Where Is Gold Going In This Market

[churchill]

Silver Subject to Price Manipulation, Chilton Says

Also on Jesse's

The manipulation in the silver market with two or three banks holding enormous undeliverable short positions was obvious, for years.

The CFTC was complicit in turning a blind eye to this, stonewalling and whitewashing the corruption, as were many market commentators and participants. Ted Butler and GATA did a wonderful job of highlighting this enormous fraud but were ignored and even vilified for the past twelve years in the same vein as whistle blower Harry Markopolos was in raising concerns about Madoff's investment scheme.

Bart Chilton is speaking out as he said a few weeks ago he would if the CFTC was not making progress in correct this travesty. This is the sort of reform that the people were seeking when they swept the Democrats into office, a reform which they never received.

This obviously should be investigated by an independent body, given the regulatory capture held by the banks who manipulated the market to the detriment of the world in suppressing prices and creating an artificial shortage that will be painful to unwind.

This is not a partisan issue, but involves politicians of both parties going back twenty years or more, in both London and New York. And the corruption is pervasive and ongoing in multiple US finanical and commodity markets. The regulators and ratings agencies have not been doing their jobs.

Some will attempt to dismiss what Mr. Chilton is saying here as inconclusive. Keep in mind that he is a high profile CFTC official, and what he says comes through a 50,000 watt megaphone, so he must choose his words with great care. But this is almost unprecedented for an official to speak out against his own administration.

The response to these sorts of revelations seem to be a blanket of media silence and whispered character assassination, which is the mark in trade of those who have no sense of duty, honor, and country. Their crime is betrayal of the public trust, and the public's fault is apathetic complicity. 'Silver did not rally on the news, it must not be significant. I did not hear about this on television, so it must not be true.'

But the dominos are starting to fall, and more revelations are to come.

Also on Reuters

CFTC's Chilton raises alarm about silver market

WASHINGTON

Tue Oct 26, 2010 9:30am EDT

Oct 26 (Reuters) - There have been repeated attempts to influence prices in silver markets, Bart Chilton, a commissioner at the U.S. futures regulator, said on Tuesday.

"There have been fraudulent efforts to persuade and deviously control that price," Chilton said in prepared remarks before a Commodity Futures Trading Commission meeting.

Chilton said he could not pre-judge the outcome of the CFTC's ongoing investigation of the silver markets, but said public deserves some answers to their concerns.

Gold and silver are no bubbles. It is a reverse Ponzi scheme that goes back for decades, that has sold many more ounces of metal than can possibly be delivered at today's artificially low prices, that was tolerated and even promoted by those who were running a monetary control fraud, quite probably the greatest in history. The banks and insiders are trapped and desperate, trying to bluff and buy themselves out of another fraud yet again. They will never give up, but will have to be rooted out. It is unlikely that reform can come from within, since the righteous anger of the people and the will to change will be co-opted by those very forces that have manipulated the system and perpetrated the fraud.

Fortunes will be made and lost, and careers ruined, as the revelations of manipulation and corruption are made over the next ten years. And this will make for dangerous times, as an empire of deceit collapses not at once, but in stages. There will be new threats and more bailouts for the banks to be paid by 'austerity' for the common person who is caught up in their own web of petty diversions, apathetic cynicism and denial. There is little better example of this than Britain but America is not far behind.

But the tide has turned and change is in the wind.

Good news - Silver up nicely , and more pressure on JPM & CO .

Gartman decided to start buying silver - perhaps he has his timing right for a change !

[flying]

The only major bullion bank that declares its bullion holdings is HSBC, which at the end of 2009 held gold valued at $13.757bn (392.6 tonnes). We shall assume that this bullion is held against HSBC’s unallocated accounts and we shall further assume a reasonable fractional reserve multiple of 10, which gives us net uncovered liabilities of 3,533 tonnes for HSBC alone.

However, there are 35 banks listed as full members of the LBMA, and it can be assumed that nearly all of them offer unallocated account facilities[ii]. It is also possible, even likely, that the fractional reserve multiple for many of these banks is higher than 10, because banks have been generally reluctant to hold the one reserve currency that pays no interest.[iii] Furthermore, some of these banks are among the largest in the world. Taking all this into account, it is possible that LBMA members are short of over 20,000 tonnes on their unallocated accounts.

Am I to assume you think that article is full of it?

[cloudhopper]

I don't know what to believe anymore but if there are overlapping electromagnetic claims to underlying physical those assets are going to vaporize. Won't even need a faichek.

