Fraud and Deceit on The Comex

Tue, Mar 8, 2016 - 11:07am

We've written about this so many times, frankly I'm not sure if I have the energy to do it again...but we'll give it a try.

Here are just the last three missives on this (sore) subject:

Basically, here's what you need to understand. The only "price" that is discovered on the Comex paper derivative exchange is the price/value of the paper derivatives, themselves. The price discovered is definitely NOT the price of gold.

Whenever prices rise, it's due to a surge in speculator interest in the paper derivative contracts. Prices fall when speculators exit this paper market and move on. To meet this surging demand for the underlying paper derivative, the Bullion Banks that are allowed to operate as de facto "market makers" create and issue new paper gold contracts from thin air. These banks are not required to deposit any metal up front as collateral nor are they required to limit the amount of paper metal they can alchemize on any given day.

Since the beginning of February, the Comex-determined "price of gold" has risen from $1116 to today's $1270. That's a gain of $154 or 13.8%. Not too shabby. But what caused this increase in price? Was it the demand for physical gold? Not really. Instead, it is the demand for the paper derivatives on the exposure to gold...and there's A BIG DIFFERENCE.

In making a market for these derivative contracts, The Bullion Banks create new paper contracts (sell short) when speculator demand increases. They then withdraw and buy back these contracts (covers shorts) when price falls. All the while, no actual physical gold is ever put up as collateral or deposited into the Comex vaults. Here's just your most recent example:

On January 29, 2016, The Comex vaults allegedly held 6,430,863 ounces of gold. See below:

As noted above, price closed that day at 16 on total Comex open interest of 373,434 contracts. At 100 ounces of gold per contract, that represents obligations for 37,343,400 ounces of paper gold or about 1161 metric tonnes.

As of last evening, March 7, the price closed at $64 on total Comex open interest of 498,172. At 100 ounces of gold per contract, that represents obligations for 49,817,200 ounces of paper gold or about 1550 metric tonnes.

So, have the Comex vaults increased by 12.5MM ounces over the same time period? Have 390 metric tonnes of additional gold been put on deposit there?

Of course not! There have been a few new ounces that have arrived but, as you can see below, it's not in the tonnage category. This is the report from yesterday, based upon the vault activity of Friday:

As you can see, on Monday the Comex vaults allegedly held 6,816,951 ounces of gold. While this total is up nearly 400,000 ounces from late January, that's a far cry from the 12,500,000 ounce increase in paper obligations. And this assumes that all of the recently deposited 385,000 ounces are actually up for sale or used as collateral for the new paper contracts. How much of the Comex gold really is for sale at current prices? Unfortunately, that's impossible to say and we'll never know.

What we do know is this...The Bullion Banks are the entities creating this paper gold and taking the responsibility for it. On the Commitment of Traders survey of January 26, 2015, the gold "Commercial" position was as follows:

Gold Commercial Gross Long Contracts: 115,343

Gold Commercial Gross Short Contracts: 175,176

Gold Commercial NET short position: 59,833 contracts or 5,983,300 ounces of "gold". Coincidentally, almost the same number of total ounces held within the Comex vaults.

Now look at the latest Commitment of Traders data from the survey taken last Tuesday, March 1:

Gold Commercial Gross Long Contracts: 115,571

Gold Commercial Gross Short Contracts: 287,002

Gold Commercial NET short position: 171,431 contracts or 17,143,100 ounces of "gold". Hmmm. That's interesting, now isn't it?

So, while price has rose through February by nearly 14%, the Big Banks categorized here as "Commercials" saw their long position in gold increase by a paltry 228 contracts. At the same time, their cumulative short position rose by 111,826 contracts. And these very same banks, while increasing their paper obligation by over 11,000,000 ounces, only scraped up about 400,000 new ounces to place in their vaults.

And here's the rub...At the end of the day, how much higher would prices have risen in February if The Banks had not been allowed to simply create over 100,000 new paper gold contracts? If total open interest had held steady below 400,000 contracts, an equilibrium price where willing sellers met willing buyers would have been significantly higher. Instead, to meet the demand from buyers, THE BANKS SIMPLY CREATED NEW PAPER DERIVATIVE SUPPLY. These banks have no intention of actually making physical delivery and the vast majority of the Speculators on the other side of the trade have no intention of taking delivery.

So, this demands the ultimate question:

What price is actually being discovered on the Comex? Is it the price of "gold" or is it the price of an unbacked and under-collateralized paper derivative contract?

