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LoneStarHog

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Reply with quote  #16 
Quote:
Originally Posted by JG
Quote:
Originally Posted by LoneStarHog

Like I stated, there have been people over the last decade who wanted to take delivery, but were harassed and intimidated by both the COMEX and CFTC, who protects the commercial shorts.  If the person refused to back down delivery was generally made.  The problem was the numerous people who were intimidated to take a cash settlement.

Personal stories have been written about by Jim Sinclair, JB Slear, et.al. 

Physical delivery was possible, but it required jumping through numerous hoops, and many people did not want the trouble if delivery was demanded.

I have been intimately involved in these markets since the 70s, and especially since 2000, following every tick and story.  They are out there if you take the time to research them.


Just because the market believes a story doesn't make it true. My website (about.ag) is about separating the fact from fiction.

Take a look at Andrew Maguire. The market firmly believes that he was involved in a nearly fatal hit-and-run by a would-be assassin, and that the London police sent out police helicopters, etc. But guess what? The *only* proof of that is an article by a U.S. tabloid; no London newspapers reported anything about it. True or false?

Same with the story by Rob Kirby a few years back about how Fort Knox was replaced with tungsten bars, and the elaborate scheme used to get the metal out. It turned out it was just a hoax (the facts just didn't add up). And when I posted at Kitco a satire of that post (mentioning at the end that it was not true), even going so far as to say that the baloney cartel was involved (yes!), people believed it.

Searching for Jim Sinclair and COMEX and cash settlement turns up articles about him thinking COMEX needs to switch to cash settlement (or something like that), and a search for JB Slear also doesn't turn up anything.

I've certainly seen *stories* (such as a well known silver bull saying that he heard from one of his anonymous readers that...). But those stories do not provide any proof.

I'm not saying there isn't proof out there -- but if so, you haven't supplied it.


Example>  http://www.gata.org/node/8477 .. GATA is probably the most credible organization in the PM field.  I know Bill Murphy and he is beyond reproach, as is Chris.

I don't have stories bookmarked nor stored from years past, and I don't have time to do research for you.  The stories of harassment and intimidation are out there, and by credible people.
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JG

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Reply with quote  #17 
Quote:
Originally Posted by LoneStarHog
Example>  http://www.gata.org/node/8477 .. GATA is probably the most credible organization in the PM field.  I know Bill Murphy and he is beyond reproach, as is Chris.


Andew Maquire supplied the information for that story. And he (or GATA) presumably supplied the information for the New York post article (which admitted "London police would not comment on the accident investigation").

I'm not saying the story is false, just that when I researched it, I found it highly suspect. Attempted murder of a whistleblower that involves police helicopters in a large city, and no London paper covers it?

Quote:
I don't have stories bookmarked nor stored from years past, and I don't have time to do research for you.  The stories of harassment and intimidation are out there, and by credible people.


It's impossible to prove a negative, so I'm stuck here.

If you come up with something, be sure to let me know, and I'll take a look at it. Until then, I can continue to say that I have never seen evidence of anyone being forced to take cash settlement (aside from third-hand reports from silver/gold bulls).

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JG

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Reply with quote  #18 
Quote:
Originally Posted by LoneStarHog
I don't have stories bookmarked nor stored from years past, and I don't have time to do research for you.  The stories of harassment and intimidation are out there, and by credible people.


Let's see what I found:

"The default-mechanism for fails to deliver is cash-settlement.  Since 2011, delivery contracts have been quietly settled in dollars rather than in precious metals.  Industry watchdogs say cash-settlements are getting larger and more frequent.  It is rumored buyers who are legally contracted to take physical silver delivery, instead, are paid dollar premiums as high as 20-30% as an incentive to settle." [http://www.youshouldbuygold.com/2011/12/naked-silver-shorting/]

This one is based on rumors (20%-30%), and misinformation (cash settlement just means selling your contract for money, which the vast majority of longs have always done, and is normal).

"
The reasons are obvious why there has been a great deal of discussion about actual, formal “defaults” in the precious metals markets. Among those “obvious reasons” is that informal defaults are apparently already taking place in both gold and silver markets. Beginning in the London gold market over a year ago, and now rumored to be occurring in New York’s “Comex” silver futures market, buyers who have legally contracted to take “physical delivery” of the metals they have purchased are said to be accepting large, paper bribes to accept a “cash settlement” instead. There are many reasons for investors to take such “rumors” seriously. ..."
[http://www.stockhouse.com/news/natural-resources/2011/01/19/gold-and-silver-default-scenarios]

This one makes it very clear these are rumors. But the idea is ludicrous. If I have $100K of silver at COMEX, and ask for delivery, and they offer me $130K cash, I'll take it. Repeat that for 10 delivery cycles, and my $100K turns into $1.3M. I tell my buddies, they do the same thing. The scheme cannot go on.

