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saxster

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Posts: 109
Reply with quote  #1 
How does that saying go that the good ol' boys down in Texas use?

'Fool me once, shame on...shame on you. Fool me — you can't get fooled again.' 

Or no, maybe that's just a Bushism. 

Nobody can be so stupid as to get burned twice on the same element: AU
Or can I? 

It's just too bad that my 401K won't let me buy physical. 

Oh, what's a poor investor to do? 
Shall I play the Casino down on Wall Street, or is that rigged, too?

Well, you fellow toasted investors may as well get wind of this before you start counting pennies on the dollar for another rip-off. 

http://www.zerohedge.com/news/2015-09-09/something-just-snapped-comex

Who says Crime Doesn't Pay?  Hint: don't ask CM, he's still laughing all the way to the bank everyday, or else making withdrawals from the stash in his hidey hole that we made possible for the Darling.

PS. I'm workin' on a new Blues tune: "I Got Murder On My Mind"
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harley_52

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Reply with quote  #2 
Why wouldn't this be good news for those who hold physical gold?
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JG

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Posts: 991
Reply with quote  #3 
Quote:
Originally Posted by saxster
Well, you fellow toasted investors may as well get wind of this before you start counting pennies on the dollar for another rip-off.


This is simply part of the game. COMEX is designed knowing that only a small percentage of investors will take delivery. Shorts are not required to have metal, and longs are not required to take delivery.

It isn't a matter of "Who gets the metal if the cards fall?", as the shorts are required to come up with the metal somehow. If they cannot, there is another layer or two before a default. If a default occurs, then in theory cash would be paid out. For that not to happen, the Chicago Mercantile Exchange would have to go bankrupt. There are a lot of failsafes before that would happen, however (it is within the realm of possibility, however).


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saxster

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Posts: 109
Reply with quote  #4 
Quote:
Originally Posted by harley_52
Why wouldn't this be good news for those who hold physical gold?


Yeah, Harley.  If a big squeeze comes down the pipes with enough longs taking delivery, and enough shorts having to cover their contracts with physical, it could potentially cause a major surge.  But, I have had the impression that a short position could fill it with another, albeit higher priced, contract to deliver.  207 long positions to each available physical seems a dubious situation, but JG seems to think it's par for the course.  JPM has earned a reputation for crushing longs with it's deep FED lined pockets, by issuing as many short positions as it takes to hammer down the spot price in both AU and AG. 

Or is it that I'm a firm believer in an Urban Legend that doesn't really hold water?
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JG

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Reply with quote  #5 
Quote:
Originally Posted by saxster
207 long positions to each available physical seems a dubious situation, but JG seems to think it's par for the course.


Par for the course just means that's what has happened for a long time -- that doesn't mean that it is not a dubious situation. If Donald Trump, for example, wanted to make a statement and buy 50 million ounces of silver on COMEX, it would likely disrupt the market twice: once when he bought the long positions, and then again when requesting delivery.

Quote:
Originally Posted by saxster
JPM has earned a reputation for crushing longs with it's deep FED lined pockets, by issuing as many short positions as it takes to hammer down the spot price in both AU and AG. 
Or is it that I'm a firm believer in an Urban Legend that doesn't really hold water?


I haven't been able to rule out the possibility. And if you take a look at other markets that have been tampered with by big banks, it is certainly not worth dismissing the possibility.

If people are convinced that manipulation is impossible, they need to look at a graph of the silver price on May 1, 2011. The price of silver plummeted over 10% in a matter of minutes, on a Sunday night, for no apparent reason. That was the day Bin Laden was killed, but news about that broke out after the plunge. That isn't *proof* of manipulation, but I haven't heard a logical explanation as to how a global commodity can go down 10% during odd hours like that.


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saxster

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Posts: 109
Reply with quote  #6 
Apparently, someone with CM's skill set has been moonlighting at JPM's vault in Manhattan.  These folks are down to their last 27 bricks. 

The claims on each physical ounce have risen even higher this week: 252 papers on each physical ounce.

Hey!  I could use a job like this:  Master Vault (Finder) Keeper   (Finders Keepers, Losers Weepers)

http://www.zerohedge.com/news/2015-09-15/comexodus-jpmorgans-vault-one-withdrawal-away-running-out-deliverable-gold
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JG

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Posts: 991
Reply with quote  #7 
Quote:
Originally Posted by saxster
Apparently, someone with CM's skill set has been moonlighting at JPM's vault in Manhattan.  These folks are down to their last 27 bricks. 


The catch here is that the amount of metal in the vault is irrelevant. They also have 1,876 "bricks" sitting in their vault in eligible accounts.

Also, they could have 0 bricks, and COMEX would work just fine -- JPM is just one of 6 vaults used at COMEX for gold. The focus on JPM's vault (rather than, say, the Brinks vault) is because JPM has been short a lot of gold/silver in the past. But they could have oodles of metal in their own private vault.

What really matters is the total in all vaults ("leaving just 163,334 ounces of registered gold: the lowest in Comex history." in the article). That is the real takeaway (however, there is also 6,729,504oz of metal in COMEX vaults in the "Eligible" category, which could be converted to the Registered category).

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