reposting from ZH: Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

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#1 Sat, Jun 18, 2011 - 1:35pm
econ3000
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reposting from ZH: Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

Submitted by Tyler Durden on 06/18/2011 13:23 -0400

It may not be quite Executive Order 6102 part 2, but it sure sounds like a rather large step toward it.

From: FOREX.com <info[at]forex[dot]com>
Date: Fri, Jun 17, 2011 at 6:11 PM
Subject: Important Account Notice Re: Metals Trading
To: xxx

Important Account Notice Re: Metals Trading 


We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011. 

In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET. 

We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated. 

We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team. 

Sincerely, 
The Team at FOREX.com

So far we have only received this warning from Forex.com. We are waiting to see which other dealers inform their customers that trading gold and silver over the counter will soon be illegal.

We hope to get some more clarity on just which Dodd-Frank provision will soon make trading precious metals illegal, and whether it will also be applicable to any trading of gold and silver in any form on any venue.

Edited by: econ3000 on Nov 8, 2014 - 5:07am
Sat, Jun 18, 2011 - 1:38pm
Captain Silver
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How far reaching can this become?

So it starts at the banks and clearing houses, how long until it's banned at your coin store?

Time to stack NOW!? (I know I know, of course it's always time to stack :P)

Our monetary system has been hijacked by morons! Abandon ship!!!!
Sat, Jun 18, 2011 - 1:43pm (Reply to #2)
H8Fiat
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You may be right

Unbelievable. Our fore fathers considered it true currency and now it's on it's way to becoming illegal for common man to own. Jefferson must be continually throwing up. They better ban lead and high velocity delivery systems as that is what it will come to when dollar devaluation happens and no alternative to run to for securing wealth.

Imagine when all the sheeples 401K's, IRA's, savings are cut in half overnight. The remaining half moved to treasuries for your well being.

Sat, Jun 18, 2011 - 1:51pm (Reply to #3)
NCOT
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I'm curious if this will

I'm curious if this will affect the price of metals on July 15th?

Is it not the same as one big contract expiry?

I'm not sure what the proportion of these trades is in comparison to the whole market....

Just wondering.

Any information written above is purely for entertainment purposes only. I will not be held responsible for my own comments as I'm slightly mentally unhinged. As most people quote a movie in their signature here's one: "Who's the more foolish, the fool or the fool who follows him?" . Don't be the fool that follows me!
Sat, Jun 18, 2011 - 1:52pm
JoeyJoeJoe
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Another Thread

There's another thread discussing this issue already (albeit not about ZH postings): 

https://www.tfmetalsreport.com/forum/forex-prohibiting-us-residents-otc-metal-trades/555

OTC trading probably doesn't affect most of us very much, but who knows, this might be just one step of many coming our way.

Sat, Jun 18, 2011 - 1:53pm (Reply to #3)
Captain Silver
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It's been scary quiet

H8Fiat wrote:

 They better ban lead and high velocity delivery systems as that is what it will come to when dollar devaluation happens and no alternative to run to for securing wealth.

Imagine when all the sheeples 401K's, IRA's, savings are cut in half overnight. The remaining half moved to treasuries for your well being.

It's been scary quiet on the firearm front for a while.

I would like to know what part of the legislation triggered the above announcement. It's been a while since I perused the bill, but I do recall my coin dealer recently going off about 1099 reporting requirements for transactions. Raise the transaction burden high enough and folks might opt out of the market. No matter what, I would suspect premiums and transaction costs will continue to climb.

Our monetary system has been hijacked by morons! Abandon ship!!!!
Sat, Jun 18, 2011 - 1:55pm
RuNuts
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When quoting material from

When quoting material from another site it's common courtesy to at least post the link.

https://www.zerohedge.com/article/trading-over-counter-gold-and-silver-b...

/just sayin

Sat, Jun 18, 2011 - 1:59pm (Reply to #7)
econ3000
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right. sorry about that.

right. sorry about that. good call.

Sat, Jun 18, 2011 - 2:12pm
Cucamonga
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Dodd-Frank

Sat, Jun 18, 2011 - 2:41pm
tmosley
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These are called "death

These are called "death throws".

The silver manipulation is on its last legs. I'm tempted to increase the chance of a COMEX default in the delivery month of July.

Maybe I don't understand what is meant by "OTC" transactions, but this sure sounds like futures trading is being banned to me (save for the end users and hedgers, and they are only allowed to buy or hedge 28 days out).

Perhaps COMEX silver will in fact hit zero dollars on July 15th, with inventories hitting zero 28 days afterwards. If that silver was real, and there isn't a gigantic amount of demand, then we will see a flood of the silver market with COMEX deliverable bars. Best buy those, because they are likely to be the last silver products you see on the market for a while.

