SAFE closed meeting with London institutional investors.

The timing is linked to the full convertibility of the currency and acquisition of gold bullion.My gut feeling says they go for a knock out competitive position vis a vis oth Central Bank gold reserves eg 20,000-30,000 tonnes versus 8000 allegedly in US.

The Obama "weak" angle is interesting but it all comes too early I feel as there is a ways to go in fulfilling their 2 primary requirements as highlighted above.No doubt a bounce in 2014 but I am putting my money on the 2016-2020 period for the main event.Chinese move,dollar collapse.

Most people have been shredded and worn out by the set back.In particular institutional investors who have monthly redemptions on their assets.Only private investors or people with a following like Sprott have survived and his hedge fund assets have dropped from US 3bn to 300m.

opticsguy
Jan 4, 2014 - 8:16am

Excalibur

I went through the whole rental thing also. If rents and wages can't keep up with real inflation (M2), real estate is a stressful way to slowly lose money.

The stock market is the same way. If you divide the SP500/Dow by M2 (or M1 even) going back to 1900, you'll find that stocks over the long haul beat inflation by 1.5% a year on average. That's a lot of risk for 1.5%.

Now if the Treasury would introduce a bond with a coupon linked to M2 (heck, even MZM), you'd have an alternative to gold.

dgstage
Jan 4, 2014 - 8:40am
unwired
Jan 4, 2014 - 9:21am

Chinese when question

The ideas presented I think make a lot of sense.

Many say that China won't do anything because they don't want to be perceived as precipitating any crisis in the west. I understand that logic... but I think its dated.

China has gotten bolder... and so has Russia. Obie is a weak president for sure... and striking while that is a reality makes perfect sense. But also... since the 2008 crisis... its become obvious that the USA... an insolvent nation... has no business or respect any longer at managing the reserve currency.

So the moves happening could be for their own protection from the next crisis which we all know is coming.. and maybe sooner rather than later. And their moves could be sooner than expected too.

I also think that the revaluation of gold needs to to be well under way...ahead of any formal moves to incorporate or introduce a new monetary regime. I think the new physical exchanges are designed to accomplish this. Once gold price is based on a true auction in its transfer.... its price will find what can be considered a free market value. Then it will become much more stable in price. After that... I think it gets moved formally into the monetary realm. But it first needs to be wrested from western control... where the motives for price have nothing to do with a market... but rather for propping a failing dollar system.

I could be all wet... but I don't think a sudden revaluation is how its going to work...even if China adopts the freegold concept and begins setting a floor as the buyer of last resort.... it's going to take some time.

My 2c.

unwired mac
Jan 4, 2014 - 9:33am

Norcini

That's why I removed him from my regular reading list. That's just clueless and sounds just like JChristian on the 'fundamental' side. Norcini is a chart worshipper... and gov't and CB's and their agents are chart painters.

Momentous things are happening behind the charts...but these types don't get it... too married to their past experiences...and 'knowledge'.

Not sure of your take on Santa. I think he's the genuine article. Also runs TRX. Like many... he's been a bit too confident....and the cartel loves people like him that they can discredit with their pricing operations.

Hammer
Jan 4, 2014 - 10:00am

lol. everything's ok as long

lol. everything's ok as long as nothing bad happens.....Ben on his farewell speech......

https://www.marketwatch.com/story/bernanke-defends-tenure-running-the-fe...

Cleburne61
Jan 4, 2014 - 10:03am

SLV Continues its Shrinkage...

As 1,580, 143 more ounces whooshes out.

The roughly 2 million oz per week flush rate is still spot on. Let's see if we surpass 2 million next week by a bit.

Hammer
Jan 4, 2014 - 10:03am
ivars
Jan 4, 2014 - 11:20am

Quote:ivars I dont know

Quote:
ivars I dont know answer to that question how can betting on future price move physical market. hope someone can shed more light on the question as I would like to see the debate. however if it wasnt naked short selling which provoked the huge price declines on those 5 days what was it that drove price down then?

Yes futures fluctuate around London Fix but never diverge when the fix comes ,may be a fraction of % represented by the chance of actual physical delivery relative to London physical trade volumes.