[churchill]

Will the CFTC Actually Act to Protect Silver Investors?

from .. http://www.financialsense.com/contributors/chris-mack/will-the-cftc-actually-act-to-protect-silver-investors

"As of October 19th, the commercial traders were still net short 58,150 contracts - roughly 290 million ounces of silver. There are currently only 52 million registered ounces and 59 million eligible ounces held in COMEX warehouses. It would not be possible to remove the short commercials from the silver market in an orderly fashion. The majority of contracts would have to be settled in paper at much higher prices. As pointed out by Butler, the worst case scenario - and increasingly likely - would be a closure of the paper precious metals markets. If that occurs physical silver would likely trade in multiples of its previous paper price and would be unavailable to most buyers. The apparent choice by the CFTC to act is most likely no choice at all. It is a desperate move to maintain the status quo and a reaction to an eminent emergence of either physical shortages or dollar devaluation instigated by a wave of quantitative easing."

[churchill]

Gold mining to boom in Thailand

http://www.commodityonline.com/news/Gold-mining-to-boom-in-Thailand-32903-3-1.html

[lannarebirth]

Will the CFTC Actually Act to Protect Silver Investors?

from .. http://www.financial...ilver-investors

"As of October 19th, the commercial traders were still net short 58,150 contracts - roughly 290 million ounces of silver. There are currently only 52 million registered ounces and 59 million eligible ounces held in COMEX warehouses. It would not be possible to remove the short commercials from the silver market in an orderly fashion. The majority of contracts would have to be settled in paper at much higher prices. As pointed out by Butler, the worst case scenario - and increasingly likely - would be a closure of the paper precious metals markets. If that occurs physical silver would likely trade in multiples of its previous paper price and would be unavailable to most buyers. The apparent choice by the CFTC to act is most likely no choice at all. It is a desperate move to maintain the status quo and a reaction to an eminent emergence of either physical shortages or dollar devaluation instigated by a wave of quantitative easing."

The commercial hedgersof non $USD currencies would beg to differ. We'll see.

http://www.cftc.gov/...es/deacmesf.htm

Edited October 27, 2010 by lannarebirth

[flying]

Will the CFTC Actually Act to Protect Silver Investors?

from .. http://www.financialsense.com/contributors/chris-mack/will-the-cftc-actually-act-to-protect-silver-investors

"As of October 19th, the commercial traders were still net short 58,150 contracts - roughly 290 million ounces of silver. There are currently only 52 million registered ounces and 59 million eligible ounces held in COMEX warehouses. It would not be possible to remove the short commercials from the silver market in an orderly fashion. The majority of contracts would have to be settled in paper at much higher prices. As pointed out by Butler, the worst case scenario - and increasingly likely - would be a closure of the paper precious metals markets. If that occurs physical silver would likely trade in multiples of its previous paper price and would be unavailable to most buyers. The apparent choice by the CFTC to act is most likely no choice at all. It is a desperate move to maintain the status quo and a reaction to an eminent emergence of either physical shortages or dollar devaluation instigated by a wave of quantitative easing."

You dont own it if you dont hold will apparently apply in that case.

The dogs behind this need to be hung for what their greed is causing.

[lannarebirth]

Will the CFTC Actually Act to Protect Silver Investors?

from .. http://www.financial...ilver-investors

"As of October 19th, the commercial traders were still net short 58,150 contracts - roughly 290 million ounces of silver. There are currently only 52 million registered ounces and 59 million eligible ounces held in COMEX warehouses. It would not be possible to remove the short commercials from the silver market in an orderly fashion. The majority of contracts would have to be settled in paper at much higher prices. As pointed out by Butler, the worst case scenario - and increasingly likely - would be a closure of the paper precious metals markets. If that occurs physical silver would likely trade in multiples of its previous paper price and would be unavailable to most buyers. The apparent choice by the CFTC to act is most likely no choice at all. It is a desperate move to maintain the status quo and a reaction to an eminent emergence of either physical shortages or dollar devaluation instigated by a wave of quantitative easing."

The commercial hedgersof non $USD currencies would beg to differ. We'll see.

http://www.cftc.gov/...es/deacmesf.htm

As you can see the commercial hedgers tend to be a bit early, but they generally get things right in the end:

Edited October 27, 2010 by lannarebirth

[Abrak]

Gold mining to boom in Thailand

http://www.commodityonline.com/news/Gold-mining-to-boom-in-Thailand-32903-3-1.html

Yes a very interesting story.

Apparently there is a gold production boom going on in Thailand where all the mining rights are owned by foreigners and of which Thais are apparently unaware of.

