TFMR Podcast #14 - Ned Naylor-Leyland Discusses PAGE, Silver and True Price Discovery

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“You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete.”

― Richard Buckminster Fuller

Please stop what you're doing and listen to this extremely important interview with Ned Naylor-Leyland of Cheviot Asset Management in London.

Many have wondered what happened to the Pan Asia Gold Exchange. We were all excited last summer when we first heard about it but, then, things went eerily quiet. Today, Ned Naylor-Leyland and Andrew Maguire are finally able to go public with an update on PAGE and, more importantly, information on a brand new exchange that will soon begin trading a spot, physical silver contract.

Please do three things for me:

  1. Listen to this entire podcast.
  2. Read the research note below that Ned published today for Cheviot clients.
  3. Listen to Andy Maguire's interview with Eric King. It can be found here:

Today is an historic day in the effort to dislodge the imperial forces that dominate the leveraged, paper markets of gold and silver. We must to grateful to Ned, Andy and all those involved in making this new silver exchange a reality. Ned promises to keep us posted with more details as the launch of the exchange draws near. For now, be comfortable in knowing that we have powerful allies who are intent upon making obsolete the existing model and will soon put forth a new structure, one that finally allows for true price discovery in the precious metals.


P.A.G.E. Squashed: And now for something completely different...


Ned Naylor-Leyland, Cheviot Asset Management

Last year at the GATA Goldrush 2011 conference I presented about the Pan Asia Gold Exchange (PAGE) and the likelihood of the ‘Spot Dog’ shaking off its ‘futures handlers’. This was to happen thanks to this new    game-changing    Chinese Exchange driving a return to a more acceptable form of price discovery. Much water has passed under the bridge since the ‘soft’ opening of PAGE in the early summer of last year, and everyone is well overdue an update. Meanwhile,thanks in no small measure to the debacle at MFGlobal, the spot dog has indeed thrown off its handlers (hence the emergence of backwardation in Silver) – but, as can be inferred from the title above, PAGE has also been squashed, Monty Python-style.

Fortunately, however, this is far from the full story, as the players behind the 1:1 allocated market concept are determined to make it run come hell and/or high water. The market is begging for this return to real price discovery and in spite of the interference so far, the change IS coming. It is disappointing to have to report that PAGE has not rolled out the way we anticipated, however everything that I presented at the GATA Goldrush conference was accurate at the time. The fact that a major Chinese regional development program was stalled appears, at least in part, to have been due to the publicity generated by Andrew Maguire and I. Too much is very evidently at stake in the world of Ponzi Bullion banking for the status quo not to fight its corner. Soon after the noise was made about PAGE and its forthcoming 1:1 allocated Gold contract, the shenanigans started. Just after the publicized ‘soft launch’ (with Central government mandarins in attendance) and the noise made on the internet about its implications, the one shareholder in PAGE that had a foreign listing (in the US) suddenly and stealthily increased its share-holding from 10% to 25%, acquiring additional board directors along the way. The rationale for this sudden change in the weighting of shareholders is shrouded in mystery, however what we do know is that this entity then insisted that they be allowed to build the trading platforms for PAGE from the ground up, rather than buying a working platform off the shelf to get PAGE operational in a timely manner.

This blocking tactic at board level effectively stopped the progress of the fully-allocated spot contract in its tracks, and it was immediately clear to the international-facing people that something fundamental had changed internally.    Interestingly, the key Independent Director of this small listed entity that blocked the timely roll-out of PAGE is a well-known Western banker within China, whose CV includes work for the Federal Trade Commission, the Sloan Foundation (related to MIT) and his wife is a member of the Council on Foreign Relations. Whether this intervention respect of the platform was nefarious or not, it was understandable that the people behind the international-facing fully-allocated contract decided to step aside from PAGE and set up their own dedicated exchange. More on that in a moment. Following on from this removal of the 1:1 international contract, the domestic and leveraged PAGE Gold contract (via the Agricultural Bank) also subsequently went the way of the dodo, thanks to the well- publicized People’s Bank of China (PBoC) announcement about control over domestic Gold trading outside of Shanghai. It appears that the shiny Gold building constructed in Kunming City for PAGE will sadly remain (as elsewhere in China) a ‘see- through’, at least until the new Communist Party Politburo are voted in and the new political culture is embedded later this year when who knows, the rules on Gold trading again may be relaxed. Ostensibly these new PBoC rules about Gold trading were brought in to ‘protect the public’, but it is interesting to me that such a U-turn in policy appears to have been driven by pressure exerted somewhere within the People’s Bank, rather than it being typically characteristic of the long-term planning of the Chinese.