Futures are not needed to control gold price..they are needed to create uncertainty in price which requires more swing capital to manage. First need for futures arose from farmers since their capital production depended on weather which was naturally fluctuating. But today because of futures and other actions everything fluctuates creating huge demands for swing capital where none should exist. Economic crisis is a good way to ensure swing capital (liquidity) is in high need. If that does not help, wars are needed. Anything that is unstable, society, political system , human value system oriented towards instability and unpredictability creates more need for swing capital. Its simple strategic game to ensure such need exists.

Production of liquid cheap swing capital is done by CBs and banks in current system, who own the stocks (gold) and can adjust production rates (of debt money ) as they always have huge enough spare capacity. And we know that the cost of producing this swing capital is low as its produced from thin air while fixed costs are compensated by government debt to the banks- interest they pay on it.

This cheapest and most liquid form of capital is now positioned in the way that it impact via compound interest all other forms of capital formation by taxing them with interest and thus making by definition more expensive than itself. So its self securing its own position and lowest production costs. Lately, it is running low on stocks. That is dangerous, very, so attempts are being made to increase them. (gold) . It can kill the franchise if gold is not retrieved.

The need for large amounts of swing capital ( financial capital) arises from uncertainty and risk. These are things that can be created to happen. And are created to happen.

Since there is no free market in capital as a result, but cartel who dictates the price of all capital in the world, no one dare call it capitalism- and especially if talking about free markets does not include competition in money creation and move of ground rules towards freeing other capital from tax it pays to financial capital.

dgstage
Jan 4, 2014 - 11:20am
Patrancus
Jan 4, 2014 - 11:41am

PM vs bonds, realestate

I found the information in the video informative, my thought like a sand burr barb nagging at a spot under foot, that darned 50k sprinkled into the shiny instead of that toss into high flying paper that ended up in the crash and burn pile would have put me over that line of retirement in this era of obummer's misery, never again will the odds escape me.

ivars
Jan 4, 2014 - 11:57am

Did You know John Nash has

Did You know John Nash has been working on ideal money?: here is a quote and link:

Quote:
The Keynesians implicitly always have the argument that some good managers can do things of beneficial value, operating with the treasury and the central bank, and that it is not needed or appropriate for the citizenry or the "customers" of the currency supplied by the state to actually understand, while the managers are managing, what exactly they are doing and how it will affect the "pocketbook" circumstances of these customers. I see this as analogous to how the "Bolshevik communists" were claiming to provide something much better than the "bourgeois democracy" that they could not deny existed in some other countries. But in the end the "dictatorship of the proletariat" seemed to become rather exposed as simply the dictatorship of the regime. So there may be an analogy to this as regards those called "the Keynesians" in that while they have claimed to be operating for high and noble objectives of general welfare what is clearly true is that they have made it easier for governments to "print money".
https://sites.stat.psu.edu/~babu/nash/money.pdf
Howard Roark
Jan 4, 2014 - 12:02pm

Fantastic Silver Doc @Cleburne61

The link to the doc says "the content is no longer available".

Things that make you go hmmmm...

HR

(edit) - don´t miss the McAlvany podcast with ACheng. The picture from China gold market is amazing!

s1lverbullet
Jan 4, 2014 - 12:08pm

Miners down, silver flat.

I see a raid coming on Monday. Miners got whacked big to close the day yesterday. Usually this means someone got the raid news early and is jumping ship. Looking for a smash Monday before I get back in. That is all.

SilverSurfers
Jan 4, 2014 - 12:24pm

No Shame

And to think that TPTB and the free chit army, could care less.

Thinking, it was after Kennicot, our host was bumed, and commented in supporting response, "all I can say is JPM wont lose".

AlienEyes
Jan 4, 2014 - 12:48pm

Fish Oil With Omega 3, 6, 9

Tens of millions of "boomers" (not to be confused with Sooner Boomers) take from 1 to 3 fish oil caps every day on orders from their cardiologist. Since the source of the oil is usually Alaska or Canada fish, there have been more than a few consumer request for the Food & Drug Administration, to start testing these O.T.C. caps for radiation released into the Pacific ocean by a Japanese nuke meltdown which some are now calling "Hiroshima's revenge".