Sadly, this confidence game and paper derivative pricing scheme is being allowed to continue indefinitely by the criminal co-conspirators of the CFTC and SEC. Until this exchange finally fails when actually physical delivery is demanded, I'm afraid that we're stuck with it. In the end, though, I suppose that's OK. Having physical price determined by the ludicrous machinations of this current Bank confidence scheme allows all of us the opportunity to buy and stack physical gold at a price that is deeply discounted from its actual value. I strongly suggest that you continue to use this historical anomaly to your advantage.


About the Author

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Mar 10, 2016 - 9:01pm

@ James Crighton

You made me laugh. :-)

No matter how bad it gets, somewhere, some poor bastard has got it even worse.

James CrightonLemming
Mar 9, 2016 - 3:03pm

Touche, Lemming..... AND MORE .....

and, additionally, you in the US are CITIZENS .... whilst us compliant pricks in the UK are .... SUBJECTS ..... in this day and age - can you bleeding believe it .... SUBJECTS. How effing nice - effing .... SUBJECTS. Are we mad - still in the bleeding dark ages. This whole monarchy thing is such an anachronism - fawning SUBJECTS maintained by an elite-controlled MSM (like so much else that is archaic - central banking, fiat money, etc).

"SUBJECTS" ...... I bleeding ask you ............. such an embarrassment.


Mar 9, 2016 - 4:17am

RE: The Queen

As to rule 1: You will note that all the words in which you insist on inserting a 'U' also have an 'R'. We will happily use U's when the British learn that there is, in fact, an 'R' in these words.

2. We admit that our minimal use of the language gets straight to the point. We find beating around the bush or being politically correct abhorrent. That is why we are in the process of installing Donald Trump.

3. We will happily sacrifice MLK day. Sacrificing the 4th would likely result in your having to sacrifice your rule 15 again.

4. Getting rid of guns would unnecessarily inhibit our ability to rid ourselves of lawyers & therapists.

5. We prefer to retain weapons more dangerous than vegetable peelers in case we need to repel an invasion of 7th century barbarians such as you are now experiencing. We may have to reinstate the WWII small arms Lend Lease program so that you can regain control of your country.

6. We prefer to go directly from point A to point B instead of driving in circles on roundabouts, except of course when it comes to electing politicians.

7. $10/gal fuel would inordinately restrict our ability to drive vehicles large enough to carry our 250 lb+ wives, therefore requiring us to be celebate. Not gonna happen.

8. We quit consuming 'French' fries several years ago when we decided the French were wimps, we now call them American fries. Since our southern border has now been wide open for a number of years, we now have problems ascertaining what is being referred to when we hear the phonetically pronounced word 'sheep'. We never know if the individual is referring to a wooly animal, a large boat, or a slice of fried potato.

9. We no longer have 'beer' in the United States. It is now referred to as 'cerveza', see #8 above.

10. We intend to relocate all the liberal limp wrist communists in Hollywood to Britain as soon as Trump takes office.

11. We have already determined to replace football with coliseum gladiators who will skewer former liberals and bankers to the delight of all who attend.

12. You British are under a mistaken impression. We don't go to baseball or football games to watch the game, we go there to drink cerveza.

13. LBJ had JFK killed. Unfortunately we are likely to have a similar event if Trump is elected. Apparently JFK preferred women and therefore refused to participate with the Sodomites in Skull & Bones. Trump appears to prefer women also.

14. You are unaware that all US income tax has been appropriated by the Queen ever since 1913?

15. We still remember how to have tea parties in Boston.

J Siefert
Mar 8, 2016 - 10:56pm


To the citizens of the United States of America from Her Sovereign Majesty Queen Elizabeth II

In light of your failure in recent years to nominate competent candidates for President of the USA and thus to govern yourselves, we hereby give notice of the revocation of your independence, effective immediately. (You should look up 'revocation' in the Oxford English Dictionary.)

Her Sovereign Majesty Queen Elizabeth II will resume monarchical duties over all states, commonwealths, and territories (except North Dakota, which she does not fancy).

Your new Prime Minister, David Cameron, will appoint a Governor for America without the need for further elections.

Congress and the Senate will be disbanded. A questionnaire may be circulated next year to determine whether any of you noticed.

To aid in the transition to a British Crown dependency, the following rules are introduced with immediate effect:


1. The letter 'U' will be reinstated in words such as 'colour,' 'favour,' 'labour' and 'neighbour.' Likewise, you will learn to spell 'doughnut' without skipping half the letters, and the suffix '-ize' will be replaced by the suffix '-ise.' Generally, you will be expected to raise your vocabulary to acceptable levels. (look up 'vocabulary').