As disappointing as this all appears, there is a very substantial Silver lining to what has happened, both respect of the international allocated contracts and the indeed the domestic leveraged ones. By freeing themselves of the other shareholders within PAGE, the international-facing contracts are now being developed independently and under a new name. After the shenanigans of last year Andrew and I will not be giving the name of this new exchange until it is properly ‘live’ in a few months time, as it seems obvious that too much is at stake within the existing Bullion Banking system for this to be allowed to launch without some attempt at interference.

The aforementioned change in domestic Chinese rules mean that along with every other regional Precious Metals exchange, the new unnamed 1:1 allocated exchange is launching with Silver initially, which of course is the Achilles Heel of the Bullion banking system. This in my opinion is far more bullish and exciting short and medium-term than the Gold contract would have been, as the physical Silver market is so tight.    Furthermore, all the regional exchanges mothballed by the PBoC rule change can switch, and are switching to Silver trading which is not covered by the change in rules. The contract itself will be, as before, an international rolling 90 day spot one, denominated in RMB, and the new entity is supported by the same serious players within the Chinese political and military establishment as before. The physical will be acquired ahead of closing each monthly tranche and will be vaulted entirely outside of the Bullion Banks (i.e. private vaulting facilities). From there the allocated receipts will be recorded on an electronic register and the issue will be tradeable in the secondary market with the register adjusted real-time. This is extremely good news for holders of real Silver and extremely bad news for holders of fake paper Silver who rely on the 350:1 leverage being maintained as the world’s sole price discovery mechanism for large purchases of the white metal. This effectively will be like dealing in an RMB-denominated and fully allocated version of some of the popular Silver Bullion Trusts, but rather than trading at a premium, the premium will price the issue ahead of purchase, affecting global price discovery, as previously mooted.

The guts of this new exchange that is rising Phoenix-like from the ashes of PAGE, are agreed and under construction. The international conduit for the new exchange has also been established and is ready to receive business once the legal framework (well down the road) is given final sign off by their Chinese legal team. Unlike PAGE, which was primarily established by domestic Chinese interests, the new entity is much more streamlined, better funded and the problems encountered last year by PAGE have helped to clarify the route going forwards.  All in all, the squashing of the Pan Asia Gold Exchange has in truth only served to accelerate the move to real price discovery, and the control over domestic Gold trading is in my opinion yet another reason to be bullish about the prospects for the Silver price. Once the new exchange is ‘live’ in the summer we will be back with the all- important details about where and how to gain access for those interested in buying physical in size rather than paper illusions. Many serious physical Silver buyers, who are desperate to leave the farce of the Loco London system are ready to jump ship once the final sign off takes place.

Ned Naylor-Leyland
February 2012


luv2stak's picture

Tomorrow, Tomorrow, I Love You, Tomorrow... You're Always

A Day (Week, Month, Quarter) Away!

NW VIEW's picture

NEW Zealand???

If your friends son is smart, he will apply for housing, food stamps, free medical, dental, and even get a free student loan.  He might even obtain a SS check.   I am not sure about New Zealands socialism but I do understand ours.  jmo

sixdollarsilver's picture

Fr. Bill

Care to elaborate on your NZ views?

[edit - THANKS TURD!]

vonburpenstein's picture


It's one year down the road...this new 'exchange' is up and running...price discovery has truly occurred....silver spot is $111...I can see it now and wonder..How many of us are going to STILL BTFD when the dip is to $105? I

Fred Hayek's picture

Luv2stak. Why does the motivation have to be benovolence?

