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Faust100F
Advisor

Gold not being delivered to fill gold contracts

Am I wrong, or is it true that if you purchase a gold contract and then request delivery of the gold, that those contracts are not being filled at the current contract price of $1410 an ounce.   Seems that physical gold prices are about what they were before Goldman and the FED trying to drive down the futures on the metal.   What happens now when a futures contract on gold at $1410 is not sold but delivery demanded.   Well . . . Kunstler has the same concerns.  John

 

Aftershocks

By James Howard Kunstler 
on April 22, 2013 8:51 AM

     If the FBI can track down two homicidal Chechen nobodies inside of forty-eight hours of their Boston bombing caper, you kind of wonder how come the Bureau can't detect the odor of racketeering, insider trading, and wire fraud in this month's orchestrated smackdown of the gold futures markets, including the parts played by the Federal reserve, one or more too-big-to-fail banks, self-interested big money players such as George Soros, slumbering regulators at the Commodities Futures Trading Commission, and tractable editors at The Wall Street Journaland The New York Times

     

Of course, US Attorney General Eric Holder, who oversees the FBI, has done a fair imitation of a Brooks Brothers store window mannequin for four years, but surely somewhere in the trackless labyrinth of American law enforcement there exists some dogged rogue investigator with a filament of nagging curiosity who might piece together the clunky train of events that may amount to the financial crime of the century.

 

For instance, it can't be so difficult to determine who was behind the several hundred ton mass dump of paper gold contracts a week or so ago. There must be a pretty simple record of the transaction, retrievable with a warrant or a subpoena. Whatever entity did it -- still ostensibly unknown -- knowingly generated losses in the

neighborhood of a billion dollars for itself.

 

Was this just the cost of doing business? Or a favor owed, say, from a bank to its godfathers at the Fed, carried out to make the dollar look relatively a lot less unsound than it really is? Or a ruse to allow the custodians of bullion in US depositories re-acquire at bargain prices gold that has been stealthily hypothicated into oblivion? Or just to divert attention from their inability to make good on contracted deliveries of actual physical gold.

     

No official has yet answered why the Federal Reserve Bank of New York told the German government a couple of months ago that it would take seven years to return that country's gold held in safekeeping (across the ocean from the Russians) since the Cold War. The NY Fed must have a vessel under contract that makes the proverbial slow boat to China look like an ICBM.

     

Doesn't anybody want some answers to these questions, including how come the two aforementioned major newspapers published front-page stories calculated to justify, if not provoke, the most extreme negative sentiment in the precious metals markets, seemingly coordinated with Goldman Sachs advisories to short those markets? And what about a glance at the trading records to see who executed massive naked shorts?

 

Wouldn't it be interesting if they were the same parties as the dumpers? And why? -- other than a strenuous intervention in the markets to make those markets look unreliable? Does anyone even remember that the purpose of financial exchanges is to verify and authenticate the clearing of trades to provide confidence that markets are honest so that real business can be conducted?

     

What the interveners have accomplished is only to prove that the gold and silver derivatives markets are unreliable. They may have smashed the trade in that kind of paper, but only achieved a firmer divergence between the derivatives markets and the bullion markets where, for example, the premiums on delivery of silver ounces makes the price exactly equal to the pre-smackdown price. Anyway, nobody believes that the London Bullion Market Association (LBMA) or that the New York Commodity Exchange (COMEX) can deliver.

 

Meanwhile, runs on bullion contracts were starting to uncover a contagion of swindling in precious metals obligations that pervaded the western banking system. It was not a coincidence that the smackdown happened three weeks after the Dutch bank ABN Amro notified clients that it would only satisfy demands for redemptions of gold held in its custody with equivalent cash payments.

 

"No gold for you today!" A fair inference based on subsequent events would be that all the custodians of physical gold bullion have misreported their holdings. And now that actions by the European Union and its agents have ventured into the dangerous territory of plain confiscation, there is not a whole lot of faith throughout the western world by people who are paying attention that an account of any kind in any financial institution is safe. There is good reason to fear runs on everything.

     

Because the smackdown organizers pulled off their operation in a panic, they probably ignored the potential further negative consequences of their stratagem, namely a worsening loss of confidence in banks generally and in the trade of abstract financial instruments in particular, including currencies.

 

Nervous public officials may be brooding on imminent "bail-ins" and currency controls, but the public may be ready to bail out of the prevailing banking model into things that have been considered more money than "money" for a few thousand years, namely real gold and silver. The basic fact remains: there isn't enough to go around.

____________________________________

 
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12 Replies
ray h.
Senior Contributor

Re: Gold not being delivered to fill gold contracts

     Do the statements above apply only to preciouse metals,what about physical grain in multiple year contracts.Traders lureing sellers that don't even have the commodditie produced yet,let alone the physical of close end.Is it realy there?

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Red Steele
Veteran Advisor

Re: Gold not being delivered to fill gold contracts

Very Interesting article, Mr. Faust. Thanks for sharing.

 

Seems like it deserves an investigation and the truth being told, if we can handle the truth.

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teaspoon73
Senior Contributor

Re: Gold not being delivered to fill gold contracts

  According to the delivery notices there were 271 contracts delivered today on the comex. Delivered by JP Morgan. I guess if you wanted to prove it to the world you would just need to plunk down the 141,000 for delivery and 100 oz are yours, in the next week. One good thing is you could carry it out of the building in a small duffle bag. I don't question the market is being manipulated. I'm just saying there is a easy way to find out.

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Faust100F
Advisor

Re: Gold not being delivered to fill gold contracts


@teaspoon73 wrote:

  According to the delivery notices there were 271 contracts delivered today on the comex. Delivered by JP Morgan. I guess if you wanted to prove it to the world you would just need to plunk down the 141,000 for delivery and 100 oz are yours, in the next week. One good thing is you could carry it out of the building in a small duffle bag. I don't question the market is being manipulated. I'm just saying there is a easy way to find out.


Why is JP Morgan making the delivery on the contracts.  More important . . . to whom were they delivered?   Only the government and JP Morgan and the Vampire Squid bad mouthing gold to drive down the price, when in fact physical gold is hard to find. Adios Amigo.  John

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NDf
Senior Contributor

Re: Gold not being delivered to fill gold contracts

Teaspoon if I remember right there are mini-sized contracts of 10 oz's traded somewhere he could try there.

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teaspoon73
Senior Contributor

Re: Gold not being delivered to fill gold contracts

   Looks like Barclays, Novia Scotia, ABN AMRO, and ADM were the recievers. My guess is Barclays will deliver tomorrow .

   NDf , could be smaller contracts, thats just what was shown. Heck make the trip to New York worth it. The question is what will you do with the gold bars once you get them? Pay for your cab? Pay for your lunch at Tavern on the GReen? Pay for a hooker?

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hardnox604008
Advisor

Re: Gold not being delivered to fill gold contracts

http://www.telegraph.co.uk/finance/economics/10017992/Japans-wall-of-money-proves-elusive-for-global...

 

Remember, though, that Japan is still the largest holder of private wealth in the world and remember that the recent depreciation of the yen has produced record profits for those holding foreign denominated investments- and gold.

 

I

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jonnybegood
Contributor

Re: Gold not being delivered to fill gold contracts

    No physical delivery on mini contract, they don't want to deal with the riff raff you know.

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rosstaylor2440
Frequent Visitor

Re: Gold not being delivered to fill gold contracts

It is an interesting fact peoples should aware this, this would be applicable only for the precious metals.

Good sharing,  thanks!

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