25 votes

COMEX on verge of default

From the blog of Harvey Organ, someone who's very knowledgable about insides & outsides of working of COMEX. Reports are alarming. Draw your own conclusions about how manipulated & fraudulent current metal "spot prices" are.

http://harveyorgan.blogspot.com/

Monday, December 2, 2013

We had some activity in the Comex gold vaults today but again surprisingly no gold enters the dealer.

Ladies and Gentlemen: we have a three-fold problem:

i) the total dealer inventory of gold remains tonight at a very dangerously low level of only 18.37 tonnes

and what is totally remarkable is the fact that no gold is entering the dealer comex vaults despite December being the busiest month for the gold calender.

======

Continued commentary from Bill Holter:

"Something" must happen."

December has arrived and with it the spectacle of COMEX delivering on contracts. Gold went to first notice day on Friday with 1,020,000 ounces of Gold standing for delivery. This is in contrast to the registered inventory holding only 590,000 ounces available for delivery. How will this 1 million ounces of Gold be delivered? It is hard to tell but suffice it to say that 400,000+ ounces need to be delivered in to make up the deficit. Last year if I recall, 1 million ounces were delivered in for December as it also had a large amount standing for delivery.

That was last year, this is this year. The difference being that China had not already "Hooverized" the planet picking up all of the Gold that they could. Yes they did have a big appetite but that has grown further this year. We also had not seen any plundering of GLD for 500 tons and LBMA had not yet seen 1,300 tons vanish from their coffers. Another quite interesting situation is that there have only been 80 contracts "served" in the first 2 days. This represents only 8,000 ounces. This is odd because it does not benefit a "short" in any way to wait until later in the month to serve for delivery. Carrying costs will only add up each day whereas the "ounces" are the ounces today just as they will be on Dec. 31...they don't "shrink".

"Why" would a short ever wait to serve delivery if by waiting their costs only increase each day? One can only guess that possibly the Gold is not there and must be sourced. How can I say something as heretical as this? Because we already know that AT LEAST 400,000 ounces need to be "sourced" because according to the COMEX themselves, registered inventory is not sufficient in quantity to make deliveries. Again, why has there only been 8,000 ounces served in the first 2 days? Is it possible that some of these shorts are offering a premium "in cash" to forego physical settlement? What!??? This is heresy! This would/could never EVER happen will be the battle cry! If you think about it, ANYTHING "crooked" can (and does) happen on a daily basis so why would this be any different? If you actually believe that "crookedness" doesn't exist nearly everywhere in the financial markets...then sorry, that's your opinion and will ultimately be your problem.

Has all of the Gold been delivered yet from the October and November contracts? I haven't seen enough Gold exit the warehouses yet to say that these deliveries have been satisfied. For that matter, a case can be made that not all of the physical deliveries going all the way back to June have been made but that would be just plain conspiratorial wouldn't it? Please keep in mind that going back to Jan. 1st there has been very little Gold that has entered the registered vaults and a drain of nearly 3 million ounces has already occurred to this point. We have seen over 80% of the beginning inventory already exit this year...yet no one seems alarmed. I don't get it but maybe I'm not supposed to?

This year has been a one way street where Gold has done nothing but exit Western inventories and gone East. China alone has already imported over 1,000 tons (30 million ounces) this year. Then you have the rest of the world to account for. It is clear beyond a shadow of a doubt that well over 3,000 tons of demand can be accounted for on the back of an envelope while global supply is only 2,200 tons. The Gold had to come from somewhere right? We even know the answer to this question, COMEX, GLD and LBMA have "bled yellow" so to speak...to the tune of roughly 2,000 tons. The tightness has grown so acute that unfortunately this bleeding has now started with one of the truly good guys. Sprott physical Gold ETF has now seen smallish redemptions due to trading at a discount and has had to deliver out Gold...no doubt also headed East.

This cannot go on forever and those in the East know this full well. Why do you think that 6 different "cash" metals exchanges are being set up to go live shortly? Because they know (or have been told) that shortly the deliveries will cease. The West has been built on "fractional reserve" everything. This works...for a while...especially with the currency itself because that can be freely created and provided. In Gold, Silver, oil, wheat or heating oil, etc. ...not so much. Especially if you are hungry, need to drive somewhere or are cold.