As I said on ZH, "This makes me hard".

Sat, Jun 18, 2011 - 2:48pm (Reply to #10)
Captain Silver
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Stack NOW

If you were an industrial user with half a brain for forward planning, wouldn't you be buying HARD right now?!

I think I'll drive over to the coin store.

Our monetary system has been hijacked by morons! Abandon ship!!!!
Sat, Jun 18, 2011 - 3:39pm (Reply to #11)
tmosley
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The "physical delivery in 28

The "physical delivery in 28 days" thing is enough to placate them.

The industrial panic is coming, but not yet.

Sat, Jun 18, 2011 - 3:44pm (Reply to #12)
Captain Silver
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Promises Promises

I'm interested in what the reaction will be to the precedent set by this announcement. Private industry is pretty efficient at responding to future threats, especially when margins are already tightening. 

Our monetary system has been hijacked by morons! Abandon ship!!!!
Sat, Jun 18, 2011 - 3:52pm
H8Fiat
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Some thoughts other than rant

I'm not sure I understand all of this correctly, however with another investment vehicle being taken out for PM's will people.

* move to more physical

* move to miners to keep exposure

* move to etf's and etn's (might allow paper games to continue)

* allow the game to continue only for those large players to continue ponzi

Also, will the people selling now be required to "physically deliver" metal in 28 days and no settlement in paper derivatives?

Sat, Jun 18, 2011 - 3:57pm (Reply to #14)
Captain Silver
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???

H8Fiat wrote:

I'm not sure I understand all of this correctly, however with another investment vehicle being taken out for PM's will people.

* move to more physical

* move to miners to keep exposure

* move to etf's and etn's (might allow paper games to continue)

* allow the game to continue only for those large players to continue ponzi

Also, will the people selling now be required to "physically deliver" metal in 28 days and no settlement in paper derivatives?

This announcement probably won't result in much, but if this is just a start and TPTB further restrict paper PM trading I imagine we'll see a substantial split in the phys/paper market (premiums through the roof) and much less efficient price discovery. I would say this is ++bullish phys. Very few paper traders can afford to take delivery, they'll be forced into other investing vehicles, some will land in phys.

Our monetary system has been hijacked by morons! Abandon ship!!!!
Sat, Jun 18, 2011 - 7:08pm
Argent
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When a Government forces its

When a Government forces its people to use a fiat currency that the people have little confidence in and just as importantly foreign people have little confidence in it ultimately seals that Governments and maybe countries fate.You then create a black market and VERY importantly real wealth leaves your country very fast.This is a desperate measure from a desperate regime whose only answer to every problem is legislation.The time for change is now the old order are incapable of keeping things going let alone attempting to sort out the problems.

Destroying the Country to save the Banks.
Sat, Jun 18, 2011 - 8:08pm
Dr Durden
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Can someone explain what

Can someone explain what "OTC" transactions are, exactly? 

Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Sat, Jun 18, 2011 - 8:22pm (Reply to #17)
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It's basically trading

It's basically trading something through a broker but without an exchange (like the amex or nyse) in the equation.

Can I offer you a drink? How about this expensive prostitute?
Sat, Jun 18, 2011 - 8:28pm (Reply to #17)
Sterling
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I just re-read what I wrote

I just re-read what I wrote and it may be confusing. It's a direct transaction between two parties and it is not done through an exchange.

Can I offer you a drink? How about this expensive prostitute?
Sun, Jun 19, 2011 - 12:42pm
CookieMonster
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I still don't understand why this is bearish?

More bearish to me is if Germany/ECB erase their compromise on Greek debt.

Small spec retail hardly effects the price of silver/gold. It's just speculating on the price of silver/gold in the forex casino. 100:1 leverage is crazy anyway. The result may be leverage goes to 50:1 or a little lower. Dodd-Frank requires 10:1, but the CFTC makes the rules. They have until July 15 to make the rule or it will be 10:1 leverage max. What's confusing to me is why forex is saying they are outlawing trading metals completely. Maybe just some time to get their shit together and give advance notice?

I am still pissed about it no doubt.

CookieMonster
Sun, Jun 19, 2011 - 1:40pm
Jimbio
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I am so confused. I tried my

I am so confused. I tried my hardest to wrap my mind around this and its implications, but i'm still at a loss here.
There's a lot of talk, but either its inconclusive, or too vague to make out if this is short, medium-term bullish/bearish. Edit: or i'm making this a bigger piece of news than it actually is. It might turn out to be just a dud.

I'm talking paper spot btw. Physical is only going one way, up.

Oh, and another thing... will these news be priced into the Sunday night open? Cheers!

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