Believe it or not, the federal government has flatly refused to do so and considers the matter closed. WTF?

There are possible reasons for this decision all over the net.....

1) "If it kills the baby boomers it will save SS a fortune." and "Most boomers are conservatives so who needs them anyway?"

2) "Hawaii has put pressure on the feds to not do it because it could kill their overpriced tourism industry." (makes me wonder if the "pressure" could be a certain birth certificate).

3) "It could ruin the seafood industry in Alaska and western Canada."

All of these could be bovine excrement BUT, when I go back twenty six hours later to copy a link by clicking on my "favorites" list and it is no longer there, ("This page could not be found."), I start to think something stinks. In this case, it smells like month old rotten fish.

.

EDIT :

See : Fantastic Silver Doc @ Cleburne61 , which is only three post above this one. Hummmmm indeed!

Bugzy
Jan 4, 2014 - 12:48pm

Howard

It is because you are in Portugal.

My IP was "set" to UK and I got the same message. I changed to a US IP address and it worked fine. I use: hide my ass.

Yes Alien: just follow the money. Always leads you to the truth; unless of course you are talking about 911 and then it is completely meaningless or something.

tyberious AlienEyes
Jan 4, 2014 - 12:53pm

people

called me crazy when I stopped eating seafood 2 years ago!

Local radiation tracker: https://www.netc.com/

AlienEyes tyberious
Jan 4, 2014 - 1:20pm

@ tyberious

Do any of those people still have any hair?

If you grab and pull the map in your link over to Japan, there is not a single problem to be seen. You can double click to enlarge any area. The Fukushima plant doesn't even showup.....because it is now closed.

Silverwing
Jan 4, 2014 - 1:34pm

Try this link for Silver Video above

SW

<edit: I embedded it for you, TF.>

Silverwing
Jan 4, 2014 - 1:45pm
DayStar
Jan 4, 2014 - 2:04pm

Harvey's Up! (TFMR)

Bloomberg: Turkey's silver imports climbed in December to the highest since at least 1999 and inbound shipments of gold rose to the most since July as the metals capped their biggest annual decline in more than three decades. Imports of silver gained to 41.6 metric tons last month, 36 percent more than in November and above September's amount of 39.9 tons, according to data on the Istanbul Gold Exchange's website going back to 1999.

Egon von Greyerz: Gold is now more oversold than at any time in history. This technical rebound will just add fuel to the precious metals explosion that will start in 2014. There are other factors such as money printing which will be massive. The physical situation in the gold market is also extremely interesting because central banks in the West are supposed to have 23,000 tons of gold, but until the Western governments prove this to us with independent physical audits, we will have to assume that they only have a fraction of this gold, or nothing at all.

Ted Butler: Everything important that transpired in 2013 in silver and gold can be traced to JPMorgan, just as this bank will dictate what happens in the future. While no one can accurately predict short term pricing or the exact moment the deliberate price beatings of 2013 will end, the facts indicate a remarkable turnabout in JPMorgan’s positioning. We fell sharply in 2013 because of JPMorgan and will likely rise sharply in 2014 for the same reason. From my perspective, that’s all that matters.

Jim Rickards: There are no more markets. When you manipulate the dollar you manipulate either directly or indirectly every market in the world. As a result the markets send false signals and do not provide price discovery. If you read between the lines, they don't know what they are doing. This is not the first taper. They have done it after QE1 and QE2 and the taper failed both times and they started it up again. I think they are tapering into weakness. We have an unstable situation with inflation and deflation, and it is like standing on the San Andreas Fault when nothing is going on. I think we can certainly expect much greater volatility in 2014. America is in a depression. Gold is going to betwen $3000-7000. 500 tonnes has come out of GLD and it's going to China. Price suppression is unstable, and it will not endure in the long run.

David Bond: Silvercorp got an early Christmas present. The British Columbia Securities Commission accused one Jon Carnes, a.k.a. Alfred Little, and his hedge fund, EOS Holdings, of lying about Silvercorp's operations. Carnes disguised his authorship of the critical reports by using the pseudonym Alfred Little. After his Sept. 13, 2011 report questioned the quality of the miner’s silver resources, the stock of the Vancouver-based Silvercorp dropped 20% in a day, earning EOS Holdings almost $2.8 million on its short sale and option trades.