The motivations of the people behind the proposed new exchange could be any of a million things in any number of  different combinations.  Who said that they're saints?  No one did.  They could be people disgusted at the cartel and simply want to see those people go down.  They could be people furious at the west's pretensions of regard for the rule of law and fair play and want to show how phony that is by busting the western powers that be at one of their weak points.  They could be people who want to take away one of the means by which western economic power's still somewhat dominant position is maintained.  They could be people who were cheated by JP Morgan and want to put a knife in its gut.  They could be people who own a lot of silver including mines and want its true value to be reflected in the market.  They could be people who have any of hundreds of other possible real motivations based on anger, desire for vengeance, national or cultural solidarity, all real emotions none of which are particularly benevolent.  If it gets us honest price discovery and puts it to the scum manipulating the silver market, then who cares?  We can't make perfect motivations a requirement for bringing us an element of economic honesty.  

¤'s picture


Nicely said Fred

JohnH's picture

If I was the cartel,

I would wait for things to get really bad, then I would trash the price of gold and silver to as close to zero as possible, then buy up all the physical.

Is this a possible or probable scenario?

Fr. Bill's picture

Views of NZ

sixdollarsilver wrote:
Care to elaborate on your NZ views?

Not really.  It's way, way off the topics of Main Street.  Plus, my opinions are formed from friendship with a New Zealander (the one whose son has immigrated to the US) who has bemoaned the leftist, collectivist mentality of NZ politics while he has reared his family.  It's all credible to me; not credible to others, as it's just too second-hand.

I will offer this: my friend thinks Americans are so gullible about NZ, forming their ideas from pretty travelogue photos, National Geographic romanticism about Maori culture, and Peter Jackson's Hobbit sets. 

Anyway, Google => "New Zealand" socialism, and you'll find plenty to ponder, particularly the sites of socialist, Marxist political parties who find NZ just peachy keen.

ata's picture

New Zealand - - -

We are no more socialist than the U.S. The difference is you have socialism for the rich and we have it for the poor.                                                                                     N.Z. is the least corrupt country in the world. Our quality of life is excellent. People here are relatively friendly and trustworthy. But probably most importantly, when t.s.h.t.f. this will likely be the best place to ride it out.

¤'s picture

FWIW, my $.02 on New Zealand

New Zealand is awesome! yes

Before the thread gets steered into the merits on New Zealand and we get away from the fine message above, how about going to the SpeakEasy and discussing New Zealand over a virtual beer over there?

I know one of the bartenders and the drinks are on him cool

TrickyD's picture

Stackers - The Cartel is our Friend

Loading up $4500.00 Gold and  $400.00 silver for $ $1650.00 and $34.00 - CHEAP.  Load up while you can as the Public and bankrupt State local governments will soon wake-up and it WILL BE TOO LATE.

Utah , Colorado, 13 other states, Ron Paul's Gold/Silver currency bill, Brazil upset at Bernanke's printing press set to retaliate  , Euro and Dollar imploding, China Russia currency wars, Euro Defaults - U.S. and ECB QE's every 6 months, DOW 13000 ponzi, baltant Wall street Fraud - GET MOVING and hope the Crimex doesn't go down too soon.

Loooooooooooooong  and enjoying every minute

¤'s picture


Welcome aboard!

Irene's picture

@Fred Hayek

I think luv2stack was being ironic about that benevolent part.  ;)

LifeIsPain's picture

What Really Happened This Week in Gold and Silver This Week

What Really Happened This Week in Gold and Silver

In Open Thread on Friday, March 2, 2012 at 5:50 am

Hard to believe, but CNBC and the World’s chartologists missed a very important point:  In the last three days JP Morgan’s house account has taken possession of 3 times more physical silver than it did in all of 2011 (626 contracts, or 3.1 million t oz.)  bringing their 2012 total to 1,058.  The last time the Morgue took delivery of this much silver was September, 2010 at around $20.55 (it’s almost like they knew QE2 was coming – more on that later).

On Tuesday,  when silver shot up more than 4%, the CMEgroup initially issued blank trading reports, as in “!!!! NO DATA !!!!”, but eventually  published this:

492 of the 513 contracts delivered (96%) came from the Bank of Nova Scotia (425!) and the US Government   JPM customers.  So it wasn’t exactly so “widespread buying!” was it?

