Guest Post: "An Open Letter to the LBMA Board of Directors", by Paul Mylchreest

Thu, Jan 30, 2020 - 11:48am

As you know, TFMR will celebrate its 10th anniversary this year. Ten years is a LONG time and it still amazes me that I've been able to meet and befriend so many folks around the globe. One such person is Paul Mylchreest...a guy whose research and analytical skills in the precious metals sector are unmatched. He's out with his latest report today and you should be 100% certain to read it.

Understand that Paul's reports are a lot like Ronni Stoeferle's in that they are lengthy and detailed. However, if you have an interest in precious metals, you simply must endeavor to read this entire report.

The world is awash in analysts, experts and traders...99% of whom have ZERO idea of how the global precious metals "markets" operate. These people see a dot on a screen and assume that it's somehow a free and fairly-derived price. It's not. Plow your way through these sixty pages and you'll soon understand why.

Many, many thanks to Paul for his effort and well as his permission to reprint his work and include it below. Again, please take time to read through this excellent piece and perhaps forward it to someone you know. Then, consider adding to your stack while you continue to "prepare accordingly".


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Silver Liningmavens
Feb 5, 2020 - 1:13am

I am curious as to why there are no cases in Africa...

I'm almost certain there is, it's just not being reported.

Jan 31, 2020 - 1:15am

a good read

The article is very revealing and an extremely good read. thanks craig! I'm glad to be a subscriber as this is all valuable information. Hopefully the awareness spreads and a revolution happens because of this. On a side note - Singapore is beginning to regulate the OTC market late 2018 so hopefully London follows soon

Jan 30, 2020 - 9:44pm


Coitus interruptus!

I thought frottage might be some kind of game involving cheese of the helmet variety?

Or is it one of those games that comes out again every year at Christmas like Buckaroo!

As for first cousins.........leave my wife out of this!

Jan 30, 2020 - 7:50pm

I read a speculative summary of this article...

On the supply side, therefore, the number of short contracts can theoretically be expanded in an almost elastic fashion without commensurate bullion delivery risk.

There's a lot of interesting information in this article, but one summary of it claimed that the gold price would be 20x higher than it currently is if all the unallocated gold and gold derivatives were removed from the market. The rationale is a 20:1 leverage of "fake gold" to real gold.

I seriously doubt it. If all the debt in the world had to be balanced with something, it could end up being as Santa says, that gold would have to provide the balance and would therefore have to be repriced considerably higher. But until then...

It would reasonable to insist, on the COMEX for example, that the number of contracts be limited by the amount of registered gold. So if a bullion bank wants to take the short side of a trade, it has to put up registered gold. This would limit supply in a big way.

But what would happen on the demand (long) side? Anyone wanting to speculate on the gold price would often have to buy a contract from someone else who was speculating on the gold price. After all, the number of contracts is now severely restricted, and how many longs plan to stand for delivery anyway? So what would happen is that the gold price might be driven up at first, but as first notice day approached, all the longs who never intended to take delivery would be forced to sell. Any seasoned trader would anticipate this outcome in advance and would therefore be reluctant to drive the gold price up too far, even in the early days of the contract.

So the question is, what would be the net effect? For every short who has nothing to deliver, what is the ratio of longs who never planned to take delivery? That's the question, and I call horseshit on any claim that the result would be a 20x increase in the gold price.

Jan 30, 2020 - 7:29pm

Allenb ---Frottage doesn't exactly involve cheese but

it's one of the favorite Japanese contact sports on their subway system. Do not request a peek at videos.

First cousin to onanism ----if your first cousin is into that sort of thing

Jan 30, 2020 - 5:35pm


Is that like fromage?

A very cheesy smell to it?

So Mr Dimon is not on your Christmas card list either?

Jan 30, 2020 - 5:33pm

Yes, apparently they're going bankrupt

Production when adding in Detour is going to ZERO and the $800MM they have in cash will be spent on hookers and vodka and not the installation of a dividend.

Jan 30, 2020 - 5:06pm

Kirkland Lake

Noticed that, too. Been going on for a week or two. Gaps at open and steadily sells off the rest of the day. Looks like someone is dumping a few hundred thousand shares a day, legging out of part or all of their position a little at a time. Could be a hedge fund, mutual fund, or it could be Sprott himself. I know he said he wants to invest in 10-baggers and KL did not qualify, in his opinion, anymore. No one will know for sure until we get a look at his most recent holdings and see if he has a sizable decrease in his KL holdings.

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Jan 30, 2020 - 4:57pm

Thanks Paul M

Thanks for a deep dive into the intentionally obscure gold history and the identifying of the 2012 to 2015 time period as the false bear market but as your chart of the HUI shows the downtrend from over 500 to 100 was where I got nailed along with that night in 2011 when silver streaked up to the highs then was smashed and so was my trading account.

This article is a rehash of what many of us have endured and the past few days indicate the evil bastards are still playing their tricks along with some of the newer ones they use like pairing gold to the Yen of the miners to silver when it fits their narrative.

The other point I got from it is the past 10 years or so being much like the 1971 to 1977 for gold as we wait for the real action as it was to the 1980 blow off top. The problem is the algos and HFT trading tricks they use now has bought them more time this time around as they pump up the illegitimate stock market they use the same tools to hold off the PM metals and mining sectors. 2015 should have been a new recession except that the ECB came up with a significant rule change of QE to infinity. The BOJ was already going strong and now the Fed has joined the QE parade once again along with the REPO madness as it takes full effort of this 3 legged stool to prop the whole mess up. For how long is the question. tick tock tick tock

Jan 30, 2020 - 4:44pm


KL took it in the keester today. Some days you just need to have an extra drink and hope tomorrow is better.

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