[Naam]

The only major bullion bank that declares its bullion holdings is HSBC, which at the end of 2009 held gold valued at $13.757bn (392.6 tonnes). We shall assume that this bullion is held against HSBC’s unallocated accounts and we shall further assume a reasonable fractional reserve multiple of 10, which gives us net uncovered liabilities of 3,533 tonnes for HSBC alone.

However, there are 35 banks listed as full members of the LBMA, and it can be assumed that nearly all of them offer unallocated account facilities[ii]. It is also possible, even likely, that the fractional reserve multiple for many of these banks is higher than 10, because banks have been generally reluctant to hold the one reserve currency that pays no interest.[iii] Furthermore, some of these banks are among the largest in the world. Taking all this into account, it is possible that LBMA members are short of over 20,000 tonnes on their unallocated accounts.

Am I to assume you think that article is full of it?

not necessarily but i hate headlines which carry a specific message and then it turns out it's all "ifs" and ass_umptions.

e.g. Thai National Enquirer:

Naam acquires Mia Noi!

Naam might perhaps sooner (or later) acquire a Mia Noi assuming Mrs Naam elopes with Brad Pitt taking all physical gold with her, and furthermore

assuming Naam's dogs will sniff out a reasonable lady among dozens of applicants and assuming dozens of ladies will apply.

also assuming that Naam's cardiologist allows him to consume Viagra more than three times a week and assuming the Mia Noi (to be) finds his gardener attractive enough to act as a substitute based on the assumption that Naam's performance lacks. it goes without saying that it is assumed that the gardeners pregnant wife will agree with the assumed arrangement.

[Abrak]

The only major bullion bank that declares its bullion holdings is HSBC, which at the end of 2009 held gold valued at $13.757bn (392.6 tonnes). We shall assume that this bullion is held against HSBC’s unallocated accounts and we shall further assume a reasonable fractional reserve multiple of 10, which gives us net uncovered liabilities of 3,533 tonnes for HSBC alone.

However, there are 35 banks listed as full members of the LBMA, and it can be assumed that nearly all of them offer unallocated account facilities[ii]. It is also possible, even likely, that the fractional reserve multiple for many of these banks is higher than 10, because banks have been generally reluctant to hold the one reserve currency that pays no interest.[iii] Furthermore, some of these banks are among the largest in the world. Taking all this into account, it is possible that LBMA members are short of over 20,000 tonnes on their unallocated accounts.

Out of interest is this how things actually work. Would all their declared holdings be to unallocated accounts? Do people hold paper gold based on a banks bullion deposits? It all sounds incredibly odd to me. Fractional reserve banking of gold?

[flying]

Out of interest is this how things actually work. Would all their declared holdings be to unallocated accounts? Do people hold paper gold based on a banks bullion deposits? It all sounds incredibly odd to me. Fractional reserve banking of gold?

Well one of the popular ones is GLD & here is the description......

SPDR Gold Trust (the Trust) is an investment trust. The Trust holds gold, and from time to time, issues SPDR Gold Shares (Shares) in Baskets, in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets. A Basket equals a block of 100,000 Shares. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion. The sponsor of the Trust is World Gold Trust Services, LLC. BNY Mellon Asset Servicing, a division of The Bank of New York Mellon is the trustee of the Trust. HSBC Bank USA, N.A. serves as the custodian of the Trust’s gold.

All sounds odd to me too & is also why I only deal in physical but.... I guess for traders that want in & out it is viable. Unless all wanted delivery.

Then like fractional reserve banking it would go bust.

Not fair though that price is based on assumed quantities that do not exist

But also corruptible as we saw a few posts back with the findings in the Silver markets.

In the end is it any different in any paper backed market? I wonder...Is it all just becoming obvious to the masses? Is the whole thing going to implode starting with the paper backed precious metals market?

Edited October 27, 2010 by flying

[lannarebirth]

Out of interest is this how things actually work. Would all their declared holdings be to unallocated accounts? Do people hold paper gold based on a banks bullion deposits? It all sounds incredibly odd to me. Fractional reserve banking of gold?

Well one of the popular ones is GLD & here is the description......

SPDR Gold Trust (the Trust) is an investment trust. The Trust holds gold, and from time to time, issues SPDR Gold Shares (Shares) in Baskets, in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets. A Basket equals a block of 100,000 Shares. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion. The sponsor of the Trust is World Gold Trust Services, LLC. BNY Mellon Asset Servicing, a division of The Bank of New York Mellon is the trustee of the Trust. HSBC Bank USA, N.A. serves as the custodian of the Trust’s gold.

All sounds odd to me too & is also why I only deal in physical but.... I guess for traders that want in & out it is viable.