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LoneStarHog

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Reply with quote  #19 
Quote:
Originally Posted by JG
Quote:
Originally Posted by LoneStarHog
I don't have stories bookmarked nor stored from years past, and I don't have time to do research for you.  The stories of harassment and intimidation are out there, and by credible people.



This one makes it very clear these are rumors. But the idea is ludicrous. If I have $100K of silver at COMEX, and ask for delivery, and they offer me $130K cash, I'll take it. Repeat that for 10 delivery cycles, and my $100K turns into $1.3M. I tell my buddies, they do the same thing. The scheme cannot go on.


This is a technical DEFAULT.  There is NO PHYSICAL SILVER backing most of these contracts.  Anyone who takes part in this is no better than the CROOKS at the COMEX. 

There can only be TRUE and LEGAL price discovery in a free market of supply and demand.  One cannot CREATE phony paper silver and sell it into a market, then claim the price is the TRUE value of the PHYSICAL metal.

Personally, I am SICK AND TIRED of arguing with people like you.  TWO GODDAMN DECADES is all I can take!
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JG

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Reply with quote  #20 
Quote:
Originally Posted by LoneStarHog
Quote:
Originally Posted by JG

This one makes it very clear these are rumors. But the idea is ludicrous. If I have $100K of silver at COMEX, and ask for delivery, and they offer me $130K cash, I'll take it. Repeat that for 10 delivery cycles, and my $100K turns into $1.3M. I tell my buddies, they do the same thing. The scheme cannot go on.


This is a technical DEFAULT.  There is NO PHYSICAL SILVER backing most of these contracts.  Anyone who takes part in this is no better than the CROOKS at the COMEX. 

...
Personally, I am SICK AND TIRED of arguing with people like you.  TWO GODDAMN DECADES is all I can take!


Yes, if you take the $130K cash instead of the $100K of silver, I'll agree that is a technical default. But my point is that it isn't happening ("The scheme cannot go on").

Tell you what -- I'll believe you that this scheme is true if you'll believe that I took a trip to Mars last year. What, you don't believe me? You need proof? But I said it was true! Get the point?

You are almost certainly correct that there is no silver backing most of the COMEX contracts. I can go and buy a long contract, without having to prove that I have silver. *But*, I am legally obligated to provide the silver unless I sell the contract (to someone who has that same obligation, unless they are a short closing out their position). Could COMEX default if all the longs demanded delivery? Yes.

My point is that it very important to know the difference between truth and rumor (and the variations in between). Otherwise, you'll believe a lot of the rumors out there that have been proven false. Want to see what happens when people let the truth slide? Take a look at https://books.google.com/books?id=JZdu0e-b9lYC&pg=PA55&lpg=PA55&dq=%22pursuant+to+the+above+authority,+I+hereby+proclaim%22#v=onepage&q=%22pursuant%20to%20the%20above%20authority%2C%20I%20hereby%20proclaim%22&f=false -- it's a book called "Using the Media - Fact, Fiction, and Opinion", a book for teachers of middle schoolers. They print a completely fake Executive Order as if it is real. The whole point of the book is that there is a lot of misinformation in the media, and THE AUTHOR GOT DUPED.

Why did the author get duped? Because of people like Barber Coins (and a major bullion dealer who finally fixed it about a year ago), who spread the hoax. Why? Because like you, they believe it -- but worse, Barber Coins isn't willing to listen. The more people that spread the hoaxes and misinformation, the more credible it seems.

And then take the "Apple Silver Shortage" -- precious metals pseudo-news outlets like Silver Doctors love that stuff ("Apple can't buy the silver they need, and cannot make 27 inch Macs!"). The *only* proof that the story is true is the word of an anonymous Internet poster who *claims* to be a *contractor* for an Apple *dealer*. And he *thinks* that Apple couldn't get the silver, solely because there was a 10 week delay in delivery of them. That's it. But within a few days/weeks, word spread, and everybody believes it! Needless to say, the Silver Doctors will happily take your money to buy silver in their ads in the articles, whether the articles are true or not.

Have I said manipulation does not exist? No. Have I said that nobody has ever paid a cash premium for a COMEX contract in lieu of delivery? No. I'm just saying I have seen no convincing evidence that it has happened. I would welcome you to show me some, if you can.

0
GWest

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Posts: 31
Reply with quote  #21 
I have heard the "empty vault" theories for almost 2 decades now. I don't like the fact that prices are established in paper markets where less than 1% of the contracts are delivered. It is a fact that the metal simply doesn't exist for 99% of those contracts. In other words, the shorts could not possibly deliver to the longs. But nobody ever asks if the longs have the capital to take delivery. The margined longs without the cash are just as condemnable as the shorts without the metal. Both parties fully anticipate that they are in a casino, not a marketplace.

Its better to look at these contracts as "exchange contracts" rather than using this long/short or buyer/seller language. Then it becomes apparent that neither party can fulfill their contractual duties. You might think you are contracted to buy gold with fiat. But the other party thinks he is buying your fiat with his gold. Each party is both long and short depending upon perspective.
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