Bill Fleckenstein (via King World News): Of course we could have a correction much, much deeper than 20%. We could have a crash. No problem. Absolutely no problem. Are you kidding me, with the computers doing what they do, we could easily have a crash. Who knows what it could be? A lot. A big dislocation. A crash is a big dislocation. Is it 21% in a day? Is it 30% in a month? I don’t know, but I mean a wipeout -- a radical re-pricing. Tatyana Shumsky: Demand for gold coins shot up 63% to 241.6 metric tons in the first three quarters of 2013, according to the latest figures available from the World Gold Council.Sales of Gold Maple Leaf coins by the Royal Canadian Mint MNT.T +0.36% surged 82.5% to 876,000 ounces in the first three quarters of 2013 from the same period of 2012. The Perth Mint, Australia's national coin and bar producer, saw sales rise 41% to 754,635 ounces last year, while the U.S. Mint sold 14% more American Eagle gold coins than it did in 2012, along with a record amount of silver coins. Nicholas Larkin: Turkey’s silver imports climbed in December to the highest since at least 1999 and inbound shipments of gold rose to the most since July as the metals capped their biggest annual decline in more than three decades. Imports of silver gained to 41.6 metric tons last month, 36 percent more than in November and above September’s amount of 39.9 tons, according to data on the Istanbul Gold Exchange’s website going back to 1999. That took the full year figure to 227.8 tons, 60 percent more than 2012 and compared with 42.1 tons in all of 2011. Gold imports increased 64 percent in December to 31.6 tons, the data show.

Ronald-Peter Stoferle: The natural market adjustment process of the current crisis would be highly deflationary. The reason for this lies in our current fractional reserve banking system, as the largest part of money in circulation is created by credit within the commercial banking sector. The much smaller portion is created by central banks. This (credit) deflation, respectively deleveraging, is compensated by very expansionary central bank policies. The unintended consequences [DS: It's not unintentional] of these monetary interventions will result in increasing volatility, potentially further disinflationary/deflationary phases and eventually (highly) inflationary phases!

Alasdair Macleod: Why are some GOFO rates negative? Near-zero interest rates for the four major currencies and time-preference rates for gold as indicated by lease rates suggest either there is minimal systemic and currency risk or gold's forward discount rate is badly mispriced. Given the rapid expansion of central bank balance sheets, logically the latter must be the case. Gold's time-preference discount is radically different from what it would otherwise be in an unmanipulated market. Instead, gold's time-preference should reflect that of other goods, adjusted by gold's own specific characteristics, including its soundness relative to fiat currencies. And therefore the gold forward rate (GOFO) in a free market should normally be negative, given that expansionary monetary policies for currencies are the norm, because GOFO is defined as LIBOR less the gold lease rate. Instead it has been nearly always positive. Sooner or later a more realistic time-preference for gold is bound to return, as leasing by central banks dries up. This explains why GOFO tried to go negative on several occasions in 2013. All that's happening is time-preference is beginning to be rightfully re-instated.

Dave Hodges: If we want to be able to enjoy our golden years and give our kids a future, we need to stop running from our problems and face reality. It may be possible to move to a place like Norway and get some temporary relief, but in reality, you would only be staying one step ahead of the burning bridge. Americans need to stop listening to Obama and the mainstream media, there is not going to be any economic recovery. We have no hope economically because there is nothing left to salvage. The debt is $17 trillion dollars, unfunded (partially or otherwise) mandated social programs constitutes another $240 trillion dollars and the credit swap derivatives total between $1 quadrillion dollars to $1.5 quadrillion dollars, which is six times the GDP of the planet. Do you get it now? There will be no recovery. You are only delaying the inevitable by leaving the country. We are not just going to see an American economic collapse, we are going to witness a global collapse. Harvey: Gold and silver had another strong day as these metals seem to be taking on the bankers. Thursday and today saw a huge 30 tonnes of physical gold delivered into Shanghai as demand for the physical metal continues to play havoc to our bankers. The country of Turkey reported that in December it imported 31 tonnes of gold (almost 17% of global production on a monthly basis). For the 2013 year: 302 tonnes. The December importation of gold into Turkey was an increase of 64% from November. Turkey provides the gateway for Arab purchases of gold and it seems that the appetite for gold from countries like Saudi Arabia, the United Emirates and other Gulf States are increasing as the dollar is shunned. GOFO is still showing major stress as we have the first two months in backwardation with the big 3 month contract heading towards backwardation. GLD: Gold was unchanged and stands at 794.62 tonnes. SLV: Silver was unchanged at 9,958.64 tonnes. All this and more on... The Harvey Report! https://www.tfmetalsreport.com/comment/edit/374723