Now let’s jump over and see what happened in gold:

Of the 335 gold contracts delivered, JPM (customer & house combined) supplied 334.  There was only one  gold delivery that didn’t come from JPM, and that one contract went to, wait for it, JPM.  So JPM was involved in 100% of the physical gold transactions on February 28, 2012.  To recap, JPM delivered a bunch of gold and took a bunch of silver, BoNS delivered silver and took gold.  That’s really all that happened, unless you believe paper-metal traders throwing confetti around  impacts things (spoiler alert: nope). 

So it all boils down to this multiple choice question:

A) JPM suddenly hates gold

B) BoNS suddenly needs/wants more gold

C) BoNS suddenly hates silver

D) JPM’s house account suddenly needs/wants more silver

Figuring out the correct answer is your job, but I will tell you that in the wake of the “Gold & Silver Crash!!!” hyped on TV,  BoNS has nibbled at silver (6 contracts),  and JPM customer(s) have taken back 47 gold contracts.  Maybe the Bank of Nova Scotia is looking to buy oil from Iran, or maybe despite everything you’ve been told, QE3 is very much on the table.  Either way, I highly recommend looking beyond the chart.

You can follow the action whenever the tools at the CMEgroup (who definitely picked the wrong week to stop sniffing glue)  feel like updating their data:

The data delays, combined with missing and incomplete reports by the CMEgroup has gone from annoying (like all the Jamie Dimon knob-polishing  going on at CNBC…JPMs a “fortress”?  And how would Maria B know?) to downright disgraceful (which is what Jamie’s appointment to Treasury Secretary will be….just wait).
Silver Monkey's picture

Still doesn't add up to me

Can someone please explain why these "investors with deep pockets" wouldn't simply buy a bunch of contracts through the Comex and stand for delivery?  Seems like a much easier strategy then trying to get through the red tape of setting up a whole new shop in China.

What am I missing?

Kerbouchard's picture


Greetings to All:

I've been lurking for many months, and hesitant to commit myself to posting because of the obligation to follow through.  In other words, I have time constraints.  That said, I feel very close to you all because of the general understanding we all share.

I've been stacking for over thirty years -- at least mentally.  My physical stash is very modest.  But to this day, I cannot for the life of me understand why it's beyond most people to comprehend what money is.  I spent ten years of my youth living in countries all over the world.  Since I was constantly crossing borders and exchanging money, I became very aware of the perils of fiat.  My first experience, ironically, was in the country of my birth.  It was 1968 and I wanted to go to America.  A British law had just passed that forbade citizens from taking more than fifty pounds out of the country.  Even at the tender age of 17, I knew this was wrong.  Then a few years later in Australia, I wanted to leave for Asia and went to the bank to withdraw my money and was told that I had to wait for several days.  Again, it just struck me as plain wrong.  There are many other instances I can recall along the same lines, but I don't want to preach to the choir.

Anyway, onto the purpose of my post.

Just thinking aloud here, but I wonder at the proposed trading between Iran and India, vis-a-vis, oil for gold.  I can well understand Iran's desire for gold, but India parting with its intrinsic wealth for a commodity that ultimately gets burned up makes me wonder.

Any thoughts on this?
FleetFeet's picture

GoldMoney vs. BullionVault

Recently, a poster on one of the TFRM threads, who is a customer of both companies, offered to detail a comparison of the two. If that happened, I missed it.  

Will the poster please go ahead and write that comparison?  Or if it has already posted, will someone give us a new link to it?  


TrickyD's picture

The World is still Asleep - especially up here in Canada

No one on the street has a clue. All they see are the occasional riot in Greece sprinkled with the odd occupy protest on CNN. Unless you are watching RT on cable ( Kaiser Reports, Capitol Accounts, Alyona or Hartman, and reading Zero Hedge plus all the overseas press reports, you are totally out of the loop. Literally all of the assets in the U.S. and Canadian banks have been rehypothecated on Euro debt.

- I just witnessed the on air anchor of our BNN business network up here in Canada touting "I know the DOW is at 13000, but WHERE IS THE VOLUME. Is anyone one actually bringing any money to the markets ( BUBBLE - Ha! Ha! computers trading). Another analyst proudly touted we up here in Canada are in a good position. Canadian Debt to GDP is only 35%.." LADY, our Debt to GDP is 81% - YIKES!!." as the AUSTERITY layoffs,  tax hikes and QE  are about to begin. All of our Canadian Banks ( CIBC, Royal Bank, etc..) are rehypothecated up the butt via their U.K. affiliates on skunky European  bonds. The next 24 months should be interesting.

