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


R man J's picture


you are right, our Western democracies are far more trustworthy.   Chicoms or Goldman/JPM. Pick your poison.

Nick Elway's picture

Canadian Nickel 94.5 per cent steel

From Wikipedia...I'll be sticking with US Nickels..

History of composition[3]

Years Mass Diameter/Shape Composition
2000–present 3.95 g 21.2 mm, round 94.5% steel, 3.5% copper, 2% nickel plating
1982–1999 (some production until 2006) 4.6 g 21.2 mm, round 75% copper, 25% nickel
1963–1981 4.54 g 21.21 mm, round 99.9% nickel
1955–1962 4.54 g 21.21 mm, 12-sided 99.9% nickel
1951–1954 4.54 g 21.21 mm, 12-sided chrome-plated steel
1946–1951 4.54 g 21.21 mm, 12-sided 99.9% nickel
1944–1945 4.54 g 21.21 mm, 12-sided chrome-plated steel
1942–1943 4.54 g 21.21 mm, 12-sided 88% copper, 12% zinc ("tombac")
1922–1942 4.54 g 21.21 mm, round 99.9% nickel
1920–1921 1.167 g 14.494 mm, round 80% silver, 20% copper
1858–1919 1.167 g 14.494 mm, round 92.5% silver, 7.5% copper
Patrancus's picture

This is a response to...

This is a response to Victor, my thoughts on Eric Sprott, I get the impressions he first works his game to advantage his own pockets, and then to his shareholders, which is why every time their is an attack,  I always come back and stack.

¤'s picture

Chinese Turdite

That's what SilverBug is. Think about it.

He's banging on the Cartel and the West or U.S.  

Isn't that what we do?  Yep.

cpnscarlet's picture

Great Minds Think Alike

Nice to know that Rantin' Andy agrees with me about the action on 2/24. It was a failed attempt (I still think it may have been an algo test) to smash Ag. So, that was TRIPLED in severity this week. And you see the result.

Thank you, no applause, just throw silver dimes. (/sarc off/)

victorthecleaner's picture



I hope you gentlemen don't forget gold over all the silver enthusiasm. I just posted this reply in an old thread:



Be Prepared's picture

Bank of Italy issues Notice to member Banks...

Bank of Italy puts member Banks on Notice regarding Dividends and Bonus Pools

Very interesting news from Italy today, March 3, 2012......

I, like all of you, try to keep abreast of the latest news and the Bank of Italy issued a Notice today to it's member banks with the following (keep in mind the translation is Google):

The Bank of Italy Governor, Ignazio Visco, stated that "In the current economic climate is important to maintain and support the economy and strengthen the needed capital and that member banks are to use all available mechanisms to ensure this policy.  Further, it is of particular importance with regards to the decisions takens by banks and banking groups in the distribution of profits and payment of variable compensation ("Bonus Pools")."  

The Governor stated further "The Bank of Italy calls on all banks to establish policies for the distribution of profits to maintain adequate capitalization, present and future, consistent with overall risk.  Any distribution of profits should therefore be compatible with maintaining a level of capitalization to assure coverage of regulatory capital requirements.  The same factors controlling dividend policies also require banks and banking groups that it equally applies on the provision of bonuses and the development of new remuneration plans.  In particular, the existing provisions of regulations provide that the total amount of variable compensation should be sustainable and should not limit its ability to maintain or achieve an adequate level of capitalization.  Specifically, this requirement should lead to a contraction of the bonus pool and/or an application of a clawback.  It is therefore considered that a correct application of these provisions will also reduce any variable compensation for the benefit of the capital profile.  Compliance with these policies with be evaluated under the most extensive process of evaluation and supervisory review conducted by the Bank of Italy."

The Bank of Italy has just put the screws to all banks in Italy and put them on notice that the CB of Italy is coming for them. Several questions come to mind:
(1)  Why has the Bank of Italy just now come out with such a notice?

Well, they most likely didn't just come out with these regulations and/or policies, but it seems that many of the banks in Italy are still living like the world is their oyster and doling out money to their boards and officers ("cronies") without regard to the health of the bank.  It seems clear that the Bank of Italy has had to make it clear that they mean business and that they will be the ones performing compliance checks.  I'm guessing the days of independent auditors for these banks are gone because it seems obvious that system wasn't working.

