"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." - disclaimer now posted on the Comex gold and silver daily warehouse stock report as of Monday, June 3, 2013.Well now. How would you 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."
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Hm.
ReplyDeleteSeven years to send Germany 300 tons of gold ?
ReplyDeleteThis entire system is a scam. I think that anyone with an iq above room tempeture can figure this out. Too bad the majority of the American public is too busy watching T.V. and ordering pizza. The ramifications of the fraud that has been perpetrated are soon upon all of us. Those who have not prepped are in for a real rough ride.
Dave, I take offense to this. Our government is benevolent. It is here to serve the people. WE ARE THE GOVERNMENT. Our forefathers were ignorant because the had slavery.
ReplyDeleteWe are the free-est, greatest country in the world! Well except for the lies. And the corruption. And the whole thing about being a military empire. And the fact that we have forgotten how to do arithmetic. Or exercise, or...
Other than that, this is very offensive.
MichaelGR
LOL. Are you related to Oscar Wilde lol
DeleteI think my sheeple friends on Facebook may be right after all. Greed is the root of our problems, and we need to regulate it out of the human DNA. Well, by that I mean other people's greed of course.
DeleteI also think they're right, that Obama's first term was picture perfect. If not for the evil Republicans that want dirty water, polluted air, and everyone to return to the 1800's (back to washing our laundry in the creek), our problems and guns would be gone. Long live the COMEX!
Charles Dickens?
DeleteAnonymous said:
ReplyDelete"Dave, I take offense to this. Our government is benevolent. It is here to serve the people."
Sorry but HA HA HA HA HA HA HA!!!!!!!!! If you're waiting for .gov to come and rescue you ( and your children ) good luck with that.
None the less I do enjoy an afternoon chuckle, and you delivered.
wow really? you cant detect sarcasm? Im not the same anonymous
Deletedid you not even finish reading the comment?
DeleteWe will have officially reached Hell when the masses fully realize that death administerred to the guilty won't resolve the newly aquired suffering.
ReplyDeleteAnonymous up top, I love the sarcasm.
ReplyDeleteThis is just par for the course. The best thing one can do when this blows up is simply be ready for self and family. Precious metals, stored food, plenty of lead, stored water, odds and ends and other supplies, get'em all.
You'll be sitting down watching your favorite movie and laying low, while everyone outside acts like a scene from Chicken Run.
The CRIMEX isn’t the only one fooling around with how much gold they have.
ReplyDeleteFrom the US Treasury’s own website-
Back in May 8, 2007 and earlier it listed US Gold reserves as
May 8, 2007
4. Gold Stock 3 11,041
Link to see for yourself-
http://www.treasury.gov/resource-center/data-chart-center/IR-Position/Pages/2007581342179779.aspx
Since May 17, 2007 and every week since, gold is listed as-
4) gold (including gold deposits and, if appropriate, gold swapped)
11,041
http://www.treasury.gov/resource-center/data-chart-center/IR-Position/Pages/05172013.aspx
From gold on hand to “if appropriate gold swapped“ no doubt Treasury is covering their ass-ets in case the truth eventually comes out.
Sorry for some nitpicking. If you take delivery of gold or silver, unless, you want to cancel the warrant, the gold/silver will be reflected in the registered category not eligible. And any silver/gold put at Comex warehouses, as long as it meets Comex specifications will be reflected in the warehouse report. For example, suppose I'm bullion dealer and need somewhere to store one 1000oz silver bar. I decide to put it at JPM. Then the 1000oz will appear in the warehouse report, in the eligible category
ReplyDeleteI guess you better research the difference between an "allocated" account and an "unallocated" account. The "eligible" account in Comex vaults is "unallocated." To be allocated, it means they stick your bar on a shelf with your fucking own name on it.
DeleteYou aren't nitpicking, you are demonstrating your lack of knowledge.
Dave, I'm not talking about "allocated" or "unallocated" here. What you wrote in your article is almost 100% possible. I just want to point out one small mistake. You wrote "and for investors who have taken delivery but keep their gold/silver in JPM's Comex vault - "eligible."". This is not true because warrants are transferrable by delivery, shall be of unlimited duration and remain valid until cancelled by the licensed facility. If you take delivery of 5000oz of silver but don't cancel the warrant through the licensed facility, the 5000oz will be in the registered category, NOT the eligible category as you wrote.