But also corruptible as we saw a few posts back with the findings in the Silver markets.

In the end is it any different in any paper backed market? I wonder...Is it all just becoming obvious to the masses? Is the whole thing going to implode starting with the PM's?

If you're right, wouldn't a good deal of that perceived risk already be priced in? Might that not explain moves that hyave already occurred? Just asking.

[flying]

If you're right, wouldn't a good deal of that perceived risk already be priced in? Might that not explain moves that have already occurred? Just asking.

I wonder.... Perhaps those high enough up the chain may have taken steps but how would the rest only now becoming aware have priced it in? I think so far the rise we see is the loss of the dollars strength & also the faith that backed it.

In the case of the silver mentioned earlier wouldn't price need to at least triple to make up for what is not there?

edit:I am assuming your talking about the precious metals markets alone.

Although I imagine the same shell game would also work for all commodities.

Edited October 27, 2010 by flying

[cloudhopper]

In the end is it any different in any paper backed market? I wonder...Is it all just becoming obvious to the masses? Is the whole thing going to implode starting with the paper backed precious metals market?

No different IMO but why should this one implode first?

[cloudhopper]

If you're right, wouldn't a good deal of that perceived risk already be priced in? Might that not explain moves that hyave already occurred? Just asking.

Isn't a good deal of the risk already priced in to every market all the time?

I love explanations of moves that have already occurred...

[lannarebirth]

If you're right, wouldn't a good deal of that perceived risk already be priced in? Might that not explain moves that hyave already occurred? Just asking.

Isn't a good deal of the risk already priced in to every market all the time?

I love explanations of moves that have already occurred...

I wasn't explaining anything. As you can see I was asking a question. A question based on perceived risk, which I assume is what the spread that exists between "paper" gold and physical gold is all about. Everyday here, people offer explanations on moves that have yet to occur. I think most of those assumptions, including my own, are based on even sketchier facts.

[flying]

In the end is it any different in any paper backed market? I wonder...Is it all just becoming obvious to the masses? Is the whole thing going to implode starting with the paper backed precious metals market?

No different IMO but why should this one implode first?

Your right & like I later said could be all commodities have blatant naked shorting going on but,

I am just focused on this one. With all the recent interest in the Silver manipulation & someone like

CFTC Commissioner Bart Chilton speaking up.....well

[Abrak]

Out of interest is this how things actually work. Would all their declared holdings be to unallocated accounts? Do people hold paper gold based on a banks bullion deposits? It all sounds incredibly odd to me. Fractional reserve banking of gold?

Well one of the popular ones is GLD & here is the description......

SPDR Gold Trust (the Trust) is an investment trust. The Trust holds gold, and from time to time, issues SPDR Gold Shares (Shares) in Baskets, in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets. A Basket equals a block of 100,000 Shares. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion. The sponsor of the Trust is World Gold Trust Services, LLC. BNY Mellon Asset Servicing, a division of The Bank of New York Mellon is the trustee of the Trust. HSBC Bank USA, N.A. serves as the custodian of the Trust’s gold.

If you're right, wouldn't a good deal of that perceived risk already be priced in? Might that not explain moves that hyave already occurred? Just asking.

I understand the GLD thing it is great you should read the prospectus. Gold might get lost, we have no insurance, we do not accept liability for counter party risk etc.

I am not a great conspiracy theorist though. Some people say that gold is leveraged 100x in paper - are they joking - or do they really believe that everyone on this planet has US$100,000 of paper gold. Everyone who is long is lending it out 10 fold so is short and banks have huge naked shorts. Obviously people who are long have a short position and people have maturity mismatches like producers and leasers.

Flying, in my opinion the manipulation is tied to the fact that the banks have both long and short positions not that they are inherently long or short.

Now GLD, US$240m a year in management fees. Wish I had thought of that.

[cloudhopper]

A question based on perceived risk, which I assume is what the spread that exists between "paper" gold and physical gold is all about.

Hmmm well maybe I don't understand what risk you are addressing. What exactly is the "spread" between physical and paper gold right now? I always thought that GLD was merely a derivative index and never purported to represent any underlying ownership of physical, unlike e.g. the Sprott fund.