Will Israeli cash save the U.S. equities market? I guess maybe if the FED is slipping them the paper under the table??

Looooooooooooong and enjoying the ride.

Katie Rose's picture



It's one year down the road...this new 'exchange' is up and running...price discovery has truly occurred....silver spot is $111...I can see it now and wonder..How many of us are going to STILL BTFD when the dip is to $105?


Bottom line, at $111 it will be out of my price range. That's why I am buying $2.00 rolls of nickels every month from my bank.

Nickels, the poor woman's silver!!!!!!!!! wink smiley wink

treefrog's picture

voltage drop

chevvy volt production suspended for lack of customers  .....weighs a ton and a half, gets 27 mpg (premium gas), sluggish performance (handles like a concrete block), cramped seating for four max, catches fire when you least expect it, costs over $100,000 per unit counting subsidies  ......what's not to like? they sold 603 units in january. 1300 layoffs today. way to go, greenies!

¤'s picture


First of all, welcome aboard!

Secondly, maybe India is giving Iran some tungsten gold or paper gold? blush  

The basis for settlement might not be  that cut and dry as India just flying gold over to Iran for every big oil transaction. I wonder if it's more of a paper settlement somehow.  Credit in lieu of a gold delivery that never happens? A rolling account between them both used for other things as a basis for settlement and it (gold) moves back and forth electronically as long as it's stored somewhere and acts as credit or a line of credit with a tradeable value between the two.

Maybe the gold never leaves India.

Random thoughts for now.

TrickyD's picture

Iceland wants to adopt the "Canadian Dollar"

Either the mighty USD is on the slide or they like  all the colors of our "fiat".

Another nail in the coffin for the mighty USD.

Sounds a bit "Loonie" wouldn't you say

Kerbouchard's picture


Thanks, DPH.  (Your handle evokes memories of good times past.)  ;-)

Your comments make eminent sense.  In fact, the more I think of it, the more it makes sense to have a storage account that can be drawn against to settle trades between the two countries.  Hopefully, PAGE II will also shake things up.


dmanson's picture

New Exchange

Pardon me but I think a few of you may be missing the significance of this event, should it happen.  Yes, it is okay to be skeptical or afraid that this new venture will be crushed like PAGE.  However, I'm pretty sure that any players have learned from any mistakes and are prepared to get it right.  Here is what I see in all of this and Turd or anybody can correct me if I'm wrong. 

1.  Extremely wealthy people aren't going to put their money into something if they fear that the Chinese government will simply turn on them and say "sorry, we are keeping all of your money".  This is big time stuff, not a dude in China selling fake silver on Ebay.  Reputation and credibility are very important.  Plus China would LOVE for Shanghai to be the next financial capital of the world so they would not want to jeopardize this by screwing over wealthy foreigners.  So, that part does not worry me.

2.  Wealthy people, hedge funds and other "big money" would like to invest in silver/gold but don't want to buy COMEX contracts because they don't trust that the silver is there, and know that bastards like JPM swing the price up and down at will like a yo-yo.  A hedge fund manager wants his clients happy and that means good returns and safe investments that make money.  A 1:1 fully allocated silver exchange as is being discussed here is just the ticket.  It allows these people to have as much exposure to silver as they want AND know that it really is there and can be delivered if desired.  For a stacker, they keep it in a safe or bury it in a yard or whatever they choose to do.  WTF is a hedge fund manager going to do with 1,000,000 ounces of silver except have it stored in a way such as this?  This is a very desirable option for big money.  Plus, it is denominated in RMB which limits exposure to the coming inflation of the US Dollar and Euro and keeps the Fed from manipulating or destroying its value somehow through the printing press. 