DeleteBesides, eligible stocks must include all the metals that meet the Comex specifications and all the approved brands. Even gold and silver unrelated to the Comex delivery activities must be included in the eligible category as long as they meet the Comex specifications.
That's Rule 7A02 (c)ii "All Commodities bearing an Approved Brand shall be included in the report. All Commodities held by a Licensed Facility, as identified in and in compliance with Rule 7A.03, must be reported, even if not weighed into Contract Units or if not intended for Exchange delivery"
If you could change it to "for investors who keep their gold/silver in JPM's Comex vault - "eligible.""", that would be more accurate.
Maybe this is not a important from your point of view. However, malicious nitpickers like Bron Suchecki or Kid Dynamite may use this small mistake to discredit your whole article. Ergo, better be careful.
Bron is a complete idiot. I shredded his argument about why he claims GLD is legit.
DeleteMy point is that the gold that is being reported by the Comex vault operators is likely not really there to be reported. Now, "not being there" could well mean that there is a lease-claim attached to it OR some other form of hypothecation. Just because bars are sitting "registered" or "eligible" accounts doesn't not mean that intended owner of that bar has a legal entitlement to that bar.
Review the laws connected with short-selling and hypothecation. When an asset hypothecated, the original holder of that asset loses legal title to it.
Now, I also believe - per the recent 35% drain of gold inventory from the Comex - that a lot of the bars have been physically removed upon demand by entitled owners. By "entitled," I mean the party who possess the legal title to the bars. The disclaimer was added to the inventory report as an attempt to exonerate the CME from the legal liability of fraudulent reporting by the vault operators, who are responsible for the record-keeping and accounting and reporting of the bar inventory that is supposed to be in their vaults.
This is the same kind of situation with GLD. Same wine, different.
Now as far as Comex bar quality standards, not only am I well aware of the criterion and rules, we have taken delivery of both gold and silver bars FROM the Comex. I am experienced in the entire process from start to finish.
This is also why I DO NOT trust the Comex reports. Back in April 2010, we took delivery and were given notice by HSBC for several silver bars. BY THE RULES, HSBC was required to deliver the bars to our possession by April 30, the last delivery day. They are given 3 days of leeway. Not only did we NOT receive the bars within the legal timeframe, it took 7 full weeks for HSBC to make good on the delivery.
Moreover, during 2010, HSBC changed its delivery policy for off-Comex deliveries, making it more cumbersome and a little more expensive to get bars delivered to your possession from their vault.
Need I remind you that HSBC has recently been charged in several fraudulent banking activities AND convicted on a couple. They are connected to the recent HKMex scandal in Honk Kong, as well.
the original SLV prospectus states "we are required to have 1 ounce minimum per 45 shares of slv stock".Do the math.
ReplyDeleteGreat find. But even that disclaimer needs to be updated to something like this:
ReplyDelete"The information in this report is provided directly by exchange member banks pursuant to their own best interests. We have no idea if it's reliable because we never check; however, the Commodity Exchange, Inc. has been informed that any effort to fact check will result in the immediate assassination of another lesser member of the exchange just large enough to wipe out our insurance fund."
Satire? Reality? I don't know which is more absurd. :-)
Hey Dave:
ReplyDeleteSo the Comex defaults. Pffft. Lucky customers get a check, unlucky customers get MF Globaled. So What!? It is a fools game to play in
the Comex and has been since at least 2009 as MF Global & PF Best later attested. Doesn't Everyone know that? I can't believe that there are still players in the Comex. I used to have an MF Global account and loved to trade Gold, Silver, Sugar, Wheat and others. But I realized that most of the markets were rigged by insiders who knew when to put their thumb on the scale and when to take it off. I was and am on the outside looking in. I don't have a Bloomberg terminal, own a hedge fund or payoff a Congressman, which is why I have been working on collecting physical and eliminating all debts. You can look anywhere in the Blogisphere and see reports of massive corruption, insider trading, a closed eye by government - State & FED - To anything and Everything Financial- a paid off judicial system - Yes! The Supreme Court Too! Obama Care was rewritten by the court in predetermined pretzel logic in what they ADMITTED was a search to bend to political will and add insult to injury with their 5-4 decision yesterday, eviscerating our 4th Amendment protections in illegal government search and seizure. Dosen't matter.......
