Posted on 06/05/2013 1:52:05 AM PDT by djf
“The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.”
Well now. How would like to get your bank statement in the mail from JP Morgan or Bank of America and see this disclaimer added at the bottom:
“The information in this account statement is taken from sources believed to be reliable; however, JP Morgan Chase & Co. disclaims all liability whatsoever with regard to its accuracy or completeness. This account statement is produced for information purposes only.”
How would feel about that? That’s pretty much the equivalent of what the attorneys for the CME/Comex have done by adding the statement at the top to their daily gold and silver warehouse stock reports. That disclaimer was not in Friday’s warehouse stock report, it was on yesterday’s (kudos to the commenter “anonymous” who discovered this).
The common reaction would be to ask “why now?” But we already know the answer to that question. I’ve suspected for a long time that the Comex vault operators lease out a substantial portion of the gold and silver bars that they keep in both the “registered” and “eligible” account designations. It would be easy income for JP Morgan, a bullion bank who actively engages in gold leasing, to lease out the majority of the bars it stores for delivery – “registered” – and for investors who have taken delivery but keep their gold/silver in JPM’s Comex vault – “eligible.” After all, in any given delivery month, less than 1-2% of the open interest ever stand for delivery, making it very easy for a Comex vault operator to earn extra income by leasing out gold and silver that it knows it will never be required to produce for delivery.
I am willing to bet a very large amount of money that this disclaimer was put on the warehouse reports starting yesterday as a result of the large amount of gold bars that has been physically removed from Comex vaults, and specifically from JP Morgan’s “eligible” account, since the beginning of the year. This means that it is highly likely that a significant portion of the remaining gold and silver sitting in Comex precious metals vaults – especially JPM’s - has been been hypothecated in some form.
For anyone who has witnessed what happened with MF Global and the illegal hypothecation of customer assets, a situation in which JP Morgan is/was inextricably tied, if you believe that Wall Street is willing to hypothecate the sacred customer accounts but would not hypothecate or lease out Comex gold, then you are either tragically naive or terminally ignorant.
To make matters even worse, I just looked up the Comex warehouse rules with regard to storage and guarantee requirements, and there is not any requirement that Comex vault operators establish “allocated” accounts for the individual customers who have taken delivery – theoretically – of gold or silver from the Comex and chose to “safekeep” it in a Comex vault. Here’s the link the to rules: Comex Storage Rules
Yes, insurance is required, but there will come a time – likely sooner than most think – when there will be a rush by Comex vault customers to take delivery of the metal they have been ambivalently assured is sitting in a Comex vault. Unfortunately for them, they will receive a notice that will say “see the disclaimer on our website, check’s in the mail.”
Just in case you thought only China likes to fudge its numbers. Now there’s this COMEX story. Looks like Soros screwed us conservatives again. Recently I Freeped a story about how former Soros’s business partner, Jim Rogers, was talking down gold investments. And look this COMEX report, I bet they were selling gold short.
Why would someone lease gold and what will all of this mean to the average person?
I think this is their subtle way, well, as subtle as can be described, to basically admit they are in default and out of gold.
Sure, they have some rooms full of bars, maybe a million ounces or so, but have no where near enough to cover all the contracts if the holders go for delivery.
Not sure. I don’t know that much about all the trading and positioning.
People who have enough money to trade on the Comex?
That’s out of MY network, fer sure!
;-)
Central Banks and Bullion Banks lease gold to make a return on it while retaining title.
They lease each bar at about 1% profit. The lessee takes the lent Gold, sells it and buys bonds at 4%. The lessee then arranges with the central bank to rollover the loan from year to year so that the Gold doesn’t have to come back right away.
Each bar is lent out or hypothecated between 40 and 100 times. Everything’s fine until the moment someone in the chain wants to take physical delivery of their gold, or a central bank (like Germany) wants its own Gold back.
China does something similar (and even more half-assed) with Copper. It’s all to do with brandishing multiply-hypothecated real assets as a source of free money.
These systems are somewhat similar to the fractional reserve system for fiat currencies, except that something with real stored value is being moved around.
These are Ponzi schemes. They will end badly.
Crash the price, people bail, and it's mostly just paper.
Hmmpphhh ... sounds like the entire planet is mortgaged and the people have been saddled with the payments.
I’d like to see Soros executed for his criminal manipulation not only our financial, but also our political systems. He is a foreign enemy combatant as far as I am concerned.
Yet another idiotic “article” about Comex warehouse inventories. Wait, wasn’t the Comex going to default on deliveries 2 years ago? 5 years ago? 10 years ago? Last month? Every month?
LOL. It’s always tomorrow. Decade after decade.
They were going to default when gold hit 850 in 1980. And when it hit 200, 20 years later. And every month in between and ever since. All the way to 1900 and back to 1300.
Morons like the guy who wrote this drivel have been droning on and on about this sort of utter BS for over 30 years. I know. I’ve been trading precious metals and other futures for 40 years.
This puerile junk never fails to fool the rubes, of which there are apparently many on this thread.
It’s not about their inventories.
It’s about the fact that they have been selling contracts.
Now, they add a disclaimer to their reporting that basically says “Hey, don’t blame us, we’re not the counterparty...”
That’s as close to fraud as you can get.
Well, lend us your expertise by telling us what is hypothication? That is beyond my ken with respect to the gold trade
We still don’t know how many of the gold plated tungsten bars are being held. Did Comex find out they got scammed too?
I don’t have a clue.
Question:
If Comex has tungsten in their vaults, are they the scammed, or the scammers?
Inquiring minds want to know!
I have no PM investments, but watch it as an indicator, like the price of oil and interest rates.
After what happened like in Cyprus, kind of makes you wonder!
Unless you are holding it in your hands, you don’t “own” anything.
Of course it is. That's what every idiotic article like this is about. Failure to deliver. OMG! Where did the gold go? Problem is that no failure to deliver has ever happened. Never will, barring a nuclear war that destroys NY.
It’s about the fact that they have been selling contracts.
Your statement is absolutely false and demonstrates that you have no comprehension of reality. The idea behind leasing gold is that the gold gets sold to buy U.S. Treasury notes or bonds to scalp 1 or 2%/year.
The gold didn't disappear, it still exists -- someone else owns it. Guess what? They store it somewhere. Like the Comex. Whoever sold it buys Comex (or other futures) contracts to hedge their price risk. Nothing really changed, on net, and the gold likely never moved from its repository. Moving gold around is expensive. The article is just the usual BS.
Now, they add a disclaimer to their reporting that basically says “Hey, don’t blame us, we’re not the counterparty...”
They said no such thing. Your claim is total crap. As is all the worthless junk posted by people like you who don't have the first clue about the Comex, futures, or the metals markets.
That’s as close to fraud as you can get.
Only in your very feeble and fevered imagination.
Thank you so much.
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