(2)  Why the sudden additional stress of maintaining adequate capitalization?

They've been under the gun for quite some time now and the LTRO is supposedly saving their bacon.  This type of letter starts to beg a larger question of whether there is a continuing systemic capitalization problem.  We all would have guessed such an issue, but to get a letter from their equivalent "Bernank" to all banks within the country about dividends and bonus pools in effect restating that they are to be reducing and/or eliminating such practices.  Further, it states that they should look at clawback for bonuses already issued puts a real urgency to this issue.  Are there just a few problem banks? or have all the banks been giving away this LTRO money with outrageous bonuses?  It seems caution may have been thrown to the wind.

Whenever I see news like this...... the first question I ask is "Why now" and then right after "What's being said without saying it?".....the Bank of Italy is telling its banks to stop giving bonuses and to clawback any that you've issued and we're coming to make sure that you do.....

I find it interesting that Monti, in early December 2011, installed capital controls in Italy by limiting the maximum amount of cash purchases to 1,000 Euros with designs to eventually lower that figure to 300 Euros.  Sure... they said it was because of tax evasion, but to require then that all purchases must be by credit or debit card has a real sinister digital money ring to it.....  Well, if Monti can't control the corruption in the Banks, which is what the letter is worried about..... then why would an Italian citizen want to be forced to do business with a banking entity that can't seem to follow the regulations laid out by the Bank of Italy.

Here a link to the Original Article in Italian.....  Remember you heard it here first on TFMR!

TheGoodDoctor's picture

Sprott redux

Sprott redux @victorthecleaner

And my rebuttal.

Chris P. Bacon's picture

@ GoodDoc re GDP

From Chris Martensen, and the way I always understood it.

Now let’s tie in inflation to the GDP story. The GDP you read about is always inflation-adjusted and reported after inflation is subtracted out. This is called the real GDP, while the pre-inflation adjusted number is called nominal GDP. This is an important thing to do, because GDP is supposed to measure real output, not the impact of inflation

Source Article


Chris P. Bacon's picture

Greek default looms as voluntary debt deal looks set to fail

Pardon if already posted.

Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.

Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets


Tabberto's picture

Sprott is a standard-bearer, he

has rebutted this particular argument more than once about the premium, I won't bother going over it here, look it up.  Bear in mind that he didnt choose to push the premium on his product to outrageous levels, its a reflection of his integrity and the crappy existing system that it gets there in the first place.  The guy is an absolute stand-up Silver warrior, make no mistake, how many other bona-fide billionaires do we have on our side actually putting their own money and their own reputations on the line against the EE?  Eric is beyond reproach imo and I think that it is a lot easier to lob narky comments at the likes of him than it is to be in his position out there on the front line of the war against mass fraud, manipulation and  a Sabbatean multi-generational cabal of reprobates and pyschopaths.  Stop the nonsense and support the Silver General.

ivars's picture

Where can I get up to date

Where can I get up to date GSR chart? Could anyone please give me a link?

Preferably on  1 to 5 year scale?


TheGoodDoctor's picture

@Rot Thanks man. I've been

@Rot Thanks man. I've been thinking about that on and off for awhile now.

So, essentially what I am getting at here is this: If the inflation numbers are fudged so are the GDP numbers by default because they take into consideration the fudged inflation numbers. So, then we are really in a situation where we are not growing and in fact are contracting (using John Williams rate of inflation). In other words inflation does not equal GDP growth. Which is what I figured was going on.

Is there anyone else that writes about this? I suppose this would throw a big monkey wrench into the whole recovery thing if they did. I'll have to look at John Williams site in case I missed anything on the freebie side of things.

TheGoodDoctor's picture

@ivars Will this

@ivars Will this suffice? Nice long term graph for you here too.

This one is better. Hope that helps.

ivars's picture


Second one is exactly what I was looking for.

Tabberto's picture

GoodDoc is worth a look for inflation adjusted prices and other matters

you may know of this already but worth a mention yes

ivars's picture

GSR could move up back to 56-57 in the next 2-3 months

Then start to drop steadily towards 25-30 within 2012.