DayStar

Fred Hayek
Jan 4, 2014 - 2:10pm

His imperial Turdship will be a speaker at Liberty Masterminds

I'm going to post this in a few threads to try and make people aware of this.

Loyal Turdites of Turdistan might want to know that his imperial Turdship will be one of the speakers at the Liberty Masterminds get together in Las Vegas on February 21 and 22. For more information, see the link below:

https://libertymastermind.us/

tyberious
Jan 4, 2014 - 2:27pm

AE please check link again

142000

Station ID 6:1181341550 Fukushima Dai-ichi, Fukushima, JP
nSv/h: current 142000 Low 138000 High 153000
Average 145888, Deviation 2854.2

https://www.netc.com/

it only appears green because the 3 month average is within normal range!

Markedtofuture
Jan 4, 2014 - 3:47pm

Armstrong - A Very Valid Point Behind Conspiracies

Armstrong...Fed being owned by the banks, is classic conspiracy theory. Readers praise the man, that knows what is hidden behind the curtain.

A Very Valid Point Behind Conspiracies

Posted on

January 4, 2014 by Martin Armstrong

The wilder the Conspiracy Theories, the more people pay no attention to Government and hand them more power in the process. Even then, people attribute such vast long-term knowledge and schemes to these people it is unbelievable. I have worked with people on Capitol Hill, in Europe and Asia. The reason they called me was simply because I understood the game. They only care about the next election – not 20 down the road. Whatever they have to do to protect themselves today they will do and and consequences long-term are never considered. Looking at it from the outside, people assume there is some scheme and begin to attribute wild theories trying to explain a patchwork of self-interest.

The conspiracy about the Fed being owned by banks is classic. The Fed was supposed to be a backup to bailout banks like JP Morgan did in the Panic of 1907 pictured here. The money supply was to be elastic expanding to ease a panic and stop a bank run without having to dump assets foreclosing on homes, and then contract the money supply when things improved and the bank run was over. The popular conspiracy was JP Morgan wanted to control the entire world and all the money would be his. They seem to always create such aspirations on people like that perhaps out of jealousy.

Stimulation of the economy was to take place by purchasing short-term corporate paper to prevent a contraction. That design made sense and the banks were members contributing capital. Then came World War I and Congress needed to sell bonds and ORDERED the Fed to buy their paper not corporate. They never put the Fed back to its original design. Then someone said INFLATION is causes by an increase in money supply, which isWRONG as QE1-3 has proven. So the Fed was now to sterilize whatever Congress did and that relieved Congress of any responsibility over fiscal management. If you go through each step, you will see that the Fed was NEVER intended to be what it is today. It is always a work in process for with each crisis, Congress only messes things up again. It is always self-interest – not long-term schemes over decades.

I thought a reader put it pretty good.

COMMENT SENT BY A READER:

Mr. Armstrong,

You are absolutely right. Years ago, I came to the same conclusion as you about conspiracies.

The simple fact is that anyone who works for a large organization has an inherent conflict of interest. Any time they are faced with a choice between what’s good for the public and what’s good for their employer, self-interest dictates that they will choose the employer. It doesn’t matter whether someone works for a government, trade union, corporation, bank, or university. Revealing the truth about dangerous, illegal or unethical behavior – even anonymously – might damage the organization, placing their livelihood at risk. Most people won’t take that chance.

The Penn State child abuse cover-up is a perfect example – it wasn’t really a conspiracy, it was just a lot of people choosing to protect a monster because it served their own self-interest.

This is why Edward Snowden is so remarkable: he was willing to give up everything in order to publicly share the truth. Look what it cost him.