2. Using the same twenty-seven words interspersed with filler noises such as ''like' and 'you know' is an unacceptable and inefficient form of communication. There is no such thing as U.S. English. We will let Microsoft know on your behalf. The Microsoft spell-checker will be adjusted to take into account the reinstated letter 'u'' and the elimination of '-ize.'


3. July 4th will no longer be celebrated as a holiday.


4. You will learn to resolve personal issues without using guns, lawyers, or therapists. The fact that you need so many lawyers and therapists shows that you're not quite ready to be independent. Guns should only be used for shooting grouse. If you can't sort things out without suing someone or speaking to a therapist, then you're not ready to shoot grouse.


5. Therefore, you will no longer be allowed to own or carry anything more dangerous than a vegetable peeler. Although a permit will be required if you wish to carry a vegetable peeler in public.


6. All intersections will be replaced with roundabouts, and you will start driving on the left side with immediate effect. At the same time, you will go metric with immediate effect and without the benefit of conversion tables. Both roundabouts and metrication will help you understand the British sense of humour.


7. The former USA will adopt UK prices on petrol (which you have been calling gasoline) of roughly $10/US gallon. Get used to it.


8. You will learn to make real chips. Those things you call French fries are not real chips, and those things you insist on calling potato chips are properly called crisps. Real chips are thick cut, fried in animal fat, and dressed not with catsup but with vinegar.


9. The cold, tasteless stuff you insist on calling beer is not actually beer at all. Henceforth, only proper British Bitter will be referred to as beer, and European brews of known and accepted provenance will be referred to as Lager. South African beer is also acceptable, as they are pound for pound the greatest sporting nation on earth and it can only be due to the beer. They are also part of the British Commonwealth - see what it did for them. American brands will be referred to as Near-Frozen Gnat's Urine, so that all can be sold without risk of further confusion.


10. Hollywood will be required occasionally to cast English actors as good guys. Hollywood will also be required to cast English actors to play English characters. Watching Andie Macdowell attempt English dialect in Four Weddings and a Funeral was an experience akin to having one's ears removed with a cheese grater.


11. You will cease playing American football. There is only one kind of proper football; you call it soccer. Those of you brave enough will, in time, be allowed to play rugby (which has some similarities to American football, but does not involve stopping for a rest every twenty seconds or wearing full kevlar body armour like a bunch of nancies).


12. Further, you will stop playing baseball. It is not reasonable to host an event called the World Series for a game which is not played outside of America. Since only 2.1% of you are aware there is a world beyond your borders, your error is understandable. You will learn cricket, and we will let you face the South Africans first to take the sting out of their deliveries.


13.. You must tell us who killed JFK. It's been driving us mad.


14. An internal revenue agent (i.e. tax collector) from Her Majesty's Government will be with you shortly to ensure the acquisition of all monies due (backdated to 1776).


15. Daily Tea Time begins promptly at 4 p.m. with proper cups, with saucers, and never mugs, with high quality biscuits (cookies) and cakes; plus strawberries (with cream) when in season.

God Save the Queen!

PS: Only share this with friends who have a good sense of humour (NOT humor)!

Mar 8, 2016 - 9:44pm

Nemesis Line

Thanks Turd.

Much appreciated.

Cheers Graeme

Mar 8, 2016 - 7:46pm
Mar 8, 2016 - 7:09pm

Turd the critical read from ZeroHedge is gone

I clicked the link and an it was not there.

I searched google: "zerohedge:oil short squeeze" and the article is the first link but clicking it Zerohedge displays "PAGE NOT FOUND". They have removed it for one reason or another.

Mar 8, 2016 - 6:14pm


If you vote for anyone you are handing over who you are, your being, to someone else.

They then control your life. You have given them the right to do do that.

See that, if it's true.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Mar 8, 2016 - 5:54pm

OK, This is WHY Trump might get elected after all

When Romney said electing Trump would CAUSE a recession!!! I believe (Tin foil hat securely on) they all know the RECESSION is coming and that Trump may be unstoppable. So, the GOP "saves" face while still helping Trump get elected. GOP gets to BLAME Obama and Trump!

BOOM, there you go! Ugly thoughts.... Thinking of vomiting now....

Mar 8, 2016 - 5:39pm

OK, I felt guilty not posting something for Hillary

I can save face and say I posted this for her and her need for your support....

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