The clown car Obama and the Elite 600 are driving, Biden riding shotgun..of course, is careening down the back side of The US of A's gigantic mountain of debt, wind in their hair, not a worry in the world. If the Comex collapses, who cares?!!! Hit the FED up for a bailout. Money, there is no there there. Isn't it all electronic? Push a button and Poof! All good! They don't care as long as they think they can soak the public after they crash & burn. Doesn't effect the Average Joe on the street. He doesn't care or understand the financial markets. But he does feel he is missing out on the BUY ! BUY! BUY! in the stock market as it zooms towards 16k. He is thinking he should get in pretty soon, what with ZIRP killing his savings. He doesn't know or care that commodities - what is a commodity again? - are used by farmers and ranchers to hedge bets on market prices, or that Airlines use commodities to hedge fuel costs. So if the Comex blows up and markets collapse and food and energy (No Inflation here .Gov says so) prices quintuple....Meh I still can't get over Kree losing to Candice in AI. So bummed!
I don't mean to sound like a douche, but you are confusing the reliability of paper records and the reliability of bank's not acting fraudulently with regard to those paper claims with actual physical gold that is sitting in an allocated account and the rightful owner has legal entitlement to that bar. Paper is NOT to be trusted - in any form.
DeleteLook at MF Global as your model for this. But there are many models going back to Long Term Capital and Enron. In my report on GLD in 2009 I said that eventually GLD will end up being one big Enron. I stand by that claim. The Comex is a mini-version of that.
Maybe I obfuscated my thoughts with an attempt at lacing them with humor. I started buying physical in 2004. Thought it was better than GLD & SLV then, because I held it in my hand. Was sure that was the smart play in 2007/2008 and have continued that strategy. I enjoyed playing commodities & made money until 2008/2009 when metals didn't react to market pressures because of GLD & SLV manipulation and their changing physical backing of their ETF's. As for paper investments, I don't think you will get anything back from Wall Street brokers or big banks and their paper crimes. That is super clear. But try telling family, friends, anyone that we are one financial crisis away from going Cypress. Even harder when trying to find a safe, liquid investment for your cash besides physical metals in USA.
DeleteI was wrong in the last post when I said, "Who cares if the Comex blows up!" Harvey Organ will be pissed. This will make his daily report a lot shorter. http://harveyorgan.blogspot.com
ReplyDeleteOh, yeah, the Boyz at the CFTC, but they might not notice, since they will be trying to put a positive spin on Matt Taibbi Rolling Stone article exposing how the Big Banks have been gaming commodities -with CFTC approval - heavily, since the early 2003, but started gaming the system in the early 90's.
Is Everything Rigged?
Rolling Stone - Matt taibbi - http://tinyurl.com/atllac8
Big Banks and Government Agency Have Been Cooperating In Market Manipulation for Decades
Washington's Blog - http://tinyurl.com/mxrko6t
Tightening down my tin foil hat. The ride is going to get a lot rougher pretty darn quick....or not.
Its very well detailed and appealing to keep to eye to read more.
ReplyDeleteWe also try to keep our blog filled with information and helpful methods to help anyone with carpet problems.
Once again great blog. Very well informative.want to see more detail visit
http://thegoldrushstore.com/sell-your-gold/
cash for gold
Housing Bubble Pop Alert: Colony Pulls IPO On "Market Conditions", Blue Mountain Rushes To Cash Out Of Own-To-Rent
ReplyDeleteHere is a simple way to test if the last year of housing market gains have been due to a real, fundamental, consumer-led recovery, or nothing but the latest iteration of the Fed's money bubble machine manifesting itself in the place of least du jour resistance - houses: Assume rising interest rates.
That's right - the oldest economic joke in the book is also the best way to approximate real marginal demand, especially by those whom even the NYT earlier today identified as the primary beneficiary of cheap credit which they have subsequently transformed into an ubiquitous landlord industry, buying up homes by the tens of thousands with the intention of quickly converting them to rentals.