Anyone using any common sense at all knew that sooner or later excess demand over supply would exhaust the existing inventories. This is where the old saying "where the rubber meets the road" comes in. We are, here and now at this moment about to see "who was correct"? Will we witness "delivery default" or not? I suppose that we could see a large deposit (it would be the first one in the last 12 months) and push the event out into the future to the February or April expirations but to what end? The same end. All I know is that as it currently stands, this is the very first time as far as I know (including the 1979-80 episode) that more Gold is standing for delivery than the COMEX reports to be available to deliver. It has taken some 7 months to arrive here after the April and subsequent "ambushes" of price but we have arrived. Something dramatic MUST happen over the next 30 days. Either metal arrives into inventory or it doesn't. Either metal shows up or the COMEX will default. This is a pretty simple observation.

Mother Nature has eaten up more and more supply with each successive raid in price. The Chinese and their brethren have seen the writing on the wall and decided to open their own "arenas". "Arenas" that will spurn fractional reserve trading in lieu of CASH ONLY trading and settlement. We can look forward to a pricing structure that is discovered by a real and free market with no fractional pikers allowed!

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Past default

According to Andy Hoffman, technically we're well past the point of default. For all practical purposes, the default already occurred. Only reason it isn't apparetly seen is because: Large number of open interests are never demanding physical delivery, but settling contracts with FIAT CASH!

This makes me belive, these must be agents of Federal Reserve thru JPMorgan who're doing these activities to keep the deck of cards alive. Holding open interest only for the purpose of keeping illusion that there are more wheels in the game than what's really there. Why would anyone bother holding open interest on COMEX & not demand physical delivery right now? (Knowing what we all know about what happened to German Bundesbank gold & exports to China?)

Even if all open interests started demanding physical delivery, I feel the opposition is so ruthless & cunning they'll pull more treachery. They have no qualms. Just like how they literally stole the German gold, they'll start stealing metal from customer vaults. Nobody in their right minds should be using JPMorgan & HSBC customer vaults right now.

This game is mathematically over, and both COMEX & LBMA are now as irrelevant as the Federal Reserve printing press.

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
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It won't break the comex, it will break at the margin

The Comex is not the indicator you're looking for. The physical market will break at the margin. It's just like the geopolitical mess that has been going on for years (Arab spring, Ukraine, China etc.). The edges are the first to break, then it comes back to the core. The LBMA and Comex will be the last to break. Look at the edges... Look at India, China and the M.E.

So.....

I have heard this so many times.
I have been stacking Silver for a while now and I am proud of what I have.

That being said, since I started stacking a default was imminent, or something was always right around the corner.

I don't won't to eat crow, but I am actually tired of seeing this rhetoric. I wish it would just do it or something.

That's all ya'll.

Peace

Ron brought the Liberty movement together, Rand is expanding the crap out of it! :)

So what happens when the gold is gone?

You know China just bought JP Morgans vaults. Are they going to step in and resupply the vaults . Does this set the game in motion again, but this time with another puppet master?

Cyril's picture

Never underestimate the crooks

I'm pretty sure they could eventually, even, come up reporting gold reserves ... in the negative numbers, and yet ... STILL keep a straight face, pretending it's perfectly normal in the business.

Never underestimate the crooks who get to keep "the books".

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

I was thinking the exact same thing.

Keep "delivering", going way into the red.

Author of Shades of Thomas Paine, a common sense blog with a Libertarian slant.

http://shadesofthomaspaine.blogexec.com

Also author of Stick it to the Man!

http://www.amazon.com/Stick-Man-Richard-Moyer/dp/1484036417

Force majeure

I think the supposed "legal" solution is called "force majeure" mentioned in this link:

http://www.marketoracle.co.uk/Article43959.html

That is, contract settlements either with cash or equally worthless paper receipts.

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

Cyril's picture

Yeah...