No wonder the rank-and-file employees at big institutions keep their mouths shut about anything that might have a negative impact on their payroll.

The problems we face now are not the result of shadowy cabals, they are the result of countless individuals making perfectly rational and understandable decisions to protect their jobs. Isn’t that why the trend is irreversible? It’s a downward spiral: the worse things get, the more people will do anything to keep their jobs, causing things to get even worse. Isn’t this what you always say? That human nature drives the cycles?

Keep up the great work. You may be the lone voice crying in the wilderness, but you have many listeners.

- A.S.

https://armstrongeconomics.com/2014/01/04/a-very-valid-point-behind-conspiracies/

Howard Roark
Jan 4, 2014 - 4:30pm

@Bugzy and SilverWing

Thanks for the tip, Bugzy. I have to learn how to do that.

As for the new link to the silver doc - works perfectly, SilverWing.

This is TurdVille at it´s best! Thanks.

And let me share a thought with you all (especially the USTurds). I read a piece in a MSNewspaper saying that bankster-friend Jack Lew is coming to Portugal. Let´s take a small detour, first.

When I was a long-haired surfer/headbanger the US was a dream of freedom and dreams coming to be. A lot of surf and sk8 movies came from the US, so the free and colorful lifestyle was profoundly embedded in us. In brief: US equal Liberty.

But coming of age and being persistent in learning philosophy gave me another view on the US at the moment. It´s almost as if the beacon of liberty and freedom to pursuit ones ideal of happiness was a fake. And it got worst when, studying political philosophy (and the constitutional history of the US), I got to understand that in some way the US is "growing backwards", going away from the core values that I, in a particular sense, identified with the US.

Back to track: at the present I ear that JLew is coming to Europe to press the EU and the southern countries to try harder to grow... I mean, the guy is coming here to spread communism... more spending from the states, more economic/financial terrorism... WTF!

I had a dream once: make a trip to the US and enjoy some of the "air of freedom". But now I start to fear when US politicians come to Europe and push these socialist states even further in to slavery.

Sad.

All the best to all,

HR

unwired
Jan 4, 2014 - 5:15pm

Total in for China gold

https://www.ingoldwetrust.ch/unprecedented-total-chinese-gold-demand-2013

While I respect the fact that the west is still in control of the metals markets... to ignore this as irrelevant according to the D Norcini / J Christian types is just plain foolish IMO.

Huge changes are in process... and sticking with old dogma will have these guys looking foolish at some point I'd guess.

When 'floating supplies' run out... something has to give. Only question is.... will it be a surprise event that turns the market.... or will it first be front run by the likes of JPM on inside info... and therefore an already established trend change that gets a new tailwind. I'd like it to be the former... so there is ample evidence that all these loud conventional wisdom bigmouths look as obviously clueless as many of us already think they are.

The Vet
Jan 4, 2014 - 6:01pm

GLD and real gold. An asymetric market.

There has been a lot of talk on paper and physical markets and which is the tail and which is the dog. This discussion usually involves talk of GLD stock and the "dumping" of GLD shares by stock market investors which has resulted in the rapid depletion of the actual gold metal stored by the custodian for the GLD trust.

GLD stock is a purely paper instrument in the hands of the average stock holder. It therefore trades at the paper gold price and is locked into the LBMA and COMEX paper prices (set and controlled by EXACTLY the same entities). However to the very select few known as "Authorized Participants" (APs), GLD stock is their ticket to buy physical gold in unlimited quantities without any demand pressure showing up in the spot physical market. The APs have that exclusive privilege which allows them the manage the supply of physical gold in large quantities at the paper price, and they use it. There was no real "dump" of GLD shares. In normal trading GLD stock is arbitraged to the PAPER MARKET not the PHYSICAL MARKET by stock traders and the small COMEX players. The APs can sit by and buy GLD at the paper price (which they manipulate at will) and then redeem those shares for real metal at zero premium. GLD is the APs private warehouse of metal... inventory held for their exclusive use without storage or insurance fees and instantly available at paper prices (or less if they redeem borrowed shares).

AlienEyes tyberious
Jan 4, 2014 - 6:05pm

Green my arse !

Right you are, tyberious.

I didn't expect that much statistical spin so I missed it. My bad.

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