3.  The biggest point about this is not about you or I or other random people being involved in this exchange.  I would imagine 90% of "Turdland" could not afford to buy on this exchange, or would not.  I'd assume that a 5000 oz bar was the minimum order (would make sense because that is customary Good Delivery Bars on COMEX), so someone would need something like $175,000 at today's prices to trade on this exchange.   Too rich for my blood unfortunately.  However, let's say a ton of people currently trading on the COMEX or people unwilling to trade on it because they don't trust it, suddenly decide that this is a safe investment.  Well, money will leave the COMEX and pile in to this new, safe exchange and THIS will take the metal off the market.  Instead of shady bankers being able to create and sell SLV ETFs or whatever the hell to create more "paper silver" to artificially grow the silver supply, they will be stuck.  No big players will buy that crap when they have this option!  Why would they?  Would you rather have 1,000,000 shares of SLV (with JPM as custodian) or 1,000,000 ounces of physical metal??  Exactly.  Once there is another option than the paper shenanigans, THEN we will be able to determine what the REAL PRICE of silver is.  This is why Turd and these guys are so excited. 

So, for you and I, just keep stacking.  The metal we have will only increase in value by this.  Even if it takes a while to catch on, even if only 20% of the people leave the COMEX and go to this new exchange, we are talking about ridiculous amounts of money going to buy physical and take it off the market.  There is no reason to not be completely ecstatic about it. 

Again, I understand, let's wait and see it really happen before we get all excited.  But the idea is brilliant and if it does happen, you stackers are going to benefit handsomely. 

Didn't mean to go on too long and don't post too often, but this one got me pretty pumped and I want to be sure my fellow Turdites understand the magnitude of this.  (Again, Turd or others feel free to correct me if I'm wrong on any of this, but this is how I see it.  I haven't been doing this 30 years but I'm not a newbie either). 

Kerbouchard's picture

Re: New Exchange

Flawless logic, DM.  Perhaps this time it really works.

Edward G's picture

And Now 4 Something Completely Different

Got me humming the Python theme tune!!  And I liked Ned's phoenix image for this new endeavour. 

We may not be 'optimistic', it's better than that: we are resolute, and a little peed off... I'm gonna 'STTFP', stick to the plan... in a strange way this is all fun.

Turd has got his broadcasting chops right down. 10/10 a totally awesome interview! 

Fr Bill mentions 'a grander' version of Bullionvault, which did come to mind... apart from the massive diff in scale, the main diff is that contracts in the "?" will be universally tradable investment instruments, of hedgefund grade, not the little internal market of BV members. It strikes me as odd-ish that Mr Rothschild is a large shareholder in BV, and that they are an LBMA member (by necessity).....these facts still leave me undeturrrd in using them.

cris's picture

Silver monkey said: Can

Silver monkey said:

Can someone please explain why these "investors with deep pockets" wouldn't simply buy a bunch of contracts through the Comex and stand for delivery?  Seems like a much easier strategy then trying to get through the red tape of setting up a whole new shop in China.

What am I missing?


I think you are missing the profound effect the MFGlobal fiasco had on undermining confidence in the market structure.

Very simply, people yearn for a transparent and fair market. How ironic that it may be lemets associated with the Chimese Communists that deliver this.

I also wonder what effect such a system would have on vehicles such as PSLV. I think PSLV stands to become quite vauable, as it is essentially a " brother from a different mother" to this proposed exchange.

TheGoodDoctor's picture

The question is, why have we

The question is, why have we not heard of the squashing of PAGE until now? That is why I am skeptical at this point.

Silver Monkey's picture

@cris - Re people not trusting the Comex

If someone took a big position in the Comex and the Comex failed to deliver, that buyer would have accomplished their goal as price discovery would soon follow.  To our knowledge, we have not yet seen a instance yet of someone standing for delivery and not getting filled.

ivars's picture

@Dr G-USDx

Thanks.  I myself have huge doubts about that USDx 120 number in 2012. That would mean 50% devaluation of currencies in the basket vs. USDx, which is not supported even by my other charts. Could be 90, 100. When I draw the chart back in October, I did not restrain myself with vertical scale so to not interfere with the trends showing on the chart.  But, the idea that it will move constantly up, holds. I may return to the chart later when the speed of USDx growth in 2012 becomes more clear.

As to EUR going down - reason can be some event (inflation data?, recession Q1, decoupling of the USA, further downgrading by agencies) , something even outside EUROzone -e.g Japan , or just slow realization coming to a critical point that EUROzone problems are not being solved (delayed) effectively enough by adding paper and trying to implement austerity. Or Greece defaulting alone could be enough. Or...

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