Prediction based on this chart, which is true in form since November , off in time - predicting current drop 2 months early; so on time scale, 1-2 months inaccuracy is present, but once first up and then down  trends appear, it should hold similar to this chart:

Island Guy's picture

Bernanke Speech and Silver Beat-Down

Cpnscarlet's recent post, citing support from Rantin' Andy, argues that the huge dump of silver on February 24 was a legitimate attempt by the Cartel to suppress silver, but it failed because it did not trigger the automated computer selling programs.   He then argues that the February 29 attack was successful because the Cartel learned its lesson on February 24 and staged a much larger attack the second time.  An attacklarge enough to trigger the computer trading programs.

I would like to suggest another factor.  The attack happened just minutes before Ben Bernanke was to address Congress.   It is very likely that many (or all) of the computer trading programs had tightened their parameters in anticipation of the speech.  In the event that Bernanke were to say anything that would negatively affect the market in precious metals, everyone wanted to be the first to bail out.

The Cartel isn't stupid.  They knew that all of the trading programs were on hair triggers.  All they had to do was stage their attack just before Bernanke's speech to take advantage of this.  And it worked.  Spectacularly.    

Given the success of this tactic this time, I think we can expect to see it again.  It might be a good trading strategy to be short just before any future speeches by Bernanke before Congress.

Island Guy's picture

Bernanke Speech and Silver Beat-Down

Cpnscarlet's recent post, citing support from Rantin' Andy, argues that the huge dump of silver on February 24 was a legitimate attempt by the Cartel to suppress silver, but it failed because it did not trigger the automated computer selling programs.   He then argues that the February 29 attack was successful because the Cartel learned its lesson on February 24 and staged a much larger attack the second time.  An attacklarge enough to trigger the computer trading programs.

I would like to suggest another factor.  The attack happened just minutes before Ben Bernanke was to address Congress.   It is very likely that many (or all) of the computer trading programs had tightened their parameters in anticipation of the speech.  In the event that Bernanke were to say anything that would negatively affect the market in precious metals, everyone wanted to be the first to bail out.

The Cartel isn't stupid.  They knew that all of the trading programs were on hair triggers.  All they had to do was stage their attack just before Bernanke's speech to take advantage of this.  And it worked.  Spectacularly.    

Given the success of this tactic this time, I think we can expect to see it again.  It might be a good trading strategy to be short just before any future speeches by Bernanke before Congress.

WineGuy's picture

@ Island Guy ....

"It might be a good trading strategy to be short just before any future speeches by Bernanke before Congress." For what its worth, this was the first time in many months the PM's fell when Benokio spoke.  

Big L's picture

Delayed - not dead

In response to questions regarding no announcement that PAGE is dead, that's because PAGE isn't dead.

If you listen closely, what Ned said is some PAGE board members insisted on a change of software for the trading platform which required significant delays in launching, not the end of PAGE.

This change was forced on the board by some members with enough power to push it through, he didn't cite which members.

My understanding is PAGE is still officially alive, albeit delayed to an undetermined time in the future. There wouldn't be an announcement of delay because the problem members wouldn't want to fess up, and the breakaway group would want to stay undercover until their plans were far enough along to be securely planted.

The breakaway group set up another concern, apparently using the original platform, to 'end run' around the problem members from the original board.

This explains why there was no announcement of the official demise of PAGE. Not officially dead, just 'delayed'.

Good luck, we all hope so.

Big L

Be Prepared's picture

The Mideast Tyrants

Be Prepared's picture

OBummer vs. Gas Prices.... Who WIns?

Be Prepared's picture

Running on Empty

Be Prepared's picture

Many rhappy returns

Many rhappy returns

ITALY: In Italy, the taxman cometh . . . to ski resorts to see how people are spending their money, writes PADDY AGNEW

MANY YEARS AGO, while shopping in Venice one weekend, we learned an important lesson about modern living in Italy. My wife had just bought some items from a small artisan jeweler when we were stopped by the Guardia di Finanza (or finance police) as we came out of the shop. Could we see your fiscal receipts, please? We did not have them because, whilst the shop had given us a receipt, it was not a bona fide, tax declarable one. Fortunately, we had our credit card receipt and given that we were foreigners, the Finance police let us go on our way. Otherwise, we would have been liable for a fine because under legislation that remained on the statute book until 2003, anyone who could not produce a proper scontrino (fiscal receipt) or ricevuta fiscale might be fined anything from €50 to €1,000.