Yeah... What I am almost praying wishing for is that there'd be some tough drug lords who haven't got their gold delivered yet.

I wouldn't want to have my name anywhere close related to the COMEX !

Sometimes one needs to get a serious spanking to learn their lesson.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

20 tons kilobars from JPMorgan to Hong Kong within days!

20 tons of kilobars are being shipped from JPMorgan vault "eligible" category to Hong Kong within a matter of days! Been keeping eye on steady "registered" inventory level thruout month of January. But as incredibly busy February delivery month starts, HSBC eligible gold big amount has moved to registered & ready to ship (most likely to China).


http://youtu.be/eWJ-ZuElncM

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

Jan. 9 level 7 tons!!

COMEX dealer inventory for major bullion banks has now dropped to its LOWEST EVER level of 7 tons since this tracking began!

Tomorrow is the propaganda employment report announcement, so there will probably be 1 more crimanal & desperate paper short attack. But since physical levels are dropping so dangerously low, we're getting oh-so near the eruption of volcano.

http://harveyorgan.blogspot.com/2014/01/jan-92014total-comex...

Tonight, we have dealer gold inventory for our 3 major bullion banks(Scotia, HSBC and JPMorgan) with its gold inventory resting tonight at only 7.545 tonnes.

i) Scotia: 88,532.124 oz or 2.753 tonnes
ii) HSBC: 67,043.114 oz or 2.085 tonnes
iii) JPMorgan: 87,071,35 oz or 2.708 tonnes

total: 7.545 tonnes

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

It's coming - early Jan 2014 update

End of Dec. 2013 contracts, 650,000 ounces of gold stood outdtanding for delivery out of COMEX. As of today, hardly 150,000 to 200,000 actually left registered inventory. Nothing has yet come in to offset it.


http://youtu.be/s6K4HmhAfQE

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

When the country is run by the crooks via the FED

anything is possible. I wouldn't doubt the comex has defaulted several times in the past. When crooks are in charge you will never get the truth.

Time for American's to pull an Iceland.

Gold standard: because man can not be trusted to control his greed

It's possible

It's quite possible COMEX defaulted many times in the past, but nobody cared or found out. People sincerely put "trust" in fake paper certificates for too long. Persistent demands for physical delivery, like run on the banks never happened.

Today the situation is very different. Hopefully their bluff has been called due to prolonged demand for physical from Asia. BTW, 3 new "PHYSICAL" metal exchanges have come up in Asia: one in Singapore, one in Shanghai & another in Hong Kong. Nobody will be allowed to do naked short selling of paper certificates there. If anyone wants to short, they'll be required to "show their hand"; i.e. physically bring the metal to exchange's vault.

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

The crooks are about to receive their rewards soon.

Not only is physical gold and silver moving east but most of the small mining operations for gold and silver have closed permanently. The larger mines are only hanging on by cannibalizing themselves to show a profit. Most have stopped all exploration, and that means no new mines opening in the future.

I don't see how the crooks can keep up the game much longer, but then it's all they know. I think we could see $200. silver before the end of 2014.

Gold standard: because man can not be trusted to control his greed

Leverage

The obvious & key question is - how much is the leverage? Meaning, fake paper contracts create fractional reserve system for precious metal commodity. To what extent have paper contracts leveraged real metal? What are the ratios like? Are the criminals pooling more & more new paper contracts into the system, kind of like Fed printing fiat dollars?

EVERYONE with supposed title should be DEMANDING physical ownership of their metal. Unless & until that happens, there is no hope of extinguishing paper contracts poison.

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

For a while I thought that

For a while I thought that "verge" meant "will happen very soon." Thanks to this thread, I now know it means "not going to happen at all any time soon."

jim willie

thanks for writing about him ..I used to read his stuff every day ..just put him aside..a mistake .

China importing a 1,000 tons a month since last year

Jim Willie seems to have a handle on what is happening with the gold. Maybe there is less gold than COMEX is letting out. Check out this interview:

http://thevictoryreport.org/jimwillie-willie-ferguson/

1000 tons a month doesn't make sense to me.

That would be 12,000 tons for the year 2013, alone.