So if, indeed, it is the smart money that defines the marginal price, and since said money is "smart" and realizes that either the US consumer is tapped out and unable to satisfy a priori modeled cash flow demands or it anticipates a rise in interest rates (not due to a pick up in the economy but due to a tapering of Fed purchases - two very, very different things: note the pick up in yields at the end of QE1 and QE2 which signaled not an economic recovery but simply more QE a few months down the line) which contrary to the propaganda on TV would have a devastating impact on the housing market and also the economy, then we would promptly see the imminent pop of the second coming of the housing bubble.
One can make the argument that some have already felt the early tremors: late last year it was Och-Ziff, one of the original entrants in the REO-to-Rent business who called it quits as the returns it was generating from rental income were "less than expected." Then just last week we wrote about Carrington, an early landlord investor backed by OakTree, which too decided to quietly slip out the back exit. Carrington's memorable quote still haunts us: "There’s a lot of -- bluntly -- stupid money that jumped into the trade."
Yes there is.
Moments ago the WSJ reported that one of the companies at the vanguard of the second housing own-to-rent bubble, Colony American Homes, has just pulled its IPO due to, you guessed it, market conditions. Because the market being a whopping 4% off its all time highs truly qualifies as a force majeur in the IPO world. Only that's not it. What is "it" is the recent pounding all related housing REITs have experienced on nothing more than the mere concern that rates may, at some point rise (even despite the simple math conducted by Jeff Gundlach today demonstrating how a return to 5% interest rates would promptly destroy the US balance sheet in a few short years time).
Sure enough, suddenly all companies that did not have to concern themselves with plunging and uneconomical cash flows simply because their cost of capital would be laughably low no matter the asset side of the balance sheet, are in near panic mode. Such as Colony.
http://www.zerohedge.com/news/2013-06-04/housing-bubble-pop-alert-colony-pulls-ipo-market-conditions-blue-mountain-rushes-cas
During prosperous times the Comex did make sense.
ReplyDeleteHowever the overall condition of the economy has turned into an artificially inflated sad state of affairs , and for that matter throughout the world.
This alone automatically takes the Comex to the level of Milton Bradley's game Monopoly.
If you would like to pour your hard earned money into nothing more than a game that will eventually leave you losing , it's there waiting to take your money.
On the other hand rumor has it that Toys R Us is having a pretty good deal on the game Monopoly. You'll be leagues ahead with your $$$r's going that way instead !
Dave, is this what the BIS means by lack of collateral?
ReplyDeleteNo doubt. The BIS is probably short leased gold too. In fact, as the Central Bank of Central Banks, the BIS is probably ultimately behind the schemes used to suppress the metals.
DeleteBut everyone forgot about the eastern hemisphere, which not only has used gold for over 5000 years as currency, but requires actual physical delivery - not electronic entries in a bank account...
"No ticket,No washee". There fixed it for you.
DeleteDave,
ReplyDeleteThe BIS is owned by its central banks who are in turn owned by the TBTFs (aside from the 14% private shares with no voting rights [my ass]). It's a cluster fuck to try and say "who is behind" the FIAT currency shell game as the trail of ownership is like everything else, a shell game.
The Money Power, generational banking dynasties who have a controlling interest in THE SYSTEM (of privately issued debt-based MONEY) know that gold is the most liquid form of wealth, and all they care about is raping the peons who are paid in debt, so they can conslodate power into a world reserve currency linked to gold when derivatives (dollar denominated debt) fail. The interst rate derivative failure will be a much bigger systemic "stress test" than Lehman. Debt will be written into the dirt.
The only way to survive this is to own physical, and as the paper price continues to fall I will trade debt for it based on my "debt rating" (good name on paper) to follow in the footsteps of those who run the show.
When the paper burns, it will not be about yield, it will be about survival.
Correction : Monopoly is made by Parker Bros. and not MB.
ReplyDeleteComex reportThis report is produced for information purposes only." - disclaimer now posted on the Comex gold and silver daily warehouse stock report.
ReplyDelete