Our jeweller was not so fortunate since all the signs suggested that he was heading for a hefty fine. Having been in Italy long enough to understand just how many bureaucratic and fiscal hurdles are put in the path of anyone trying to do business honestly (particularly in a world heritage site like Venice), we felt very sorry for our artisan and his small business.

The incident also highlighted the strange role of the Guardia di Finanza. In theory, these guys are policemen. In practice, they are tax inspectors in military uniform, directly controlled by the finance ministry. While the Guardia di Finanza is often called on to carry out normal policing duties, its major responsibilities concern “fiscal policing”.

In other words, this corps deals with financial crime, ranging from money laundering and drug trafficking to cybercrime, credit card fraud and right down to the “non-emission” of the scontrino. In our village, when the loathed Fiamme Gialle (or “yellow flame” as the finance police are known) come to town, word soon goes out and all of sudden, shopkeepers start ringing in their proper, fiscal receipts.

For one of the realities of modern Italy is that finding ways to avoid tax is about as prevalent as preparing a plate of pasta. Not just plumbers, electricians and other manual workers but also white-collar professionals such as dentists and private doctors take it for granted that many people will prefer to pay “in nero” (in cash and thus not liable to VAT). The most respectable dentist may ask you which way you want to pay, with or without VAT, with the former tariff costing 20-25 per cent more.

So-called fiscal fraud abounds. Sometimes it suits the consumer – as in those restaurants where no bill is presented and only cash rather than receipts change hands. Sometimes, the sympathetic consumer will help a retailer such as the trusted hairdresser by paying the full whack but willingly accepting a receipt for a much smaller amount.

In a society in which public services often seem wasteful (even the health ministry estimates that the Italian health service “wastes” an annual €13 billion), many see nothing wrong in such small-time evasion – in fact, with organised crime remaining a huge problem (the Italian retailers’ confederation, Confesercenti, claims that with an annual turnover of €130 billion, Italy’s various mafias account for 6 per cent of GDP), people wonder just how much of their taxes end up in mafia pockets, via falsified public contracts.

There are, of course, the “cute hoors” such as the Venice couple who recently “forgot” to declare a €65 million sale of property. Clearly, tax evasion in Italy is not just small-time, with most economists estimating that private and corporate evasion costs Italy an annual €130 billion. The fight against tax evasion, at all levels, has become one of the major concerns of the current, so-called “government of technicians” led by former European Commissioner, Mario Monti.  <Rest of the Article>

Big L's picture

Tax evasion

in Italy is the national pastime.

Big L

opticsguy's picture

underground economy

I have an old Blazer with 120,000 miles, which I only drive to Lowe's and back and occasionally 2 miles to work.  Of course to pass "state inspection" ($40 shake-down) I have to have tires with a certain amount of tread.  One of the tires was down to the wear bars and another was close.  Needless to say it makes no sense to buy brand-new tires to put on vehicle that may not last another year.  If you want used tires you must go underground, because Discount Tire, NTW, etc., will only sell new, and the cheapest tire for this truck is $135 out the door each, mounted and balanced with tax and disposal fee.

So, off to the hispanic side of town where multiple used tire shops exist (I found them in the Yellow Pages).  The first place I found had a set of Goodrich tires with 80% of the tread left.  Cash price for all 4, mounted and barely balanced: $180, $200 if I wanted to use plastic.  And there was a bank next door with an ATM.  I'm sure this guy didn't report the sale or pay sales tax to the state, nor did any similar businesses nearby, and I'm sure the state and city know it.  But drive up the road 5 miles to the nice part of town you can't open a doughnut shop without covering one wall with framed permits and licenses.

I kept 4 tires out of the landfill, at least.

treefrog's picture

good dr.

thanx for the gsr chart link.

¤'s picture

Anyone interested in gold mining? Read this...

I'd like to throw a shout-out to our man Eric O and his "Eric O's Favorite Gold Miners"  thread for just recently hitting the 100,000 mark in views last night. cool

I hope everyone  takes the time and cruises through his thread to gleen some of the nuggets of advice that he's been willing to passionately and diligently provide for all of us on a daily basis.



Take a moment to stop by his thread if you're interested in the miners and if you want to be up-to-date with what's going on. His thread is usually updated throughout the day.

Great job and Congrats EO!


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