[churchill]

Talking of Sprott --

Gold's latest dip, QE and the next 12 months - John Embry Interview

'JOHN EMBRY: Maybe a bit but on the other hand the anti-gold cartel has been extremely active. All you have to do is look at the open interest on Comex, which has blown out - no intelligent trader would stand in the path of a freight train and this is what whoever is shorting the stuff is doing. I think they're going to get overrun this time and we'll finally maybe get a free market. It's fascinating you would call me today because Bart Chilton and the cftc (Commodity Futures Trading Commission) has just come out and made a statement that the silver market is subject to fraudulent influences. Bart Chilton has been a very strong supporter of looking into the issue of silver manipulation and for him that's after having studied the issue for at least the last 12 months, to issue a statement that the silver prices are subject to fraudulent influences and there have been repeated attempts made to influence silver markets, is a significant development. And not surprising the silver price jumped about 30 cents when he said that. We've been making that point for considerable period of time, and that's the same impact is being seen, maybe to a lesser extent but nevertheless seen in the gold markets. So I don't think that serious QE II has been discounted at all fully in the market because it would have a real difficult impact on the US Dollar and if the US Dollar heads further south, the gold price could really explode here.'

continued ....

http://www.mineweb.com/mineweb/view/mineweb/en/page96985?oid=113666&sn=2010+Detail&pid=102055

Edited October 27, 2010 by churchill

[churchill]

I am sure China is building its Gold Reserves and this would never be officially confirmed , and if it were Gold would rocket ! .....

China should significantly boost gold in reserves

'Meng Qingfa, a researcher with China Chamber of International Commerce, was quoted by the International Business Daily as saying that China should eventually boost its gold reserves to a level equal to that held by the United States.'

more .. http://malaysia.news.yahoo.com/rtrs/20101027/tbs-china-gold-21231dd.html

Edited October 27, 2010 by churchill

[cloudhopper]

'Meng Qingfa, a researcher with China Chamber of International Commerce, was quoted by the International Business Daily as saying that China should eventually boost its gold reserves to a level equal to that held by the United States.'

That will take some doing. But he did say eventually, as in the sun will eventually become a red giant.

[Naam]

The only major bullion bank that declares its bullion holdings is HSBC, which at the end of 2009 held gold valued at $13.757bn (392.6 tonnes). We shall assume that this bullion is held against HSBC’s unallocated accounts and we shall further assume a reasonable fractional reserve multiple of 10, which gives us net uncovered liabilities of 3,533 tonnes for HSBC alone.

However, there are 35 banks listed as full members of the LBMA, and it can be assumed that nearly all of them offer unallocated account facilities[ii]. It is also possible, even likely, that the fractional reserve multiple for many of these banks is higher than 10, because banks have been generally reluctant to hold the one reserve currency that pays no interest.[iii] Furthermore, some of these banks are among the largest in the world. Taking all this into account, it is possible that LBMA members are short of over 20,000 tonnes on their unallocated accounts.

Out of interest is this how things actually work. Would all their declared holdings be to unallocated accounts? Do people hold paper gold based on a banks bullion deposits? It all sounds incredibly odd to me. Fractional reserve banking of gold?

when i read that i smiled. the fractional reserve finally caught up with precious metals

[Abrak]

when i read that i smiled. the fractional reserve finally caught up with precious metals

Actually I can never tell when people are taking the piss in this thread.

I know JOHN EMBRY is - 2.5% management fee and a kicker over 10% by buying PMs. (Also I believe you have a chart somewhere on your computer which would imply that he is 100% wrong - namely that the lack of open interest marked the bottom of gold.)

[teletiger]

when i read that i smiled. the fractional reserve finally caught up with precious metals

Didn't fractional reserve banking start with gold? (goldsmiths)

Regards.

[crusader79]

In the end is it any different in any paper backed market? I wonder...Is it all just becoming obvious to the masses? Is the whole thing going to implode starting with the paper backed precious metals market?

No different IMO but why should this one implode first?

Perhaps because of its peculiar/unique monetary role as a proxy currency during financial cataclysms.

[churchill]

JPM, HSBC Sued For Silver Market Manipulation, Reaping Billions In Illegal Profits

http://www.zerohedge.com/article/jpm-hsbc-sued-conspiracy-keep-silver-price-low-reaping-billions-illegal-profits

[flying]

JPM, HSBC Sued For Silver Market Manipulation, Reaping Billions In Illegal Profits

http://www.zerohedge.com/article/jpm-hsbc-sued-conspiracy-keep-silver-price-low-reaping-billions-illegal-profits

Very Good to hear

Now this paragraph from the article does address what LB said about some moves occurring already.

Although I am not sure I am interpreting LB correctly.....

Prior to public complains and the government investigation of manipulation of COMEX silver futures prices that began in March 2010, silver prices greatly underperformed gold prices. Since the government investigation began, silver prices have greatly outperformed gold prices.

[cloudhopper]

Some fairly bold assertions here -

http://www.ft.com/cms/s/0/0945597e-e1c6-11df-b71e-00144feabdc0.html