Where does the 1,000 tons per month come from???

Here is a link to some more sense able figures:

http://www.ingoldwetrust.ch/more-on-the-west-to-east-gold-ex...

beesting

Slip of tongue

I have a feeling it was slip of tongue for Jackass - whatever his name is - who speaks very fast. Maybe he really meant to say 100 tons a month?! Agreed 1000 tons doesn't make any sense, but all the rest of Jackass's diatribes are very much sensible.

Immoral funding of Military Industrial Complex by Federal Reserve and US taxation system must stop!!!! End illegal/unconstitutional wars! Preserve US currency!
http://facebook.com/NoPropagandaZone
http://twitter.com/the_chiefe71

Look for interest rates to

Look for interest rates to skyrocket and gold to crash

deacon's picture

If one isn't tied to the other

How would interest rates crash the gold?
D

setting your expectations to high,can cause depression

On the margin....

...it makes fiat "dearer" than before.

Maybe not to us, but to the trades on the margin, which moves the curve.

deacon's picture

Meaning?

If the dollar drops per inflation/deflation.and gold/silver is still tied to it,(people still buy with notes)
this reflects in the up/down swings of them metals?
Or,do you mean something entirely different?
D

setting your expectations to high,can cause depression

No difference

It is called a spread, they execute a bet against the same amounts equal to what they are betting against.

So if the stock does not sell, they get paid double. If the stock does sell, they still get paid double.

Also you must keep in mind these are on spreads of commodities, such as mortgages, car loans and actual signed promises. This is really called credit default swaps and they are illegal.

If the rates on credit default swaps go up on metal currency, it just means they rigged the market again forcing metals down. If it goes down they can't hike the rate you pay back, so metals might shoot past spot price. Then they claim that this adds value, it never does.

Consider the fact that the economy is filled with credit default swaps, which are stated to add liquidity. Now that this is obviously a scam, you understand why the whole Federal Reserve is one too. You can't add any liquidity to anything that is based on betting invisible chips. Isn't that merely a slot machine?

People downvoted this reply above and should not have...

...because this brief reply above speaks the truth. The #1 weapon for central banks to use to sink gold is increasing interest rates.

It would not surprise me that they are seeking to jilt China once again, but allowing them to buy all this gold and then attacking through a short term spike in rates to force China to sell back at lower prices.

Whether they do or not, people need to understand the interest rate mechanism and the effect it has on gold.

"spike in rates to force China to sell back at lower prices"

I'm not sure that makes sense. China has massive reserves, only a tiny fraction of which are in gold. Most of the reserves are in treasuries. And China has repeatedly expressed an interest in shifting away from treasuries (and has been doing so gradually for years). So, if a rate spike put China in a situation where it needed to raise fast cash, which assets would they most likely sell? I'd say treasuries, not gold.

Not only would the US banks not get their former gold back cheap, China selling treasuries is about the last thing the US government and banks want to happen. And they don't want higher rates in any case, given that every 1% rise means about $100 billion more in annual interest payments on the debt and a decline in value of the huge treasury holdings of the banks (not to mention that rising rates risk collapsing the entire cheap-credit-fueled bubble economy that now exists here).

After all, what's the whole purpose behind gold price suppression? To rid the dollar of a potentially lethal competitor, so that they can keep printing, so that they can keep borrowing to fund leviathan. Raising rates to keep the gold price suppression scheme going makes no sense.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

You can't add liquidity by betting on invisible chips...

Isn't that merely pulling the lever on a slot machine?

http://www.silverdoctors.com/jp-morgan-makes-another-big-adj...

I don't follow....

Comex inventories are low, yes.

There might be a risk of default, yes.

I never said otherwise. I was only addressing 76's hypothesis about a rate spike being orchestrated to refill the gold coffers in the West.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

It's one lever.

It's not the only one. The simple fact, which I pointed out above, which is important to understand is that, at the margin, a rise in interest rates makes a fiat dollar relatively "dearer" vs. a unit of gold.

That's simply the way it works, right or wrong. It's not really a debate. You are free to ignore physical laws or economic mechanisms at your own peril.